“In reading… history… we find that… individuals…have their whims and their peculiarities; their seasons of excitement and recklessness, when they care not what they do. We find that… communities suddenly fix their minds upon one object, and go mad in its pursuit; that millions of people become simultaneously impressed with one delusion, and run after it, till their attention is caught by some new folly more captivating than the first.”
Sound familiar? Like Dot Com Mania? Or maybe the sub-prime mortgage meltdown? Actually, it’s a passage from the 1841 classic, Extraordinary Popular Delusions, and the Madness of Crowds, by Charles MacKay, republished in 1999 with a foreword by Sir John Templeton.
McKay was talking about the psychology of crowds and their tendencies for creating mass mania. He had on his mind the Tulipomania (17th Century), The Mississippi Scheme (18thCentury), and The South Sea Bubble (18th Century). But he could have been talking about sub-prime scandal and associated economic meltdown (Early 21st century). Could we one day say that it also sounds like the social media craze, also of the early 21st century?
When a fad comes along, like Beanie Babies, cigar bars, or buying groceries on-line, there is opportunity to be had - no question. But this is typically only for an existing business, which, along with its perennial products, adds the “new folly” product to its line - not for a new business based solely on the “new folly.” In terms of adopting social media for your small business, this means creating a strategy that is compatible with your traditional marketing strategy.
There is tremendous pressure on small businesses to take advantage of social media these days: peer pressure, fear of missing an opportunity pressure, fear of becoming uncompetitive pressure, and, yes, greed pressure. Truth is, none of these are unworthy motivators. The problem comes when the manifestations of these pressures are misapplied in the form of mania.
By all means, develop and execute a social media strategy that helps your small business gain and maintain a competitive advantage. But make these applications complement your current business model, rather than merely getting caught up in “some new folly.”
The last thing we want to happen, when you read Mr. MacKay’s book on popular delusions and the madness of crowds, is for you to see yourself there.