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Loss Aversion is NOT “No-risk”

I talk about asking and acting ad nauseam.

Chasing the Revision. Google Lyria. Public Domain.

There’s a reason.

People don’t act.

Perhaps tiny startups are all too willing to act, to the point of moving fast and breaking things. But executives at more established firms become well versed in loss aversion.

“Loss aversion is a cognitive bias where the emotional impact of a loss is felt more intensely than the joy of an equivalent gain….

“According to the original research conducted by Daniel Kahneman and Amos Tversky, the pioneers of loss aversion, the torment of a loss can be psychologically twice as powerful as an equivalent gain. This discrepancy often motivates the choices we make, leading us to cling to what we already have rather than try to acquire new objects or opportunities. Simply put, it’s better not to lose $10 than to find $10.”

Once you look at it dispassionately, you realize that loss aversion makes no sense from an economic perspective.

But corporate leaders are loss averse anyway.

Why?

Four reasons for loss aversion

Here are some reasons for loss aversion.

Reason 1, Product unreadiness

Executives may panic because the product on the floor is nowhere near the one in the product marketing materials. The product on the floor is buggy, and that amazing new capability that the marketing slick discusses isn’t even in the code yet.

And I can tell you from personal experience that this isn’t limited to product marketing.

When I was writing and managing proposals for automated fingerprint and biometric identification systems (AFIS and ABIS), the product usually wouldn’t hit the “factory acceptance test” phase until a year after I wrote the proposal.

Sometimes the agency explicitly asked whether feature 129 was in your code today. If it did, then you had to be honest and say whether it existed, or whether you’d have to add it in a future release in the next year.

Sometimes the agency didn’t ask, so you took a different approach with your answer.

Same with product marketing. If you are writing the data sheet in September, but you’ll show the product at a trade show next March, then you write the data sheet as if it were already March and the amazing new capability was already in the code.

If everything goes well.

“But John,” you’re saying. “Isn’t it dangerous to write about things that are 6 months or a year in the future?”

Think about it. Even if a prospect sees the data sheet and gets really really excited, the prospect couldn’t buy it that day even if they wanted to.

First, you’re not selling it. (Well, probably not.)

Second, even if you were taking pre-orders, the prospect probably won’t buy it that day anyway. It will take months if not years to line up the budget and all the approvals, and the prospect may be forced to go to competitive bidding anyway, which tacks another year on the timeline (at least for complex offerings such as AFIS and ABID).

In summary, some “future present tense” writing probably isn’t going on hurt you. Don’t be scared to tell your prospects where you’re going. At least that’s my view.

Reason 2, Compliance and legal exposure

Now I’m going to contradict what I just said.

Because there are some times when you CANNOT go the future present tense route.

You can’t say that your product has received a presentation attack detection (PAD) Level 3 conformance certificate if you haven’t received one.

You can’t say that your algorithm ranks high in NIST FRTE 1:N testing if you haven’t submitted your algorithm to NIST.

You can’t even say that you’re doing business in the United States when you’re not.

If there is a legal requirement and you claim to meet it, make sure you do.

Reason 3, Positioning ambiguity

I’m old enough to remember Shimmer, the Saturday Night Live “product” that was both a floor wax and a dessert topping.

But for most products you have to decide on positioning and messaging, and there may be known consequences if you get it wrong.

Certainly for the products sold by Bredemarket’s clients, products with critical security, privacy, and legal implications. If you say something stupid such as “Our facial recognition product provides all you need to arrest bad people,” you will be in BIG trouble.

Now I’m not denying that product positioning is critically important.

I’m just saying that it shouldn’t take two years to create your positioning and messaging.

And don’t be afraid to iterate. Get something out there and tweak it later during the next review cycle. (You ARE setting regular review cycles for your positioning and messaging, right?)

Reason 4, Fear of firing

Are you afraid of losing your job? Join the club.

I like the way Google Gemini put it:

“In risk-averse corporate cultures, a failed campaign carries higher personal downside for an executive than the neutral outcome of waiting a few extra weeks.”

But I have learned the hard way that you don’t have to fail to lose your job. You can lose your job for a myriad of reasons, including office politics, a worldwide pandemic, or the need to boost short-term profitability. Or no reason at all; some companies terminate employees and can’t say why.

Pausing a risky go-to-market initiative does NOT guarantee that you will keep your job.

But doesn’t loss aversion reduce risk?

Let’s go back to the beginning of this post. Loss aversion seems so attractive because it prevents you from losing $10.

So it avoids risk, right?

Um, no. Loss aversion is risky.

It introduces the risk of not gaining $10.

Or gaining a lot more than $10, according to this article that was republished on (checks notes) Yahoo! Finance.

“Back in 1998, two individuals, Larry Page and Sergei Brin, who were unknown to the technology company offered to sell their little startup to AltaVista for $1 million so they can resume their studies at Stanford….

“AltaVista turned down the offer to acquire the company. Similarly, Yahoo wanted its users to spend more time on its own platform, contrasting PageRank, which sends a user to the most relevant web site.”

So Page and Brin kept working, along with Eric Schmidt, and their startup Google started doing pretty well.

So much so that in 2002, Yahoo! came calling again.

“Yahoo had another opportunity to acquire Google. In 2002, Yahoo’s CEO at the time, Terry Semel, engaged in negotiations to acquire Google, which lasted several months.

“The outcome of the negotiation was Semel balking at Google’s price tag of $5 billion.”

But Yahoo! didn’t come away empty-handed. In 2003, it acquired the company that had acquired AltaVista.

But Google, um, continued to do well on its own.

But Yahoo! and AltaVista avoided that huge risk.

Oh, and AltaVista no longer exists, and Yahoo! isn’t going to buy Google any time soon.

So what?

Now I will not guarantee that using Bredemarket’s services will make you Google-level money.

But I can help you accelerate your content, proposals, and analysis to help you act before your competitors do.

Click below to learn more about how Bredemarket can help biometric firms (and other identity and technology firms).

https://bredemarket.com/2026/09/01/biometric-product-marketing-expert-2609b/

Biometric Product Marketing Expert Detail

Ask before the courage fails.

Turning the Phrase

Smartphone games are not games. They are ad delivery devices. You start the app, and you see ads for other apps. You download the new apps, and the cycle continues endlessly.

So I was playing a Bitcoin-earning game (actually a Satoshi-earning game; don’t count on earning 1 Bitcoin in an hour’s worth of play) when I saw an ad for a poker game app. An update of the Yahoo! Poker games from long ago, the app screen shows five faces surrounding a poker table. Except these are not still images, but video with audio sound.

So I am watching the ad when one of the players says:

“Life is too long for bad poker hands.”

Read that again.

Life is too long?

Shouldn’t the player be saying that life is too short? The statement makes no sense the way it was said.

But sometimes a turned-around, wrongly-worded phrase is illuminating. Take the time that John F. Kennedy intentionally reversed a phrase to joke about our nation’s capital:

“Washington is a city of Southern efficiency and Northern charm.”

What if you built a spaceship and nobody came?

Things were different a few years ago.

As I write this, one of the big news stories involves Jeff Bezos’ plans to go on a spaceship built by his company Blue Origin. Not many people can afford to go on a spaceship, but Bezos certainly can.

Back in 2017, when you referred to a tech CEO going to a spaceship, you thought of Apple CEO Tim Cook staying on this planet and going to Apple Park, Apple’s new building in Cupertino. One of Steve Jobs’ last great accomplishments, Apple Park was a $5 billion corporate headquarters that provided Apple employees with an insanely great place to work.

By Arne Müseler / http://www.arne-mueseler.com, CC BY-SA 3.0 de, https://commons.wikimedia.org/w/index.php?curid=78985341

Of course, not everybody went to an office to work in 2017. In fact, Silicon Valley had discussed this in 2013 when Yahoo’s then-CEO Marissa Mayer saw all of the Yahoo employees working from home and deemed it, um, essential that Yahoo employees work in the office whenever possible to help build Yahoo’s culture.

In February 2019, remote culture advocate Sarah Dixon looked back at the Yahoo episode. Among other things, Dixon stated:

…there’s no doubt that Mayer’s announcement did some damage to the acceptance of remote working. If you’ve tried to persuade a reluctant boss to let you work from home, they may have even used Yahoo! as the reason they don’t think it’s a great idea.

Ah, way back in 2019. I remember those days.

A little over a year later, attitudes toward remote working changed in ways that even Sarah Dixon couldn’t have imagined. In March, Dixon’s coworker Gabriela Molina was providing a step-by-step guide to working remotely during COVID-19.

Due to COVID-19 restrictions, a lot of us were forced to work from home, whether our companies liked it or not. Security systems were updated. Videoconferencing systems installed on our computers were used much more frequently. Additional collaboration tools were adopted.

But now, at least in the United States, COVID-19 is receding. More and more people are theoretically able to go work. Yet many people continue to work from home today, including employees of some major tech companies.

Apple, however, would like its employees back in the spaceship three days a week (Monday, Tuesday, and Thursday). After all, Apple spent $5 billion on the thing; might as well get some use from it.

But some Apple employees aren’t so eager to return to the practices of old.

…we would like to take the opportunity to communicate a growing concern among our colleagues. That Apple’s remote/location-flexible work policy, and the communication around it, have already forced some of our colleagues to quit. Without the inclusivity that flexibility brings, many of us feel we have to choose between either a combination of our families, our well-being, and being empowered to do our best work, or being a part of Apple. This is a decision none of us take lightly, and a decision many would prefer not to have to make.

The letter from the Apple employees uses many terms such as “flexibility,” “empowered,” “unconstrained,” and “tearing down cross-functional communication barriers.” The employees claim that remote work allowed them to do their best work ever…and they don’t want to go back.

It’s hard to predict how all of this will play out for Apple and other companies. On the one hand, many companies are taking advantage of distributed working models. Ever since August, my consultancy Bredemarket has conducted ALL of its business without setting foot inside any of my clients’ offices. Actually, my clients themselves aren’t setting foot in their own offices; for one of my clients, I frequently deal with two employees who live several states away from their employer’s office.

On the other hand, out of sight, out of mind. Unless your corporate culture has a habit of firing up Zoom or Facetime at any moment to talk to someone, interactions with remote workers are going to be more limited than they were if you were down the hall from each other.

My perspective on this is admittedly unusual. From 2017 to 2020, my corporate supervisor was on the other end of the country from me. Over the nearly three years that I reported to him, I probably saw him in person less than a dozen times. So I sort of had an experience with remote work before COVID sent all of us home in March 2020, and things worked out well.

But how are you going to get a company with hundreds of billions of dollars in revenue, who paid more to build their corporate headquarters than many companies make in a year, to change its way of doing things and “think different”?