Human beings often have a distorted view of reality, shaped by cognitive biases and media influence. We tend to overestimate what is highly visible or emotionally appealing, leading to skewed perceptions. In business, for instance, companies like Tesla or Robinhood appear to dominate their industries due to media amplification, even though their market presence is far smaller compared to established giants like Volkswagen or Fidelity. This tendency to focus on disruptors while ignoring broader market realities is rooted in our brain’s desire to simplify complex information.

E-Commerce vs. Traditional Retail: Misconceptions of Market Dominance

A common misconception in today’s retail landscape is that e-commerce is rapidly replacing traditional brick-and-mortar retail, often creating the impression that physical stores are on the verge of extinction. While e-commerce has indeed grown exponentially in recent years—accelerated further by the COVID-19 pandemic—the narrative that it is dominating the retail sector is far from accurate.

As of 2023, e-commerce represented only about 20% of global retail sales, with the vast majority—around 80%—still occurring in physical stores (Source). Despite the success of e-commerce giants like Amazon and Alibaba, traditional retailers have continued to thrive by adapting their models to integrate online and offline experiences. Walmart and Target in the US, for example, saw significant growth in its e-commerce segment but still generates most of its revenue from its physical stores.

A key reason for this enduring strength of traditional retail lies in the consumer experience. Shoppers still value the immediacy, tactile experience, and personal interaction that physical stores offer, particularly in sectors like fashion, groceries, and luxury goods. Moreover, physical stores are not only surviving but in some cases, they are essential for sectors where online shopping struggles to replicate the customer experience, such as in fresh groceries or high-end fashion.

While the growth rate of e-commerce is impressive, particularly with platforms like Shopify enabling small businesses to quickly enter the online space, the notion that e-commerce will fully replace traditional retail is exaggerated. Both channels are evolving toward integration rather than competition. Many retailers are embracing omnichannel strategies, utilizing both digital and physical platforms to meet customer expectations and create a seamless shopping experience.

Bitcoin and Cryptocurrencies: A Case of Overestimated Market Impact

The rise of Bitcoin and other cryptocurrencies has led to the perception that they are rapidly becoming mainstream financial assets, with the potential to replace traditional currencies and revolutionize the global financial system. However, despite the hype surrounding cryptocurrencies, their actual usage and adoption remain limited, particularly outside speculative trading. The global cryptocurrency market cap is approximately $1.98 trillion as of the latest data (Source). While this is a significant amount, it’s still much smaller than the total value of traditional currencies in circulation. For comparison, the M2 money supply (which includes cash, checking deposits, and easily convertible near money) for the US dollar alone was over $21 trillion as of 2023 (Source).

Warren Buffett, CEO of Berkshire Hathaway: “Cryptocurrencies basically have no value and they don’t produce anything. In terms of value: zero.”

A prime example of the discrepancy between perception and reality is the notion that Bitcoin will replace fiat currencies. While Bitcoin has been touted as a new form of money, it remains impractical for everyday transactions. Factors such as high volatility, slow transaction times, and limited merchant acceptance have hindered its widespread use as a reliable medium of exchange . For instance, El Salvador, which adopted Bitcoin as legal tender in 2021, has faced significant challenges, with much of its population continuing to rely on the U.S. dollar for day-to-day purchases .

Nouriel Roubini, Economist: “Bitcoin is the mother of all bubbles.”

In reality, while blockchain technology—the underlying infrastructure of cryptocurrencies—has significant potential across various sectors, cryptocurrencies themselves face substantial challenges in becoming dominant financial tools. The perception that they are poised to replace traditional finance is largely overblown, and their role will likely remain niche, at least in the near future.

Influencer Marketing vs. Traditional Advertising: A Reality Check

In recent years, influencer marketing has captured significant attention as the next big thing in advertising, leading many to believe it is becoming the dominant channel for reaching consumers. However, this perception is far from the truth when we examine the actual numbers. In 2023, global influencer marketing spending was estimated at $21.1 billion, a mere fraction of the $856 billion total global advertising expenditure. This means influencer marketing represents just about 2.5% of the overall ad spend, despite its massive visibility (Source; Source).

One of the key reasons for this perception lies in the rapid growth influencer marketing has enjoyed. The sector has grown exponentially, appealing particularly to younger demographics like Gen Z and Millennials, who are highly engaged on platforms like TikTok and Instagram. Influencer campaigns provide highly personalized and authentic content, making them effective in niches where traditional ads often struggle. This has led to impressive returns in certain sectors, especially e-commerce, fashion, and beauty.

As influencer marketing continues to expand, questions of sustainability and saturation arise. With the influx of brands into the space and the increasing number of influencers, the market might face oversaturation, which could lead to diminishing returns over time. While strong growth is still expected in the near future, the current trajectory hints that influencer marketing may reach a point of stagnation or plateau in the coming years as brands balance their investments across a wider array of digital and traditional channels.

Tesla: A Case of Disproportionate Market Perception

Tesla’s visibility and market influence have created the perception that it stands shoulder to shoulder with automotive giants like Volkswagen (VW) and Toyota. Yet, despite its outsized visibility, Tesla remains a relatively small player in terms of actual vehicle production. As of 2023, Tesla’s global production numbers were far behind those of established automakers. For instance, Tesla delivered just over 1.2 million vehicles in 2023, while VW produced nearly 9 million and Toyota over 11 million. Even relatively new entrants from China, such as BYD, have surpassed Tesla in electric vehicle (EV) sales (Source).

This discrepancy between perception and reality is largely driven by Tesla’s role as an early leader in electric vehicle technology and automotive digitalization. Tesla did indeed push the industry to take electric mobility seriously, introducing vehicles like the Model S and Model 3, which set new standards for EV range, performance, and software integration . However, many of these advantages have been quickly neutralized by competitors. Companies like Volkswagen, BMW, and even BYD have caught up or surpassed Tesla in terms of battery technology, production scale, and vehicle quality.

Moreover, Tesla has faced criticism for reliability and durability issues, which are areas where the century-long expertise of traditional manufacturers shines. Reports of manufacturing defects, inconsistent build quality, and software glitches have tarnished Tesla’s reputation for long-term reliability . In contrast, manufacturers like VW and Toyota bring decades of experience in delivering consistent, durable vehicles that stand the test of time. This knowledge, gained from over a century of engineering and manufacturing, is increasingly evident as Tesla struggles to match the long-term quality standards of its competitors .

Finally, while Tesla’s early innovations in EVs and autonomous driving were groundbreaking, the company has not introduced any truly revolutionary products in recent years. Aside from incremental updates to existing models and the controversial Cybertruck, Tesla has not delivered the same level of technological leadership that once set it apart.