Put your ladder against the wrong wall and you may have a long climb.
A business consultant’s life isn’t easy. Carla (not her real name) had a problem. “What businesses should I be in?” It was the question that had haunted her for the past few months. Was it the right question?
She was asking the question from the perspective of that familiar trap: coming up with an idea for a product or business that suits the entrepreneur’s technical skills and inclinations but ignoring the reality of the marketplace.
Carla faced the most difficult question of her business life.
What was she to do?
When markets are down, consumers are not spending and business formulas that worked in the upturn are being shattered like skittles in a bowling alley, it’s difficult to have clarity. But clearness of vision is exactly what is required. How does a businessperson know where to position their ladder when so many walls are crumbling and some collapsing?
Trend spotting, distinct from forecasting, an unreliable and inaccurate “science” at best, is a tool to clear away the clutter and focus on more certain bets.
“But I’m just interested in getting my business to grow,” Carla said in frustration. “Don’t talk to me about trends. I’ve seen so many just come and go.”
What Carla was describing was fads, which are very different. We’ve all seen fads appear like night flies and disappear as quickly. Can anyone still remember low-carb diets, Doc Martins, digital pets and tongue piercing?
As business people, we need to find trends that are big enough and sustainable for a long time. We need to be like surfers looking for a giant wave or even a tsunami that we can ride on and on for a long time. We can’t catch shore dumpers that roll in, break and are gone in an instant. We need something more substantial.
The biggest and most obvious trend is economic growth. “But look where that is now,” Carla said. Even economic upswings sometimes only last up to three to five years. Nobody talks anymore about the “long boom”.
The problem is that economic growth is too big a target. If we are to become more effective in trend spotting, we need to narrow our focus. We also can’t merely look at different consumer or industrial markets and place bets on them. Just consider general consumer spending and see how it expands and shrinks.
We need to pinpoint exactly where we want to place our bets. Because much depends on it, our lives, our reputations our income for our families. Hindsight might be looked at cynically as a perfect science but it does give us insights. If you were to pick the most robust trends over the past 20 years, what would they be?
Carla took out her Moleskin notebook and listed her top five:
1 Home entertainment.
2 Health foods
4 Convenience foods
Videos and computer games have had a long run. Just imagine the owners of video stores– those who took a bet on the home entertainment trend. They are now in their second decade and are smiling, driving smart cars and wearing open-necked brand-name T-shirts.
“The question,” I said to Carla, “is what are the next trends?”
She frowned, looked at me with disbelief and said, “How am I to know?”
“I would read newspapers, magazines, reports, sift through the data, badger insiders until I see a pattern emerging.”
Carla came back to our next meeting with a list of what she believed would be the top five megatrends over the next few years. She showed me her list:
2 Green products and power
3 The senior market
4 Health and wellness
There were some that I would have liked to put on her list but I resisted the temptation. Personal computing had been a 30-year wave with many facets to it and had morphed into various forms up until today where we virtually have computers in our pockets. The Internet had spawned a new breed of businesses that seemed unimaginable only 20 years ago.
“These trends that you’ve identified are like rich veins of gold that will most likely be around for a long time,” I said. “Though we don’t have a crystal ball we can be reasonably certain that your list represents profitable areas for further exploration.”
Just remember that for some movements there will be a countertrend and further opportunities. For example, while people might like fast food and convenience today there’s also a slow-food movement gaining momentum. You won’t find the slow-food markets in the high-end retail spaces but look around in your city and you’ll find them in rehabilitated old buildings. A growing number of people, dissatisfied with the mass-produced food they find at their local supermarkets, are traipsing into these markets on weekends and stocking up on produce for the week.
Carla was excited. She was going to explore the area of pets and see if she could come up with an idea to make life easier for pet owners. “Just imagine the size of the market,” she said. “It’s growing and it covers millions of people. If I could just get something in there. What do I do next?”
Trend spotting and analysis is one of the ways to look beyond the obvious and find opportunities for the future that are sustainable and where you can focus for a number of years. A growing trend gives you much more substance that you can bet your future against.
The next step in any entrepreneurial business person’s evolution is to brainstorm and research a particular trend and see where your skills, inclinations, passion, passion and experience can be applied to either coming up with new products and services, educational materials, coaching, teaching, consulting, to serve the needs of the market. It’s also a good idea to look at some of the problems of consumers in these markets and see how you could better serve their needs. Take the cost of pet ownership. It’s not only about food but also veterinary services that are ever escalating. Pet insurance was one of the innovative products a few years ago to better serve pet owners by guarding against exhorbitant medical bills.
But what’s next? Whatever it is, markets are awaiting for new ideas to make consumers lives easier, lower the costs of ownership and to increase their convenience and enjoyment.
Trend spotting is a fundamental building block in the process of producing ideas for profit.
Copyright 2010 Bell & Cray Business Research™. This excerpt has been used by special permission from Bell & Cray Business Consulting™. Bell & Cray Business Consulting™ and Bell & Cray Research are both divisions of Bell & Cray™. All rights reserved. No part of this material may be duplicated or re-disseminated without permission.