A few weeks ago, a bakers son posted on twitter his father’s sad day. It is because their doughnut shop just opened and no one is buying. This was retweeted by the thousands. Celebrities even chimed in on the discussion. This caused the business to be swarmed with customers and became an overnight sensation. It is yet to be seen how this will affect the business in the long term but this business followed a common phenomenon that occurs to start-ups that become famous overnight.

Reading an article by Max Ogles about The Spotlight Effect made me think about how often it happens to entrepreneurs. What is The Spotlight Effect? It is that stage in the business cycle where the business will value the “artificial buzz” and media feedback over the voice of the customer base. The “spotlight effect”- causes businesses to overestimate their capacity and behave in ways that are not consistent with the reality of business circumstances. A startup that is affected by the spotlight effect might over think their marketing goals, underestimate customer acquisition costs, unintentionally create the wrong brand or set unrealistic targets – all things that result to emotional frustration for the entrepreneur and the team. How do you avoid it for your own business?

  1. Keep your Feet on Earth –  prepare for the worst by anticipating them. If your startup received a lot of complaints, how bad would it be for business? If you address the complaints well, you’d continue business as usual. And when you receive positive attention, you can expect a similar effect.
  2. Manage your Expectations– Your real audience can be narrowed down to a small circle that represents the group that might try your product and like it. A nice, humbling way to take on the spotlight effect.
  3. Include other Variables– businesses don’t operate in a vacuum, include other variables whether or not these people are even in your target audience. The best ways to see different variables is to receive constant feedback from customers and those outside of your business.