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Malcolm Gladwell: The unheard story of David and Goliath


dcollon
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Is what kind of a weird concept/talk, but I was somewhat funny to me to see someone spend so much time thinking about it.

 

 

Oh, I don't know about that.  I found Gladwell's though-process inspiring!

 

And of course I immediately thought of analogous stories in the business world.  First to spring to mind was Wal-Mart, probably because I recently finished the "Made in America" book and Sam Walton made such a big impression on me.  Walton looked a complete underdog in the early days, as he was competing with larger stores.  He would have lost had he tried to compete with them using their business model (the equivalent of trying hand-to-hand combat with Golaith).  However, Walton's large competitors had a weakness -- they priced based on their achieving a high margin.  Sam realised early on that it wasn't about margin, but rather about the dollar profit he made (lower prices more than offset by higher volumes).  Walton was small, but played to his strengths by keeping margins wafer thin and costs pared to the bone.  His large, high-cost competitors were simply unable to match him.

 

Sam (a.k.a. David) was destined to win!

 

[P.S. I know this is a gross simplification of the story.  Walton was certainly not destined to win.  But it fits with Gladwell's story.  So there.].

 

The Wal-Mart example is certainly not unique.  I guess it happens more often in industries with greater incidences of disruptive technologies.  What other David-Golaith business world examples can people think of?  The more obscure the better  ;)

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I also thought it was very sensible. Underdogs rarely win. They win more often when the favorite errs, not from their own transformation. The favorite is the favorite for a reason! It either has better technology, more scale, etc. etc. David wasn't the underdog, in fact according to Mr. Gladwell's analsysis, an intelligent observer would place his bets on David given the advantage in weaponry and maneuverability!

 

Apply this concept to both moats and challengers with superior technology/operations/value proposition. 

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  • 2 weeks later...

I quite enjoyed reading Gladwell's The Tipping Point, but after that, I read some things about him and his methodology that made me take everything he says with a grain of salt. F.ex, see here:

 

http://www.nytimes.com/2009/11/15/books/review/Pinker-t.html?pagewanted=all&_r=0

 

(piece by Steven Pinker, one of the smartest people I know of -- I highly recommend his book 'The Blank Slate')

 

http://ksj.mit.edu/tracker/2013/10/should-we-stop-believing-malcolm-gladwel

 

(an overview of some of the criticism)

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"They win more often when the favorite errs, not from their own transformation.

The favorite is the favorite for a reason!"

 

The favorite lost because they drank the cool aid, & got addicted to the public adulation; to keep the adulation coming they progessively stepped further out on the risk curve - & eventually overstepped. Identical to feeding an addict; except that its ego versus herion, & the fall from grace costs 'status'- not your life. The effect, & consequence, has been well known for a very long time.

 

The traditional solution has long been the periodic beheading, head spiking, & burning of publicists. Permanent solutions were preferred over humiliation to prevent retaliation, & it was usually the 3rd or 4th most prominent publicists whose head graced a spike. The message was very clear .....

 

Unfortunately we're not allowed to do that any more .... though a Putin or Stalin might disagree!

 

SD

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I enjoyed Outliers and going through Blink now.

 

Hey Liberty,

 

Have you read anything that Taleb has said about Pinker?

 

http://www.fooledbyrandomness.com/longpeace.pdf

 

Heh, now if we can find something bad that Gladwell wrote about Taleb, that'll close the circle.

 

I think it's very possible for both Taleb and Pinker to be right; existential risks are higher and potentially more destructive, because human technology is much more powerful (nuclear war, global warming, biological weapons, etc) while our everyday life is a lot less dangerous and violent than is used to be (Pinker's thesis in Better Angels).

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I quite enjoyed reading Gladwell's The Tipping Point, but after that, I read some things about him and his methodology that made me take everything he says with a grain of salt. F.ex, see here:

 

http://www.nytimes.com/2009/11/15/books/review/Pinker-t.html?pagewanted=all&_r=0

 

(piece by Steven Pinker, one of the smartest people I know of -- I highly recommend his book 'The Blank Slate')

 

http://ksj.mit.edu/tracker/2013/10/should-we-stop-believing-malcolm-gladwel

 

(an overview of some of the criticism)

 

On one hand, you have Pinker saying outliers is crap. on the other hand, Munger liked it enough to have copies available at the BH meeting. Who is right?

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I like Gladwell's stuff. He's a great raconteur and there are lots of insights to be found in his writings.. I'm just not sure his conclusions are always based on a sound, scientific methodology, as has been demonstrated. Hence the grain of salt required (you take some, you leave some). Doesn't mean he's wrong about everything, just that his process seems a bit lax...

 

That's the danger. Gladwell's talent seems to be to have one big idea and then dig up juicy anecdotes in science and history and weave great narratives around them to support the big idea. That's fine. It can be very entertaining and insightful.

 

Problem is, when things get more complex (in fields like statistics and psychology) he apparently sometimes bases his stuff on weak or flawed studies, or studies that have been contradicted, or he cherry picks and doesn't try to falsify his hypotheses, and because he's such a great raconteur, you end up with 50 million people retelling those incorrect things to their friends on the bus.

 

I love Munger to death, but he's not infallible and it's not because he likes something that it's without flaw (Lee in Singapore or the Chinese government come to mind).

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On one hand, you have Pinker saying outliers is crap. on the other hand, Munger liked it enough to have copies available at the BH meeting. Who is right?

 

I don't know if Buffett read Outliers, but it seems that he would agree about a lot of the conclusions. He talks about how lucky he was to be born where he was, with the right family, temperament, etc. 

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I like Gladwell's stuff. He's a great raconteur and there are lots of insights to be found in his writings.. I'm just not sure his conclusions are always based on a sound, scientific methodology, as has been demonstrated. Hence the grain of salt required (you take some, you leave some). Doesn't mean he's wrong about everything, just that his process seems a bit lax...

 

That's the danger. Gladwell's talent seems to be to have one big idea and then dig up juicy anecdotes in science and history and weave great narratives around them to support the big idea. That's fine. It can be very entertaining and insightful.

 

Problem is, when things get more complex (in fields like statistics and psychology) he apparently sometimes bases his stuff on weak or flawed studies, or studies that have been contradicted, or he cherry picks and doesn't try to falsify his hypotheses, and because he's such a great raconteur, you end up with 50 million people retelling those incorrect things to their friends on the bus.

 

I love Munger to death, but he's not infallible and it's not because he likes something that it's without flaw (Lee in Singapore or the Chinese government come to mind).

 

Lot of people agree with you:

 

http://ksj.mit.edu/tracker/2013/10/should-we-stop-believing-malcolm-gladwel

 

It has been my experience as well. Gladwell used the "broken window theory" to explain the drop in crime rate in NY in "The Tipping Point".

It was later shown in "Freakonomics" that the drop is crime rate had more to do with Roe V Wade. I learnt not to trust what I read in Gladwell's books.

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Heh, now if we can find something bad that Gladwell wrote about Taleb, that'll close the circle.

 

There is a entire chapter on Taleb that Gladwell wrote in <a href="http://www.amazon.com/gp/product/B002ROKQGA/ref=as_li_ss_tl?ie=UTF8&camp=1789&creative=390957&creativeASIN=B002ROKQGA&linkCode=as2&tag=businmaste-20">What the Dog Saw: And Other Adventures</a>

 

It was a great story.

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It has been my experience as well. Gladwell used the "broken window theory" to explain the drop in crime rate in NY in "The Tipping Point".

It was later shown in "Freakonomics" that the drop is crime rate had more to do with Roe V Wade. I learnt not to trust what I read in Gladwell's books.

 

And the Freakonomics explanation was later debunked itself (http://en.wikipedia.org/wiki/The_Impact_of_Legalized_Abortion_on_Crime#Foote_and_Goetz)

 

I don't think it's a matter of "trusting" the research Gladwell uses (he obviously doesn't do his own research, he just summarizes others').

 

Gladwell's books are very well-written narrative combining summarized research studies, anecdotal stories and histories to support his overall thesis. It is not a scientific study. He "connects the dots" of what he believes to be the central theme (usually non-intuitive) of his book. In "David and Goliath", it is along the lines of "perceived disadvantages can be advantages, and vice versa." He tells stories and uses research to support that. Just because one story/anecdote is disproven or seems to lack evidence, doesn't invalidate the entire book, or make it any less enjoyable.

 

There will always be detractors to any non-fiction author, especially one so popular. (Taleb's and Pinker's books are examples.) If you can find a non-fiction book without major detractors, it probably isn't very good.

 

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