Want to buy a tamagotchi?
Probably not, right? But in the late nineties, the digital pets from Japan were all the rage. Bandai, the company that made them, earned a fortune. Between November 1996 and March 1998, the company sold 40 million units around the world. Smaller businesses piled in, offering accessories that enabled buyers to take their pets with them or make them look cute.
And then as quickly as the boom began, it ended. Bandai was left with 6 million unsold units and huge losses. Accessory makers who had been slow out of the gate were left with nothing.
Trends are like bubbles of rising demand. If you can tap that demand, you can quickly inflate your profits. But if you dive in just before the bubble bursts, there’s always the risk that you’ll land on your face. Timing is everything.
So how do businesses keep track of the trends so that they can jump in at the right time, and earn from a new interest?
They look in a few directions.
First, popular culture and social media are a great source of rising trends. Business owners who want to make the most of new trends make sure they know what music people are listening to, who the big stars currently are and what those stars are doing. They also know what shows people are watching. what books people are reading, and what’s being discussed around the watercooler.
Those might not be topics that they themselves are interested in at all—though making the most of a trend is much easier if you love the subject. But they still keep up to date with what’s happening. The success of Funko Pop, for example, now lies in its ability to spot the shows and pop culture that people currently enjoy. But the success of the company as a whole is down to its ability to spot a single rising interest: in collecting.
“Funko identified a trend in pop culture as a whole, and then aggressively went after being a bigger player in that,” CEO Brian Mariotti told the Seattle Times in 2016. The company, which started after founder Mike Becker didn’t want to pay the thousand-dollar prices charged by collectors of Big Boy coin banks, had revenues of more than $500 million in 2017.
Social media influencers can help to keep track of trends in popular culture; they’re often the ones driving those trends. But there’s another source of trends for businesses that’s even more important: customers.
The way customers use a product, they way they talk about a product, and the features they ask to be added to a product all indicate the development of new trends related directly to that product. Mobile phone companies, for example, invest heavily in glass that can’t scratch and phones that can be dropped without causing damage. But customers continue to buy screen protectors and cases. Businesses, like Dodocase, that saw that trend happening early were able to ride that trend and have been able to continue riding it for as long as there’s demand.
Finally, it’s also possible to search for trends. Google Trends show what people are searching for online at the moment. Bear in mind that it’s always a snapshot of what people are currently want to know, and it only compares search levels not actual search volume. But it does show how trends and interests are rising and falling.
Making money out of a trend is always going to be difficult. But if you can identify trends that appear to show a long-term rise, contain plenty of potential value, and that you’ll enjoy exploiting, you could have a fun new way to build a business.