One of the great things about my job is that I get to meet with people who are making or are looking at making that first step into entrepreneurship. They are energetic and excited about the possibilities entrepreneurship opens up for them and are VERY eager to get started.
My job then becomes encouraging that excitement and exploration but also working on unpacking their idea and why they are pursuing it to identify how best I can help them. I’ve met with hundreds of entrepreneurs in the time I have been in my role, and I'm in no way an expert in all facets of entrepreneurship. That being said, the ones who keep coming back and are eventually successful, are those that started a business that fits with who they are versus chasing an opportunity or trend.
Bitcoin, Blockchain, CBD, “the Uber of…”, these are all trends that have had their few months of hype, and with-it birthed hundreds of startups trying to cash in on the trend in some way. If you check back on those companies in a few months, many of them do not exist. There are many well-researched reasons why this is true and why so many people fall victim to chasing a trend. Here are a few that I see every day:
1. The Lure of Success
The first reason is that they see that some people are successful. In other words, they are chasing the money. Usually, there is some high-profile event, acquisition, or policy change that kicks this all off. In the months leading up to Canada’s legalization of Marijuana, I felt like every second meeting I had was related to Cannabis or its derivatives in some way. It is not to say that no one can be successful if they are trying to capitalize on a trend; however, I can think of only 1 in 50 entrepreneurs from my network who made substantial progress. The successful entrepreneurs were also individuals who had more than just the idea to capitalize on a trend. They had knowledge of the industry, they knew their customers’ needs very well and had the skills and leadership on their team to deliver a product that did exactly what they needed. Companies like that will do well regardless of the trend.
2. It Looks Easy
Another reason is that a trend makes the business opportunity seem like low hanging fruit. I’m used to hearing, “If I just set up my website, I know people will buy it” or “If I just order 500 of these from my manufacturer, I know they will sell out!”. The frenzy that a trend creates makes people throw fundamentals out the window. I find this reason behind pursuing a trend exciting because often, what it tells me is that the person is eager and passionate about being an entrepreneur and is looking for the easiest way to get there. I can work with that. It also tells me that the person is a little risk-averse. The excitement of a hot trend creates that low barrier to entry by providing a false sense of assurance that there is a market begging you to put up your website so that they can buy from you. In reality, most of these entrepreneurs miss the mark on the value proposition and spend money on ads that are on-trend but do not resonate with their target market.
3. The Need for Speed Leads to a Commoditized Market
Missing the mark on the value proposition is also a byproduct of another reason you only get so far when you chase a trend. You feel like you are in a rush and have to be first to market. I call it “the need for speed,” and yes, people roll their eyes when I say it. Thousands upon thousands of people try to capitalize on a trend when it comes around. That means thousands upon thousands of people are essentially offering very similar or sometimes the same thing as you.
A trending market very quickly becomes commoditized and leaves nothing to compete on except price and questionable claims to quality.
A trending market very quickly becomes commoditized and leaves nothing to compete on except price and questionable claims to quality. Again, some are first to market AND among other things, knew the industry, they knew their customers’ needs very well and had the skills and leadership on their team to deliver a product that did exactly what they needed.
4. They Don't Care Enough
The most significant drop-off in entrepreneurs chasing a trend is when life around them gets too busy, or they've reached a seemingly insurmountable challenge with their business. People who start a business following a trend got into it for reasons that do not set them up well for adversity. If they are expecting easy and fast money, they don't do well when the unexpected occurs. Their most common solution? Quit. You can't blame them either. Their only vested interested in pursuing the opportunity was money. On the other hand, people who have created a business on the foundation of something they genuinely care about will find a way to overcome any obstacle. A mission or vision motivates them instead of a quick payday.
...people who have created a business on the foundation of something they truly care about will find a way to overcome any obstacle.
All that being said, sometimes I don’t care and let them at it
After a few paragraphs of what I am now thinking sounds a little negative, I will admit this; sometimes, I don’t care and throw fundamentals out the window. It is not my preferred approach, but on occasion, I come across an entrepreneur who is so ready to "get after it" (pronounced "stubborn") and understands that it might fail but wants to try and has nothing to lose.
There is so much entrepreneurs can learn from failure. For one thing, they have started something and overcame their “failure to start.” Whether it fails a week from now or in 1 month, if they approached it correctly and did not have much on the line, they at least got a taste for entrepreneurship and may never go back to a regular job. That is a win for me. They also learned so much along the way. Just from trying and failing, they are exposed to marketing, operations, sales, and managing a team in a way that you do not get in many other jobs or the classroom. You do need to be smart about it, however. You can get very far in this space without spending a dime (some more on this in the future), and it's this failing that I preach, the one that loses you nothing but maybe some time. If you learned something along the way, then that was time well spent. Often, these gritty entrepreneurs who want to pursue this challenge, pivot into another area or find some way to make the trend work for them. These instances occur once in a blue moon, but they go on to do amazing things.
The ultimate truth is that businesses that are formed on the foundation of a trend are not here for the long-term, and neither are their founders. Eventually, the next trend comes along, and all of those people are running to sink their teeth into a small slice of the pie, leaving no one to grow and nurture the previous business. So take a moment to pay your respects to the "hoverboard" and "silly bandz" and find comfort in knowing that CBD infused Mayonaisse is only here for the short term.