Hit or miss: jumping on a hot trend at just the right time can be a great way to launch a business, But how can you tell if a trend has enough staying power to stake your startup on it?

Entrepreneur, June, 2004 by Chris Penttila

And don't forget your potential customer. Curler and Krane conducted focus groups early and built momentum based on what they learned. "Keeping the momentum going after you spot a trend is important," says Cutler, "because, if it's something with staying power, chances are good there's someone else out there who's thinking about it."

Distinguishing between trends and fads requires quantitative and qualitative analysis with a bit of gut instinct thrown in for good measure, Janet Lee, 31, is founder of Petote, a 3-year-old Chicago company that makes upscale pet carriers that look more like fashionable purses. Company sales have increased from $120,000 in 2002 to projections of more than $1 million in 2004. Petote's five designs--which retail from $100 to $600--are sold at more than 400 stores in the United States, including Hallmark Henri Bendel, Marshall Field's and Petco. Lee also touts a roster of celebrity clients like Halle Berry, Jewel, Jessica Simpson and Justin Timberlake.

But back in 2000, Lee--whose family owns a carrying-case manufacturing business--was itching to create her own product line. An animal lover, she spent a few months researching the pet-carrier industry, visiting pet stores and Web sites for pet--and travel-related gear to figure out what was on the market. She also found statistics showing the market for small pets was growing fast.

Lee had a gut instinct that there was a need for a stylish, zippered pet carrier with a rigid, plastic lining inside to protect a small pet. Her hunch was backed up by research. "There was just a very plain, soft-sided bag that you could put your pet in," Lee says. "I decided it would be great to develop a pet 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 pet stores. Lee feels she hit the pet trend at the right time: Since she started the company, Kate Spade has come out with a pet-carrier line, and shoemaker Donald J. Pliner is marketing its own upscale line of dog collars and leashes. The 25 employees at Petote are staying a step ahead of the competition by extending the company's product line into matching duffle and tote bags for people and their pets' accessories. The company is also developing a line of dog clothes and recently moved into a 30,000-square-foot facility. "Having a little dog and carrying it around in a pet tote is the trendiest thing now," Lee says. Her advice: Research every channel out there. That includes vetting competitors as well as big and very small retail stores. "Know everything about the product you're making," she says, "what's out there, what's not available and what fits into your creation."

Where's the Countertrend?

Every trend has a matching countertrend, a phenomenon Carey Earle, partner in New York City marketing and design firm Harvest Communications LLC, refers to as "cultural schizophrenia." Countertrends are everywhere. Just look at the growing obsession with organic food and yoga at the same time that obesity is a growing crisis. Technology is becoming more pervasive, while people are spending more money to go where they can't be reached by BlackBerry. Flashy and bombastic Christina Aguilera shares the top of the pop charts with understated and soothing Norah Jones.