Over the last six decades, 64% of artists that graced the Billboard top 100 were one-hit wonders.
Some were novelty hits, some were just plain lucky, and for others, the market simply moved on.
However, most artists fell victim to the unconscious cognitive bias of loss aversion.
What is Loss Aversion Bias?
Loss aversion is when our subconscious preference to avoid failure is greater than the desire of acquiring new gains.
Research has shown that losing $10 is 2.5 times more impactful on us psychologically than the positive gains of finding $10.
Our tendency to avoid losses causes us to make stupid decisions and subconsciously change our behaviour simply to keep things we already own.
We are wired to protect our status. This often leads us to overvalue it against the alternative options of growth.
In other words, we play it safe.
On a basic level, you probably have an item of clothing which used to be a favourite but you haven’t worn it for months or even years.
But you can’t bring yourself to donate it to a charity shop, right?
Why? Loss aversion bias. Our brains are wired to avoid pain. Throwing away an item of sentimental but no practical value is painful. So we keep it.
For years and years.
It’s why hoarders hoard.
Loss aversion and one-hit wonders
The best and worst thing that can ever happen to an artist is having a hit record.
On one hand, it’s an amazing accomplishment. To have created the most popular song in an entire country is an incredible achievement and a huge adrenaline rush.
It’s what every artist dreams about when they’re kids.
On the other hand, the pressure to following it up is overwhelming.
Loss aversion bias kicks in.
The fear of having a flop terrifies them. They are successful and respected.
The thought of losing that status is terrifying.
So they subconsciously play it safe, they stop taking the creative risks or pushing the boundaries that led to their success in the first place.
The fear of losing status is a trap. It’s a self-fulfilling prophecy.
The bigger the fear, the more they dilute their creativity in a futile attempt to appeal to more people.
They get in their heads. Overthink everything. And generate weak, bland, vanilla music that doesn’t resonate.
By trying to please everyone, they miss the mark entirely and don’t please anyone.
Who is impacted by loss aversion bias
Most high achievers.
Loss aversion impacts investors, when they lose on a stock, the fear of more losses is greater than the desire for the stocks to rise again.
They buy when confident and sell in fear. This is a buy high, sell low trap. And a poor investment strategy.
Loss aversion can impact a high-status employee who wants to start their own business, but fearful of losing the status of their job.
It impacts everyone in creativity. It impacts everyone who is a maker, a service provider, a builder of things, who sells to the public.
It impacts creators the most though.
While an Indie hacker can build and iterate one product that catches the public’s imagination and makes them their fortune.
Content creators are only as good as their last piece of content.
It’s a constant battle to keep connecting. To keep having bigger and bigger content hits.
What can we do about it?
Firstly, knowing you are experiencing a cognitive bias is a huge strategic advantage.
Knowledge is power.
Metacognition is a fancy name for thinking about our thinking.
It’s highly recommended as a high-level thinking tool to overcome our subconscious biases.
We need to question our thinking and remove the emotion from the situation.
Think of the overall net position. Not every piece of content will succeed, nor will they fail.
It’s important to consider the overall net position of your content portfolio rather than focus on the all or nothing of one piece of content.
As long as more content pieces hit than misses it’s a portfolio net gain.
When the fear of failure grips us we should turn to de-risking critical thinking.
I have written before about the six honest serving-men method.
We then need to apply some critical thinking methods to discover the best reasonable options available to us.
- Be aware that we all have a loss aversion bias
- As a creator, you will be fearful after a piece of content goes viral or gets a lot of positive feedback from leaders in your niche.
- Use fear to push your creativity and not dilute it.
- Take risks. Push the boundaries. And refuse to accept mediocrity.
Interested in 1-2-1 Creative Business Coaching/ Consulting?
I help creators and solopreneurs become famous in their niches. I specialise in:
- Creative business strategy
- Standing out in saturated markets
- Overcoming creative blocks that are holding you back
- Building audiences.
I do a discovery call. Cost? $0.00 Commitment? Zero. Time? 30 minutes
More info? Go here
A bit about me
I’m an ex- multi-platinum artist manager. I created strategies and built audiences for artists who sold millions. I’ve challenged myself to write 50 articles in 50 working days. 30 down, 20 to go.
You can read more in the archives here. Find out more information on my website or connect on my LinkedIn