233: Fear of Missing Out Among Startup Founders
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In today’s episode, Steli and Hiten discuss “FOMO” or fear of missing out which is a common experience for a lot of entrepreneurs and founders. This fear tends to crop up, especially in people who are struggling in their businesses rather than people who have thriving businesses. Instead of concentrating on other people’s success, entrepreneurs should focus on their own work and customers. Tune-in to find out how to deal with this fear by engaging in self-introspection and why being comfortable in your own skin is your ultimate defense.
Time Stamped Show Notes:
- 00:27 – Today’s topic is about “FOMO” or “Fear of missing out”
- 00:45 – Do not get distracted by new, shiny startups on the block, and instead concentrate on your work and customers
- 02:03 – Steli shares a personal anecdote about a time when he came across a couple of founders who had made a killing by trading in cryptocurrencies
- 02:16 – They were very enthusiastic about it and kept talking about it
- 02:32 – This affected a lot of other people on the boat and they felt as though they were missing out
- 02:59 – Steli also started feeling bad; he felt he missed out investing in cryptocurrencies
- 03:13 – “Somebody is always getting richer than you—that is not a tragedy”
- 03:23 – Avoid making investments without a solid strategy in place; don’t invest for the sole reason of missing out
- 05:40 – This “fear of missing out” is evident as lot of startups attempt to imitate their more successful counterparts
- 06:00 – Hiten’s 3 year old daughter recently told her mother, “You do you, I do me”
- 06:50 – “FOMO” is especially relevant when businesses are buying and selling stuff
- 08:43 – Loss of passion, discipline and drive are common reasons for having “FOMO”—the other likely reason is undergoing a prolonged business struggle
- 09:12 – Rationalize your fears before making investment decisions
- 10:36 – Once you become more comfortable in your skin, the fear of missing out tends to dissipate
- 12:10 – Steli remembers an experiment carried out on rats to illustrate his point
- 12:10 – A lonely rat in a cage got addicted to heroin-infused water
- 12:40 – Once other rats were introduced into the cage, the rats were less likely to try the heroin-infused water since they were busy socializing
- 12:55 – Parallels can be drawn to humans
- 13:16 – “If you are totally fulfilled with your life and your business, if you are proud of what you are doing and your business is doing well, you are probably not going to be hit by the fear of missing out”
- 15:42 – End of today’s episode
3 Key Points:
- Beware and do not get distracted by the new shiny startup—focus on your customers and your work.
- Rationalize and assess whether an investment decision is right for you; don’t just jump because you’re blindly following others.
- Be comfortable in your own skin to avoid falling prey to “FOMO”.
Hey, everybody, this is Steli Efti.
This is Hiten Shah.
Today what we’re going to talk about is FOMO in startup so fear of missing out when you’re a founder or you’re a startup. I think we’ve talked about this hidden in the variety of ways in past episodes but never really directly and with the focus on. A lot of the advice that we give can be summarized at, don’t worry about what everybody else is doing, focus on your customer, focus on the problems they have. Have customer insight and intimacy and that’s always going to lead you in the right direction and at the end of the day to success. Don’t be distracted by the shiny fad, by what’s fashionable, by what everybody else is doing, whatever the recent article you read about this new startup, the unicorn startup that exploded. About the recent growth hacks, some online marketing guru’s sharing with you. Don’t get distracted by all these noise, focus on what truly matters, which is your customer. We’ve never talked about like how powerful fear of missing out is and how it plays and messes with founders minds and how to use it sometimes maybe even in the marketing to attract customers. I will tell you one recent situation and why I wanted to talk about this. I thought about this many times but just recently I was on a boat and we were sailing and island hopping in the Mediterranean. I was with 10 other founders from all around the world and we had a great time, we had great discussions and everything. One funny thing that happened was that there were two of these founders that had made a shit ton of money in the past few months investing in crypto currencies. Especially in one crypto currency. Just an insane amount of return and they were very enthusiastic about it obviously. They kept talking about it; they couldn’t shut up about it. They were very passionate. That passion, that excitement of having made a ton of money recently with an investment and with something that is even exciting, you could tell how it was affecting a lot of other people on the boat. Obviously, a lot of people had already invested a little bit in crypto currencies or knew about it or thought about investing. You could tell by how just over the days, more and more people started leaning in and getting that sensation of, “Shit, maybe I’m missing out on something. Maybe everybody is getting rich with this thing and I’m just stupid not putting a lot of money in there as well.” I even caught myself in a moment thinking, “Am I stupid?” I hadn’t invested in this specific crypto currency. “Am I stupid? Should I do something about this?” Then I remembered this quote. This is one of my favorite Charlie Munger quotes, which is, somebody is always getting richer quicker than you, that’s not a tragedy. To me, I was like, okay, do I really care about this? Am I really knowledgeable about this? If I invested money on this right now, what will be the core reason I’m doing it? The only reason why I would be doing it is greed and fear of missing out. Being afraid that everybody else is on some kind of a train that I’m missing out. I was like; I’m getting rich in so many different ways, I don’t have to be part of everything. This is something I’m not that knowledgeable about; I’m not that passionate about. I don’t have any real strategy or real like insight or principle that would lead me to invest other than just being a follower, being a sheep, being somebody that’s just afraid that somebody else is getting rich. I was like, fuck this; I don’t care. Then, I noticed funny enough and the last day a bunch of guys on the boat, I assumed quietly had decided they would invest. One person was publicly announcing it and was setting up his account and trying to purchase a large amount of this crypto currency. The internet was not that good on the boat and for another number of other random factors, he was not able to invest. Literally, it was like, fuck this; I’m traveling today, back home tomorrow I will invest. Literally, the next day, this crypto currency had like a massive crash and the price had crashed. I don’t know; it was just a funny … Not to say it’s not a good investment or not going to work out or whatever but it was just a funny display of just human nature and a bunch of founders being like, “Shit, we should also make a ton of money with this.” Then one person actually trying to buy a large sum of this and potentially he could’ve lost a lot of money within a day just because his timing was off. Today, if you look at that currency up which is a month later, it’s still significantly lower priced than it would’ve been on that day. We still would’ve lost a lot of money. I don’t know; it was just a put of display of like even very smart people getting trapped into this emotion that everybody else has figured something out and they haven’t and then you want to just jump into it and act. You don’t have any real strategy, it’s not really the right thing for you to do but you’re just afraid you’re missing out on something. A lot of startups are doing this with their marketing strategies, with their sales strategies, with fundraising. My god, all our competitors have raised millions of dollars; we need to raise millions of dollars. There’s no rhyme or reason to it. I don’t know, I thought this was a fascinating topic and I just wanted to talk about fear of missing out and how it affects startups and founders.
You know what’s funny? I have a daughter; she is three-years-old. One day, she’s talking to my wife. My daughter’s name is Arya, my wife’s name is Emmy. Arya goes to Emmy and says, “You do you, I do me.” This is my three-year-old daughter throwing down a lesson to her mother that got recorded on video that I still send to people. I just send to people randomly. They’re like, “What?” I’m like, “Yeah, this is the lesson I have for you today.” I will send to you Steli.
Yeah, send it to me.
It hasn’t been appropriate until now but seriously; I think she sums up FOMO in a nutshell right there, right?
Charlie Munger, super awesome business person and strategist. I don’t believe he has ever started a business besides Berkshire. Which is interesting when you think of their mental model. I’m not sure if I’m right about that I’m pretty sure.
I think so.
He has a perspective. Yeah, something I think about because you want to think about someone else’s perspective. I think his perspective is a lot more of like looking at something and kind of evaluating it which is really me but I digress the FOMO. I think he’s got a very good perspective and FOMO, that was my whole point because he is buying and selling things basically. In their case, they don’t sell really so they just buy and make more money out of it and buy more because they made more money. Those folks are super interesting from an investment strategists sort of standpoint and FOMO is so common when you’re buying and selling compared to when you’re growing your own business. It’s because you could’ve bought something and all over sudden, a year later, you could’ve bought it. Now it’s worth 10 times what it was, what’s that, right?
Same problem with investors like venture capitalist, angel investors, seed investors and same problem with humans. It’s not a problem but I think it goes back to even the grass is greener. It’s so funny like I was texting with a friend this morning recently before this call-in. I had to text her and say the grass is greener. We were actually talking about something completely different; we were actually talking about relationships. That was interesting too. There’s a confluence of a bunch of stuff that kind of gives me my quick rant on it after years. Which is, I don’t know; there are so many opportunities in the world today, so many things you could be doing, so many new things coming up that you should be doing maybe, according to you. Getting over this FOMO is so important. I will say one statement just to see where we go with it. The statement I would say is like, you have FOMO because you have either lost passion, drive, motivation, discipline for whatever you’re doing. You never had it or you’re struggling but it’s still there. What I will do, when you feel that FOMO in any way especially if you’re a founder or a business person working in your own business, think about it. Where is it coming from? Why do you even feel the need to think about something else that is so unrelated to what you’re doing? Is it because you think there’s an opportunity to link it to what you’re doing okay? Is it because there are one of those three things I just mentioned that’s causing you to think about something else when you should be thinking about your own business? You know the whole; you do you, I do me kind of comes to mind. Why are you doing them so to speak or thinking about what they’re doing? Usually, it has a they in it. It’s like; other people are investing in Bitcoin and crypto currency, shouldn’t I be? Well, maybe but why are you even thinking about that if you’ve got this whole thing over here and that you’re probably working on? Maybe it’s not doing well; maybe it’s doing well, maybe you just want to be distracted. Maybe you’re an investor and you really do to consider it. If you’re that person then FOMO is what drives you big time. What drives you to analyze these things and make decisions around investments. That’s kind of I got for you on which is a bunch of little random lessons around it and things that I think human beings struggle with constantly.
I love that. That perspective. The way that I always viewed, they way that I kind of check myself before I wreck myself with all these stuff is that when I have that emotion, which is not often anymore. It used to be all consuming and this is maybe also an interesting thing. I feel like as you mature as a person, as you get more self-aware and more self-accepting, you have less and less FOMO in life. As you know who you truly are, you’re not confused about that or you’re not constantly thinking you’re not enough and you should be somebody else. As you are more okay with who you are, I think it lessens that emotion that you’re missing out on life or missing out on what everybody else is doing or orienting your life externally versus internally. When I do have that emotion, which I had on the boat, which was interesting to me. Where at one point I was like, am I the idiot? Am I just missing out on a shit ton of money, easy money right in front of me? As I had that question, that emotion, I always get that feeling of if I get action on this, what is the core reason for it? The core reason like in my articulation, my mind was core reason is that somebody else is doing it. I didn’t discover this; I didn’t have any original thinking that led me to the conclusion that I have to invest in this. I’m just following somebody else based on fear of missing out. I’m not going to do that. I have done it a number of times in the past in my life and it’s never working out well. The thing that you described, I didn’t even think about that. The thing that you described of like if you’re completely happy of where you are, you probably don’t have FOMO. You’re totally passionate about what you’re doing, how your company is doing. You’re not looking at other companies and wishing you were there and you will do what they would do and all of that. I don’t know if it’s appropriate or not but it reminded me of this rat experiment. You know the experiments they made with rats on getting them addicted to heroin? Did you hear about that, did you read that?
Yeah, I did.
Right. This is a popular thing that was described a lot times where they took rats and they had like a little bit of water and some water that’s some heroin in there or something like that in there. The rat will drink a little bit of water and then would try the water with heroin in it. Then it would get totally addicted and only drink the heroin water. Once they extended the cage and they had other rats and they had like a little playing ground and all kinds of things, the social life of the rat. The rat again, will go try the normal water and try the heroin water and then not take the heroin water again. The conclusion, the moral of the story is that if a rat has a healthy social life and is busy and there’s things to do, it will not get as easily addicted to drugs as a rat that’s lonely and doesn’t have a social life doesn’t have an active life. You could easily draw the parallels to humans on this. It kind of reminds of that like if you’re totally fulfilled with your life and with your business, if you’re proud of what you’re doing, if your business is doing well, you’re probably not going to be hit by fear of missing out as much as if you’re running a business that’s not doing well. Which is a really good point. I know a lot of people that have startups that are struggling and they’re not succeeding as much as they should. This people are much harder hit on fear of missing out than founders that have startups that are doing well for obvious reasons. These founders totally have lots of doubt and stress and constantly thinking others know something they don’t know. They feel maybe guilty of it; they feel jealous. That state of mind obviously is much easier to be influenced by having constant fear of missing out and looking over the fence to the greener grass. Then if you’re kind of happy with your lawn, happy with your house, happy with your life. Taking stock at how much fear of missing out is driving you as a reverse engineer method to ask yourself how happy you are with your life or how happy you are with your business and what you’re doing. It’s kind of an interesting take that I hadn’t taken before.
Yeah. I think it’s one of the most valuable ones that I found for myself. It just really flips the script on this whole FOMO thing in a way it’s like you focus on yourself on what’s either missing or what’s causing you to think about something that is not necessarily the best for you. Yeah, I think for me like that really sums up the strategy of what you do when you’re dealing with FOMO. It’s like go and get introspective and figure out why the FOMO. All of us deal with it; it comes on time to time. Usually, it has to do with what’s missing in your life or what you think is missing right now.
I love it. All right, we’re going to wrap up the episode on this tip. Hey, if you guys like the startup chat and we know you do. Lots of people giving us feedback and we always love your feedback. If you have something to say nice or not so nice if you have a struggle that we haven’t addressed yet, just send us an Email, steli@closeio, firstname.lastname@example.org. Always love to hear from you. Do us a favor if you haven’t yet, go to iTunes and give us a review and a rating. The more ratings and reviews, the more we pop up when people search for startup podcast and the bigger the community it gets. We highly appreciate that and that’s it from us for this episode.