Hot stuff

Entrepreneur, Dec, 1999

MILLIONS OF PEOPLE: HOW DO YOU GET TO THEM? ENDLESS OPPORTUNITIES: HOW DO YOU TAKE ADVANTAGE OF THEM?

IT USED TO BE THAT THE UBIQUITOUS "HOT LISTS" WERE MORE HYPE THAN HOT. BUT THESE DAYS, WHO NEEDS HYPE? SURE, THE HYPE IS FULL-BLOWN AND MILLENNIUM-POWERED, BUT FOR ONCE, THE PURE REALITY IS MANY DEGREES HOTTER THAN THE HYPE.

CONSIDER ONE OF OUR HOTTEST TRENDS, E-COMMERCE. WHAT CAN WE SAY ABOUT E-COMMERCE THAT ISN'T SURPASSED BY THE TECHNOLOGICAL MIRACLES WE SEE DAILY? WHILE MUCH OF THE FUROR OVER THE YEAR 2000 IS EGOCENTRIC VAPOR, THE INTERNET WILL PROVE TO BE OUR ROCK-SOLID LEGACY. IT'S OUR VERSION 2.0 OF THE INDUSTRIAL REVOLUTION, WITH ONE MAJOR IMPROVEMENT: THE REVOLUTIONARIES AREN'T FACTORY-RUNNING CAPITALISTS - THEY'RE ENTREPRENEURS RUNNING CORPORATIONS FROM THEIR DESKTOPS. E-COMMERCE ISN'T MERELY HOT; IT'S HISTORY IN THE MAKING.

Simultaneously, the eve of 2000 finds us hitting a high note in consumerism. Drank with the fruits of a strong economy, many people have more money than ever before and are itching to spend it. To better determine what's hot to the all-important consumer, we examined this year's trends according to demographic groups. And we found these groups are more than the sum of their catchy monikers - Generation Xers, tweens and the like are savvy consumers and major economic drivers.

Consider the hottest of today's markets: teenagers. Proving the power of their opinions and pockets, if not judgments, they handed the Backstreet Boys the highest first-week album sales by any artist ... ever. Their fanatical approach to consumerism has everyone from Hollywood moguls to Madison Avenue veterans squealing like 14-year-olds at a Britney Spears concert. These teens have Internet access, credit card authority and an overwhelming desire to spend, spend, spend.

The last time a market generated this much heat, we were just becoming acquainted with the term "baby boomers." Now cutting-edge entrepreneurs are saying goodbye, BMW; hello, WB.

In addition, we've selected a number of nonage-discriminatory markets or life situations (for example, people who are stressed for time) that hot businesses will be operating in or selling products and services to - and show that when trends and markets collide, hot businesses are born. We've pinpointed 15 hot businesses for 2000 - some traditional, some futuristic, each with undeniable potential.

Sure, you may be tired of all things hot. But this isn't your father's popularity contest, nor your mother's "in" and "out" list. This is the beginning of the new economy as we know it. So before you take one more step toward the future, read this, our most important "hot" list to date.

BABIES/KIDS

It's a small, small world, and you'd better get used to it. Anyone who's spent time around children knows the whole universe revolves around their pint-sized needs. And it isn't any different for you as an entrepreneur. An estimated 4 million babies will be born next year, and the U.S. Census Bureau projects that number will gradually increase, reaching a birth rate of 5.7 million per year by 2050. Though you may at first think your business has nothing to do with kids, think again. Kids influence parents' purchasing decisions from the time they can talk - probably even from the time they can point. This minivan is cool; that restaurant has the best kids' meals. And if you want it to be your restaurant or toy that's the coolest, read on to find out what our younger friends (and their parents) will be begging for in 2000.

Infants

Who are the new leaders of hip? You got it, baby. Parents are dressing babies in miniaturized chic brands like DKNY, Eddie Bauer and Tommy Hilfiger, and also letting the little ones indulge in upscale luxuries such as beauty products and organic baby food. And don't assume that cashmere sweater from BabyGap is out of the question because parents can't afford it - 30 percent of apparel purchases for infants are gifts, and grandparents (age 55-plus) account for $2.2 billion of the $17 billion infant market. Also be on the lookout for toddler products: Rather than continuing to treat this niche as an extension of infants or preschoolers, today's marketers are developing products specifically for toddlers, such as bridge foods.

HOT BUSINESS: TODDLER TECH

Just when you thought there were no new frontiers for the computer industry ... here comes lapware - software for babies and toddlers that reacts to the simplest stimuli: tapping on a mouse or a keyboard. This industry grew 18.5 percent in sales from 1997 to 1998, with units sold growing by 63 percent. Be warned, however: Much of the industry is controlled by large corporations, but true lapware - that is, for infants - is still relatively new turf. And the Web is the last frontier for the drooling set. Most pre-readers aren't yet attracted to the mostly text-based Web - that is, until your site full of interactive animation, games and photos goes live.

For examples, check out a Web portal for 3-to-7-year-olds at www.alfy.com, multimedia activities aimed at kids at www.mamamedia.com, or baby software at www.babywow.com.