Trends: Follow or flee?
8th February 2012 · 0 Comments
I’m not a “big trends” thinker. Maybe that makes me short-sighted, maybe that makes me focussed on reality. How much should you care about “trends?”
A lot of predictions are easy. In the next 10 years:
- There will be another “surprising” Black Swan financial market event.
- Mobile device usage will increase.
- “Old Media” will be consumed less.
- Attention spans will shrink.
- New companies will challenge the current guard of Google, Apple, Twitter, Facebook, and Amazon.
- India and China will grow in population and influence.
- The West will become more multi-cultural.
- Today’s technology will become cheaper.
- Tomorrow’s technology will be more accessible to more people.
It seems obvious to follow the trends, paddling downstream with the currents. Surely building a story around a “geo-mobile app with viral social gaming” stacks the funding deck in your favor. Go disruptive or go home!
But everyone else is doing that too. So you’re diving into an ocean of well-funded competitors, all steeped in the culture of “listening to the market,” willing to “pivot” into your space as soon as you uncover evidence of its viability, and fighting over attention and sign-ups with complete disregard to profitability or sustainability, which can come later, after you’ve cemented your growth.
That doesn’t sound easy to me — that sounds scary, and crowded, and risky.
So should you buck the trends? What if you pick a boring niche — even a dying one?
People selling first edition hardcover books are met with dwindling competition and joined with grateful customers who feel abandoned by the Kindle-driven online “book” industry. But the numbers of those customers is itself dwindling and few booksellers make enough money to keep the doors open.
Is that really better?
It depends on your aspirations. If you want a comfy, beloved little company where you can make a nice living, a “A cozy corner bistro on the Web” as Peldi wants Balsamiq Mockups to be, then ignore trends. Indeed, running in the opposite direction is an easier and less risky path, because customers are clear and under-served, perfect for a little startup to service.
But if you have the drive to be the next Twitter or GroupOn or the “Facebook of XYZ,” something big enough and important enough to enough people to generate a billion dollars in value, something that is #1 in its market, then you can’t look backwards; your path must be to follow the trends and duke it out with everyone else…
…except, once GroupOn is GroupOn, is there still another billion dollar opportunity in local group-based deals? To the extent that location-based “check-ins” is a trend, does it make sense to start now and challenge FourSquare? Even if you’re well-funded and have a fantastic team? Ask Gowalla.
No, the next billion-dollar opportunity won’t exactly fit any trend you see today, because the next “big thing” is a trend that’s not yet a trend. If you want to be the next Facebook, you can’t follow the wake of the current Facebook.
Too early and no one understands it. Too late and it’s obvious. It’s precognition combined with impeccable timing.
It’s Amazon selling books online just when everyone wanted to buy stuff online but before everyone believed shipping costs weren’t overwhelming. It’s Salesforce.com helping SaaS become viable before everyone trusted 3rd-parties with their trade secrets. It’s Twitter connecting the world with real-time mass mini-chat before everyone realized how tiny and fragmented our attention spans could become.
What’s the secret to manufacturing this combination of foresight, timing, and financing?
For the institutional investor, it’s a set of bets. Invest in two dozen ideas containing this sort of potential and a few might make the cut. Improve the odds by selecting products with traction backed by a team with the ability to both build and learn. Even so, venture capital has a horrible record in the past ten years — most funds don’t make good money. Still, enough do, and a small subset are able to do it consistently.
For the entrepreneur, there’s no secret. You’ve placed your bet, playing in a game with massive upside but almost certain failure. It’s not wrong per se, it’s just a choice.
If you won’t be happy unless you change the world, you have to bet. Consider the current trends but bank on a new one. In fact, invent one.
But if you don’t need a billion-dollar market cap to be happy and fulfilled, then perhaps it’s not wise to roll loaded dice and muster the chutzpah to claim you alone know the secret of the next global business/consumer trend.
Maybe instead you worry less about trends and more about having a strong opinion about the way your corner of the world should be, and see if you can find enough others who agree.
Chances are, some do.