Trends bring about change. Smart entrepreneurs who can spot trends early and get in when the timing is right are able to profit from them. Fads are short lived. They are usually found in pop culture and fashion. Again, timing is critical because a fad can come and go as fast as lightning.
A start-up or small business owner who sets themselves up to ride a trend in the early stages can do well. They may not be able to benefit directly from the main trend but by establishing a foothold in a niche part of the market, they can take advantage of the trend.
Take, for example, the cell phone trend that started about two decades back. The giant telecommunication and cellular network operators scored as well as the handset and software manufacturers. But there was opportunity for the smaller guy to open a cellphone shop, sell accessories and do repairs. In the early stages, the margins are healthy but as more and more people climb on, the margins start looking pale.
Coffee shops have been part of a long-term trend. Now they have been combined with people’s ability to work any where with their mobile devices. Few city coffee shops are without Wi-Fi services to keep and attract customers. Only in the most remote parts is Wi-Fi not available. I was in the Southern Peninsula Village of Kommetjie where the local coffee shop had excellent Wi-Fi, for example.
Fads are tricky. You usually find them in pop culture, fashion and the arts. For a few weeks people are downloading and raving about a particular song or musician and then their interest fades. Shoes, dresses, handbags, and jeans are suddenly in and then suddenly out. The same thing happens with fad diets – how many fad diets have you tried out? But while the trend is going if you can come up with a product or service associated with fad dieting, you may be able to benefit.
Artisinal foods are part of a longer term trend. Recently I saw in a Time magazine article how oak barrels are in high demand – so much so that companies who are making them have to turn orders away because they cannot fill the capacity. The barrel run is as a result of the soaring worldwide demand for whiskey and a shortage of the wood for vessels necessary for ageing it. But whiskey and bourbon makers also face increasing competition for second-hand containers from the fast-growing foodie market. They want the barrels to impart some of the bourbon sweet smokiness to things like soy sauce and maple syrup. Craft distillers and brewers represent a small part of the market but they have been growing by 30% a year, according to Time.
Spotting a trend early can make a big difference. People are behind the demand for everything from artisinal products to new diets and forms of entertainment. Have you looked around yet for a trend to hook into? Who knows? You might get your timing right.