Dreaming of becoming your own boss? These five tips can help make your business “super.”
For every story of an entrepreneur who was in the right place at the right time to capitalize on a fad, there are probably 10 more about the poor guy who, after the craze, found himself with a warehouse full of product that won’t sell.
“It was popular for a while, but then no one wanted it anymore,” says David Choi, a Los Angeles-based entrepreneur and business professor, speaking of an acquaintance who bet big on a 1980s fad, the Rubik’s Cube.
Starting a business is a wager on the future. Sure, it’s possible to catch lightning in a bottle with a fad, and some, like the Rubik’s Cube, see a resurgence years after their heyday. But are you willing to pour your blood, sweat and tears — not to mention your money — into an idea that could fade as quickly as it emerged?
As an entrepreneur, you choose where to focus your efforts and resources. To be more than a flash in the pan, your business should address specific customer problems, offer solutions and latch on to trends that unfold over years and decades, not months.
Here are five ways to tell if your business aligns with a lasting trend:
1. You solve a problem
The annals of entrepreneurship are rife with solutions in search of a problem. It should be the other way around.
For example, Choi says, online shoe retailers solve a problem of selection and convenience by offering customers wide variety and home delivery. But a monthly subscription service that ships high-fashion shoes with a celebrity’s stamp of approval? That’s a tougher case, he says.
“Do you really need advice from [a celebrity] on what kind of shoe you want to wear?” asks Choi, who directs the Fred Kiesner Center for Entrepreneurship at Loyola Marymount University.
2. You have a strategy to find customers
“Early adopters” are consumers who jump on new technologies and whose early buy-in can influence those in the mainstream. They’re great customers in the beginning, but they shouldn’t be the only ones, says Joe Foxton, a New York entrepreneur who runs an online-marketing firm and mentors startups.
“These people just love to be the first to latch on to a new idea, but they can be flighty and fickle,” he says. If your early adopters move on to the next thing before you can tap into a broader market, your sales could fizzle fast.
Customer acquisition is no small task. But as a start, Foxton advises, your business should address the demands of more mainstream customers and make it easy for them to add your product or service to their current routine.
3. You tap into big underlying trends
Some view subscription boxes as a fad. But Charlie Ritchie is bullish on his business, a specialty-tea subscription service called Tea Runners, because it’s supported by strong underlying trends.
High-end, exotic and rare tea varieties are a small but growing segment, the Tea Association of the U.S.A. says. Meanwhile, Americans are increasingly shopping online, analytics firm comScore notes.
Ritchie, whose business is based near Vancouver, British Columbia, doesn’t think about the big market trends every day. Still, they form a foundation for his strategy: to make high-end tea easier to try for those who don’t already drink it.
“I like tea, and I like the opportunity in this space,” he says.
4. You think long and broad, not short and narrow
Fads happen over months or a few years and typically are characterized by the intense interest of a relatively small group in a narrow set of products. Trends build over years or decades, unfold across different industries and affect broad swaths of people.
Choi points to the rise since the 1990s of craft beer. He attributes it in part to the shifts in Baby Boomers’ priorities toward quality and taste over quantity and standardization. Those changes sparked a proliferation of craft breweries, which differentiated their beers from the less flavorful mass-market brews that dominated the industry.
Trends related to the aging of the Baby Boom generation also influence many other sectors — autos and health care, to name two — and don’t seem to be letting up.
5. You see competition as a good sign
Conventional wisdom holds that it’s best to be the first mover in a market, but the lack of serious competition can be a red flag, Foxton says.
If others have determined that a trend is worth investment, it can validate your idea. At the very least, a successful similar product may be a sign that your idea is more than a fad.
“You can’t imagine a new use case that doesn’t exist unless you’re Steve Jobs,” Foxton tells entrepreneurs he advises, “and you’re not Steve Jobs.”
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Andrew L. Wang is a staff writer at NerdWallet, a personal finance website. Email: email@example.com. Twitter: @andrew_L_wang.
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