Why Entrepreneurs Need to Avoid Fake News
Many people, businesses and government agencies have had to pay big costs due to the fake news epidemic.
By Andrew Medal •
Opinions expressed by Entrepreneur contributors are their own.
Fake news is nothing new, but renewed awareness of its existence (ironically) has been a big news story since the 2016 election. It seems that even though we all grew up being told "don't believe everything you're told," no one ever expected that caution to be relevant of seemingly trustworthy news publications. Unfortunately, that cost many individuals, businesses and even government agencies to make decisions that seemed logical -- until it came to light that the information they were using was, in fact, fake news.
I'm personally of the opinion that most of these stories are simply serving as growing pains as we adapt as a nation, and as a species, to the increasing ease of distributing information, which includes the unfortunate reality that there is no one person or agency in charge of fact-checking. While the extent that fake news has influenced the election is still up for debate, there have been several specific instances where fake news led to disaster.
Related: How to Avoid the Danger Fake News Could Pose to Your Brand
As a business owner and entrepreneur, I think going through the top errors caused by fake news over the past few years is a good exercise in double checking sources before major decisions are made, using gut instincts and maintaining a healthy amount of wariness towards all things.
AP's Twitter hacked
In 2013, just a week after the Boston Marathon Bombing, the Associated Press's Twitter account was hacked -- and a tweet told the world that President Barack Obama had been injured in an explosion at the White House. While the AP quickly addressed the situation, the news spread faster than its correction, and caused the S&P 500 to decline 0.9 percent -- resulting in $130 billion in stock value being wiped out in minutes.
How was there such a huge impact so quickly? Stock brokers use high-frequency trading: essentially algorithms that buy and sell based on the data available, with no human interaction needed. These robotic brokers comb the internet for news and react accordingly, without supervision, and thus reacted within milliseconds to the original tweet.
So what can entrepreneurs and business owners learn from this? First, the more obvious lesson: the stock market is chaotic, and that fact should be kept in mind when you're considering pursuing an IPO, especially if there's no emergency fund available. The value of stocks will live and die by international and domestic news -- real or not.
Related: Sharing Fake News Can Hurt Your Reputation
More importantly, it shows how incredibly fast, efficient and effective computers are, but also how that speed and efficiency can cause problems. Finding a balance between algorithmic work and human effort will be key to any business's success, especially when it relates to the outside world.
Pizzagate
In December of 2016, a man in North Carolina went to a pizza restaurant, Comet Ping Pong, and fired a gun inside the establishment. He claimed he was "self investigating" the reports that a paedophile ring was being operated on the premises -- a fake news story that had been circulating for a few days.
Luckily, no one was injured, and the man was arrested. The obvious lesson here is actually two part: don't self-investigate and definitely don't fire a weapon to kick off your efforts.
The more relevant lesson for entrepreneurs is the importance of confirming suspicions before aggressively reacting to a situation if at all possible. This lesson applies both to internal human resources issues -- especially office politics -- and to external events, such as the behavior of your competitors. A jarring example of this in action is the recent debacle with United Airlines, in which the CEO made a statement before he had been briefed on the entire situation.
Related: Don't Let Marketing Zest Lead You Into the Fake News Morass
Just as with public speaking, it's always better to take a breath than say something you'll regret.
As entrepreneurs and business owners, we're invested in not only our own companies, but the communities they serve -- whether they're local or global. Because of this, it's important that we not only listen to our audience to learn what they want, but also react to news quickly. However, don't allow yourself to become so obsessed with being the first to respond that you become careless, or you and your bottom line will regret it.
