Trends: Follow or flee?

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.

Am I being dismissive or small-headed? Let’s continue the discussion in the comments.

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  • http://twitter.com/SteeleRacing Nathaniel Steele

    Spot on.  The only item you forgot was to attach a link to Frank Sinatra’s My Way.  

  • http://matthewritter.net Matt Ritter

    Though you’re spot on about the difference between life at the forefront of a trend and in the ‘quiet bistros of the web’, I think there’s a third category that could be drawn around the new micro-opportunities that spin off of these titanic shifts.  

    For example, selling iPhone accessories in 2008 wasn’t an enormously prescient business, but the explosion in demand still happened too quickly for some large companies to take advantage of it.  Of course, the first mover advantage may quickly fade away as they begin to commit serious resources to the new market, but there’s value to being able to place your chips just after the roulette ball stops.

    • http://www.facebook.com/people/Matt-Sharper/100000807088310 Matt Sharper

      again so true!  bit like wordpress themes

  • http://blog.memberhub.com Matt Harrell

    I think this is good solid advice here. It almost even reflects the difference in west coast versus east coast startup scene. There are so many small-medium size companies now on the east coast in un-sexy markets that aren’t creating the next Facebook but are creating good solid SaaS products for industries and customers that care about relationship. 

    • http://blog.asmartbear.com Jason Cohen

      Yup, there’s 1000x more opportunities if you don’t need to be Facebook to feel successful and fulfilled.

      • http://www.ecgroup-intl.com/ Josh Roley

        On Bob Walsh’s recent poll on 47hats.com, the number 1 problem entrepreneurs face is coming up with an idea.  I think there are a lot of brilliant entrepreneurs sitting on the sidelines waiting for the perfect idea to come there way, when they could be tackling a myriad of smaller problems. 

        A lot of it depends on how you’re wired.  I am very content with the niche that we’ve carved out, working with great customers and enjoying a healthy work/life balance.  I realize that not everyone is wired that way. 

        Contentment really is the key.  Being content certainly doesn’t mean being lazy or you’ll get crushed.  But it does mean having a very clear understanding of what is important to you in life and pursuing that with a passion and with excellence. 

        • http://www.techhustlers.com/ MatchLites

          I totally agree Josh and people’s lives would be so much happier once they figure this out.

  • Anonymous

    Agreed!  This is particularly true if you are boot-strapping a new company.  Smaller niche markets are less interesting to large companies because they don’t offer the kind of growth the big players are looking for.  A million looks great to a boot-strapper, but not to a Microsoft or an Amazon.

    • http://blog.asmartbear.com Jason Cohen

      Right, not only looks “not great,” but they literally cannot attack that market because by definition they would lose money on it.

  • http://www.facebook.com/people/Matt-Sharper/100000807088310 Matt Sharper

    So true.

     there are more $10MM+ opps than billion ones

  • http://twitter.com/ricardodsanchez Ricardo D. Sanchez

    I am glad I am not the only one who thinks that way! cheers.

  • http://www.techhustlers.com/ MatchLites

    Jason, this is really a great post! It is seriously refreshing to see someone address the area of happiness. It is 100% about us finding out what makes us happy and how to focus on that above all else. I have to admit I hate feeling like I have to “go big or go home” because lately I am realizing that the efforts that it would take to accomplish this, is far too sacrificing to my four small children and my wife. I think what is far more important to me, is creating something different and original. I want profits but I don’t want to be focused on profit 24/7!!!!!!

    • http://blog.asmartbear.com Jason Cohen

      Family time is profitable too. Not all Value and inflows are monetary.


      Jason Cohen
      http://blog.ASmartBear.com
      @asmartbear

  • Derek Scruggs

    To me the only trend that matters is, do I like going to work every day? Is that trending up or down?

  • Dan Lucraft

    Didn’t Gowalla come before Foursquare?

  • http://broshegroup.com/ Leo Luis Salvador

    Nice point Jason, for those who are new in doing business it’s really catchy to get into trends since more prospect clients/customers are into it. I also agree that there some dangers in following trends in business, aside from having a lot of competitors, it will also make the customers thinks you’re business is just the same as everyone else. To me I prefer having a business which I really like doing and passionate about it. Lastly, there  are lots of coaches around every corner of the state to help you with your business. This is a good one. Thanks for sharing it!

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  • http://shaheen.georgee.ca/ Shahee Georgee

    Great breakdown! Thanks for writing this.