Spot the Latest Trends
Once upon a time, yoga was a purely spiritual practice. Although this remains true for traditional practitioners, it stands to reason that today's breed of yogis is decidedly different--with decidedly different gear to match. "They're not necessarily deeply spiritual, but looking more to do yoga as another form of exercise," says Jennifer McKinley, co-founder and general manager of Plank, a Charlestown, Massachusetts, maker of chic, high-end yoga mats, totes and other accessories. Launched in 2005, the company projects sales of $750,000 for 2007.
Plank is but one example of a company that spotted a trend--yoga enthusiasts who want more than a muted blue mat on which to pose--and acted on it. Part art and part science, this kind of trend spotting is truly the key to entrepreneurial success. The good news: It's not as difficult as you might think.
"First, understand that current events form future trends," says Gerald Celente, founder and director of The Trends Research Institute in Rhinebeck, New York. "If you keep up with what's going on socially, environmentally [and] with business and consumers, you can see that all things are connected."
The art part of this is that you need to be creative in your thinking, and anticipate what consumers will want not only right now, but also years down the road. The science part is that, while you don't exactly need to walk around in a lab coat, you do need to treat your environment like a lab, where you're constantly making observations and discoveries. Follow the steps we've outlined below, and you'll be well on your way to identify-ing a trend that could turn into a successful business.
Distinguish trends from fads. "When deciding to adopt one or the other, it's important to know the difference," says Nancy Trent, president of Trent & Company Inc., a New York City PR firm specializing in building health, beauty and fitness brands.
Essentially, anything that has staying power is a trend. It has social, political and economic significance. It develops gradually and follows a sequence of events. Fads, meanwhile, can come and go in a flash. (That isn't to say you can't start a business based on a fad. See "Absolutely Fad-ulous" below for help determining whether this is the route for you.) If a trend is what you're after, though, Trent has a simple acronym to help you nail down one that's worth pursuing.
Time: Trends don't happen over-night. "Yoga is the oldest trend in history," says Trent. But yoga has become so well-accepted that it's now mainstream--hence the story of Plank.
Roots: "Because a trend is developed in a wide variety of ways, it develops roots," explains Trent. Trends won't vanish even as they evolve, because their roots are deep and intricate.
Everywhere: A trend will slowly sprout up in different places. After a while, you'll see it all over the place.
Nonstop growth: Trends keep building slowly, never stopping their growth. "A trend isn't going anywhere--it will be there for a long time," says Trent. In contrast, she says, "A fad won't last."
Durability: Trends are strong. Unlike fads, they don't weaken as they become mainstream; they only become stronger.
Make observations. "You always have to be on the lookout," says Trent. Read newspapers and magazines, especially from the East and West Coasts, where trends are often born. Go online and read blogs. Watch TV--not just the news, but popu-lar shows. Talk to teenagers; they're especially in tune with trends. Look to companies like Wal-Mart to see where their profits are coming from. Basically, do anything you can to stay on top of what's hot and what's not--and what will be in the future.
The key is that you can't only pay attention to industries that interest you--because, as Celente says, everything is connected. "It's one of the big mistakes [potential entrepreneurs] make," he says. "Opportunity misses those who view the world through the eyes of their profession."
Obey the rule of threes. If something gets written or talked about in the media at least three times, "then you know it meets the initial criteria for being a trend," says Trent.
Remember, however, that you need to know the demographics and needs of your particular market. Look for the patterns that are happening locally, and ask yourself whether they make sense. "If it's something you need hot weather for, it's not going to work in Alaska," explains Trent.
David Lobel, founder and managing partner of Sentinel Capital Partners, makes it his business to look for those patterns and understand market needs. Just in the past several months, his New York City private equity investment firm has purchased several businesses that are taking advantage of a powerful trend: catering to the aging population.
Lobel says the trend is obvious even to the casual observer. "I don't have to do a lot of deep thinking to figure out that this is a [good idea]," he says. Indeed, a simple Google News search for the words aging and population together produces more than 4,000 results. Not all the results are relevant, but this helps demonstrate that the trend is a no-brainer. What patterns are you seeing in the media?
Be your own trendsetter. Why not be the one analyzing the market and looking at changing needs? You can be the apparel manufacturer determining what to manufacture, or the children's business creating the next great learning toy. Anticipate what lies ahead, and you'll always be in business--even as the trends change in your industry. "Spotting is [seeing] what already is," says Celente. "Forecasting is [seeing] what's going to be."
In addition to being active yogis, McKinley, 41, and partner Doreen Hing, 39, did plenty of research to determine that there was a market for people like them who wanted to assert their individuality in yoga class. But that research didn't end just because they successfully identified the trend. "We try out all different kinds of yoga," says McKinley--everything from naked yoga (yes, naked) to hot yoga (done in a heated room). And with product development, it comes down to items that she and Hing talk about and say, "I wish I had this."
The beauty is that it's within your power as an entrepreneur to act on trends you spot. You're in control of your own destiny. So when you see a trend coming, you can plan for it and jump in when the timing is right, without any bureaucratic baggage. "Entrepreneurs can actually outflank many large businesses," says Celente, "because the bigger the businesses are, the slower they move."
There are some subtleties to trend spotting--the primary one being identifying trends vs. fads. If you think you've spotted a worthy fad, you may have a worthwhile business. But you have to be prepared to act quickly and move on when the fad has run its course. "To be successful in a fad business, it's all about timing," says David Lobel, founder and managing partner of Sentinel Capital Partners, a private equity investment firm in New York City. "You have to get in early enough and get out before it's too late."
Deciding between a trend and a fad business largely depends on the kind of business you're in. Apparel companies create fads all the time, with great success. Most important, don't assume a fad is business-worthy just because you have a good feeling about it. "That path is littered with companies that failed miserably," says Nancy Trent, president of Trent & Company Inc., a New York City PR firm.
Instead, research your idea and test it on your target market as you would with any trend or business idea. In fact, many of the same principles of trend spotting apply to spotting fads--just in a much shorter time frame. "People have made fortunes on fads," says Trent. "It [takes] a cost-benefit analysis." How much will it cost you to get in? How much can you make? If it's likely to be a short-lived fad, how will you get out? "On the other hand," says Trent, "you can keep a fad going if you're waving a blanket at it and stoking the flames."
Karen E. Spaeder is a freelance writer in Southern California specializing in small business and education.