Beware the Employment Sunk Cost Fallacy

I was a sucker... or I was suckered.

Heather and I were planning to get married. It was time for me to get a grown-up job. I didn't know enough about networking yet, so I applied on job websites. I spent countless hours submitting my resume and writing cover letters for entry-level marketing jobs. 

I was getting desperate when I finally got a call for an interview. The company was situated in a swanky office off Bay Street in downtown Toronto. Bay St. is similar to Wall St. in New York, picture skyscrapers and suit and ties everywhere. Not really my bag, but I wanted a decent job. 

The Worst Job I Have Ever Had

The company specialized in creating high-priced, industry-specific summits. These summits would bring together representatives from many businesses for sales and marketing workshops and presentations. Each summit would be hosted at an exotic location that would normally include views of an ocean and golf course. There was only one catch I wasn't aware of, the summits didn't exist.

On my first day of work, I was placed in a cubicle with a computer, headset, and script. Some of the days were spent researching businesses to pitch the summits to. The other part of the day was me on the phone, carefully following my script, attempting to convince the business owner that he or she shouldn't miss such a valuable opportunity. 

The bell (yes, an actual bell) rang occasionally and a co-worker's name was written on the whiteboard walls. Everyone would scream in congratulatory excitement. My first sale couldn't be far behind, but it was. In fact, my first sale never came. After a couple of weeks, I was getting desperate because the job was commission based only, which meant if I didn't make a sale, I wouldn't get a paycheck.

They promised I would earn huge commissions off each summit sold, but I needed to make a sale first. Each night, I would sheepishly arrive home empty-handed and depressed.

This type of business relies on what phycologists call the Sunk Cost Fallacy. David McRaney's definition from You Are Not So Smart nails it perfectly.

The Sunk Cost Fallacy

"The Sunk Cost Fallacy. The Misconception: You make rational decisions based on the future value of objects, investments, and experiences. The Truth: Your decisions are tainted by the emotional investments you accumulate, and the more you invest in something the harder it becomes to abandon it."

I kept showing up because I had become too invested and embarrassed to make my experience there a failure. I finally reached my wit's end when I learned the summits didn't actually exist.

They explained they would create the summit only when enough tickets were sold in advance. The kicker was if a person purchased a ticket and there were not enough sales, the purchase was non-refundable. Their "investment" could be used for a future summit instead. This was the worst job I ever had, but I learned a few valuable lessons.

Research companies before you apply.  

Don't be fooled by fancy offices and fast talking sales types.

Don't depend solely on commissions. 

I learned the hard way and share this with you here because these types of businesses exist in every city. Be careful out there if you are looking for a job.