Capture new trends
One of the most dangerous phrases in business is, “We’ve always done it this way.”
This mindset is one of the reasons companies like Borders, Sears, Ward’s, Kmart, Control Data, and Digital Equipment Corporation (DEC) failed. Their CEOs failed to pivot and take advantage of new trends, and they paid a heavy price. DEC’s Ken Olsen even called the new personal computer a “toy.”
Why this revolutionary emerging trend matters
Emerging trends can be revolutionary or evolutionary.
Evolutionary trends can be adapted by established businesses to grow. For example, AI, an evolutionary trend, is being used by established businesses such as Microsoft and IBM.
· Revolutionary emerging trends like the PC and the Internet disrupt existing business models, destroy old companies, and enable entrepreneurs to build new giants.
Emerging trends can make or break fortunes. Nearly every billionaire entrepreneur, from Andrew Carnegie to Robinhood’s Vladimir Tenev, made their fortunes by capitalizing on emerging trends. For the past 40 years, Silicon Valley has thrived on emerging trends. But with every success in Silicon Valley, there is destruction left in its wake. For existing businesses, the reality is harsh: master the emerging trend or perish.
Based on their skills in emerging trends, executives can be categorized into three groups:
#1. Victims of the trend: Failures.
These are mostly CEOs of companies like Ken Olsen of DEC and Bill Norris of Control Data who failed to pivot from old outdated trends to dominate new ones. Their old assets, costs, skills, employees and technology became liabilities. In contrast, some founder-CEOs have successfully pivoted. Examples include:
· Bill Gates moved Microsoft from DOS to Windows and the Internet.
· Steve Jobs was able to transition Apple from the old PC model to smartphones.
#2. Trendspotter: Trailblazer.
A trendspotter is a pioneer who detects a potential trend by developing the first product (or service) based on an emerging trend in technology, market, or industry. Then, they jump on the trend and start a business. To analyze a trend, a business owner needs to understand the cause and impact of the new trend, as well as the process and impact of launching a venture on a new trend where old rules and advantages do not apply. In recent years, technology has been one of the biggest drivers of trends and unicorns. Personal computers and the Internet have changed the world. Many people have made fortunes by spotting trends and using their skills to launch ventures. Spotting trends is the main characteristic of a “pioneer.” However, only 11% of pioneers became dominant.
#3. Trend Master: The Wise Ruler.
Trend masters are usually not pioneers, but smart pioneers: they read the emerging trends and dominate them primarily by improving on the pioneers.
· Returning to Apple, Steve Jobs mastered new trends in music platforms (iPod), smartphones (iPhone) and tablet PCs (iPad).
· Sam Walton wasn’t the original promoter. He started the trend of big box stores by opening stores in rural areas, and then in urban America.
· Bill Gates wasn’t the original promoter. He got in early and dominated the personal computer industry by signing a very lucrative contract with IBM.
Page and Brin didn’t pioneer internet search. They built a better search engine.
· Bezos wasn’t the first retailer on the Internet, but he was the best.
· Zuckerberg wasn’t the first person to bring people together online, but he first focused on students and then expanded to dominate everywhere.
My take: If you’re a new or growing business, become a trends master. Find the emerging trend that works best for you and dominate it. This strategy has been key for almost every millionaire entrepreneur.
