As I often do, I’ll start with the biological analogue. You will know of course that any natural habitat is populated by the species that thrive in that habitat. You don’t expect to see frogs in the desert or mice in the Antarctic. Most species have a geographic and environmental range. A friend of mine can tell how far up a mountain he is by looking at the flowers. That’s his party piece.

This relationship between species and habitats is an artefact of evolution. Biological species evolve to fit their abiotic environment and, although it’s driven by random variation, this process is more subtle, more sophisticated than most non-biologists realise. And one of the most interesting aspects of this are indicator species, which are so well adapted to a particular aspect of the environment that their presence more or less shouts out something significant about the habitat. There are lots of indicator species, some of which indicate the presence of something, some the absence. In the Everglades, a thriving Wood Stork population indicates a healthy habitat and vice versa. The Buck’s Horn Plantain is a plant that you might see growing out of cracks at the side of the roads. It’s adapted to cope with very salty soil, so if you see it you know what the soil conditions are. Similarly, river otters are early indicators of mercury pollution. Some very geeky lichen specialists can look at a rock and tell you how urbanised and polluted a habitat is. When I see my biologist friends do this sort of thing – deducing important information from a snapshot of data – I’m always impressed. But of course it’s not magic, they are using indicator species.

Can you see where I’m going with this? As regular readers of this column will remember, species are directly analogous to business models. And there are business models that are direct analogues of indicator species. For example, the early-development biotech space is dominated by business models built around venture capital. This is an expensive form of capital, compared to other sources, and it tells me (if I didn’t know already) that this space is high risk/high return because that environment’s VCs are adapted too. When I work in medical devices, it’s striking that there’s a divergence between models that depend on distributor networks and those that maintain their own expensive specialist field teams. The latter tells me that only companies with a high added value proposition can survive in those markets, which usually indicates relatively few high-value accounts. By contrast, distributor-led markets usually indicate fragmented markets where the value comes from aggregation of multiple products. There are lots of examples like this. Each of them gives me the opportunity to see one thing and know another. If you don’t know about indicator business models, it looks like intuition but it’s really just informed insight.

This party trick goes further too. You tell me your market is growing fast? I can guess you’re about to see new investment by rivals. You tell me you’re facing increased price competition? I can tell you that your customers can’t differentiate between alternatives. You tell me your market is plateauing? I can guess that your sales team are probably struggling to adapt from product-selling to solution-selling. These, and other examples, are just variants on the indicator species idea and they all have their scientific roots in the ideas of Charles Darwin.

The practical application of this little party trick is to enhance your ability to make sense of your market. To be clear, I’m not suggesting that you should rely on informed intuition instead of solid data. But most organisations learn by a combination of induction and deduction, so it accelerates your organisational learning if you can come up with hypotheses that guide your information gathering. In other words, indicator species may not give you the answer but they guide you where to look for the answer. You should add them to your repertoire of business party tricks.

This column is also available as a podcast here or search ‘Darwin’s Medicine’ on your podcast provider.