Why We Always Mistake Fads As Trends, And How Not To Do So? — Part I
Constantly switching between “a management consultant advising CEOs in mature industries” and “an entrepreneur doing the dirty work in unknown fields”, I get to see how things converge and diverge across different perspectives.
When making my 2018 resolution, I decided to start blogging to share my experience and lessons I’ve learnt with you. This is the first blog, on a theme I found over the last year to be of particular importance.
If there was only ONE thing I could share with you, this would be it.
This article hopes to help you with the following questions
- What are fads and trends?
- Why are many “trends” actually fads?
- Why differentiating between fads and trends is crucial?
- How to use this information to make better decisions in business and life?
What are fads and trends
In short, fads fade away while trends grow in importance and have profound impacts over time.
For example:
- Smartphones become increasingly popular in country A, due to lower cost and increasing local purchasing power — -> which is a trend
- The sales of red smartphones are 50% higher than other colors, because a local pop singer recently sported a red smartphone — -> which is a fad
Compared to trends, fads can explode quickly and grasp peoples attention, whereas trends might seem boring at first glance and are sometimes ignored initially.
The term machine learning was coined in 1959 but didn’t take off until 2015 coinciding with the improvement in GPU’s.
In fact, most of the information we receive that is presented as “breaking news”, “hot topics”, and “the next big trend” are almost certainly all fads.
Why many “trends” are instead fads?
- To keep up with the amount of content currently being consumed, media has to sell you tales of fads to grab people’s attention
Imagine your friend asks you “what’s new?” every minute, what can say after a while?
2. Media companies are incentivized to exaggerate fads and claim they’re trends
So they can get more views on their website, or more investment in their next, “Alibaba” startup.
3. Even people promoting the trend are not sure whether it’s really a trend
The line between fads and trends are much more blurry in real time than the examples I used in the beginning. Hence the heated debates on topics such as Cryptocurrency and Virtual Reality.
Even before we’re able to distinguish between fads and trends, it’s vital to keep in mind that real trends are far rarer than we think.
Venture capitals are known for investing in the future. Yet, among the 0.05% startups that are cherry-picked and actually receive funding from VCs, 75% of them ultimately fail. Although startups fail for various reasons, betting on the wrong trend does play a role.
The influence of media is one reason why we overestimate the importance of fads. On the other hand, our fear of being left behind also makes us obsessed with “buzzwords topical discussions”.
Why discerning between fads and trends is crucial?
Because chasing short-living, frequently-iterated fads exhausts your energy and time
It’s like counting cars that pass by with your eyes when walking on the street.
However, it doesn’t mean fads have no value. Many people make their success on fads, such as traders.
There’s nothing wrong with following fads, it just demands a high level of responsiveness, an area where machines can do a much better job than humans.
Traders, for example, make profits on market volatility. However, data shows that the more trades traders make, the higher the chance they make mistakes and take losses.
It’s actually not easy to be a fad-chaser!
So, how can spotting fads and trends help me make better decisions?
In the next post, I’ll talk about how to distinguish between fads and trends, and how to use this skill in decision-making. You will be able to put this into practice with many examples and experiences I will share with you.
To wrap up
- Fads explode but fade, trends grow and last
- Most of the so-called trends are instead fads
- Media are forced/incentivized/unaware of exaggerating fads as trends
- Fads have value, but machines can chase them better than humans
Preview for the next post
- A book that talks about fads and trends in details
- My two personal tactics for distinguishing between fads and trends
- How to apply these tactics to manage our time and energy, and to better make decisions and improve communication
What’s the biggest trend you’ve seen ending up as a fad?
Comment below and share your thoughts!
Claire Liang is the person who wrote this article while sitting on her table. She led multiple tech startup projects, worked as a management consultant in Accenture and A.T. Kearney, and spoke at TEDx. | Learn more or contact her on LinkedIn
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