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

"Countertrending" is used all the time in the fashion industry. Designers Betsey Johnson and Marc Jacobs are hot because they always seem to find the countertrend that makes their clothes different and edgy. "You need to think of the countertrend because, a lot of times, the big guy is already riding the trend," Earle says. There's a lot of room for entrepreneurs who can use countertrending in new and clever ways--for example, the entrepreneur who can take advantage of countertrends to lure the coffee lover who is turned off by Starbucks. Get out of the office, and visit the fringe where new things are happening. Ask the people there what they're craving in products and services, and put away that inner cynic "Lock him in the supply closet, and let the ideas come out," Earle says.

Some trends and countertrends have a short shelf life, though, so check clearance racks for hints about what's not working or selling anymore. In a clothing store, for instance, "You can stand 40 feet away from the clearance rock and see a whole color palette that's on sale because no one's buying it," Patler says. Use store salespeople as a part of early focus groups. Why do they think the items on the clearance rack still aren't selling even on markdown? What feedback do they get from customers? Their answers, trendy insights not found in surveys, will offer a closer look at what's not working. "Ideas created in the boardroom are usually the worst ones," Earle says.

Telling the difference between a fad and a trend is a constant balancing act for entrepreneurs navigating fad-driven industries. "Companies in our industry can bring in trendy services that have no merit," says Bruce Schoenberg, 50, cofounder of Oasis Day Spa, which has New York City locations on Park Avenue, in Union Square, and in the JetBlue Airways terminal at John F. Kennedy International Airport. He points to the recent craze for pure oxygen and caviar-enriched facials, which were hailed as trends but proved to be nothing more than fads.

So how do Schoenberg and wife/co-founder, Marti, 41, ferret out the trends from the fads? For starters, they go to at least one to two networking events every week populated by hip twentysomethings, and they survey customers once a month to stay on top of emerging services and products. "Spa-to-go" services--where the pedicurist or the massage therapist comes to the customer--is a trend they feel holds a lot of potential. But they'll dip their toes in slowly to make sure it's not a fad. "Before we roll out any new product or service, we use it for several weeks until we see it works. If it's something we feel has legs, we do it," Bruce says. "We want to see a proven value first." The strategy is working beautifully: Annual sales are now more than $6 million.

Chris Penttila is Entrepreneur's "Staff Smarts" columnist.