Outliers

One afternoon a four year child and his mother were on their way home when the mother suddenly stopped the car and put out child. She told the boy to find his own way home and then drove off. The child got lost in the surrounding fields of the countryside but eventually found his way home. It was the year the 1954 and it turned out that the mother was in fact putting the child on the road to greatness.

Another ‘imposed adventure’ began one cold dark January morning. The toddler now maybe twice as old now, possibly a little older, was suddenly and rudely woken out of his sleep by the mother and was told to get dressed. He was given a pack lunch and told to cycle fifty miles to the home of a relative and find water to drink on the way. It was not quite dawn when he left. When he returned later that day he expected a reception akin to a ticker tape parade, but instead he received a few pleasantries from his mother and told, “the vicar is expecting you, I told him you should be home any minute now so you’ll be around shortly to chop some logs”. The child’s name was Richard Branson.

I stumbled across Malcolm Gladwell’s book Outliners in March 2009. The content is riveting and I’m ‘no longer’ surprised why Time Magazine named him in their list of 100 Most Influential People – I agree. Outliers seem to add veracity to the hypothesis of Evolutionary Entrepreneurship. For me Predator and Outliners are two sides of the same coin (I say this with great humility). Outliers are defined as:

1. Something that is situated on or classed as differently from a main or related body
2. A statistical observation that is markedly different in value from the others of a sample

Both books converge on many aspects of success, one of them being environment can have an increasing or decreasing affect on the probability of success. I thought a chapter on the books’ intersecting was a worthwhile exercise.

The first thing that I noticed was the shared view that pushy parents were important to a child chances of success. Gladwell went to some length to detail the role that parents play in the success of outliers. In the chapter The Problem With Geniuses Gladwell outlines the conclusions of sociologist Annette Lareau in her study on the what accounts for the difference in the performance of third grade students (8-9 year olds). Was it race, culture, location, school? Gladwell highlights the Annette Lareau findings was it was not culture, religion or race that differentiated high performing kids in the families compared. It was what she described as middle-class parenting values that differentiated high performing children from lesser performers. Her basic conclusion was that there are two parenting philosophies – there was a middle class parenting attitude and a poor parents’ parenting attitude. The wealthier parents taught their children what could boils down to how to navigate the world and pursue goals.

Timing is critical in an entrepredator’s fortunes. In North America, during the Pleistocene epoch (that ended around 10,000 years ago) megafauna or large mammals, disappeared (during the latter stage of the epoch). This correlates with the appearance of man (an apex predator) in the region. Smilodon’s (Sabre toothed Tiger) extinction correlates with a man’s arrival. Ten thousand years or so later in North America, another epoch began, but this was a commercial one. The epoch correlates with the appearance of another predator. The new environment was as sponsored by the animal spirits and herd instincts of investors and corresponds with the arrival of the entrepredator species called - the Arbitrageur. Knowledgerush.com define Arbitrageur as …the practice of taking advantage of a state of imbalance between two (or possibly more) markets… Warren Buffett is a member of this ‘species.’ His phenotype was Suit Able to the landscape, he was lucky enough to be born into. Bill Gates highlighted the point saying “Warren says if he’d been born a few thousand years ago, he’d probably have been some animal’s lunch. But he was born into an age that has a stock market and rewards Warren for his unique understanding of the market”

On page 62 of Outliers Gladwell lists fourteen entrepreneurs, five of which I featured in my previous book This extract from Outliers addresses the same point directly. Gladwell highlights the reason for why fourteen of the seventy –five (or 20%) of those he list as the world’s richest people in history were born between 1830 and 1840. This time frame suggested momentous change was taking place in and around this time as highlighted earlier. He writes “In the 1860’s and 1870’s, the American economy went through perhaps the greatest transformation in its history. This was when the railroads were being built and when Wall Street emerged. It was when industrial manufacturing started in earnest. It was when all the rules by which the traditional economy had functioned were broken and remade. What this list says is that it really mattered how old you were when that transformation happened. If you were born in the late 1840’s you missed it.” Gladwell supports his case citing Sociologist C. Wright Mills who wrote “The best time during the history of the United States for the poor boy ambitious for high business success to have been born was around the year 1835.” Gladwell overlooked James J Hill. He was born in 1838! Paul Allen and Bill Gates founders of Microsoft were born 1955 and 1953 respectively. Steve Jobs and Steve Wozniak founders of Apple were born in 1955 and 1950 respectively, Bill Joy of Sun Microsystems was born 1954. Nagavara Murthy founder of Infosys one of India's largest IT companies, Azim Premji founder of Wipro, one of the largest software companies in India and Shiv Nadar, founder of HCL Technologies, a global leader in IT Services were all born 1946, 1945 and 1945 respectively this time in India. Of course there are men and women that are successful in the above named individuals industries that were born much earlier and much later. But the clusters of birthdates do support the idea that there is a correlation between characteristics and environments.