How Startups and Legacy Companies Can Both Cash In on Market Trends
What service or product can you provide to companies looking to ride the next big wave to sweep through a consumer market?
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Health seems to be on almost everyone's mind today and this was highlighted recently when New York City became the first city to require warning labels for salt.
When there is any major trend, smart entrepreneurs and established business leaders alike look for opportunities and the current focus on health is not only serving to slim down American waistlines, it has the potential to fatten up profits for a wide variety of companies.
Here's a great example of this symbiotic relationship:
- Consumers look for more simple and healthy ways to eat. The Paleo Diet is born.
- Busy schedules make it difficult for Paleo Diet adherents to create many dishes that require a wide variety of Paleo-compliant ingredients and above-average cooking skills; these include sweet snacks.
- Paleo Treats is founded and begins to market to this segment.
- The market is widespread, so Paleo Treats needs to ship products, and because the company sells food, the products need to arrive rather quickly. FedEx is a natural choice for a shipper.
- FedEx can benefit from the Paleo Diet movement if companies like Paleo Treats are successful.
- FedEx gives Paleo Treats a small business grant, hoping that it will become – if I can steal a line from "Casablanca" – "the beginning of a beautiful friendship."
To sum this up, if the Paleo Diet works for consumers, Paleo Treats has a good shot at long-term success. If Paleo Treats does well, FedEx also profits.
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There are a few lessons here. The first is that smart entrepreneurs are always keeping an eye on trends and finding the pain points they create. In the world of diets and health, for example, it can be difficult for average consumers to easily get the kind of foods and ingredients they need.
Americans are pretty famous for having a rather large sweet tooth, but creating sweets that adhere to the Paleo Diet guidelines isn't such an easy task, so there's opportunity there. Stephen Charles Lincoln, who founded The Protein Bakery in New York back in 1999, recognized the same thing but was inspired by different diet and health trends. He saw that the personal fitness, personal trainer and gym-membership movement created demand for high-protein products and later moved into the gluten-free trend as well.
The upside of marketing to these trends is that the playing field is, at first, relatively uncrowded. The downside is that many trends have a natural lifecycle and someday they start to wind down or at least level off. However, if there is a broader general category of your product or service – and the examples here have been healthy food items – you can pivot to some degree, as Lincoln has done by moving into the gluten-free area.
But maybe the most important lesson among the companies I've mentioned so far is how FedEx nurtured Paleo Treats, recognizing that if Paleo Treats grows, it's also a win for FedEx. If you don't want to bet everything on a rising trend, find a way to work with someone who is!
What service or product can you provide to startups that are looking to ride the next big wave to sweep through a consumer market? Even if you can't offer grants like FedEx does, perhaps you can tweak your pricing or the ways you serve clients in a way that benefits these kinds of startups and establishes their relationship to and reliance on your company.
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