Rule# 25 Avoid the Sunk Cost Fallacy

Lots of musicians and music business professionals fall victim to the sunk cost fallacy.

The sunk cost fallacy is our tendency to stick to a project even when the current costs outweigh the benefit. Basically, you continue with your current endeavor based upon the time and money that you’ve invested rather than what the current benefits are. I want to emphasize current benefits in contract to the benefits that were to be had at the start of the project.

The willingness to move on should be weighed against Rule# 33, Being a Shark, to ensure that you’re not being perceived as a pushover.

Below is a list of things to consider to ensure that you avoid the sunk cost fallacy:

• Regularly Assess Progress: Continuously evaluate the success and potential of your music projects, considering factors beyond the resources already invested.
• Define Clear Objectives: Establish specific goals for your musical endeavors and ensure that decisions align with these objectives, regardless of past investments.
• Stay Informed: Keep abreast of industry trends and market dynamics to make informed decisions based on current conditions rather than past commitments.
• Engage Audience Feedback: Pay attention to audience reactions and feedback. If a project isn’t resonating with your audience, be willing to reassess its viability.
• Budget Wisely: Set budgets and timelines for your projects, and be disciplined in adhering to them. Don’t let past expenses justify additional investment without a clear benefit.
• Be Willing to Pivot: If a project is not gaining traction, be open to adjusting your approach or trying something new rather than persisting solely due to past efforts.
• Network and Seek Advice: Connect with industry professionals, mentors, or advisors who can offer objective insights and guidance, helping you make decisions based on current circumstances.
• Track Key Metrics: Monitor key performance indicators (KPIs) relevant to your music projects. If these metrics indicate a lack of success, reconsider your commitment to avoid falling into the sunk cost fallacy.