FOMO is one of the most powerful tools in a Marketer’s toolbox. It turned NFTs into a billion-dollar industry, drove sneaker prices through the roof, and helped fill up countless storage containers with Beanie Babies.
(I had a whole tub as a kid that my mom gave away and I’m PISSED. I’ll never forget you Inky 💔🐙.)
As it turns out, Marketers have been harnessing the power of FOMO for centuries. And it’s been blowing up in their faces for just as long.
But, I’m getting ahead of myself—let’s take a trip back in time…
The year is 1636 and Amsterdam is BOOMING. On the heels of Dutch independence from Spain, Amsterdam is becoming the global center for all things commerce (mainly spice). It was a golden age for importers, exporters, and merchants.
This was a massive wealth transfer. Suddenly, people outside of the aristocracy had boatloads of money and they wanted to show it off. But, instead of Bored Apes and Yeesys, they bought exotic art, huge mansions along the canals, and artifacts from the Ottoman Empire and the Far East.
Until 1 item became the ultimate symbol of wealth for the new rich…
The tulip. Yep, I’m talking about the flower.
Now, you may be asking “How does something you can literally grow in the ground become so sought after?” A couple of reasons:
For 1, tulips weren’t native to the Netherlands. The soil wasn’t ideal and growing tulips required a very careful eye, so they were all imported from Istanbul.
They were also super hard to grow. They needed constant attention and took up to 12 years!!!! to fully develop.
But IMO, the most important thing was how these tulips looked. They had ‘broken bulbs’—lines and spots that set them apart from solid-colored tulips. The more “broken” a tulip appeared, the rarer it was (poetic, really), and as that rarity increased, so did demand. Prices climbed higher, and higher, and higher.
Take, for instance, the ✨Viceroy ✨, a tulip so rare that it sold for a floor price of 3,000 guilders (~$180,000 in today’s money).
These tulips became more than flowers, they became STATUS SYMBOLS. They signaled to everyone that you had made it and you knew how to spend it. As historian Mike Dash put it, “It was deemed a proof of bad taste in any man of fortune to be without a collection of them.”
AKA, it wasn’t just cool to have them, it was UNCOOL not to. That’s FOMO at its most powerful, Marketing Besties.
The flexing got so serious that owners of these tulips even got their portraits done with pieces from their collection. And not gonna lie, this picture is tight.
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With greater demand, came more, and more speculation. People began trading futures contracts on the price of tulips, treating them like a financial asset more than a flower. Companies sprang up to cash in on the tulip trade and people began buying tulips on credit, hoping to repay their loan whenever they sold a tulip for profit.
That’s when things took a turn for the worst.
TLDR; the bubble burst. Because, as we Marketers know all too well, when demand is propped up by hype alone, it can’t last forever. 😱
While we don’t have a 100% clear view of WHY this happened (it was 400 years ago, after all), the most reputable theory is that the buyers just kinda … moved on. People got fed up with the high prices for tulips and stopped bidding. When the money dried up, traders defaulted on their futures contracts and the whole tulip market came crashing down around them.
Dutch Tulips were the 1st-recorded hype bubble … but they weren’t the last
We Millennials lived through this with Beanie Babies back in the ‘90s.
Ty Inc.’s bean bag bears sold for $5 bucks at retail, but their secondary market was huge. That’s because Ty manufactured demand by creating scarcity. It retired different Beanie Babies at random, creating a buying frenzy when a new Beanie Baby debuted. The rarest of the babies, like the Princess Diana Baby, can still be found on eBay for up to $765,000. They were our broken bulbs.
But, just like the Dutch Tulips of yore, by 1999, the market collapsed. Why? Once again, people got bored. At the end of the day, they were just stuffed animals filled with PVC. Albeit, cute as heck. Ty Inc.’s founder was also getting more erratic with its Marketing strategy, and lost trust with customers (should I write about that in a future Marketing History? LMK and thank you kindly!)
All but a few Beanie Babies (like the Princess Di) plummeted in value, and people who banked their entire futures on their Beanie Baby collections got burned.
So, here’s the lesson, my eager Marketing pupils:
FOMO and hype are powerful tools… but they come with a risk.
Products with staying power bring inherent value to the customer. That means solving a REAL problem (and communicating that value in a way buyers understand — that’s where we Marketers come in 😏).
Beanie Babies and Dutch Tulips solved a problem in theory (I have too much money and need to spend it on something to show off), but their biggest value was in their hype.
People are fickle, if your strategy is built on hype alone, demand for your product will eventually wither away. 🌷🧸
