How to Make Money and Survive in the Trendy Business
ntrepreneurs interested in venturing into a trendy business often ask questions, like: When's the right time to jump into a trend?
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Novelty business enterprises are justifiably attractive. Besides, they can be exceedingly money-spinning. These trendy businesses are designed to meet demand, wooing new customers with just a little bit of marketing. And if it works, such ventures can last for many years -- existing long after they stop being cool. Entrepreneurs interested in venturing into a trendy business often ask questions, like: When's the right time to jump into a trend? And how one can survive after the trend becomes a pass?? The answers remain same -- every business must consider: timing, location and, most importantly, the business owner's ability to predict and act according to their customers' varying requirements.
Here is more from the industry players:
Clayton Menezes is an entrepreneur and runs a branding company called "Start Tall Branding Solutions Pvt Ltd". According to Menezes, Trendy businesses are always known to hit the bull's eye of people's core tastes. It's like finding a person's ticklish spots. When the person no more feels tickled on one spot, you move to the next. He cites the instance of Chumbak and says, "Chumbak, a popular and fast-growing souvenir brand in India, entered the Indian market by selling unique fridge magnets that became so popular that the company grew by leaps and bounds. Soon it was selling mouse pads, mugs, keychains, and several other handy merchandises with a unique piece of Indian art that depicted everyday life in India.
What exactly made the company so successful? Chumbak didn't invent fridge magnets. It just made them look awesome!" Clayton further believes that the people who take the risk of setting up trendy businesses aren't always looking to set the trend in a particular niche. On the contrary, they are more interested in moving ahead of the game before competition saturates their efforts of being the coolest business in town. Constant innovation is the key to surviving the race of business plagiarism and the diminishing marginal utility of the trend.
If you are one among those people who wouldn't mind getting your hands dirty to set up a trendy business, here are a few key points by Clayton Menezes to make the maximum profit and survive a trend apocalypse.
Get a trailer home, not a villa by the sea!
Setting up a business that can go viral means that there will come a time when people will turn to something else that's more innovative or fun than your product or service. Say no to perfection. Say yes to constant innovation. For example, if you are setting up a business where people can barter clothes online, don't wait to be funded before you can create a social media buzz about your website and earn your profits through the hype. Who knows if the idea will succeed or fizzle out in a few years or even months?
Don't cry "My Baby." Just produce more.
Businesses that are based on trend must innovate or will face the fate of Nintendo, if you know what I mean. You've developed a fashion app that helps people discover styles that suit their body type, and you're running a million downloads in just a month? Excellent! But if you sit still, basking in your glory, getting famous through PR, then expect it all to be short lived. If you do want to continue making money, you will have to climb the stairs of innovation. There's just one problem, though--there might never be a top stair, unless you want to come out of the vogue style of business onto something more stable.
Be the Pied Piper of Hamelin, not a critical idiot.
Play your tune, tell stories, keep the crowd following you. Whether it's a hybrid coffee liquor cum clothing house or The Avengers merchandise, your product or service must tell a story. Trends are set by stories. They are invented. They don't just come into being by setting up a shop and waiting for customers. Use social media and internet virality to your benefit. Don't wait for your business to look like the crown of Queen Elizabeth before you yourself are convinced about the feasibility of it becoming a successful venture.
Sow in variety and reap its benefits.
Setting up a business that runs on people's fancies than their core needs, calls for entrepreneurial wisdom. Invest into several relating ideas and see which one pops. By doing this, you can ensure that if one comes crashing down, you still have the others to keep money flowing into your pocket. In short, being flexible is the key to keeping a business in vogue running even after the trend begins to die down. Whatever the trend-based business, blind dinners, cotton candy, paintball arenas you can keep the money coming in as long as you learn the art of wooing customers. It's like playing with Lego. You use the same building blocks to create a variety of structures, all of them as amazing as the first one.
Tanay Desai and Vinay Pillai are the Co-Founders at Dekkho, a disruptive video streaming service in the Indian sub-continent. Tanay leads overall growth, business and content strategy, core partnerships, and is also responsible for finance/investor relations. An expert in the field of video tech, product lifecycle, and advertising strategy, Vinay spearheads the product, operations, and marketing verticals at the organisation, and also oversees business and content strategy.
Catering specifically to the diverse entertainment needs of Indian viewers, Dekkho is a disruptive new-age video streaming service which allows its users to watch free, high-quality, multichannel premium content with advertisements. Headquartered in Mumbai, the platform aims to curate and showcase content close to its users' hearts to enable a seamless access to the most relevant entertainment solutions, anytime, anywhere. The end goal is to become the default destination for all online video-based Indian entertainment content across Android, iOS, and web platforms.
Here is what they shared-
Users will flock to one destination with superior technology and content diversity
India is at that stage where Netflix and Hulu were while conceptualizing aggregation. We've already seen extensive activity prior to Netflix and Amazon enter this segment, with production houses and their OTT portals such as Voot, Eros Now, Sony LIV, TVFPlay and Hotstar. The paradigm of identifying the 'default' video-streaming platform has been an ongoing debate. Dekkho believes while their portfolios have a substantial advantage over others in terms of in-house content, users will eventually want to flock to one destination with superior technology and content diversity supplemented by strong curation.
Dekkho aims to establish successful partnerships with all production houses while providing sustainable digital revenue streams. It is difficult to recover production costs through a digital-only model in India. We see OTT's success in decoupling content production and broadcasting. Digital monetization has long been a discussion in the Indian content industry. Disruption has become a clich?d term in the OTT segment. While customer experience and engaging content is our core value proposition, there is much more to video. We are here to create a profitable business in the long run.
Popular soap operas beginning with Hum Log in 1984, emanated a new era of programming at Doordarshan. A logical derivation from this was that premium production could garner a loyal audience, generating exciting avenues for monetization around their content giving rise to television advertising. The messaging supported by Hum Log marketed a new consumer product - Maggi Noodles.
The resulting adoption of the product communicated the effectiveness of advertising on premium content. We want to replicate this success on digital and create a relevant and enticing three-way ecosystem for the user, content producer and advertiser. In 2016, we saw digital advertising spends in the US reach $72.09 billion, exceeding the $71.29 billion spent on television for the first time ever. Today India has 220 million smart phone users, second only to China with under 30% of the audience possessing a device. This enables us to reach out to a large, albeit growing audience through premium video content.
Higher ad spends on digital than on television
Today digital advertising is a significant component of marketing spends, and typically captures about 15-20% for an FMCG company. Similar to mature markets such as the US, India will also move to higher ad spends on digital than on television.
We aim to move content consumption from cable television to smart devices as a primary choice. Production houses that have an OTT business are positioned as a value-add service rather than a primary destination. Given the penetration of TV in India, these companies have an on-going legacy cable advertising business and are in no hurry to disrupt it for the better, more intuitive and quantitative form of advertising that digital video brings along with it. Dekkho, on the other hand, solely focusses on this disruption, while aiming to become the default online destination for all video in India" said Vinay Pillai, Co-Founder at Dekkho.