Everyone has heard the term "megatrends," from the John Naisbitt bestseller of the same name. A megatrend is a large, overarching trend with major implications for individuals, companies, and governments throughout the world. By the time something is a megatrend, lots of entrepreneurs have glommed onto it and competition rises.
John H. Vanston, chairman of Technology Futures Inc. and author of the book Minitrends: How Innovators & Entrepreneurs Discover & Profit from Business & Technology Trends," contends there's gold in the hills for entrepreneurs who can spot opportunities and act on them before they go mega.
A minitrend, Vanston says, is an emerging trend that has evolved to the point that reasonable projections can be made about future developments; has the potential to be of significant importance in the next two to five years; and is not yet recognized or appreciated by the general public or most organizations.
How does a minitrend differ from a megatrend in actual practice? Here's an example: "Everyone is aware of the need for clean energy," Vanston says. "This is a megatrend. Wind can provide such energy. Again, this is a megatrend because it does not present a specific business opportunity. The wind is quite unpredictable in terms of strength, direction, and continuity. Therefore, there is a need for equipment to address these challenges. This is a minitrend, and American Superconductor, Inc. has established a very profitable business in manufacturing, selling and operating such equipment. Eighty percent of its sales of the equipment, by the way, are in China."
There are plenty of companies already succeeding in leveraging minitrends, Vanston notes. "In San Bruno, California, in February 2005, Steve Chen, Chad Hurley, and Jawed Karim, noted the increasing capacities of digital electronics, particularly in cameras and cell phones. They noted the growing ability of individuals to produce short film clips. They perceived a business opportunity in providing a method for individuals to distribute these film clips and for others to download these clips. Based on these factors, the three entrepreneurs founded YouTube."
Here's another example: "In the late 1990s, Romi Haan, a young Korean wife and mother, frustrated by the time and effort required to keep the floors in her home clean and sanitary, decided to develop a steam mop, "Vanston says. "This mop uses high temperature steam to loosen and wipe away dirt, kill germs, mites, fungus and E.Coli from any hard floor surface. To produce and market the new product, Ms. Haan established the HAAN Corporation, which had revenue of more than $100 million in 2008 and has now expanded into the United States".
Of course, pouncing on a minitrend doesn't guarantee success. The Sharper Image was founded in 1977 as a catalog business selling jogging watches. Later, the company moved to retail outlets, specializing in high-end electronics and special-interest gifts and featured open sales displays where potential customers could easily browse and closely inspect the products. At its height, Sharper Image had retail outlets in 184 locations throughout the United States. "Sharper Image remained alert to emerging trends in both its product lines and sales processes, and as a result its business remained successful for more than three decades. But they failed to appreciate the public's decreasing interest in high priced luxury items, the aggressive pricing policies of big box competitors like Best Buy, and the general decreases in large mall shopping. In February 2008, the company filed for Chapter 11 bankruptcy. Sharper Image failed to see the minitrend bullets coming from unexpected quarters," Vanston says.
So, how do entrepreneurs discover minitrends? One way is to analyze consumer frustration. "In 1997, Reed Hastings was dismayed that he was being charged $40 for the late return of a movie. On his way home he stopped by his athletic club and, while there, he noted the club's business model. People paid a monthly fee to the club and were then entitled to use the club's facilities as much and as often as they wished during that month. He thought this model might also work in the movie rental business. Customers would pay a set monthly fee to keep a certain number of DVDs for a long as they wish, thus eliminating a late fee. This was the genesis of NetFlix."
Minitrends are all around us, so how do you choose the one you're going focus on? Here's Vanston's advice: "Individuals considering exploitation of a given minitrend should concentrate on those in which they have a personal interest. Those which will provide them with a sense of involvement and satisfaction, one that piques their curiosity, and, if possible, one that can provide ancillary benefits such as relevance to the job."