Is it the way of the future, or is it a fad?
Running a successful business often means being a student of history. When laying a course for the future, consider who else may have faced a similar situation in the past.
Adopting new technology is an area that challenges many business owners. Sometimes, an industry can be strong for years (or even centuries), and then it goes so far out of fashion that it never returns. At other times, a fad comes along that looks and feels like the next big thing, but it burns out, and businesses that feared the end was near ... survive.
I have an example, but first I have an apology. I am remodeling my kitchen (while living among the mess), so I apologize if my perspective is skewed. My example is nails. I've seen a lot of them lately, so I did some pondering and a bit of nine-finger research (avoiding my sore left thumb). The history of nails is interesting. Mentions of hand-made nails go back thousands of years, including in the Bible. There were two areas of specialization in the making of nails, Slitters, who slit sheets of iron (and later, steel), and Nailers, who forged heads on the slits of metal made by Slitters. As the industrial revolution replaced countless hand tasks, Slitters were replaced with machine-slitting and wire-making. For a while, Nailers still put heads on machine-made nails, but then someone invented a machine that did that, too.
Consider the plight of the mid-nineteenth century Nailer. Putting heads on nails may have been the family business for many generations. Some probably thought, "Hand-made nails will always be better than the machine-made ones. These machines are a fad." That proved to be a bad business strategy. Nailers who saw the industrial revolution as a paradigm shift in manufacturing, not a fad, moved out of the hand-made nail business into something that was not threatened by the industrial revolution.
So how do you tell if something is a fad or a permanent replacement of an established technology? Here are some of my observations.
1. Is everyone suddenly talking about the Thing? Fads are commonly popular across the entire population and erupt quickly.
2. Is the Thing marketed to or accepted by a specific group? If the Thing is a business solution, it may be valued more highly than a consumer Thing. If the Thing appeals to a specific section of the consumer population, they may heroize it or absorb it into the group's culture. Rap music never went away, no matter how many stodgy music "purists" claimed it was a fad. Apple Computer found a stronghold in the graphic design and music industries, thwarting the wishes of PC-users.
3. Can you see how the Thing will make (or save) money in a recurring way? The Pet Rock made money, but there was no opportunity for opening a steady revenue stream. People who thought it was funny bought one, and people who didn't, didn't. Then it was done. If a Thing can make steady money, it is much more likely to stick around.
4. Is the Thing popular because it's cool? If the buzz is all about how cool something is, it's more likely to be a fad than if the buzz is about how the Thing is improving the lives or the businesses of adopters.
5. Do adopters of the Thing make room for it in their lives, or are they replacing something with it? Fads commonly are a distraction from the things people need, use, do, etc. If it can replace something useful or important, it is more likely to become permanent.
If change is affecting how and where your business operates, you need to decide how to respond.
1. Capitalize on fads if (and only if) it makes sense for your company. When the 1,000,000th Beanie Baby sold, The Vermont Teddy Bear Company may have been discussing damage control, but McDonalds was planning a new Happy Meal campaign. However, don't jump on every band wagon. If the connection between your company and the Thing is a distant stretch, you may be perceived as desperate.
2. What seems to be a fad could become permanent if no alternative appears. If some Thing is threatening your business, look for ways to outmaneuver it. Do not simply wait for it to go away. In the 1970s, CB radios became very popular. Today, CBs appear to have been a fad, but at the time, people were pondering the possibility of a world without telephones. What really happened to the CB craze? The telephone industry responded with a better portable communication solution.
3. Not every new Thing will affect your business, but some things will. Just because everyone is talking about the Thing doesn't necessarily mean you have to change what you do. However, don't dismiss the new Thing as a fad without considering if dismissing it has the potential to hurt your business.
I encounter this last point fairly often as part of our internet consulting business. While it is rare to find a business with no website, it is surprisingly common to hear business owners dismiss emerging internet trends like SEO or social networking as unimportant fads - something their customers don't care about.
This current generation of the internet has proven itself. It is not a fad. Businesses make money with it, day after day. It has effectively replaced brochures, telephone directories, road maps, cashiers, magazines, and on and on. Companies who understand that websites can create a personalized experience for each unique visitor are beating competitors who sit around waiting for their website to send someone to their phone. Dynamic, data-driven websites with flexible and ever-changing content are the future of business. If you're happy with a website that just sits there, go back to biting your nails.