There’s a reason why we don’t tell children stories of the big guy crushing the little guys. Where’s the fun, justice or inspiration in that? Instead, the stories that work are the ones where the little guy, against all the odds, manages to overcome adversity.
And it is presumably this preference for the story of the underdog which drives our bias towards the ‘startup kills established player’ story archetype. Whether it is true or not. As a result, examples of innovation which do not fit the romantic David and Goliath story-type are often forgotten or overlooked.
People ask why Microsoft couldn’t have invented Twitter for example, discounting entirely that Microsoft did invent something similar and almost exactly as popular – Instant Messenger – several years previously.
But there is a bigger bias yet in this type of tale. As the story is told by the victor (and their triumphant PR team), it looks as if the single David of the startup – in a moment of self-assured mastery – fells the Goliath of the established business. But be sure that there was many more than one potential David in this story. In fact, every Goliath is being attacked by a swarm of Davids, each with their own variation of the slingshot.
Put this way, it can be pretty tough on the big guy. With small but significant threats on all sides, the corporation must assess which is a real threat to their business and which can safely be ignored.
Again a product of selection bias, when history comes to be written, the most dangerous opponents seem obvious. Of course Kodak should have been most scared of the digital camera, and Microsoft of the tablet computer. But at the time that these threats emerged, the respective companies were already battling on multiple fronts that seemed, in terms of day-to-day business, much more important.
Without the benefit of hindsight, the selection of which battles to fight is a lot more difficult. The large player is likely to prioritise the markets in which they currently have the highest returns and margin even though these may not be the markets which eventually come to be the most lucrative or decisive. The market focus of the incumbent becomes a risk to the established player, although it is often only with the benefit of hindsight that the correct strategy can be identified.
We do not need to praise the David in the story for their choice of market space; the success of their selection is guaranteed by their status as eventual victor.
A colleague of ours at Fluxx despairs when he hears the phrase “What were the chances of that happening?” because he knows, the event having already happened, that the chances were exactly 100% – and knowledge of this does not help us predict our own lives or companies’ futures any better.
If you’ve missed any of our previous instalments, check the list below.
- When a revolution is required
- The myth and magic of innovation
- Where do ideas come from?
- Money and politics – why innovation could be doomed to fail
- Sociopaths, clueless, losers
- Our five principles for revolutionary innovation
- What makes products successful?
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