Gladwell's Views on Entrepreneurs

Last night, I was privileged to listen to Malcolm Gladwell discuss innovation at an ICAP Ocean Tomo dinner for entrepreneurs. In his speech, he proposed that innovators are operationally conservative but socially nonconforming. This contrasts with the vast majority who tend to be socially conforming -- constantly looking for acceptance from their families, peer groups, co-workers and even strangers. The operationally conservative part of innovators specifically refers to the idea that innovators are better at identifying the true risk of a situation and are more willing to fail than others.

One example he gave was Ted Turner. Turner had inherited Turner Advertising Company, a highly profitable billboard business from his father. In 1969, Turner purchased a defunct television station and put it back on the air with inexpensive programming while promoting it using his billboard business. The synergies between his businesses helped this television station eventually became the super-station, a cash machine which funded many of his future ventures. Operationally, Turner's move into a defunct television station was conservative in that he understood the synergies between the billboard and TV advertising business, but socially he was highly criticized in the Atlanta business community. Additionally, Turner's outspoken personal style has continued to earn him public enemies but his business moves have generally been built on carefully analyzed insights.

Mark Zuckerberg fits this model of operationally conservative but socially nonconforming as well. Zuckerberg founded Facebook in 2004. Soon after, he dropped out of Harvard and moved to California to pursue his business goals. Dropping out of school is generally socially nonconforming as so many of us are pushed to graduate from top colleges and graduate schools. For Mark, dropping out may have been particularly nonconforming given the significant educational accomplishments of his family -- his father is a dentist, mother a psychiatrist and he had recently graduated from the prestigious Phillips Exeter Academy. But operationally, dropping out was reasonably conservative. Zuckerberg had interest from entrepreneurs like Sean Parker and investors such as Peter Theil (who invested $500,000 by late 2004), there was good reason to feel confident in the customer base growing (based on initial successes like Facemash and the limited version of Facebook that was operational) and he could re-enter a top university sometime in the future if Facebook failed.

There is selection bias in Mr. Gladwell's discussion, much like in his book Outliers. After all, his lecture focused on examples of successful innovators, with no discussion of those who misestimated risk and failed perpetually. Nonetheless, there is a broader point about social conformity. How often do we avoid taking an action not out of the fear of failure itself, but rather out of the fear of other people's opinions of our failure?

On a personal note, my greatest regrets have never been in my abject failures, but rather in the times where I simply didn't try.

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Comments

[iwritereadrate]

12:24 PM on 04/04/2011

Really interesting idea around conformist/non-conformist actions by entrepreneurs.

Thanks for posting

Adam Charles
www.iWriteReadRate.com

[Sidewalk Social]

10:57 PM on 04/03/2011

I can relate with you on this one Mr. Friedman. While my family is overly supportive of my entrepreneurial goals, my very own business partner, has a much different story as her family is not supportive to this day. In fact, when she presented the idea to her family that she was to venture off in a start-up with me, they scolded her and shook her as if what she was committing the worst of sins. While she has the degrees to land a perfect little fortune 500 job with benefits and paid vacations to please mommy and daddy she won't. I, on the other hand, only made it two years into college before I had to fight to survive as an adult and later opted to work on my own. We come form 2 different worlds, but still managed to come together with one vision to offer other start-ups and non-profits a fighting chance. While neither of us finds there is anything wrong with social conformism, we feel entrepreneurship is what drives change, inspiration and innovation for the future. If you don't try, you will always wonder "what if"...right?

[Howard Steven Friedman]

01:41 PM on 04/04/2011

Well said! "What if" is what often keeps me up at night. Good luck with your business.

[johnbracamontes]

10:30 PM on 04/03/2011

Malcolm Gladwell always has a great perspective on these types of subjects. Please read his other books as well.

[Sarah Trickey]

08:28 PM on 03/31/2011

I so enjoy Gladwell's books. Insightful and fun to read.

[Howard Steven Friedman]

03:06 PM on 04/01/2011

While I may not always agree with his conclusions he is certainly a great writer who makes me pause and think. If you get the chance to attend a lecture it is well worth while - I was very impressed with how friendly and accessible he was.

[Gabriel Boehmer]

07:05 PM on 03/31/2011

I especially like your question: How often do we avoid taking an action not out of the fear of failure itself, but rather out of the fear of other people's opinions of our failure? I'm afraid I fall into the latter camp too often. Thanks for the great post.

Disclosure: I am an AVP in Corporate Communications for Wells Fargo. Opinion expressed here is my own.

[Howard Steven Friedman]

10:00 PM on 03/31/2011

Gabriel - Thank you for the kind words. Unfortunately, I think most of us fall into that camp too often.

[robjh1]

06:12 PM on 03/31/2011

Great insight.