Admit it, you’re spending a lot (I mean…day and night) thinking about the economy. Inflation, interest rates, tariffs, labor costs, consumer spending, artificial intelligence, and an endless stream of economic predictions have made it difficult for entrepreneurs to know what to plan for.
Those are legitimate concerns. But this isn’t the first volatile economy, and I want to share a couple of hard lessons I’ve learned over the last 30 years of owning businesses during economic downturns. I mean, I made it through the recession AND the pandemic. And there’s one reason for that:
I looked at my customers and how they were consuming.
And something pretty cool happened. Ok, better than cool – lucrative.
Once I started to observe customer behavior, I organically stopped trying to predict something I couldn’t control. The result? I learned what customers’ pain points were, what changes they were making in their buying decisions, what they may need from me, how I could provide answers to their needs.
In a volatile market, attending to a client or customer’s needs is far more useful to an entrepreneur than any economic forecast.
The Lesson from Poppi
Recently, I read this article in Entrepreneur magazine about how the Poppi prebiotic soda brand became one of the most recognizable examples of a new generation of better-for-you beverages – before PepsiCo acquired it for approximately $1.95 billion in 2025.
More importantly to you, the small-business owner, isn’t the size of the exit. It’s where the business began. Allison Ellsworth, the founder of Poppi, started experimenting with a beverage in her kitchen, took it to farmers’ markets, listened to customers, refined the product, and gradually built something much larger.
Poppi wasn’t created in response to a perfectly predictable market. It emerged from a changing one.
The Bright Side for Small Businesses
The current environment doesn’t lend itself to easy predictions, but small-business owners are dealing with higher costs and uncertainty while still finding ways to grow. The U.S. Chamber of Commerce’s Q2 2026 Small Business Index found that 69% of small businesses surveyed considered their businesses healthy, while inflation remained the top concern for owners. At the same time, 66% expected their revenue to increase over the following year.
A difficult economy and a healthy business are not mutually exclusive.
Remember: Your business does not need the economy to be perfect. It needs to remain relevant to the people who buy from you.
Poppi Didn’t Predict the Beverage Market. It Responded to a Change in Consumer Behavior.
I wanted to bring up Poppi’s story because it combined two things consumers wanted. Sure, people still enjoyed soda, but people also have wellness goals – goals that Poppi could support. Ellsworth’s original product bridged that gap by offering something that felt like a soda while incorporating ingredients such as prebiotics and apple cider vinegar.
Now that’s innovation.
Don’t get stuck thinking innovation means coming up with something nobody has ever seen before. Very often, innovation is simply recognizing that customers want something and finding a better way to help them do it.
You don’t need to invent a new desire. You need to notice an existing desire that is becoming stronger, changing shape, or colliding with another trend.
To note, (yup, insert book plug here) that’s one of the central ideas behind Surge: entrepreneurs can create substantial growth by identifying movements in the marketplace and positioning their businesses where those movements are headed.
The critical word is positioning. But how?
Don’t Chase Every Business Trend – Learn to Test the Ones That Matter
Important warning: Listening to customers does not mean chasing every new trend.
Me? I’m vulnerable to shiny-object syndrome when the economy is uncertain. (You’re nodding, aren’t you?) You’ve seen it. If artificial intelligence is hot, we decide we need an AI strategy. If a particular social platform is growing, we decide we need to be on it. If a new product category is exploding, we wonder whether we should launch one ourselves.
That isn’t responding to the market, it’s reacting to noise.
You Don’t Need More Resources – You Need a Smaller Test
Another trap I fell into was thinking I needed to have everything figured out before I started. I thought I needed more cash, more people, more technology, a perfect business plan…
But resources don’t create certainty. Experiments create certainty.
Look at what a farmers market gave Poppi. It wasn’t a national distribution strategy. It wasn’t a billion-dollar advertising campaign. It wasn’t a giant retail footprint.
It was a place where a customer could taste the product.
Your experiment might be much smaller. If you’re a consultant, it might mean offering a new service to five existing clients. If you’re a landscaper, it might mean testing a new maintenance package with ten customers. If you’re a retailer, it might mean carrying a small quantity of a product before committing to a major inventory purchase.
The objective isn’t to prove that your idea will work.
The objective is to find out.
In a Volatile Market, Reduce the Cost of Being Wrong
Economic uncertainty makes this approach even more valuable because uncertainty increases the cost of big mistakes.
If you don’t know exactly what customers will want six months from now, you shouldn’t necessarily make a giant six-month bet. Make a smaller bet that teaches you something.
An experiment isn’t supposed to be a miniature version of your final business. It is supposed to answer a question. So ask yourself:
- Will customers buy this?
- Will they pay this price?
- Do they actually care about this feature?
- Will they use the service again?
- Does this save them enough time to matter?
If the answer is no, you’ve learned something while the cost of being wrong is still manageable. If the answer is yes, you have evidence that can justify the next investment.
You don’t have to get every decision right. You need to make decisions that allow you to learn quickly without putting the entire company at risk.
Your Customers May Be Better Economic Forecasters Than the Experts
I’m not suggesting that entrepreneurs ignore economic data. You should understand the environment in which your business operates. But there is a danger in spending so much time trying to understand the macroeconomy that you stop paying attention to the microeconomy happening inside your own business.
An economist can tell you that consumer spending is changing.
Your customer can tell you why.
An analyst can tell you that a particular category is growing.
Your customer can tell you what they wish that category did better.
A headline can tell you that inflation is putting pressure on households.
Your customer can tell you which trade-offs they are making because of it.
That information is gold, and you have access to it.
The Question Every Small Business Owner Should Be Asking
So instead of beginning every morning by asking, “What is the economy going to do?” I would encourage you to ask a different question:
What are my customers doing differently?
Then keep asking.
- What are they buying more of?
- What are they buying less of?
- What problems have become more urgent?
- What are they willing to spend money to avoid?
- What are they doing themselves that they used to pay you to do?
- What are they asking you to do that you don’t currently offer?
- Where are they frustrated?
- Where are they delighted?
- And perhaps most importantly, what are you hearing repeatedly?
Repeated behavior is a signal. You are looking for the movement underneath the individual transaction.
You Don’t Have to Build the Next Poppi
Here’s where I think the Poppi story can become dangerous if we tell it incorrectly.
The lesson isn’t that you should find the next billion-dollar trend. It isn’t that every entrepreneur can turn a kitchen experiment into a $1.95 billion acquisition. That kind of outcome is extraordinarily rare.
The useful lesson is much more accessible.
- You can pay attention.
- You can notice change.
- You can listen to customers.
- You can test an idea before committing enormous resources.
- And you can position your business around a problem that is becoming more important to the people you serve.
That’s entrepreneurship in a volatile market.
Don’t spend all your time trying to predict the next wave. Get close enough to your customers to notice the one that’s already forming. Then test whether you can ride it.
You’ve got this.
-Mike
