Forecast Lessons from Past Small Business Trends Lists

Last week we released our Top 10 Small Business Trends for 2012 list.  This is the 5th year we've done a public top 10 trends list (we've been doing small business forecasting for about a decade). 

Part of the process of putting the list together is a review of past lists. 

Here are 4 key forecasting lessons we relearned through this review:

1.  The future doesn't change that often:  This is another way of saying the vast majority of trends take a long time to reach the mainstream.  What changes is the stage a trend is at.

For example, we consider the broad shift towards Mobile Computing starting in 1993 with Apple's failed Newton PDA.  Others will argue the trend is much older.  Either way the trend had been around quite a while in 2008 when we said it was "taking off" due to the iPhone's recent success and the expected 2008 release of Google's Android. 

Mobile Computing has been on our list every year since 2008 and will likely be on our lists for at least the next 5 years.   This year's lists covers the growing impact of smartphones, tablets and the Cloud. 

The overall trend hasn't changed, but the forms, impacts and importance of mobile computing have changed - and will continue to change. 

2.  Trends are easy, timing is hard:   Trendspotting isn't a difficult task.  Pretty much anyone who has an interest can become a proficient trend spotter.  The hard part is forecasting when a trend will have an impact and when it enters the mainstream.

One of my favorite examples is RFID and it's short range version NFC (see this post for a description of NFC and mobile payments).  I think the first "year of RFID" I remember is 2001.  I think the first "year of NFC" I remember was 2003.  Neither happened and both technologies have made steady progress since but neither really broke out.

Here we are about 10 years later and 2012 is being declared to be yet another "year of NFC."  This is because large banks, credit card companies and Google are pushing mobile payment systems based on NFC.  There's also rumors that the iPhone 5, due to be released this spring/summer, will include NFC technology. 

We like NFC, agree it will be a successful mobile payments technology and that 2012 will likely be a break out year for the technology (it's still several years from mainstream use).  But if you'd asked us in 2003 when NFC would have its breakout year, we would have said 2007 or 2008.  So we basically missed it by 5 years.

There are many, many more examples of trends - and especially technology trends - where the general consensus around their timing was way, way off. 

BTW, I think ability of Steve Jobs to know when a technology was ready for the market - and the market ready for a technology - was a key reason he was Steve Jobs.  I also think the difficulty associated with  forecast timing is one reason why people like Steve Jobs are so rare. 

3.  Follow the Money:  Trends that are supported by clear, logical and identifiable business models tend to be the most likely to be impactful.  This is true for most types of trends, but especially technology trends. 

The reason is pretty simple.  Trends supported by business models see greater levels of investment, which greatly increases the probability the trend will have an impact. 

Examining business models also helps a lot with forecasting the timing of trends.  Going back to Steve Jobs, the iPod was a huge success not because of its technology.  It was a huge success because the Internet matured to the point Apple could create the itunes store.  The store created a powerful business model that drove the iPod's success. 

4.  No one can predict the future:  But the process of trying is extremely valuable. 

Comments

[telemarketing mailing lists]

My favorite article from this morning is the article on three ways to capitalize on business optimism. It’s refreshing to read an article that isn’t all doom and gloom once in a while and this article really helped me to look at things from a fresh perspective.

[List GIANT]

With venture capital came accountability to board members, forecasts, and other people’s agendas. They were smart enough to realize that IBM’s existing processes and procedures wouldn’t be agile enough to innovate in this new market.

[telemarketing lists]

There's also rumors that the iPhone 5, due to be released this spring/summer, will include NFC technology.

[Fintelligence]

Excellent post!

It's not the trend, stupid. It's the timing.

I never thought of Steve Jobs in this context, but you are absolutely correct. I just wonder about the behind-the-scenes false starts that we don't know about.

- Mike