Taking Advantage of Trends to Start a Biz Jumping on a hot trend can be a great way to launch your biz. Find out how to tell a biz-boosting trend from a passing fad!

Three years ago, Rebecca Cutler and Jennifer Krane saw bigchanges happening in the athletic wear and maternity industries.Women were wearing athletic clothes for going out, not just workingout. Obstetricians were encouraging pregnant women to keep up amodified exercise regimen to stay fit, whether it be yoga, walkingor another favorite sport. Designers were creating fashionableclothing lines for pregnant women, and celebrities were makingpregnancy look hip, beautiful, fashionable, even athletic. Cutlerand Krane did some research and learned that 4 million babies areborn every year in the United States, and American women spend anestimated $1.2 billion annually on maternity wear.

There was a pregnant pause, however, when they compared whatthey saw to what was on the racks at sporting and maternitystores-especially when it came to tennis, a sport Cutler and Kraneboth love. "[Pregnant women] were buying extra-largenonmaternity tennis skirts-pulling them on, feeling awful and notreally fitting into them," says Cutler, a mother of two. Theythought a box set of fashionable maternity athletic clothes thatincluded a mix-and-match reversible tennis skirt, a few V-neckshirts, and shorts that could transition from the tennis court to anight on the town just might sell.

Fast forward to 2004: Cutler, 36, and Krane, 38, are co-foundersof Raising a Racquet, a 2-year-old Darien, Connecticut,company that makes athletic wear for pregnant women. Theirmultipiece box sets retail from $108 to $158 and are sold at storeslike A Pea in the Pod, Bloomingdale's, Copeland Sports, MimiMaternity and Pickles & Ice Cream. The company has expandedinto three clothing lines for tennis, golf and yoga. Gross sales inthe first year were $250,000 and are projected to reach close to $1million in 2004.

Jumping on trends early helped Cutler and Krane develop a loyalcustomer base, especially among stores with limited buyingresources. "[They might] pick up fewer pieces of Nike runningpants and hold that money back for the Raising a Racquet yogakit," Cutler says. It's also making the company acontender. Adidas, Nike and Reebok have come out with maternitylines since Cutler and Krane started the company, and Raising aRacquet has been mentioned in stories alongside these industrybehemoths. "That was thrilling," Krane says. "Ithink we hit [the trend] just right."

Early trend spotting can set up young companies for long-termsuccess. But how can entrepreneurs discern whether what they'reseeing is a long-lasting trend or a fad that will die out in sixmonths? Mistaking the two can put entrepreneurs out of businessfaster than they can say "fad."

So what is the difference between a trend and a fad? Ask 30people, and you'll probably get 30 different, yet similar,answers. A fad is a statement, a one-hit wonder, somethingeye-catching that comes and then goes just as quickly. (Think PetRock.) A trend has roots and staying power; it strikes a deeperchord and is connected to a larger change in society. The realdebate starts when you ask people whether a popular product orservice is a fad or a trend. Take the Atkins diet, for example.Some experts say it's a trend because it's become part of alifestyle and ties into larger trends like the quest for health.Others argue Atkins is a fad that's riding a larger, long-termtrend: a fundamental shift in consumer behavior.

A trend is "nothing more than a manifestation of anindividual's values," says Vickie Abrahamson, co-founderof Minneapolis trend analysis firm Iconoculture,who points to the late 1990s craze for clear products such as clearbeer, clear soap and even clear Pepsi as a fad that didn'tconnect with consumers. Even Saturday Night Live parodiedthe fad in a humorous commercial for clear gravy. Clear productsdidn't succeed because the inventors didn't factor into thedesign process the value people put on their senses of sight andsmell. In the end, clear beer just couldn't tap into theimportance consumers place on the total beer experience, and thegenre went flat. As Abrahamson puts it: "[Clear beer] was fununtil people actually tasted it."

Let's Go Trend-Spotting

A trend spans more than one industry and touches more than onemarket and generation, says Louis Patler, chairman of consultingand market research firm Near Bridge Inc. in Mill Valley, California,and author of TrendSmart: The Power of Knowing What'sComing...and...What's Here to Stay. "Trends do notexist in isolation," Patler says. "The entrepreneur whowins is the one who sees how three or four of them dovetailtogether." Consider the iPod, which draws on multiple trends,ranging from our desire for more mobility, instant gratificationand customization to our craving for all things fashionable.

It's too late to catch a trend if you're reading aboutit or seeing it at a trade show, says James Chung, president ofReachAdvisors, a marketing strategy firm in Belmont, Massachusetts.Start following lead indicators in similar industries forwhat's bubbling up. "You have an advantage if you cantrain yourself to look at adjacent industries," Chung says,noting it wasn't until recently the ski industry realized itstrends follow those happening in surfing and skateboarding."That's why California ski resorts are a lot more ahead ofthe trends than others," he says. "They've had achance to view the adjacent industries driving the trends withintheirs."

And don't forget your potential customer. Cutler and Kraneconducted focus groups early and built momentum based on what theylearned. "Keeping the momentum going after you spot a trend isimportant," says Cutler, "because, if it's somethingwith staying power, chances are good there's someone else outthere who's thinking about it."

Distinguishing between trends and fads requires quantitative andqualitative analysis with a bit of gut instinct thrown in for goodmeasure. Janet Lee, 31, is founder of Petote, a 3-year-oldChicago company that makes upscale pet carriers that look more likefashionable purses. Company sales have increased from $120,000 in2002 to projections of more than $1 million in 2004. Petote'sfive designs-which retail from $100 to $600-are sold at more than400 stores in the United States, including Hallmark, Henri Bendel,Marshall Field's and Petco. Lee also touts a roster ofcelebrity clients like Halle Berry, Jewel, Jessica Simpson andJustin Timberlake.

But back in 2000, Lee-whose family owns a carrying-casemanufacturing business-was itching to create her own product line.An animal lover, she spent a few months researching the pet-carrierindustry, visiting pet stores and Web sites for pet- andtravel-related gear to figure out what was on the market. She alsofound statistics showing the market for small pets was growingfast.

Lee had a gut instinct that there was a need for a stylish,zippered pet carrier with a rigid, plastic lining inside to protecta small pet. Her hunch was backed up by research. "There wasjust a very plain, soft-sided bag that you could put your petin," Lee says. "I decided it would be great to develop apet carrier that's not only cute and functional, but [that]people could use for a very long time."

She created some prototype bags and made sales calls to 20 petstores. Lee feels she hit the pet trend at the right time: Sinceshe started the company, Kate Spade has come out with a pet-carrierline, and shoemaker Donald J. Pliner is marketing its own upscaleline of dog collars and leashes. The 25 employees at Petote arestaying a step ahead of the competition by extending thecompany's product line into matching duffle and tote bags forpeople and their pets' accessories. The company is alsodeveloping a line of dog clothes and recently moved into a30,000-square-foot facility. "Having a little dog and carryingit around in a pet tote is the trendiest thing now," Lee says.Her advice: Research every channel out there. That includes vettingcompetitors as well as big and very small retail stores. "Knoweverything about the product you're making," she says,"what's out there, what's not available and what fitsinto your creation."

Where's the Countertrend?

Every trend has a matching countertrend, a phenomenon CareyEarle, partner in New York City marketing and design firm HarvestCommunications LLC, refers to as "culturalschizophrenia." Countertrends are everywhere. Just look at thegrowing obsession with organic food and yoga at the same time thatobesity is a growing crisis. Technology is becoming more pervasive,while people are spending more money to go where they can't bereached by BlackBerry. Flashy and bombastic Christina Aguilerashares the top of the pop charts with understated and soothingNorah Jones.

"Countertrending" is used all the time in the fashionindustry. Designers Betsey Johnson and Marc Jacobs are hot becausethey always seem to find the countertrend that makes their clothesdifferent and edgy. "You need to think of the countertrendbecause, a lot of times, the big guy is already riding thetrend," Earle says. There's a lot of room forentrepreneurs who can use countertrending in new and cleverways-for example, the entrepreneur who can take advantage ofcountertrends to lure the coffee lover who is turned off byStarbucks. Get out of the office, and visit the fringe where newthings are happening. Ask the people there what they're cravingin products and services, and put away that inner cynic. "Lockhim in the supply closet, and let the ideas come out," Earlesays.

Some trends and countertrends have a short shelf life, though,so check clearance racks for hints about what's not working orselling anymore. In a clothing store, for instance, "You canstand 40 feet away from the clearance rack and see a whole colorpalette that's on sale because no one's buying it,"Patler says. Use store salespeople as a part of early focus groups.Why do they think the items on the clearance rack still aren'tselling even on markdown? What feedback do they get from customers?Their answers, trendy insights not found in surveys, will offer acloser look at what's not working. "Ideas created in theboardroom are usually the worst ones," Earle says.

Telling the difference between a fad and a trend is a constantbalancing act for entrepreneurs navigating fad-driven industries."Companies in our industry can bring in trendy services thathave no merit," says Bruce Schoenberg, 50, co-founder ofOasis DaySpa, which has New York City locations on Park Avenue, in UnionSquare, and in the JetBlue Airways terminal at John F. KennedyInternational Airport. He points to the recent craze for pureoxygen and caviar-enriched facials, which were hailed as trends butproved to be nothing more than fads.

So how do Schoenberg and wife/co-founder, Marti, 41, ferret outthe trends from the fads? For starters, they go to at least one totwo networking events every week populated by hip twentysomethings,and they survey customers once a month to stay on top of emergingservices and products. "Spa-to-go" services-where thepedicurist or the massage therapist comes to the customer-is atrend they feel holds a lot of potential. But they'll dip theirtoes in slowly to make sure it's not a fad. "Before weroll out any new product or service, we use it for several weeksuntil we see it works. If it's something we feel has legs, wedo it," Bruce says. "We want to see a proven valuefirst." The strategy is working beautifully: Annual sales arenow more than $6 million.

Trump's Trend-Spotting Tips

No one knows how to ride the crest of a trend wave better thanreal estate tycoon Donald Trump. Tsunami is more like it: Trumpcapitalized on the reality-TV trend by becoming the star ofNBC's The Apprentice, a solid-gold branding opportunity he hascommitted to for two more years.

Trump has built his business on trends, but he knows how to cashin on fads, too-at press time, he had moved to trademark hissignature catchphrase "You're fired," which will beemblazoned on a line of T-shirts. He shares his advice forentrepreneurs eager to capitalize on the next big thing:

• Do your research for a big-money payoff. Read and studymagazines in great detail, and pay attention to pop culture forsigns of the next product craze or innovation in productdevelopment. "If you are able to hit a trend or a fadearly," says Trump, "you'll make much more money thanyou would from a more normal business."
• Try a variation on an already viable trend. "Alwaysextend a trend," he says, describing how, for example, theprinciples of the Atkins diet may be used to help children-or evenpets-shed unwanted pounds.
• Consider a contrarian approach. "One of the thingsI do, and often successfully, is to go opposite the trend,"Trump says. If the hottest buildings in Manhattan are smallerunits-studios and one- or two-bedrooms-he'll start buildingvery large ones. "By the time you plan the building and get itbuilt, which is a number of years, there'll end up being a glutof small apartments and not enough big ones."
• Fine-tune production. Since no one can predict how longa trend or fad will last, make sure, if you're a manufacturer,that you aren't stuck with overages. "You can't createor build so much product that, if the trend or the fad doesn'tlast, you're going to be stuck with it," Trump says. Youneed flexibility and the ability to stop quickly when it ends.
• Jump in before anyone else. Being too cautious will costyou dearly. "If it's already on the shelf," saysTrump, "you can, generally speaking, forget theidea."
• Go with your gut. "You're going to do well ifyou're lucky to be blessed with gut instinct," Trump says,adding not to worry about the naysayers who don't understandyour vision built on an idea that hasn't yet become a householdname. "You're the one taking the risk, they're not.And by the way, when it turns out to be good, family and friendswill be right behind you."

Finger on the Pulse...

Want to keep up with the latest trends, but not sure where tostart? These 10 online resources will help you stay in theknow.

• DailyCandy is a free daily e-mail service spillingthe beans on fashion, food and all things hip.

• Trendcentral is a free daily e-mail newslettercovering lifestyle, technology, style and entertainment,particularly for Gens Y and X.

• Daypop offers a Top 40 list of the hottest blogtopics including links, archives and performance indicators fromprevious updates.

• BlogPulse allows visitors to search, analyze,chart blog content and includes ready-to-go trend analysis such as"yoga vs. Pilates."

• Google Zeitgeist charts the most popular searcheditems on Google on a monthly basis, plus offers access to archivedZeitgeist lists.

• Yahoo! BuzzIndex is a daily ranking of searched terms through Yahoo!based on total searches and percentage of change from the previousday. A free weekly e-mail buzz report is also available.

• Small Business Trends is a business trend-trackingblog for entrepreneurs and small and mid-sized businessesthat's updated even on the weekends.

• Emerging Trend Advisor by Find/SVP is amonthly e-mail newsletter written by industry experts coveringbusiness trends. The newsletter is free to all Find/SVP clients,but non-clients can sign up for the latest newsletter online.

• PollingReport.com is an independent, non-partisanWeb site revealing American trends through regularly updated polls.PollingReport.com also offers a bimonthly subscription-basednewsletter.

• Trendwatching.com offers a free monthly e-mailnewsletter covering consumer trends and related business ideas. TheWeb site also offers a preview of the current newsletter in case ofcommitment reservations. -Steve Cooper