Being down for a few days with a minor illness has given me an opportunity to get through Malcolm Gladwell’s Outliers. After finishing the book, I went back and looked at the post I wrote here about his first book. It’s amazing how much of that post is as applicable to this latest book as it was to the first. The basic themes that seem to always apply are:

• Gladwell latches on to an important insight, and expounds upon it in an enticing and insightful manner.
• He makes beautiful use of engaging stories to make his points, though his pure reliance on those stories (and the inconvenient links between them that he carefully chooses not to address) do more damage to some of his arguments that I suspect he realizes.
• His motivation to explore the topic at hand tends to be driven by belief in fantasies that undermine his ability to emerge with a better overall understanding of the world.
• For all the flaws and infuriating tendencies, his work is still highly provocative, worth the effort and moving thought in a roughly positive manner.

In this particular book, the nice insight is the notion that success does not come from nowhere, and that context is as or more important than individual initiative in achieving it. It’s a case that I’ve wanted to make for years, but my take has always been too pedestrian (remember the “resume study” I wanted to do of the biotech industry?).  Gladwell is great at finding clever and sexy ways to bring forth his key points.   At first, I was impressed and enticed by the way he showed that some of the elements of that “context for success” were even more random than anything I would have ever considered. The stuff about birth order and cultural legacy seemed like pure genius. Until…

It occurred to me that the “randomness” of the contextual elements he was identifying underscored his fundamental belief in the Horatio Alger view of success. While there may be no such thing as a purely “self made man”, those who succeed need to acknowledge the heroics of others in getting them where they are. Gladwell ultimately does not acknowledge systematic advantages. Instead, success is individual initiative mixed in with a little dumb luck and some heroics from those who came before. Two steps forward, three steps back.

Gladwell tips his cap towards his delusions at the end of the second-to-last chapter. “We look at the young Bill Gates and marvel that our world allowed that thirteen-year-old to become a fabulously successful entrepreneur. But that’s the wrong lesson. Our world only allowed one thirteen-year-old access to a time-sharing terminal in 1968. If a million teenagers had been given the same opportunity, how many more Microsofts would we have today?” The answer, of course, is probably none, and Gladwell’s failure to understand that shows that he doesn’t truly grasp his own insights.

As you’ve heard me say a million times before, the reason that the answer to Gladwell’s question is near zero is because the social system will not allow that many newcomers to be successful at any one time. Too much entrepreneurial success would be too disruptive to the system, and would require too many more people or firms currently accumulating wealth to stop doing so at the rate to which they’ve become accustomed. All the individual initiative in the world is not going to stop that from happening. Newcomers will usually be undone by the efforts of established wealth to keep what they have. The key to understanding entrepreneurial success, then, has less to do with the success of the newcomers than it does with the failure of established firms to preserve what they have.

An interesting insight on this came to me from Robert W. McChesney’s Communication Revolution. While not a new idea, I was moved by how concisely he put it. McChesney warns his readers to beware of firms who obtain a disproportionate amount of their profit margin from the currying of political advantage rather than the inherent value of their products. He is speaking about media conglomerates, but the same notion applies to any other established ventures as well. Those who have will fight to keep – if they succeed, newcomers will be thwarted. If they fail, newcomers will step in. Failure of the old does as much (if not more) to explain entrepreneurial success than the victories of the new. Perhaps some of the more interesting entrepreneurial opportunities can be found in areas where established firms have to rely on political advantage to maintain their success. Of course, this may be a chicken-and-the-egg question; the shift of profitability from the inherent value of products or services to the currying of favor on behalf of those products is sometimes driven by modest successes from competitors. Clayton Christianson’s work speaks to this, and the recent debates on “net neutrality” provide an interesting example. There’s also all the stuff around the American automakers, but the barriers to entry in an industry like that are so high that it might be a different beast. Still worthy of understanding, but perhaps a different beast.

But maybe I’m too tough on Gladwell. Spectacular failure is frequently more valuable to forwarding thought than is modest success, and I love the fact that he seems willing to cross that line. We’re all the better for it…