My Method for Identifying Market Trends
Eads Bridge - The first railroad bridge across the Mississippi that allowed westwards movement of goods.
One of the requirements of a good business is its ability to solve big problems. For example, Vanderbilt’s railroads solved the problem of fast movement of goods from point A to B, one of the biggest challenges in post-civil war industrial age. In this article, I present my steps for identifying big problems (or market trends) which include a/ capturing raw idea; b/ visualizing the idea; c/ brainstorming implications; d/ clarifying trends; and e/ testing the trends.
CAPTURING RAW IDEA
First step to identify a market trend is to find a raw statement from sources like rumors or headlines. This raw statement must be written down as a fact or principle. It could be something like – ‘solar energy is the future’. Once we have such a statement, we must analyze the truth of it before continuing with the analysis. If the statement is incorrect, we should discard it. It is important to make sure our principle/fact is true, or else we risk reaching bad conclusions.
VISUALIZING
After we have a statement, we must visualize it. Visualizing involves attempting to look at the statement from different angles. What helps me is to prepare hypothetical questions and answering them. For example, in case of the statement – ‘solar energy is the future’, I would write down questions such as what is solar energy, how does it work, how much does it cost, etc. Then I will answer these questions. This allows me to visualize the statement and reach a state where our brains begin to throw multiple ideas.
BRAINSTORMING IMPLICATIONS
After visualizing, my brain has multiple ideas being thrown at random. To organize these, the first action is to put them on paper. I do this using a mind-map. After putting the unorganized ideas on paper, I could work on them one at a time instead of tackling them all together. Then, I keep expanding into the raw ideas until we have clarity on each.
CLARIFYING TRENDS
After brainstorming, we will have a few concrete implications of our raw idea. We need to capture and organize these into proper statements. For example, ‘solar energy is the future’ could imply ‘solar energy might lead to not only clean energy but also a low operating cost source of energy as it does not require any fuel’. We should make collections of all such well-defined statements.
TESTING THE TRENDS
The statements defined in the above step must be tested. We must find facts or anecdotes that can prove whether the statement is true or false. This way we can reduce the trends to actionable problem statements that will be basis of our actions.
With this, we end up with actionable market trends. The general process requires raw brain power. It gives structure to unleash creativity while ensuring we are not stagnant.