On FOMO
- 7 min read
Ever heard of this great new invention, AI? Have you adopted it thoroughly yet? No? Aren’t you afraid?
The FOMO in the industry is real. Executives either have this fear themselves or are pressured into it by their boards and peers. It seems, at the very least, you must act NOW, else the shareholders lose trust in your leadership. I call bullshit. That’s not how innovation works. No one is getting left behind.
If an innovation becomes so useful that it’s ubiquitous, everyone gets to adopt it at their own pace. My grandma was happily taking selfies on her smartphone after resisting mobile phones for years. She was even giving smartphone tips to her friends - that doesn’t look like being left behind. And it’s the same story with every other new thing.
Just like we’re able to learn new things today, we’ll still be able to do that next year. Things won’t magically become impossible to learn or adopt just because you didn’t start studying that one specific year. Every month, some opportunities are gone while new opportunities open up. It’s business at its core - find the tide of the opportunity where your company can uniquely serve a need. If not today, then tomorrow. The reason companies get left behind is due to their strategic inertia, which is different than simply not pursuing an opportunity.
I remember when the internet revolution was happening. It was clear back then it had a lot of potential, but no one was quite sure what exactly it was good for and how to convert that potential into tangible value. It took smartphones to really get us there. It’s clear to me that we’re facing the same situation with LLMs - there is a lot of potential, but we’re still missing some key ingredient, a somewhat unrelated innovation that will let this one shine and become actually useful. So the only real way anyone can be left behind is not becoming the next inventor. But you can’t force this sort of process.
I’m a firm believer that the option leaving the most doors open is usually the best one to pursue. Unless you have a clear shot at that next enabling invention, or becoming a key player in the infrastructure supporting the emerging new technology, it’s much more prudent to wait until the innovation stabilizes enough for a five year planning horizon to be possible again. Otherwise you’ll be locking yourself into a potentially outdated version.
When the internet revolution was happening, some cities rushed to be the first to embrace it. They’ve invested a lot in making the “fast internet” available to their residents. They’ve laid out additional cables. ADSL or co-ax ones. And then a few years later, fiber optic became a thing. Suddenly the places that were on the bleeding edge of technology were stuck in the past. And they were truly stuck for decades, because who can afford a second huge cable-laying investment when the first one is still being paid off?
Now, I’m not saying companies should never make big bets with new technology like that. By all means, they should, progress is made through failures. But such big bets should be calculated attempts at winning a solid chunk of market share or creating an entirely new market. “Everyone else is doing it” is not a good argument to make your big bet on. And if there is an overwhelming sense of urgency surrounding the big bet, that’s a sure sign something is not quite right. The urgency should come from within - it’s when you know you have all the pieces to make it work and can’t wait to make your idea a reality, because it's obvious the time is right. If the urgency comes from outside, it likely means you’re not in a good position to benefit from a trend in a big way anyway. That’s the worst possible circumstance to invest the future of your company in a new thing.
But, of course, that’s easier said than done. FOMO resists rational arguments, because the condition is emotional. It’s a glitch in our human programming. In environments with information asymmetry or suspected information asymmetry (spoiler: the world as a whole falls into that category), it’s reasonable to assume someone else knows something we don’t. If you’re not familiar with this side of human psychology, I encourage you to read about herd behavior on wikipedia, and specifically how it’s used in marketing. This is exactly what we see with the current AI hype.
And then there is a matter of what you know and what you are actually capable of doing with that knowledge. I bet there are many executives who are fully aware of the irrationality of the FOMO, but who still get pressured by their board to do stupid things in case the company gets “left behind”. I have a lot of sympathy for them, it’s a tough position to be in. No matter what you do in this situation, you lose credibility with someone. You either go with the board’s direction, set the money on fire and lose any customers’ goodwill you may have left while also losing your employees trust and still may end up being sacrificed by the board once it’s clear the big investment is not paying off. Or, like all smart executives, you go through the motions of being bought in on the new direction, making bold statements and promises while not really going full in - this still makes you look like a clown and you may end up losing trust of the board and your employees, but the effect is much smaller, so you may be able to wait it out.
In any case, the first step to success, or to minimize losses, depending how much influence you have on your environment, is awareness. So here’s a simple guide that will help you distinguish when THE THING is, in fact, a great opportunity to invest or just a FOMO to dismiss:
Dorota's guide to dispelling FOMO
- Can you immediately identify what tangible value THE THING provides? Can you describe it in a few sentences? If so, write it down. Share it with another person - do they see the same?
- If not, is there another opportunity that THE THING opens up, which would provide tangible value? Can you describe it?
- Would capturing that value make a meaningful difference for your business?
- Do you have means - time, capital, whatever else is necessary - to pursue that opportunity and capture the value? Are you able to come up with a tactical plan to make it happen?
- Would you be able to operationalize it and make it stick? How different would it be from your present operations? What would need to happen to bridge that difference?
- Assuming you succeed in utilizing this opportunity, what’s the ROI? How does it compare to the next best alternative you have for the same resources?
- If you’ve got this far and are still convinced this is a great opportunity, can you verbalize your first step to make it a reality? Is it something you can do today or tomorrow? If not, why not?
If you’ve got through all the steps above and you still don’t have anything concrete written down about this opportunity, ignore it. It’s not real. It’s pure FOMO. You may even be able to convince your manager/executive/board/whoever pays your salary that this direction is futile. Good luck.