Beating the Hype Cycle
Here are three strategies for avoiding market swells and pricing increases due to what’s “popular” or “hip”.
I’ve noticed this trend that is starting to occur where big celebrities or particular “self-help, lifestyle design gurus” recommend products or services which then become very popular. This has happened in the past 6 months with chaga-mushroom-infused-coffee, acroyoga, gymnastic strength training, and pu’erh tea, despite all of these things existing for months (if not years) beforehand.
Here’s the secret to beating the hype cycles:
Get ahead of the curve.
I’ve written before how it’s easier to ride the wave than it is to catch it. The same goes for buying stocks, investing in start-ups, and buying products.
The best way I have found to do this is either to get insider information (really challenging) or do the hard work of identifying individuals and groups you wish to emulate (particularly before they become admirable) and studying them.
Want to become as strong and flexible as an olympic gymnast? Investigate what kind of workout a 12-year-old training to become that level one day is doing.
The goal here is to identify potential future areas of interest and beat the market to them. In my experience, this is particularly difficult to get right (the market is stupid, irrational, and difficult to predict) but is rarely wasted time if done from a purely research standpoint.
Get really behind the curve.
The thing with hype cycles, is that they ebb and flow.
There are definitely some activities and past-times that have outlasted the test of time.
Surfing is still satisfying in a whole-being kind of way. Paragliding is still thrilling. Hot air balloons are still romantic and breath-taking.
Jazzercize and Step-Aerobics have come and gone (thankfully), likely due to their overpromising and underdelivering. Aren’t you glad you didn’t buy all that overinflated equipment?
The secret to being really behind the curve is to find the few things that have survived the test of time. Taleb in Antifragile refers to this as the Lindy Effect — the principle that things that last the test of time are more likely to continue to last the future test of time. Coffee and red wine have existed for hundreds (and thousands) of years, and are likely to exist for thousands more.
So when trying to beat a hype cycle, the smarter way to approach the problem is to look to the past, and wait it out.
Chances are, if that thing that everyone is buying now is actually worth the time and effort, and can deliver as promised, people will still be into it in 6 months or a year. Best to make a calendar notification and forget about it. If it’s still relevant in a year, don’t hesitate. If not, you just saved some cash. Now you can spend it on something you know to be satisfying (like craft, small batch chocolate).
Completely ignore the curve.
This one I find particularly enticing.
While the whole world is going crazy to the waves being made in the media and across the internet, maybe the best way to react is to just ignore it.
Chances are, like 95% of major events, this one will pass and no one will care a year from now. Do you remember the biggest news story of October 2013? September 2002? How about the 18th centure? Didn’t think so. And if you just went and looked it up because I said that, you’re missing the point.
Further than standing the test of time, another concept from Taleb is the idea of the signal breaking through the noise if it’s loud enough. If a piece of news or information is going to radically change the way your life is unfolding, chances are, it’s going to make it to you in one way or another. No sense fretting about the noise that fades and dissipates in comparison.
Want to beat the hype cycle like a pro?
“What the hell is a hype cycle?”
Spend your time instead doing the work that matters.
Absorb what is useful, ignore what is not, add what is uniquely your own.
— Bruce Lee