7 Dangerous Business Words: How Revolutionary Trends Impact You

One of the most dangerous phrases in business: “We have always done it this way.”

This mindset is one reason why companies like Borders, Sears, Wards, Kmart, Control Data, and Digital Equipment Corporation (DEC) failed. Their CEOs failed to pivot and take advantage of emerging trends and paid the ultimate price. Ken Olsen of DEC even dismissed the personal computer, an emerging trend at the time, as a “toy.”

Why revolutionary emerging trends are crucial

Emerging trends can be revolutionary or evolutionary.

· Evolutionary trends can be adapted by existing corporations for growth. For example, AI, an evolutionary trend, is being used by existing corporations such as Microsoft and IBM.

· Revolutionary emerging trends, like the PC and the Internet, can disrupt existing business models, destroying old corporations, and allow entrepreneurs to build new giants.

Emerging trends can create or destroy fortunes. Nearly every billion-dollar entrepreneur from Andrew Carnegie to Vladimir Tenev of Robinhood made fortunes by capitalizing on emerging trends. For the past 40 years, Silicon Valley has excelled in emerging trends. But the flip side of all this Silicon Valley success is the destruction left in its wake. For existing businesses, the reality is stark: master emerging trends or face extinction.

Based on their skills on emerging trends, executives can be classified into 3 groups:

#1. Trend Victims: The Failures.

These are mainly corporate CEOs, like Ken Olsen of DEC and Bill Norris of Control Data, who failed to pivot from the old obsolete trends and dominate the emerging trend. Their old assets, costs, skills, employees, and technologies became liabilities. In contrast, some founder-CEOs successfully pivoted. Examples include:

· Bill Gates shifted Microsoft from DOS to Windows and the Internet.

· Steve Jobs was able to pivot Apple from the old PC model to smartphones.

#2. Trend Spotters: The First Movers.

Trend spotters are first movers who are the first to develop the first products (or services) on emerging trends in technologies, markets, and industries, and detect potential trends. They then jump on the trend to start their business. To analyze trends, executives need an understanding of causes and impacts of new trends, along with the process and impact of launching ventures in new trends where old rules and dominance may not work. In the recent past, technologies have been among the most prolific cause of trends and unicorns. The personal computer and the Internet changed the world. Many made fortunes by spotting the trends and using their skills to launch ventures. Trend spotting is the principal trait of “first movers.” But only 11% of first movers dominated.

#3. Trend Masters: The Smart Dominators.

Trend masters are typically not the first movers but are smart movers. They read emerging trends and dominate them mainly by improving on the first movers.

· When he returned to Apple, Steve Jobs mastered the emerging trends of music platforms (iPod), smart phones (iPhone), and tablet PCs (iPad).

· Sam Walton was not the first mover. He dominated the big-box retail trend by locating his stories in rural areas. Then he dominated urban America.

· Bill Gates was not the first mover. He dominated the personal computer industry by entering early and developing a very advantageous arrangement with IBM.

· Page and Brin were not first movers in Internet search. They developed a better search engine.

· Bezos was not the first retailer on the Internet but the best.

· Zuckerberg was not the first to link people online but focused on students first, and then expanded to dominate everywhere.

MY TAKE: For new ventures and growth-seeking businesses, become a Trend Master. Find the right emerging trend for you and dominate it. This strategy has been key for nearly all billion-dollar entrepreneurs.

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