Opportunity Cost And The Knowledge Of Missing Out

There are 4 fundamental forces that govern the world -  gravity, electromagnetism, strong nuclear force, and weak nuclear force. I pose that a 5th and arguably strongest force for humans is FOMO, the fear of missing out. This deep existential dread fills us with anxiety on all the hip parties we aren't attending, business investments we aren't making. Our primitive brains alight with primal fear of being left out.

A close cousin to FOMO that receives a meager fraction the attention and is arguably much more insidious is opportunity cost — the knowledge of missing out (KOMO). The real cost of a decision that seals us from attaining alternative possibilities. Passions unrequited, things we didn't do, what could have been?

As a human or an organization, we have finite resources of money, energy, and attention. When we decide to spend these resources to an activity, like training for a marathon or funding project A, we no longer have those resources available to use for a different activity, like learning a new language or funding project B. The cost is not incurred by what we decide to do, but what we decide not to do.

When conducting financial analysis such as revenue forecasting or opportunity sizing, I have never once seen a consideration for opportunity cost. This cost is often overlooked or completed forgotten, but has very real impact on what we can no longer do after making our decision.

The impact of KOMO is brought to light especially when we continue to pursue activities that do not give duty to our goals, or is even counter to them. This consumes our finite resources that we then no longer have to pursue other activity that could return greater yields for our investment.

I would encourage to take inventory of how you spend your resources, think on what you aren’t doing — actively seek KOMO.