Making Bank Off Hot Trends

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Welcome to another issue of Passionate Income.

Today we’ll be discussing the messy intersection of hot trends, supply and demand, and luck. In particular, how understanding these elements can make it dramatically easier to launch a successful business.

Let’s dive in.

• WebStreet is the first platform to offer accredited investors passive ownership of cash flowing online businesses.

• How? They acquire high-growth businesses like Micro-Saas, and Amazon FBA at low multiples giving investors an asymmetric bet to the upside. 

• So while real estate bubbles are popping and the stock market is looking shaky, WebStreet is on track to deliver over 20% IRR to its investors. 

• Find out why investors are buzzing about their newest round here.

It’s easy to look at millionaires and billionaires and think they’ve got it all figured out. In reality, however, many attribute their success to “luck.”

But there are different types of luck, some of which we have more control over than others. Consider the quote below:

While many of us have heard this before, most have never considered how profound its implications are when it comes to building wealth.

See, there are opportunities around us at all times.

Some of which have dramatically more upside than others (given some look like opportunities but are in reality traps).

So what makes some businesses more likely to succeed than others?

First, veteran entrepreneurs recommend operating in a growing market. Ideally, one that’s expanding a minimum of 10% per year or more. Why?

Because it’s hard to succeed over the long term in a stagnating or shrinking industry.

As an example, imagine starting a newspaper in 2023. Yes, in theory, you could do it. But newspapers are going the way of the dinosaur.

On the flip side, artificial intelligence is expected to grow at a 19% compounded annual growth rate (CAGR) between now and 2032.

On the surface, it doesn’t take a rocket scientist to understand you’re more likely to succeed building an AI business than you are a newspaper one. But growth alone doesn’t tell the full story.

Because if you’re involved with the space, you know tons of so-called “AI startups” are struggling right now. Why?

Because of criteria #2: Supply and Demand

When ChatGPT went viral last winter, demand for all things AI was insane.

VCs were throwing money at AI companies. Twitter / X was exploding with ChatGPT threads. The list goes on and on.

But over the following months, the public’s voracious appetite for all things AI started to wane. There were too many tools and too many threads for people to keep up with.

On top of that, while many people find AI interesting, very few apps solve a legitimate problem in most people’s lives. And because of that, after the dopamine hit of tinkering with them wore off, most of these apps were abandoned.

Too many tools, not enough users.

Along the same lines, most people’s social media feeds were so flooded with AI content they started blocking it out. After bookmarking hundreds of threads and videos, most people realized they would never get caught up on it all.

Too much content, not enough time to consume it all.

So what does this have to do with building a business?

Let’s use an example that should hit a little closer to home.

During the crypto and stock bull market that ended in November of 2021, Twitter was red hot for Personal Brands. To the point many people were picking up hundreds if not thousands of followers per day.

And because of that, the Twitter ghostwriting niche exploded.

Not only were the guys who’d been doing it for a while making bank, many of them launched courses and coaching programs showing other people how to become ghostwriters.

By the time 2022 came to a close, thousands of people jumped on the Twitter ghostwriting biz opp. Except for one small problem:

The number of ghostwriters chasing the opportunity very quickly exceeded the number of English-speaking CEOs / Gurus / Agency Owners who wanted (and were willing to pay for) Twitter ghostwriting.

As 2023 rolled on, and Elon Musk updated the algorithm - which slashed people’s organic reach - getting new followers on Twitter became much harder.

With fewer and fewer people growing, and ghostwriters having a harder and harder time delivering results, the industry rapidly crashed down. To the point that today, it’s near dead.

See, both Twitter ghostwriting and AI met the criteria of being growing markets.

But as we saw in both examples, just because they were growing doesn’t mean building a business around them was a good idea.

And the reason for that is because of Supply and Demand.

To fully capitalize on a trend, you have to get in before Supply of the thing (your product or service) exceeds Demand for the thing.

In both examples, the “easy money” was made when demand was hot but supply was low. Soon as the masses jumped on them, however, things got harder.

As someone once said: “A party reaches fever pitch right before the cops show up.”

I’ve been in business long enough this same dynamic play out with:

1. High-ticket webinar funnels

2. Facebook Groups

3. Coaching

4. Starting an Agency

5. Starting a Dropshipping Store

6. Cold Email as a Lead Gen Channel

7. Building an Instagram Page

8. TikTok

The list goes on and on.

In short, it’s not that you “can’t” make money or build a business after a trend goes viral. Plenty of people start boring businesses all the time.

But their growth is exponentially slower relative to someone who gets in on a hot trend early. As an example, look at the people who started Twitter pages and YouTube channels around the topic of AI in Q1.

They grew so insanely fast it’s not even funny.

But if you try to start an AI page today, you’ll be lucky to grow at 1/100th of the speed they did.

So if you want to make your life easier, learn how to spot trends before the general public. Doing so requires hard work, a deep understanding of the nuances of your niche, and keeping your eyes open for emerging trends.

Remember, “luck” is achieved when preparation meets opportunity.

So while millionaires and billionaires may claim they got lucky, in reality, many of them had the vision and foresight required to get in on a hot opportunity at exactly the right time.

💡 Takeaway: Entrepreneurs can generate serious wealth chasing trends. But only if you get in early, when demand for XYZ thing dramatically outstrips supply. Wait until the masses jump in and you’re too late.

I'll leave you with this quote…

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