The secret to identifying critical new business trends
Written by Chris Barling
Friday, 16 July 2010 01:00
There are two mistakes that business people make when responding to new trends. The first is to blindly follow them and the second is to ignore them. After being around in business for a few years you can have the problem of being less enthusiastic and too cynical. However, the big advantage is that you experienced a few cycles, and can compare the hype with the reality.
If you blindly follow the latest trend, you miss taking the advice of Anatole France. He’s the one credited with saying “If a million people say a foolish thing, it is still a foolish thing”. For instance, the conveniently forgotten fact is that a lot of people, including many British, thought Hitler was great before he started the Second World War. A lot of people thought that buying dot com shares was a great investment. Too many people thought England could win the World Cup. It’s a very human instinct to feel safe in the crowd, but in business terms that’s just not enough.
Ignoring trends is equally risky. Some years ago I remember reading about Kodak’s new strategy to deal with the web. At the time, all of its money came from selling film. The new strategy involved people sending in film for processing, and then the digital images would be uploaded by Kodak to a web portal for the customer to access/download. I guess that it wasn’t politically possible inside Kodak to say that film was dead and the strategy was understandably a disaster. While Kodak eventually made a reasonable come back, the rest of us may not be so lucky.
When assessing trends, I think that there are three questions to ask.
- Does it make sense? I remember thinking that shovelling lots of sub-prime housing debt together to make “high quality” debt didn’t make sense, and I was right.
- What is the actual adoption rate, as opposed to the talk? Try to get some figures if you possibly can. Google can help you to see how many mentions something gets on the web, and monitoring this over time can be a great source of intelligence.
- Find out whether those that have gone with this trend have changed their minds, or have they become advocates for the new thing? If everyone who tries it hates it, it will never catch on, regardless of the hype.
I applied this thinking in 1994 to the technology area where I wished to start a business, and as a result chose the internet. When an investment manager from a well known firm of venture capitalists told me the internet was like CB Radio, I knew that he was talking nonsense. I was confident that the web made sense; I knew adoption was growing exponentially and I knew that those who went online stayed online.
It’s a simple formula. The good news is that you can apply it to almost any business or technology trend.
Chris Barling is CEO of ecommerce specialist. Originally published on BusinessZone.co.uk
