Patrick McGinnis: FOMO (Fear of Missing Out) vs. FOBO (Fear of Better Option), Overcoming Career Paralysis & VC & Life Decision Frameworks - E394

· Podcast Episodes English,VC and Angels,Harvard,USA,Creators



“I floated around trying to find that thing that would light me up and give me joy. It just took a long time, and it was worth it because very few people that I know truly feel fulfilled in their work. In retrospect, I didn't like my job all that much and I wasn't particularly good at it. I would never be great at that job. I would never be the best in the world, but I found the thing that I was supposed to be doing. And that has been such an unlock for me in so many other parts of my life.” - Patrick McGinnis

“We live in a world where there are afflictions of affluence. If you're living in a war zone, you're not going to have FOBO because you're just trying to make it through the day. That's a luxury good. The other thing is that we live such digital lives. FOMO exists and it's part of the human experience, but the triggers are largely digital. It's information-driven. Information is the trigger for all FOMO. And so the more information you're consuming, the more likely that you will experience FOMO and FOBO.” - Patrick McGinnis

“When FOMO becomes a pathology, it means you have created an inner narrative in which you're comparing your life to some idealized form of your life that doesn't exist, but, FOMO can be positive. It can be an incredible motivator to get people off the couch, live life, and go experience things. It's like wine. Having a little bit of wine makes you start dancing and talk to the person you want to meet. Have too much wine, not so great, you'll fall over.FOBO is like smoking. It’s bad for you and the people around you because FOBO is about trying to minimize and eliminate every risk in a decision. Therefore, it holds people back. They become paralyzed, and paralysis is extremely damaging to people.” - Patrick McGinnis

Patrick McGinnis, VC & Creator of FOMO (Fear of Missing Out) Sapiens, and Jeremy Au talked about three main themes:

1. FOMO (Fear of Missing Out) vs. FOBO (Fear of Better Option): Patrick shared how he had created the terms FOMO and FOBO during his MBA student days at Harvard. He shared how he was surprised 10 years later that his lingo with friends had grown into a globally recognized phenomenon. These behavior patterns of overcommitment, indecisiveness and optionality maximization have been exacerbated by the endless choices and information overload facilitated by digital platforms, leading to widespread analysis paralysis and stress. He discusses why he thinks FOBO is less popular than FOMO due to its darker nature and more insightful lens into human decision-making.

2. Overcoming Career Paralysis: Patrick shared his personal journey from a career in venture capital to becoming an author, speaker, and entrepreneur. He shared how he had to have a heart rate monitor installed due to the high stress of his job that he fundamentally disliked, and the eventually lonely, painful, and scary decision to take a career sabbatical and step outside the conventional path that would have been expected from a Harvard MBA graduate.

3. VC & Life Decision Frameworks: Patrick detailed his conscious effort to integrate strategies to combat FOMO and FOBO, sharing a framework for categorizing decisions (high stakes, low stakes, and no stakes) to streamline decision-making processes. Patrick shared his frustrations with the VC industry's incentive structures, including the challenges of decision-making in an environment rife with FOMO and FOBO. He emphasized the importance of discipline, due diligence, and being mindful of underlying motivations when making investment decisions. He also shared examples from his "FOMO folio" strategy to manage investment temptation.

He also discussed the societal shift towards constant comparison and indecision, strategies for combating decision fatigue, and why he's exploring coaching and building for the next stage of his career.

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(01:34) Jeremy Au:

Hey, Patrick, really excited to have you in the show. I'm a big fan of your original student writing as well as your book, 10% Entrepreneur. Could you please introduce yourself?

(01:42) Patrick Mcginnis:

Sure. I'm Patrick McGinnis. I live in New York City and I do three things actually. I do sort of media. So I have a podcast. I write books. I give talks. I became the spokesman for a tech company in Latin America last year. So that's the media bit. I do investing. So I, I make sort of angel investments. And then I'm on the investment committee of a venture capital fund in Latin America. And third is I just started a company with one of my good friends from Harvard and another friend that is a new executive coaching company focused on investors and founders.

(02:14) Jeremy Au:

Wow. Amazing three amazing verticals that we're definitely going to get into.

(02:18) Jeremy Au:

So I want to hear a little bit more about what you were like in the early days, in your early career, before you went to HBS, what were some of your pivotal decisions that at the time?

(02:27) Patrick Mcginnis:

So my trajectory was a, I didn't really know what I wanted to do. What I knew was that I was, I had lived in Argentina as a college student and I love Latin America. And so I wanted to do something with Latin America. And then everybody was becoming an investment banker when I was graduating from Georgetown. So I thought, well, okay, let me go do this. And I got a job in investment banking and I was very bad at it. I'm really not good at banking stuff. Like I'm not a good Excel person, pretty terrible, not a very good, I'm like good at math, but not, I'm no, no quant jock. I was just not, I was like not good at any of it. And I was looking to get to leave and actually do like a full ride or some other kind of academic program, go back to school. And my boss said, listen. Why don't you interview for our, our venture capital group? And I was like, nah, I don't want to do that. And then he said, just go meet them.

And so I did, I got hired in the, you know, the, the kind of peak 2000 year, 2000 first internet boom. And I did all these investments and then they all blew up and it was so spectacularly exciting and crazy. And then that convinced me I wanted to, you know, focus on investing. So I applied to HBS and I took my GMAT on September 10th, 2001, believe it or not. So like, literally took the GMAT, got a good score, celebrated with my friends. Next morning, 9/11 happened. I lived in New York City. It was completely horrible. Applied to Harvard, got in, went up to Boston and that, you know, that was, that was the next phase.

(03:48) Jeremy Au:

Wow. What a crazy ride to there. And then obviously the tech bubble there that happened. And it was there at Harvard that you ended up writing this article about two things, right? Fear of Missing Out and Fear of Better Options. So how did that come about?

(04:01) Patrick Mcginnis:

So after I got into business school, I moved out to Boston and I come from a very middle-class family in the state of Maine. You know, Harvard was such a like for many people. I was like, Wow, like, Oh my God, what am I doing here? There are so many opportunities. I wanted to do everything. I wanted to interview for every job. And you probably remember that I was interviewing for jobs that I had no interest in. I was like, why am I interviewing at Procter and Gamble? I don't know. And then I was, you know, so many parties and trips and classes and events and I did it all. And part of that was because having been through 9/11, I was just sort of like, Wow. Like the world is really uncertain who knows what's going to happen?

I got to like really take advantage of every moment. And so I remember like at one point or another going to like seven birthday parties on one night or something and just being like, yeah, I mean, you know, it's business school. And I was like, this is not normal and I am not enjoying this. I'm stressed. Like I never commit to anything. I'm like, I drop in for 20 minutes and leave to the next thing. And this is not normal. So I started calling this anxiety, the stress I was feeling, the fear of missing out, shortage of FOMO. And then I also noticed nobody committed to anything. They'd always wait for something better. They were all sort of maximizers. And I started calling that fear of a better option or FOBO. And I started using them all the time with my friends became our lingo. And I decided when I was graduating, right before in 2004, the last episode or the last, sorry, edition of the newspaper, The Harvest, I wrote an essay, a satirical essay about these two words and how, you know, I was so glad I was going to graduate and go back to the real world where these things didn't exist. Cause you know, it's such a high-class problem that Harvard students have. And I wrote an article and it got really popular. And you know, that was the beginning.

(05:38) Patrick Mcginnis:

I can, I'm happy to explain how it made it to the dictionary, but that was the, that's how it all went down.

(05:42) Jeremy Au:

How did it make it to the dictionary? Because, fast forward a couple of years, I'm hearing about it. I Googled it and I was like, Oh wait, a Harvard student made this and I'm in Harvard as well. So it's a bit circular there, but how did it make it out there? Break out anyway.

(05:54) Patrick Mcginnis:

So what happened was, I moved back to New York and got a job in finance and I didn't think about FOMO very much. Like I was too busy. Then 10 years later, the week before my 10-year Harvard reunion, I got an email from a journalist who was writing an article for Boston magazine. And he said, Hey, I'm writing an article about the origins of FOMO and I've traced it back to you. Would you be willing to talk to me? And I said, wow, like, I mean, yeah, I did that, but like, why, why do you care? And he's like, dude, it's in the dictionary. And I was like, what? So I said, listen, I'm actually coming to Boston tomorrow. Why don't we grab a beer and I'll tell you what the story is. And so I went and had a beer with this guy. His name is Ben Schreckinger. He's now become a big reporter at Politico. And I gave him an interview and then I didn't think much more of it. Well, a month later or two months later, I got an email from a friend of mine that's like, have you seen the article about you? And I was like, what? And then it turned out he'd written an article that went quite viral. And it was all about me. He made me kind of the focal point of the article and I had never written about it before. So I was very nervous actually, but the more I read it, I realized actually this is quite cool. And then I had a book proposal out for The 10% Entrepreneur that had been rejected 33 times, but my agent took the article about FOMO, sent it to Penguin and I got a book deal two weeks later.

(07:08) Jeremy Au:

Wow. Amazing. What And what was it like? I mean, obviously, to have that feeling where it's something that you thought of 10 years ago, and then now it's back. Were you surprised? Were you excited? Were you grateful? How do you feel?

(07:21) Patrick Mcginnis:

So I, first of all, it's so crazy. It's like, I really, FOMO was such a niche problem and we didn't have Facebook when I was at business school. In fact, Mark Zuckerberg was like half a mile from my apartment on campus coming up with the Facebook like the same spring that I wrote this article about FOMO. So like then he, that being it FOMO a thing that everybody could experience. So like, thank you, Mark and Eduardo and team, but I remember I had left my, I had been through this like whole career upheaval. And when that article came out, I was very lost actually, like super lost. I didn't know what the heck I was going to do with my life, but I felt that article when it, when I saw it, I was like, this is special. This doesn't happen every day. There's something here. And I knew that it was going to turn into something. So I felt very thankful and it really gave me a sign in a moment that I needed it that that there was something for me out there that was special. And that really helped me a lot in a time when I didn't feel all that special.

(08:17) Jeremy Au:

Right. Interesting. Why were you lost? Because, supposedly, I mean, but all masters of the universe, Harvard MBA graduate, so on and so forth, but why were you feeling lost at 10, almost 10 years on?

(08:28) Patrick Mcginnis:

Yeah. Well, guess what? I'm now more than 20 or I'm almost 20 and I see my classmates and the conversation that everybody has is like, I thought at this point in my life, I'd have it all figured out. And I am like clueless. And I think that that's something that we have to normalize. Because it can sound like, first of all, it sounds a little obnoxious. Like, Oh, I went to Harvard and my life's so difficult. I mean, that's ridiculous. Obviously, like we have, we have to be realistic about the many privileges that we have, but It's life is about expectations versus reality. And if they don't line up cause they never will, I mean, you know, then, then it's hard. And what I think my personal story was that I had gotten a job out of business school. That was my first job. I lasted six months. I hated it. Then I took a job that I did like. Investing all over the world, but unfortunately it was for a division of AIG and AIG blew up in the 2008 financial crisis. My stock went to zero. And I ended up on a heart monitor with all the stress and I was like, Really? More than that, though, like I had a plan and my plan got blown up and I didn't have another plan and I looked for jobs and stuff, but I was kind of like depressed about it. And so I just didn't know what to do.

So I kind of floated around trying to find that thing that would light me up and give me joy. And it just took a long time. And I think that like, It was worth it because very few people that I know truly feel fulfilled in their work. Like it's shocking how few do. And I realize now in retrospect, I didn't really like my job all that much and I wasn't particularly good at it. I would never be great at that job. I would never be the best in the world. But you know, when you write it like FOMO, I mean, it's my word. So like who's better than me? Right? So I found the thing that I was supposed to be doing. And that has been such an unlock for me in so many other parts of my life.

(10:02) Jeremy Au:

Can you talk about what that means in terms of unlock for you personally.

(10:05) Patrick Mcginnis:

I think what happens to many of us is that we're smart, hardworking people. So we could kind of be successful in anything. If you had put me in McKinsey, if you had put me at, I don't know, million different companies, like I would have done well, but my true skills, like my area of transcendence is what Susie Welch who came on FOMO Sapiens and is a professor at NYU, but with the Harvard Business School, your area of transcendence is like that, what you're supposed to really be doing like finding that and then doing it. It's really, really hard, and oftentimes you only discover it because the thing that you were doing that's much more conventional blows up and you have to kind of dig deep. And so. I think that, you know, for me, the unlock was number one, recognizing, like, I'm never going to be awesome private equity. Like I'm pretty good at venture, but I'm not like an awesome private equity guy, but I am really good at ideas and writing and big picture and all the things that I do now. And like, I didn't know anybody who did those things. I didn't have like role models, you know what I mean?

And, and still within Harvard Business School, there's very few people that do what I do. So it was very unconventional. I had to kind of abandon the treadmill as it were. And by the way, some people love private equity. It fulfills them and they find deep joy in it. Right. Which is great. Like I wish I did too, but I had to find my own path. And that was really hard for me.

(11:14) Jeremy Au:

Would you mind sharing who are some of your past role models versus some of who they are today?

(11:19) Patrick Mcginnis:

Yeah, that's a great question. Wow. So I think was like the guy who really looked up to like the, the managing directors in the bank, you know, like the Hermes tie. You know that stuff, like all that you get sucked into that.

(11:32) Jeremy Au:

That's so good though. And it's so nice.

(11:34) Patrick Mcginnis:

I know I have some, you know, I never wear them anymore. She go put it on right now for you. But like, that was kind of a thing, but you know, what's funny is I always super, so I was always like really into like literature and music. I was always like really interested in media and stuff too. And I, and I super, super like, always would held up journalists as like heroes. And so, I had a lot of respect for those people, but I, I don't do that work. So that was that was the old. Nowadays, the people that I most admire. It's funny, I'm not a person that's like a fan boy person. I don't have that many people that I'm like, I want to be like you. It's never been who I am. I've kind of like do my own thing, but I would say the people who I most admire are people who combine multiple disciplines.

It's like, I'm an investor and I write books. I just interviewed Scott Galloway, like Scott Galloway. I mean, he's a professor, but he's in media and he writes these really meaningful, heartfelt books about the journey of life. That's awesome. That's the kind of person, people who are multidimensional, like a Mitt Romney, actually, like the fact he was a Bain and then he became a Senator. That's great. So I think it's people who bring together many different skills in service of doing cool, impactful things.

(12:37) Jeremy Au:

Yeah. I think that's really interesting because they've also gone through multiple stages of the career, right? Mitt Romney, he was a consultant and then he became private equity. And then after that, he was in public service and different forms and fashions. So how would, would you describe your own kind of like arc of your own career?

(12:53) Patrick Mcginnis:

It's a great question. I think I did what I did. I'm now very pleased. I got some hard skills. And I got, credentialized and then I was able to, using what I had learned and then tapping into my innate skills that I've had since I was a little kid, I've always been very curious and observer and really good at assimilating very, you know, like you read a Harvard case study and there's like a gazillion pieces of information and you have to distill it into like some, like that is something that I very much can do. I travel the, I've been on over a hundred countries at this point. And when I go, I'll be in like, I don't even know. I was in Dubai last week and I'll see something that reminds me of something in Peru. I'm really just good at making the connections in my head.

So what I do a lot now, because I told you I'm doing these three things. I've got the executive coaching, I've got the media stuff and I've got the investing, they all are feeding into each other. They're about spotting trends, reading people, and then trying to take things and make them better and build. And I did this test recently, which was very, totally revelatory. I was like, whoa, it's called NBI. And I took it. It's like a shows you how you, you think and what part of your brain you use. And I found out, yeah, it's cool. You should do it. Everybody should do it. That I'm 50%, like I'm all one part of my, I'm like deeply like right top quadrant, that's like everything for me. And it's 50% imagineering and 50% strategic. So, I'm not supposed to be in the detailed spreadsheet. That is not where I'm going to win. And like, had I known that 20 years ago, it would have been very comforting. Cause I was always like, God, I suck at this. Well, now I don't have to worry.

(14:15) Jeremy Au: Yeah. And what's interesting is that you also coined the words FOMO and FOBO, right? fear of better options, can you share a little bit more about that? Because it's interesting because everybody coins words, right? You know, and the truth is most of us become more relevant over time. If I think about it, most words become less and less relevant, like telephone. I mean, people don't really understand what a telephone looks like these days. So why do you think it's become more relevant? I think you mentioned Mark Zuckerberg was a big bit of it as well, but just share what you think is happening.

(14:41) Patrick Mcginnis:

Yeah, so, it is insane. Like FOMO, when the pandemic hit, I was sitting in my apartment reading Twitter, which is very unhealthy. Don't do that. Don't do that ever, but like, especially during a pandemic and everybody was like FOMO is dead. FOMO was dead. And I was like, this is really bad for me. Good for the world. Bad for me. And then now it's like back with the vengeance. Why? What is happening? Well, FOMO, FOBO, fear of missing out, fear of better option, they really are, if you think about what unites them, it's a desire for more and maximization, more, bigger, faster, whatever. The FOMO is you want, there's a lot of psychology there, but that's kind of a basic part of it. And what is going on in our world is that we are so inundated with things. You go online and you want to buy like I go on Amazon to buy like, just socks, there's like thousands of pairs. What are you supposed to do with that?

I was just, I think I mentioned I was in Dubai last week. I stayed at this beautiful hotel. There are like 19 restaurants and they're all amazing. It's like, how am I going to deal with this? So I was like, this is insane. So we live in a world where these are afflictions of affluence. If you're living in a war zone, you're not going to have FOMO, because you, you're just trying to make it through the day. That's a luxury good, but that's really what's happening. And I think that's part of it. The other thing is that we just live such digital lives. FOMO didn't exist. I mean, it's existed, obviously, it's part of the human experience, but the triggers are largely digital. It's information-driven. Information is the trigger for all FOMO. And so the more information you're consuming, the more likely that you will experience FOMO and FOBO.

(16:02) Jeremy Au:

And what's interesting is that it feels like FOMO is way more well-known than FOBO, I think in terms of lexicon, do you have a point of view on why?

(16:10) Patrick Mcginnis:

It's a great question. So FOBO has had a few moments, like New York Times and stuff like that, but it has not, and I've been trying to like elevate it. I think it's two things. The first is that FOMO is way more fun. Like it's funny. It's a meme. Nobody's doing a FOBO meme, right? And the second that I think that FOBO is a much more, it's darker. It's much darker. FOMO can be funny. It can also be a real problem, but FOBO it's like, it ruins people's lives. Why do people not get married? Cause they just swipe, swipe, swipe all day long forever. Stuff like that. And also it tends to affect people who are older and more affluent. So it's not as fun for internet culture. So, yeah, that's what I think. But I actually, I often say this and I think people say this to me too. When they hear about FOBO, people will say like, that's actually the real problem. FOMO, ha ha, whatever, but FOBO is really what's holding me back. And so a lot of my work is around decision making and about overcoming FOBO.

(17:03) Jeremy Au:

Let's go into that. Why do you say that FOBO is a darker one? I mean, fear of missing out, makes sense, right? It's like, ha ha, I had seven birthday parties. I got to pick four of them, but why is the fear of better option? Why is it a darker? I mean, it's definitely different, but why is it darker from your perspective?

(17:17) Patrick Mcginnis:

So they're both. They both can be very dark, like FOMO, if you think about it, when FOMO becomes a pathology, is that you have created an inner narrative in which you're comparing your life to some idealized form of your life that doesn't really exist. And you're now you've you're telling yourself a story that is not true. That is devaluing, you know, like, ah, I suck. So that's really bad. don't get me wrong. But, FOMO can be positive. FOMO has, it can be an incredible motivator to get people off the couch, to live life, to go do things, to experience. So like we can see the positives. It's kind of like wine, a little bit of wine, you start dancing, you go talk to the person you want, meet. Too much wine, you know, not so great, you're going to fall over.

FOMO is like smoking. Bad for you, bad for the people around you because FOBO is about trying to minimize and eliminate every risk in a decision, which is impossible by the way. And therefore, it holds people back from whether it's picking a movie on Netflix to watch or whether it's like, making major life decisions. People are paralyzed and paralysis is extremely damaging to people.

(18:19) Jeremy Au:

It's interesting because, that paralysis reminds me of like, the fear response triggering either flight or fight, right? You know, flee a fight. But then I think it was only this year that I learned that there's something called freeze, right? Which is the other response, which is the paralysis response, which is actually a common response, which is quite surprising to me. I think when you said that, it reminded me about that. Why do you think so many people are starting to freeze up when they're trying to make

(18:42) Patrick Mcginnis:

Cognitive overload. a lot of it is that. It's just like, I'm the guy who, this is my job to not have these things. I'm supposed to be the expert. And so I'm very, very in touch with my FOMO and my FOBO. I'm very, very in touch. And I've had to develop a whole cadre of strategies because I feel all the time. I really do. And now I'm ruthless about it. I have a whole ways that I deal with it, but like, I just think that like in our modern age, we just are so, our lives are so chock full of stuff and information and choices when I was a kid, I grew up in the eighties, like there was like 13 channels on the TV. It was easy. It was like, we had one phone in our house. It was like rotary phone kind of thing. Right now, it's like our TV is on our damn phone and there's like unlimited, there's unlimited content. So it's just like, that's the stuff.

(19:29) Jeremy Au:

Yeah. You mentioned a cadre of strategies that you deploy now. So could you share a little bit more about what's in your toolkit?

(19:39) Patrick Mcginnis:

I wrote my book, I did a bunch of research because psychologists write about this stuff. Thank God, God bless them. Every university, somebody's writing about FOMO. It's like insane. Love it. But also, I've developed strategies over the years and, so I, I combined my sort of lived experience with research-based analysis. And my favorite one, which I did a TED talk about called "How to make faster decisions?", is we make three types of decisions in life. What I call high stakes, low stakes and no stakes. Let's start at the bottom.

No stakes decisions are things you're not going to remember in three days. It's going to be like, what did I have on the airplane on Friday? I can think about, I'd be like, Oh, I had like hummus and pita. Yay. It was delicious by the way, but they're not important, but you just have to make them there. And most of those decisions you make every day without thinking about it, right? Low stakes decisions are things that require a little bit of criteria. It's like, which hotel should I stay at or which printer should I buy or whatever? But you're not going to remember making that decision in three months, say. And then high stakes decisions are really important things. And what happens is when we have FOBO, we tend to the high stakes, the low stakes and the no stakes all feel really, really big. And we overanalyze like, go on Netflix. And then 30 minutes later, you've not decided and you just give up.

So what I do with no stakes decision is I outsource. I literally, where are we going to dinner tonight? I don't know. You choose. I'm at the restaurant. I can't decide on the menu. I asked the waiter, what's your favorite thing? Good. I'll get that. I literally, cause if I knew the answer, I would choose already. So if I'm indecisive, it means that I'm just never going to, I'm putting the drama in. And by the way, if that person then says you should have the chicken and I'm like, actually I wanted the fish, then I know it's problem solved. But like I really outsource, and typically with the no stakes, what I do is I flip a coin. Literally heads or tails, chicken or fish. And so, because I, you can't ask everybody all the time, but if I'm like sitting at home and I'm like, should I go to the gym today? I don't know. I'll literally look at my phone. If the time is even, I go, if it's odd, I don't go. So I do that all the time.

Low stakes. I outsource to people like which printer should I buy? Well, I know a friend who knows a lot about that stuff. I just asked them. Or I'll read Wirecutter and the New York times, which recommends things like I just find an expert and outsource and then a high stakes, I have a, it's a much more complicated thing, but it's really about doing a ton of diligence and then basically forcing yourself to eliminate things, you know, through like a kind of ruthless process. So you get down to one thing and you just choose it.

(21:47) Jeremy Au: Right. And what's interesting is that for those high stakes decisions, a lot of them, you're doing them in the context of venture capital, right? But you have to make decisions, investing in startups. Could you share a little bit more about how you make those decisions? Maybe not from a generic, obviously VC perspective, but in a, how you think about using these pruning and strategies.

(22:05) Patrick Mcginnis:

Yeah. So I think the really interesting one for VC is the FOMO one because, so I'm part of a VC fund. I'm on the investment committee of a fund and we have what we call our FOMO folio, which is literally, the deal that comes in the door that like, it's like, everybody's investing in this company. It's like, Oh, Sequoia is in and Kleiner and Founders fund or whatever. They're all in it. And you're like, wow, that valuation is really high. Like what? And you're like, this deal is cool, could be interesting, but like at half the valuation. We would say like, this is a great deal, but the price is wrong. We have FOMO. We really want to do it, but we know that we shouldn't do it. So we're putting it in our FOMO folio. We're not going to do the deal. We'll track it. We'll see what happens and we'll learn. It's like an anti portfolio kind of, so I think really being in touch with what are your motivations? So many times, investors do deals. Motivated on who else is on the cap table or what's the hot flavor of the month and really understanding how much of your investment decision is based on fundamentals versus FOMO. That's like deeply important in diligence. And you know what happens is like, people have very messed up incentives and funds because they're like, well, some people it's pride, it's looking cool. It's PR, it's fear of missing out on the deal or whatever, all those play in and it's natural, but that is really thinking through the why on a deal because in VC, it's also hard because you don't know yet, right? Like it could work out, but like, that's been a big part of my career, learning how to think about that. And I think the reason why is because early in my career, we invested in everything and it all blew up and I had to clean it up and it was terrible. And then with FOBO, what I think happens there is investors, investors do this thing, which is very, not very nice, which is like, great company founder, but you know, can we just see like another couple, come back in a month with your, your figures and we'll take a look. And, they keep dragging it along. And I think that also, like the best thing you could do as an investor is give a fast note to a company. That is the right way to play the game. Like it's either you have to have conviction. And so companies that get strung along by venture capitalists, like they don't forget that it's very disrespectful.

(24:01) Jeremy Au:

I mean, you mentioned about messed up incentives and funds want to talk about that. I mean, I'm also in venture capital, so we can talk about it. I think one form of messed up incentives is I think people who are investment committee. So they're senior, right? And they're investing because they see performance. And I think the people who are not in carry, they're not thinking about a long term investment. So they're very much more maximizing the deals that have the opportunity to climb up. So I think that's one interesting time differential in terms of performance, I guess.

(24:27) Patrick Mcginnis:

Yeah, for sure. And it's kind of interesting is, so when I started my career at VC, I was right out of college and I didn't know what I was doing, but I didn't know that I didn't know what I was doing. I thought I was like super smart or whatever. And so I remember doing these investments and like sitting on boards and acting like I was a big man at the age of 25 and these poor founders, like they, they probably thought I was awful, but they needed me because I had the line to my boss. So they had to be nice to me, right? And you know, then when the VC market blew up in 2000, a lot of the junior people exited because you don't really need. It's not like a heavy analytics game. What's happened now is with the new wave, all these VC funds are massive and they have very, younger professionals who've never seen a downturn who've been investing in everything they touch turn to gold because it was like, everything was up and to the right.

And I feel like one thing that's interesting when you talk about incentive is like, they're they're not experienced yet. And so their incentive is to get experience and do as many deals as they can. And like, I don't fault them. It's the job of the senior people to put the guardrails on, but then they also are so rich sometimes. And like, they're just off in the golf course that they're not even. So I do think that we've seen over the last five, 10 years, like a real lack of rigor in the venture capital industry, people investing in like anything, and I mean, look at NFTs for goodness sake. I mean, my goodness. And you know, there's no the time on incentives, like the people don't like think about, Sam Bankman-Fried and his investors, like the Sequoia investors who publicly said that, like, he was playing a video game when he pitched them and they make that investment and they lose all their money. Did they have, what happened to them? Did they get fired? Like, what was, what was their punishment? Like probably nothing. So there's a real lack of accountability when it comes to the lazy investing of some of these people.

(26:01) Jeremy Au:

Yeah, I think it is frustrating. I mean, I think NFTs when I was coming out, I was very much like this looks like a pump and dump because you could be scarce by the tokens of that system, but I don't know. That'd be like saying that I abide by the copyright system or some tier three country. You'd be like, yeah, it's copyrighted there. It's scarce in that copyright registrar, but it's not copyrighted in America or available places. I don't know. Yeah. You do remind me though, there's a lot of really weird incentives around the Web3 VC space. I think it was the most egregious version of it because you're so short term, right?

(26:30) Patrick Mcginnis:

Yeah. It's like something people don't talk about. Like, I love this conversation because really, by the way. And I acknowledge it's easy to rip on people who made dumb investments. Like I've made some too. So rip on me, but I find the sort of the lack of accountability of people who make really bad investments. There's a lot of arrogance. I just think it's too bad because the biggest opportunity we have as individuals is to learn from our mistakes and do better. And people need to be humble enough to own their failures. That's the only way you grow.

(26:57) Jeremy Au:

Right. Do you think it's going to get better venture capital? I mean, one part you mentioned is, the down, down rounds or downturns, but is it like a structural thing? Is it like, you know, are we doomed to six cycles of this? How do you think about it?

(27:08) Patrick Mcginnis:

It's such an interesting question. Well, I don't, what do you think? You go first.

(27:11) Jeremy Au:

I go first?

(27:13) Patrick Mcginnis:

Yeah, tell me first.

(27:13) Jeremy Au:

I was reading this interesting research paper to say that boom cycles happen every, decade because the old ones, but like you said, retire. and then the new generation takes over. So we're destined to like boom and bust. That's a very high akin point of view, but that was a very funny research paper that was saying that central bankers on this leadership, at the top are about 10 years. So as a new person coming on, that could be one version of it.

(27:34) Patrick Mcginnis:

Yeah. That's interesting. I, so I would say that number one, VC is a good thing. It's a good force in the universe. So we should just say that like, there's a lot of good things done by the industry and it's getting better in some ways, like it's getting much more international, it's more diverse, like all that sort of stuff. I love that. I'm like, I'm not anti-VC at all. Like I, you know, no. What I think is that we're going to see a period, by the way, what I'm saying is, I don't think it's all that novel, but number one is you're going to see a bunch of funds just go out of business. Like they can't raise a second fund.

It's going to be like bloody. Then I just read yesterday that 70 percent of US venture-backed companies need to raise within the next 12 months. So that's going to be cray cray. You're going to see just very bad things. But that's the nature of the beast. But then the other thing is if I were a founder of a crappy company that needs to raise money, I would just say I'm doing climate AI. And then I raised all the money I wanted. So that is the thing that's so funny is it literally, yeah, there's a huge retrenchment unless you've got AI or climate in your business model. I mean, that's so, it's, that's. crazy right now. So nobody learned anything like you literally, AI companies are just raising off of like, if you literally, we could just, you and I tomorrow could come up with a deck, call it like AI something or other, and we would be raising money and that'd be fun. We could be co-founders. We'd love that. Let's start a company.

(28:44) Jeremy Au:

There we go, just start a company, ai probably taken by now.

(28:49) Patrick Mcginnis:

Let's do well, I have a section, a friend from HBS who's starting a company in that space, so we could just partner with him, but anyway. It's nuts.

(28:59) Jeremy Au:

But I think it's interesting because you're describing like lot of the hype cycles that are happening. I mean, good and bad. It's right. Like you said, NFT was a hype cycle. AI is a, I guess, larger hype cycle. There's a bit well-deserved.

(29:09) Patrick Mcginnis:

Yeah. And you're in Asia too. It's so interesting when American, like, and again, this is not like a super novel point, but like, you know, when I was just in the Middle East, I was in Singapore, in the Philippines last year. And when Americans go to place like the Middle East, like Dubai or Singapore which are very different places, but have some similarities, you're sort of like, man, like, this is the future. This is where it's all happening. New York city feels so yesterday in a lot of ways right? And so the opportunities are huge, but then the hype cycles are even crazier. Like the fact that you have these like coffee companies, like Pick Up Coffee and stuff that are like VC backed and whatever. I mean, Oh my goodness. It's crazy. No offense, Pick Up Coffee people.

(29:49) Jeremy Au:

Yeah, it's tricky. I mean, the awkward reality is that Singapore and America are more similar in the sense that, we have the same GDP per capita, right? But you know, many countries in Southeast Asia, they're around the 9, 000 GDP per capita, whereas, the US and Singapore have 90,000, right? So it's like a 10X difference. So, Singapore and America are listening to the same music, paying the same price on Netflix, and then, for a country that's around 9, 000 GDP per capita, when they double their GDP per capita in the next 15 years, if they're growing 5 percent every year, it turns out they really want to buy coffee and, you know, air-conditioned seats and things like that.

So it's actually an interesting dynamic where I think the investment opportunity is real. I think that's what people really want to buy, consumer and all these basic stuff, and then we have this very new venture capital model that's directing investments to a risk frontier. It says that the risk frontier for the US is space and AI. In the country, it's conditioned Starbucks, you know?

(30:40) Patrick Mcginnis:

Well, it's interesting too, because, obviously the U. S. is one market, and so it's easier, like, Southeast Asia, which is massive, but like, it's fragmented, so, it's hard to be multi-country, like, people do it, like Grab did it, obviously, and did it really, really well, but if you think about what? Like the challenge of being great in three markets. What's the MVP they say, or what's the, it's like VIP Vietnam, Indonesia, Philippines? If you're deploying in those three countries at once, think about how many things you have to do well, it's so challenging.

(31:08) Jeremy Au:

So hard.

(31:08) Patrick Mcginnis:


(31:09) Jeremy Au:

It's crazy hard. And talking about crazy hard, could you share about any times, any hard stories in your life that you found it a time where you had to be brave?

(31:18) Patrick Mcginnis:

After the financial crisis back in 2008 that I mentioned, I ended up on a heart monitor from stress. I'd never, I mean it was crazy, like I had this whole health thing and I was very afraid. I felt really scared and I felt very lonely and, and ashamed. And I remember actually, when I was so sick, I had a virus, it was like kind of like long COVID almost before we knew what that was and so I was I was like, a bit of a recluse. I wasn't seeing people and I was just like, I don't know, I wasn't feeling happy or well or whatever. And then I recovered. I felt better. And physically and, and mentally over some months. And then I was like, what am I going to do next? And I knew that I needed to leave my job, but I didn't know what to do next. And I decided to take a sabbatical. I quit my job. And that process of quitting a job without another job, Was extremely hard for me. I felt very afraid and I had money savings and things. It was like, it wasn't financial so much as really about identity and being able to know who I was, because I think sometimes, so much of our identity is caught up in our work.

And so doing that, quitting that job, walking into my boss's office was deeply terrifying and I did it. And. then I felt a euphoria because I'd done something that I didn't think I could do and I had succeeded and it was the first step to everything that has come ever since. And so one thing I would encourage people, I think my lesson from that is that like we, we get sometimes tempted to think that every decision in life, big decisions are like make or break decisions. Like this is it, like this is the fork in the road. And sometimes they are. But in general, a decision is just a door that you walk through to your next set of decisions and doors. And so, I think that I tended to put, I put way too much drama into it. I should have just, but I did it and it, was the brave moment. So I'm glad I did it.

(33:00) Jeremy Au:

Could you share more about that heart monitor? What was it for? Why did you even have to be on a heart monitor?

(33:05) Patrick Mcginnis:

Oh my goodness. So I, Oh, this is so terrible. But so I was at a board meeting in Charleston, West Virginia, which by the way, is like a whole, that's a whole other situation. And I woke up in the middle of the night and I had these night sweats. And then I had a swollen gland. And I was like, there's something really wrong with me.

I went to a doctor. He took my blood pressure. My blood pressure was like off the charts. And he was like, what is going on with you? He's like, we need to check everything. So I had every test. And then they went to, I went to the cardiologist and had the thing and everything was okay, but it was stressful. Stress is a killer and I didn't meditate and do, I was like pretty unhealthy in some ways.

I was definitely like, did not take care of myself the way I should have done. So yeah that's what it was. And I ended up getting, losing 30 pounds and running marathons and getting in shape and taking care of myself and starting meditating and all this other stuff. And like, it's a long process. That's a life process, but that's what happened. And it was a very lucky thing that I learned that lesson at that time.

(33:58) Jeremy Au:

Why was it so hard to quit from your perspective back then?

(34:01) Patrick Mcginnis:

I didn't know anybody who had done that. I was not raised to quit my job and take a sabbatical, but it's not something that my parents did. Like my parents had jobs. And I felt, I think I felt very like a combination of deeply ashamed. Of having worked in this company that failed and even though it wasn't my fault, I was like, God, I'm really blew it. And like, who, and also I think really though, I didn't know what I wanted to do next. And so the idea of leaving something without any idea what I wanted was deeply terrifying to me, but that I had to go through a, like a process of sort of de programming myself in order to find the thing I wanted to do.

(34:34) Jeremy Au:

Right. And that deep programming, what do you think you had to deprogram?

(34:37) Patrick Mcginnis:

Oh, so my brother, my brother is an artist. He's a musician. And he said to me, you should get up every day for six months, not knowing what you're going to do or three months or something. And I was like, that's crazy. I know it was crazy. And then I did it. And what I realized was like the whole value system that I had become really obsessed with or ingrained into me, like private equity is the greatest thing on earth.

And like, which is by the way, not true. There's, it's nice, but there's other things too. I had to get, I had to get out of that and realize like, private equity is not the only thing you can do. And I think that that when I was at HBS, like that's what everybody did. That was the thing. And there's a very famous thing. People say that if you want to know what's going to crash next, look at what all the HBS grads are doing. but I think it was that it was recognizing that I didn't have to, I could have a much more. You know, multidimensional path than I, than I knew I could have,

(35:26) Jeremy Au:


(35:27) Jeremy Au:

And if you were to look ahead into the future next year, are those dimensions that you see coming together?

(35:34) Patrick Mcginnis:

It'll be interesting. Like it's funny, like 2023 was such a a crazy year for me. Like it was a terrible year for the world. Awful. For me, it was wonderful. I became the spokesman for Mercado Libre, which is an amazing company, and made a TV commercial for them. I've been doing events for them, like stuff. And that came out of nowhere. They called me one day and they said, Hey, we're thinking about this idea. And that has been such amazing, I was in a movie in 2023 that is actually out now called "This is Not Financial Advice" you can probably get it on your plane. If you fly, it was on it was on my flight on Qatar Airways.

And so you can see me in that. So like those kinds of things that came to me, people called me. So there is an element where I just don't know because you will get exciting calls. Fun and interesting things. And then, so that's the nature of being an entrepreneur is that some things you just can't generate. And I've learned that and you kind of have to trust. And then on the parts that I can build like this, launching this company in the coaching space. It has been such a wonderful experience, partially because I have business partners, which I hadn't had, and I miss that. And so having a business partner, it makes everything better if you vibe with them, but also because it's the first thing I've done in my career that Has felt like I don't want to say easy. I'm not saying easy, but like, it's so natural. Everybody that I talked to about it is like, yeah, this is, they're like, Oh my God, this is amazing.

This is, I see you should be doing this. And by the way, let me introduce you to a potential client. So I have so much inbound right now. I can see the moment. Maybe it's this year, maybe it's next. I don't know when, or where I'm, but I want to do it part. I don't want to do a full time. I still want to do other things too. It's going to be part of what I do, but I can see the moment when I have a really, you know, I'm kind of in demand. I'm, you know, can't take anybody else. I'm working with amazing people having a real impact. And I can see it like very clearly. I know, what it looks like. And I'd never had that before where I just knew. What was going to happen? And I felt very confident that I could do it. So that feeling is very helpful.

(37:19) Jeremy Au:

Amazing. On that note, I'd love to summarize the three big takeaways go from this conversation. First of all, thank you so much for sharing by early career decisions. I really appreciate you sharing, not just about the decisions you had to make, but also a lot of the feelings behind it in terms of the uncertainty, the stress and the concerns that you had which obviously, is the shadow of everybody's life, but also thank you so much for sharing that.

Secondly, thank you so much for sharing about the fear of missing out as well as FOBO, the fear of better options. And I really enjoyed our conversation about the light side and the dark side, the utility, but also the detriment of that in today's society. And also talk about why we think that these options terms are becoming more popular over time to describe what we're describing and feeling.

And lastly, thanks so much for sharing about how have you worked very consciously to bring them all together. The cadre of techniques and strategies you use to deal with them, not just for the no-stakes, and low stakes, but also the high-stakes decisions, and also how you're looking to further advance your own career based on these principles.

On that note, thank you so much, Patrick, for sharing.

(38:14) Patrick Mcginnis:

Thank you so much, Jeremy.