Over the past few years, millions of people have become day traders for the first time.
Seeing the popular stories of traders getting rich on Robinhood, chasing crypto, and gaming GameStop’s stock, they’ve followed the crowd and jumped on various bandwagons.
If everyone’s getting rich, they thought, I will, too.
But in times like these, the typical outcome is disaster.
The average day trader, for instance, loses money over the course of a year. In fact, according to one study, “only about 4.5 percent of day traders are successful.”
Get-rich-quick stories are so popular, so widespread, and so viral because they are so rare. As Maria Konnikova noted, professional poker players get a higher average return than professional investors.
In entrepreneurship, the odds are better, but still not great. We all know the statistics about business failure rates, with about half of U.S.-based businesses not making it past their fifth year.
So why is it so difficult to realize that that means the average business will fail within five years?
Not the bad businesses, not the careless businesses—the average businesses. Which suggests that they are also doing the average things, like following the crowd, obsessing over benchmarks, and trying to capitalize on trends.
Those are the businesses that don’t make it.
More than 25 years ago, before modern businesses had centralized on the same digital platforms, dashboards, tools, and techniques, Michael E. Porter wrote about the risks of following the crowd in his famous HBR piece What is Strategy?:
“The more benchmarking companies do, the more they look alike. The more that rivals outsource activities to efficient third parties, often the same ones, the more generic those activities become.”
Or, as Roger Martin wrote, “The more your choices look like those of your competitors, the less likely you will ever win.”
The more we copy others, the less likely it is that we’ll succeed.
Because the crowd is lost—it doesn’t know what it’s doing.
What’s popular is rarely what works, and what our competitors are doing is not necessarily what we should do, too.
So what’s the alternative?
Standing out from the crowd.
Making decisions based on probabilities, not on our our envy of others.
Positioning ourselves for multiple outcomes and futures, not just the current state of affairs, the world, or the economy.
And planning many years ahead, not just a month or a quarter at a time.
As the authors of Blue Ocean Strategy wrote, the most successful entrepreneurs “didn’t use the competition as their benchmark.”
No, “instead of focusing on beating the competition, you focus on making the competition irrelevant by creating a leap in value for buyers and your company, thereby opening up new and uncontested market space.”
It’s nearly impossible to become a successful, long-term business by following another business’s lead.
And the only thing holding us back from being different is what high performance sports psychologist Michael Gervais calls FOPO, the fear of other people’s opinions.
Or as Keynes put it, “Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally.”
People don’t like the feeling of being different, of standing out from the crowd. They’d rather blend in and do what everyone else is doing, because that feels safer.
But blending in is what I call “business camouflage.”
Following the crowd is just another way of giving up on yourself and your dream, because it cannot work. It’s not safer, it’s not more responsible than being different. It’s dangerous and reckless, because the odds are profoundly stacked against businesses that merely copy others—whether that’s their service offering, their marketing, their product, their pricing, or their value proposition.
You’re far more likely to succeed if you choose to be different, and to do what you love, than to half-heartedly copy what someone else has already done. Or to steadfastly but blindly follow someone else’s checklist or playbook.
By all means, keep an eye on your competition, your industry, and your peers.
But do so as a means of identifying additional opportunities they might not have seen, or to avoid making the same errors they have.
“Fools,” as Bismarck supposedly said, “learn from their own mistakes. I prefer to learn from the mistakes of others.”
Instead of doing what everyone else is doing—using the same software, the same tools, the same tactics, the same techniques—learn what makes you, your business, your service, and your position truly unique.
And reinforce that position in everything you do, creatively and and experimentally.
Don’t hope your business will succeed. Make sure it can by standing out and being different.
And don’t follow the crowd—they’re lost.