Saturday, October 31, 2015

When You Can't Tell the Loners from the Posers

I still remember when Steve Jobs was featured in business school case studies as an example of bad leadership style. At the time, Apple was a less-than-successful computer company, and Steve – ever the loner - had moved on to create another less-than-successful one (Next). When things go poorly for a nonconformist, how easy it is to call them the fool. But on those rare occasions when the loner gets it right, he does so in a big way. As Andy Rachleff likes to say, nothing pays off so well as a nonconsensus strategy that wins.

But where do we find these nonconsensus entrepreneurs? Many people come to the Silicon Valley in search of them. But here’s the problem: The way to conform in the Silicon Valley is to act like an entrepreneur. Often I have been told by spectacularly intelligent Stanford students, sheepishly, that they have accepted a well-paying job at a big established company. That such great news is delivered with embarrassment says something about the culture of the Silicon Valley: The way to conform is by acting the entrepreneur. So here is the rub. In places where entrepreneurship is all the rage, you can’t tell the loners from the posers.

So to find a nonconsensus entrepreneur, we should look to places where entrepreneurship is unpopular. Naturally that brings to mind Tokyo. Your company’s status matters a lot in most countries, but this is especially so in Japan. So it was shocking when the “Purinto Kurabu” – Print Club in English – appeared all over Tokyo back in the 1990s:

Japanese teens lined up for blocks to get into one of these booths for a picture with their friends, which would then come out on a sticker. Ultimately, this little device proliferated worldwide, and made a lot of money along the way. But unlike most Japanese innovations, it did not come from a big established firm. Instead, it came from a start-up company, “Atlus,” formed when Naoya Harano struck out on his own. His little company was creating some of the earliest fantasy-based video games, such as “Megami Tensei” (“Transformation of the Goddess” in English) - and had a cult following in Japan. But these games did not pay the bills. Harano, desperate and intelligent (a great combination), made money any way he could – distributing billiard tables to gaming rooms, setting up karaoke machines in empty container vehicles around Tokyo, and the like. The consummate loner, Harano would likely have stayed off our radar screen, except that one day his unpredictable behavior led to a fantastically successful product. In fact, the idea for the product itself came from a female secretary at his small company. At one of the huge, established Japanese conglomerates, a new idea from a low-status female worker would have no chance. But in the hands of a nonconsensus entrepreneur, the idea saw the light of day.

More generally, it turns out that at times or in places where entrepreneurship is least likely, those few entrepreneurs who do appear may win big. So to find the nonconsensus entrepreneurs, look to where entrepreneurship is least likely. Examples abound once you look for them. In the UAE, you might be surprised to see twofour54, an entrepreneurial media hub in Abu Dhabi run by Ms. Noura Al Kaabi. Coming out of Peru, you’ll see Kola Real, formed during a coup d’├ętat in 1988 – not exactly an ideal environment for business incubation. Or, in Kamchatka, you’ll see ecotourism ventures by Wild Salmon River Expeditions – initiated by an alliance between a former American military officer and his Russian associates. Name your own unusual circumstance. Where entrepreneurship is least expected, only the authentic entrepreneurs show up.


For academic research on this idea, check out my paper with Professor Elizabeth Pontikes on the nonconsensus entrepreneur.