Do YOU Watch Trends? - Here's WHY You Should!

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I'll explain this graph soon.

For many, videography became the preferred choice over still photography. That's because we could now film events as a continuum rather than capturing parts of them as snapshots.

Observing trends over time, as they shift, change and evolve, is fascinating. And also more meaningful than a single cross-sectional impression.

For instance, a business might have a sensational quarter and post impressive figures - only to crash back to where it has been for years. That would be glaringly obvious if you studied the trend, but you may completely miss it by focusing on the 'snapshot'.

That's why I created that graph above. It shows the trend of a new project I've been working on for just over 5 months.

The line in blue indicates expenses incurred. The red one is income generated. As you see, this project is still sucking out more money than it is earning - and to look at that single variable in a snapshot evaluation would be disheartening after so much effort invested into it.

That's where it pays to watch the trend.

Expenses peaked in the 2nd month, and have dropped since. I expect it to drop even further, since the initial investments were one-time payments or annual subscription fees that won't fall due until 6 months later.

Income, on the other hand, is steadily (even if only slowly) rising. Each month, the project is bringing in 20% to 50% more than the previous month. And unless something goes drastically wrong, I expect this to continue at least over another year.

If I were an analyst with an MBA from a fancy university, I'd probably extrapolate these trends out to infinity (or the next 5 years), amortize the costs over that time span, and show how investing into it is like buying a gold mine before the news hits that we've tapped into a rich vein of yellow metal.

But because this project is NOT accepting any investments, I just stopped at the point where ACTUAL data is available!

There are a few reasons for my sharing this post.

1. To highlight the importance of watching trends rather than focusing entirely on data from any one point in time.

2. To demonstrate the value in planning your project over a reasonable time frame, and the need to measure metrics of performance as it unfolds.

3. To illustrate the need for patience. Too many entrepreneurs are carried away by the dream of multiplying an investment within days, if not weeks. It can take months, or even years at times, before this happens. The good news is that if you can get it to scale and sustain, the big payoff can be mind-boggling.

Incidentally, the target for this project is to fund 50 heart operations every year by 2013. Do the trends support this possibility? I think they do

All success
Dr.Mani