Before you panic and think I’ve turned to the dark side and embraced LOL’s, BRB’s, and BTW nonsense favouring text message speak I urge you to relax. FoMo is a real term, yes, its an abbreviation but this one is a bit more serious. FoMo is short for Fear of Missing out and I promise to explain.
Fear of Missing out (we’ll use FoMo going forwards) is nothing new, its something that most of us have come across at least once in our adult lives. I had one the other day that I’ll use as an example.
I was looking at phone contracts and I happened to get a call from o2 (or so the claimed) offering me an upgrade. The price was good, it seemed really good and it was mine if I agreed to the upgrade then as the offer had really expired the day before, but they wanted to do me a favour.
Was this an offer that was too good to miss? Of course not, it was FoMo at play. They tried to create a need and then pushed for closure by attempting to make we think I’d regret not taking their offer as I’d miss out. This is a common sales technique in car dealerships and double-glazing companies who try and push one-time or time-bound offers.
So, if this is nothing new why am I writing about this as a business article? I’m writing about this as it’s not just a personal issue but also a very serious business challenge. Honestly.
We have had a wonderful example recently of FoMo at play in the business world where the loss was over $100 Million in lost investment. I say it’s wonderful, it’s great if your writing an article about FoMo but it’s awful if you were that company. And now you’re wondering just who fell for one of the oldest tricks in the book, so I’ll put you out of your misery. It was Walgreen’s, the US pharmacy business.
Walgreen’s partnered with Theranos to offer blood sampling using what was claimed to be a new, revolutionary technique that was certain to bring customers flocking through the doors. If Walgreen got onboard quickly, they would be able to stop Theranos talking to CVS and claim exclusivity. So, they invested £130 Million as they were afraid to miss out. Darn, I wonder if they need some new windows for their buildings? I know of an amazing deal that we cannot afford to miss out on.
Now I’m being unfair to Walgreen’s, the list of companies and individuals that also invested in Theranos is incredible to the extent that in total the value of the investment is said to exceed £900 Million and included Rupert Murdoch ($125 Million), Betsy Davos, the US Secretary of Education ($100 Million) alongside numerous venture capitalists and fund management organisations. Think about it for a minute, one FoMo leaning investment cost investors nearly $1 Billion. That’s Austin Powers money. Dr Evil wanted less to avoid holding the world to ransom. It sounds like a funny comparison, but a good story is simply that, a good story.
The truth was that the Theranos product was so far from a finished product and the investors were never likely to see returns as promised and now the two primary founders are facing multiple charges of wire-fraud.
FoMo plays an emotional game with our rational. It creates a time-based need and fear such that we often ignore rational, our gut-instinct or even basic logic in favour of getting the deal done. The fear that it might cost us more in the future, that the deal may never appear again, or our competitor might benefit from it at our expense brings real risks into play. But luckily, there are things we can do to try and mitigate against this risk.
Ask yourself these six questions, answer unemotionally and if you are sensing any negative answers then the answer should be to run away or seek independent advice.
1. What really happens if you miss out?
2. Does it sound too good to be true?
3. Who is driving this? How do you know you can trust them?
4. Does it take investment away from other areas?
5. Does it diversify your core business or personal activities?
6. Can you afford to lose what you put into the opportunity?
FoMo is based primarily upon an individual creating compulsion or fear in their target. If you’re sensing any of these pressures, then you have a great indicator to hand. Listen to your gut as well as your heart and your head. Allow the three to come into play and walk slowly reassessing at all times. ‘The perpetrators want to make you feel that they’re in the driving seat at all times when the reality is that they want something that you have. This puts you in charge of the speed and direction that things will travel in. Never forget that.
So FoMo really is a major risk and it’s not just at play when you’re buying a new car, it’s a major business risk that cannot and should not be ignored or taken lightly. If you fear that there is a fear that you might miss out on a deal, follow the six questions, stop, breath and assess before doing or saying anything. Finally, good luck out there.