Terry Tateossian is a 4th generation entrepreneur, growth hacker, and co-founder of SocialFix Media.
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Entrepreneurs should observe at least four types of trends—economic, social, technological and regulatory—to identify business opportunities and grow their startups.
By paying close attention to economic trends, they can identify areas that are ripe for new ideas. Social trends, such as the aging of baby boomers or an increased emphasis on eco-friendly practices, can help them identify individual behavior. Likewise, by looking at technological trends, they might be the first to learn about opportunities that will soon emerge. Finally, staying up to date about regulatory changes can open new business opportunities.
By observing social, economic and technological trends and keeping up with regulatory changes, entrepreneurs can identify inefficiencies in the market and give themselves the opportunity to bring together the resources, knowledge and capability to correct these inefficiencies.
Technological Trends
Rapid technological change involves, among many things, advanced and emerging technologies such as the Internet of Things, big data, 3D printing and robotics. Advanced technologies span from machine learning and artificial intelligence to nanotechnology, biotechnology, and drone, satellite and renewable energy technologies. These rapid technological advances affect virtually every aspect of culture, society and the economy.
Technology is not necessarily the key to identifying entrepreneurial opportunities. Instead, it can help create business opportunities that satisfy basic needs and improve quality of life. Take critically ill patients, for example. They require continuous monitoring of vital signs such as respiration rate, pulse rate, body temperature and blood pressure. To answer that need, entrepreneurs created applications to monitor critical patients’ information in real time and regardless of location. They enable communication between bedside and off-site teams and ensure real-time data streaming.
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Economic Trends
Economic trends provide entrepreneurs with important information about the health and vitality of the economy and the opportunities open to them.
Irrespective of whether the economy is weak or strong, there could be plenty of opportunities for entrepreneurial activity. When the economy is weak and peoples’ incomes decline, they are reluctant to spend and may shop off-price to save money. This is how deal sites emerged in 2008, offering shoppers access to museums, restaurants and vacation packages at steep discounts. When the economy is doing poorly and people face poor employment prospects, they are also more likely to go back to school. This trend offers opportunities for universities, colleges, education nonprofits, online learning platforms and entrepreneurs that develop products or services to enhance the learning experience.
When the economy is strong, people borrow and invest more and have more money to spend on items and experiences. They commute and travel more, are more concerned about social and environmental issues and are less likely to put off having children. This may make it a good time to invest in developing discretionary products, personalized travel products, baby-related items or sustainable fashion wear.
In addition to broad economic trends, entrepreneurs need to conduct an industry analysis to assess the state of the industry they are entering. They should look at things such as barriers to entry, competitors, potential suppliers and whether the industry is growing or slowing.
Social Trends
As social trends affect the makeup and profile of customers, they also help entrepreneurs identify business opportunities. As a rule, social trends cause shifts in consumer behavior and change the way people set expectations and priorities.
Examples of social trends that affect how people behave are world population aging, increasing diversity in the workplace, and the speeding up of society. Due to the speed-up of social life, for example, more and more people will likely seek deeper personal meaning and work-life balance in response to a fast-paced, always-on society that continuously brings new challenges.
Each of these social trends provides ample opportunities for entrepreneurship. The aging of global populations not only presents many challenges but also opportunities to support senior wellness, health and engagement. From senior dating sites, brain training programs and applications with anti-wrinkling properties to VR headsets for seniors in assisted living and retirement communities, population aging has created ample entrepreneurial opportunities.
The Regulatory Environment
While regulatory constraints provide entrepreneurs with the opportunity to tailor their product or service, regulatory changes can actually open opportunities. New laws and regulations often incentivize entrepreneurs to start a business that helps government agencies, nonprofits, individuals and firms comply with these laws.
For example, as states have been involved in passing consumer data privacy legislation, there have been entrepreneurs starting firms to help businesses improve customer privacy. Some have done so by helping businesses to remediate risk and manage as well as assess and monitor their data security compliance. Others work to ensure control consolidation across different standards, manage and assess vendor risk, and offer compliance audits.
Conclusion
In my experience, entrepreneurs who observe social, economic, technological and regulatory trends have a higher chance of growing their startups. These trends are often interconnected or overlapping and affect one another, so using foresight is what really matters.
Savvy entrepreneurs look at industry trends, subscribe to trade journals and attend relevant conferences and events. They look at economic trends and indicators such as employment figures, the consumer price index and how the global financial markets are performing. Entrepreneurs keep track of social trends as well, from the rise of heterogeneous world culture and women’s empowerment to brain drain and population aging.
Some people think they don’t have what it takes to become a successful entrepreneur and are hesitant to start a business. Yet, what distinguishes entrepreneurs from non-entrepreneurs is their keen observation ability. So, if your powers of observation are good, it is time to get started.
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Author: Terry Tateossian, Forbes Councils Member
