Key Sentence:
- Predicting and trying to understand what future products also services will look like is the holy grail of any business.
- Knowing what lies ahead will give a person or company a considerable advantage in this market.
Asked by the industry how Steve Jobs had such a strange understanding or instinct for what consumers needed afterward, he said, “You can’t connect the dots with impatience; You can only relate to it by looking back. So you have to believe that somehow in your future, the dots will connect.
So if you want to know where an industry or even a product is going, you need to collect “points” of information that, combined, give you an idea of where it’s going.
Let me give you an example. In 2010, I met a serial entrepreneur researching various industries that he says are undergoing dynamic change. More specifically, he’s attracted by the dog food industry’s combined annual sales of $26 billion, about 5% annually for 50 years, even though several recessions.
First, he noticed the growth of stables and hotels.
Then he saw how many people bought more dogs. He studied these new dog owners and found that they treated them very humanly, almost like their “first child.” Finally, he noticed that the owners of these younger dogs were interested in health, travel, and healthy eating. More specifically, eat natural or organic foods.
By setting the “points,” he predicts that the organic dog food “niche” will increase over the next ten years. It worked, from humble beginnings of less than $90 million in 2010 to more than $8 billion in 2020. The launch of its organic dog food is going very well.
So if you want to know where a potential industry can go, earn points. First, earn previous points by viewing historical sales or product developments. Then start exploring the current issue by looking at people, trends, markets, etc. Here is some insight into what points to earn and how to get them.
Understand your current and potential customers.
The excellent news about researching existing customers is that there is a wealth of data about the demographics, psychographics, and trends they manage. After your research and analysis, ask yourself the following questions: Which customer group is missing in this large segment or industry? Where are you now? Why are you not in this market? What do you need to become a customer?
Understand your industry. If you’re looking to start a business in a specific industry, you know that. Get all analyst reports. Check industry trends and trends that might change them. Discover the first three companies that are currently leaders in the industry. Then look at the last three companies that received some Series A venture capital and entered the industry. What do you do differently?
Watch for trends. It’s funny how you meet entrepreneurs and small business owners who are doing well right now, but when you ask them about a potential movement that could change their industry, they look you in the eye in bewilderment. This most often happens when their business is doing well, focusing on keeping their current product or service growing.
They don’t even see emerging trends or hear their customers “talk” about things that will disrupt their business. Think of companies that have never heard of or noticed trends and changes in their industry, such as Blockbuster, Kodak, Kmart, Pier One, Soup Plantation, Brooks Brothers, GNC, etc.
Visit your race. Your competitors can provide a lot of information.
Sign up for their newsletter, set up Google Alerts for their brand and all significant products, visit them when they are physically present. The goal is not to imitate them. What you are looking for are vacancies that have been created that allow you to sign up with new products or services for your existing customer base.
Which industry are you interested in? Analyze back ten to fifteen years and sketch the evolution of the product or service—overlapping trends and changing customers. Based on the collection point, what are the three most logically closest possible new products or services? If you are interested in any of them, look at the opportunities as these could be potential companies.