So what does the high school generation want now? Understand trends to give them what they want … [+]
Trends exist whether you see them or not, and one of the best ways to look at the importance of trends is related to something Steve Jobs once said: “You can’t connect the dots when you look ahead; you can only connect them backwards. So you have to trust that the dots will somehow come together in your future.” The interpretation could be to explore past trends, add people and market variables and future trends, and maybe you can create an innovative product or service. As a current or aspiring entrepreneur, you really need to look for and follow trends as you may be raising money, hiring and building a business that has the potential to grow with the trends.
The key is to understand that multiple trends are happening at the same time. Some are macro trends that can span entire industries, marketplaces, or even people. Some are microtrends. An example of this is electric vehicles. A microtrend within that industry could be the emergence of autonomous software. The pet care industry is selling more dogs to a millennial marketplace waiting to have kids and here comes organic dog food and pet insurance. And so forth. The good news is that you can learn how to spot trends and create your own “set of points” that will give you insight into emerging macro trends and potential micro opportunities to create next-generation startups.
Here are some insights to help you identify and analyze trends better.
Understand the difference between trends and fads. Trends have long, deep legs and can last a long time. Think smartphones and laptops, maybe even farm-to-table food. Fads appear for a short time and then disappear. They may even reappear for a next generation several years later. Think tie-dye t-shirts and wide-leg jeans. Don’t confuse the two. It is very difficult to build a business on a whim.
Macro trends can be global. If you see macro trends in computing, health care, climate, food, or even entertainment in the United States, chances are those macro trends are happening to varying degrees around the world. What is interesting for entrepreneurs is that it may be easier to establish the start-up company in a place where the trend is early and fast and there is little competition. So pay close attention to where trends surface and whether that region can provide a competitive advantage.
For every macro trend, there are several micro trends. While the pandemic wasn’t much of a trend, it did create a huge macro-trend for working from home that fueled several micro-trends, such as buying more webcams for Zoom meetings and chairs for home offices. It also accelerated the food delivery trend. Believe it or not, masks were actually all the rage, as they’re now in a huge retreat. If you invested and built a mask factory in 2020, you probably made some great income in the short term, but that factory is standing still today.
Follow real leaders and not influencers. This one will be challenging for Millennials and Gen Z who seem to get their “news and insights” from social media and influencers. The problem with that is that the information is only new for a short period of time in the now and doesn’t really look ahead to the future. Moreover, most influencers are not experts. You need to cultivate better sources of information and start making a “leaders” list of people you follow (not as influencers but as experts) as they build forward thinking companies or have always known when to run their business to be successful . And when you make your list of leaders, read all about them, read all their interviews, all the books about them, listen to them in earnings reports, set up Google Alerts on them and their companies, even their competition.
Everyone has an opinion, so follow the data. They say it takes 10,000 hours to become an expert at something. One thing you can do is surround yourself with experts in an industry you care about. Care for dogs? Then grow pet food, pet grooming, pet health care, pet kennels and even a vet or two business executives. Know what’s happening in the industry from a variety of sources to give you insight into what’s coming next. Second, no matter what anyone says, follow the data. If somebody says something, don’t believe it; verify it yourself. The nice thing about data is that it doesn’t lie. It’s just like that.
Listen to what customers are saying. Many entrepreneurs who get too close to their product or service like to believe that they are the customer. That is, they think they know exactly what the customer wants. Know this, you are not the customer and while the customer may not always be right, they are never wrong. Never wrong as by not buying your product or service if they are not convinced of the benefits. So spend time on customer forums online, listen to chats and complaints on social media, read reviews and, if possible, visit customer environments and observe them as they buy or try products. You can never have too much personal customer insight.
Read many trend reports. Internet is a beautiful thing. Search for “Gen Z” and you might get industry or trend reports from McKinsey, Deloitte, E&Y, Statista, and so on. Why create your own data or voice your opinion when these powerful reports contain so much good data, trend insights and future projections? These kinds of reports are your friend. They don’t always have the exact answer you’re looking for, but they substantiate or eliminate the noise you may be hearing. And by linking different sources of reliable information, you might be connecting your own dots to give you valuable insights that could lead to a great startup.
