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To Appreciate a Trend Look Over the Curve of the Horizon

Mar 1, 2008
In developing an entrepreneurial strategy for taking advantage of irresistible forces, it's very helpful to be sure that you first understand the force. Otherwise, you may inadvertently pick a strategy that opposes the force.

How can you be sure that you've understood the trend? The longer the time perspective you have on any trend involving irresistible forces, the more you will understand about the trend. At a minimum, look back at five complete cycles (from top to bottom and then up again to the next top) for prices and demand. In looking at these cycles be sure to understand what was happening that caused the cycle to change directions near the tops and bottoms.

This analysis will give you clues about the current trend. Then investigate to see what is happening in terms of those historical trend-changing factors. Consider what else is happening now or could happen in the future that could be new and different in its effect on the trend.

What might you learn from such thinking? Here's an example: Norman Augustine was an aerospace executive at Martin-Marietta Corporation looking at the implications of various long-term trends. He noted that the cost of a fighter-bomber was accelerating so fast that before many more years passed it would take the entire annual economic output of most countries just to purchase a single fighter-bomber.

He modestly suggested that this trend would not continue much longer because it could not be afforded. In that observation, he laid the groundwork to predict the end to the Cold War arms race between the Soviet Union and the United States.

At some point, one side would have to drop out because it could not afford to continue. That is, in fact, what happened. Anyone wanting to predict when the sophisticated fighter-bomber industry's growth would end could have used this same analysis.

Someone who looked at a shorter time period might instead have focused on the growth rate in the industry and incorrectly assumed that the trend would continue forever. That conclusion would have been wrong because the cost trend has meant that military planners would look for less expensive ways to serve some of the same purposes.

The consequence of the trend meant that stealth bombers, cruise missiles, remotely controlled surveillance plans, and laser-guided munitions would be developed to replace fighter bombers. By understanding the trend earlier, aerospace leaders would have earlier understood that they should focus on creating inexpensive substitutes for ever more sophisticated fighter bombers.
About the Author
Donald Mitchell is an author of seven books including Adventures of an Optimist, The 2,000 Percent Squared Solution, The 2,000 Percent Solution, The 2,000 Percent Solution Workbook, The Irresistible Growth Enterprise, and The Ultimate Competitive Advantage. Read about creating breakthroughs through 2,000 percent solutions and receive tips by e-mail by registering for free at

http://www.2000percentsolution.com .
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