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Shawarma, roasted chicken, pearl shakes, and rubber clogs have one thing in common in the Philippine setting: they were once touted as market changing businesses, and recognized as burgeoning segments in their own right. However, their mercurial rise was almost as precipitous as their rapid fall; overnight, these ‘novel’ business ideas fizzled or became a shell of their former prominence. These ‘fads’ made a lot of money in their time, but were ultimately deemed unsustainable.

But how does one tell the difference a fad and a trend? www. entrepreneur.com.ph asked marketing expert Ernest Tamayo of Singapore-based marketing and research firm Huthchins and Mercer, as well as business consultant and financial planner Mike Yason, to enlighten us on the subject.

WATCH OUT FOR THE SIGNS
A trend is something that has staying power, and usually has a social, political, and economic significance. Tamayo says trends gradually develop and follow a sequence of events, and is generally tied to a global movement or idea.

Tamayo gave us a simple acronym to help determine if a business is a trend or a fad:

Time: Trends don’t happen overnight. “A trend must gradually build towards acceptance, and not just come out of nowhere,” he said.

Roots: “Because of its unique characteristics which is a function of the market it services, a trend develops roots,” explains Tamayo. This will ensure that trends will not fizzle even as they evolve, because their background is deeply ingrained in the consumer’s mind.

Everywhere: A trend will slowly sprout up in different places. “After a while, you’ll see it being established by more people, and in the process, it will evolve,” Tamayo said.

Nonstop growth: Trends are like a slow and steady train that builds momentum over time. “A trend is a sustainable idea--it will be there for a long time, compared to a fad that will die out fast,” says Tamayo.

Durability: Trends can stand the test of time, and won’t wilt when the going gets tough. “Trends are strong. Unlike fads, they don’t weaken as they become mainstream; they only become stronger,” Tamayo said.

To spot trends or fads, entrepreneurs must always be on the lookout, according to Yason.

“The key is that you can’t only pay attention to industries that interest you because everything is connected. Remember, opportunity misses those who view the world through the eyes of their profession,” he said.

TRENDS VS. FAD

Deciding between a trend and a fad business largely depends on the kind of business you’re in. Most importantly, don’t assume a fad is business-worthy just because you have a good feeling about it.

“Gut feeling is important, but that’s not the only thing you should look at,” Yason said.

Tamayo acknowledges that people have made fortunes out of fads. Not a few entrepreneurs have used a fad business as a testing ground when they first let the entrepreneurial bug bite them. As a first business, it will teach you a lot of things about being an entrepreneur, but keep in mind that you don’t have to be discouraged if it fizzles out, since that is its nature. Ideally, by that time, you’d have learned enough about handling a business, and you’re ready to get into your second, more stable one.

But to be successful in a fad business you should do a cost-benefit analysis first. Entrepreneurs must take into account sales and profit projections, how you can prolong the fad, and your exit strategy.

“The exit strategy is the most important aspect of betting on a fad. True, you can stoke the flames by waving a blanket at it, but soon you’ll tire of it. The mentality of people who cash in on fads should be get in, and get out ASAP,” he said.

Yason echoes this sentiment and adds: “If you think you’ve spotted a worthy fad, you have to be prepared to act quickly and move on when the fad has run its course. To be successful in a fad business, it’s all about timing,” he said.

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