Every year brings an increasingly overwhelming tsunami of stuff. Whether it’s NFTs, crypto, the Metaverse, Pokemon Go, flossing, planking, dabbing, twerking, or avocado toast, it can be hard to keep up. Much of it fades away, but some of it sticks. In other words, some fads become trends. How can you tell the difference? I’ve had a crack at it…
Check out this diagram from the much-loved business book Crossing the Chasm by Geoffrey A. Moore.
So much tech hype is driven by “innovators” and “early adopters”. You know the type… they are on the keto diet, have a crypto portfolio, and know all about the blockchain. They’re first to get the newest iPhone or Apple Watch or have very strongly held opinions on why Apple sucks and Androids are the only way to go. They speak in impassioned tech jargon that makes less fervent eyes glaze over in polite patience. They probably have a sound system or coffee machine worth thousands (guilty as charged!). They are the first people we text when we need to fix a tech problem, but be ready to get an earful of opinions on why you should discard your outdated tech and shell out thousands on the newest whatever.
These a-dork-ables are also the prime audience for the tech press, who loooove to inflate hype around the latest fad. It’s what sells advertising inventory and subscriptions. If the tech press were good at predicting trends, then we’d all have Google Glasses, 3DTVs in our living rooms, and 401ks emptied into Dogecoin.
The reality is that so few fads “cross the chasm” into mainstream adoption, where they mature into real, lasting trends.
A fad doesn’t last and has high abandonment from the get-go.
A perfect example is the ill-fated Palm Pilot, which shot to popularity in the 90s. There was a period when you couldn’t have a business meeting without seeing everyone whipping out their Palm Pilot styluses to flick contact details to one another via super high-tech infrared signals. Fast forward a couple of years and the same Palm Pilots were collecting dust in office draws everywhere.
The tricky problem here is that you often can’t distinguish a fad from a trend until quite some time has passed. So one must turn to other criteria…
A real trend is fueled by real customer needs and lifestyle changes that are happening organically throughout the majority of a market. A fad is fueled by press and hype, is based on a temporary desire rather than a need, or requires new and artificial changes to behavior. In other words, a fad is fueled by novelty. Novelty is fun, but it wears off.
An example was the buzz around bug protein in the US a few years ago. The argument for bug protein sounded solid: we should get our protein from an efficient, sustainable source that doesn’t ruin the environment, and respects the lives of intelligent, sentient creatures. Makes sense. And indeed, bug protein may be humanity’s saving grace when there is a food or water crisis.
So, is bug protein a trend or a fad? It’s missing one important trend characteristic: it’s just not needed or wanted. People aren’t demanding more bugs in their diet. Nobody is craving the taste of bugs, and the ingredient requires heavy masking or treatment to be swallowed without gagging. Some bug protein companies saw an early spike in interest, maybe due to the novelty of eating bugs, and the whirlwind of food press attention. Early adopters relish in this novelty, but only temporarily.
In the tech world, we see a lot of “solutions looking for a problem”;
ie. technologies that were developed in the faith that they would be needed by someone. Many beginner entrepreneurs have fallen into this trap on their way to becoming seasoned entrepreneurs. So how can you know if your product is truly needed?
Ask yourself the question… Does it solve a real-world (not newly invented) problem in a way that is significantly better, cheaper, or faster than existing solutions?
Competition is validation that a problem is worth pursuing. During my time in the venture capital world, I saw a lot of pitches from entrepreneurs who claimed to be first movers in a new market.
A well-worn adage says that a startup must “be first or be better”. This is true, but only if you are first at solving a real, quantifiable problem, in a way that appeals to a majority of people, and is genuinely better than the status quo.
One of the first bits of research an investor does after seeing a good pitch is to look at the competitive landscape in the target segment. If there are no funded, de-risked companies vying for that market, then alarm bells ring.
Apple was a late entrant into the smartphone market, delivering a product that was better in many ways to the incumbents. The most valuable company in the world built its wealth and power, not from the fresh invention, but from solving existing problems better than the incumbents.
Dreams and opinions aren’t worth the paper they’re written on. Smart investors want to see validation that there is an existing, growing market for your product or service. Before your offering has significant traction, the best and only way to validate a market is by gathering long-standing trend data from reputable sources. Then you must convincingly show that your offering is better, cheaper, or more efficient than the offerings currently serving that market. If you find brand new data showing a huge spike in traction for an idea or huge overnight growth of a new market, it may be indicative of a fad.
There is certainly money to be made from fads. Just look to Dominique Ansel who has made a killing from his ground-breaking innovation, the Cronut. Or Robert Atkins, hero of bacon lovers and inventor of the famous fad diet which has been widely discredited, who has now sadly passed away after multiple heart attacks.
At the end of the day, it’s all subjective until time has passed, and the data is in. Predictions are only opinions about the future. This fact notwithstanding, I hope that I’ve given you a rough framework to form your own opinions about which trends are going to stick, and which will fade away into irrelevance and quaint folklore.
With love, HKEK 💚