We review the best small business and investing books
Outliers: The Story of Success
By Malcolm Gladwell
Outliers by Malcolm Gladwell is an extremely well-written, insightful, and fascinating evaluation of what external factors in a person's life lead to success or failure. The book also examines the effects culture has on people and how those effects influence peoples' lives.
Gladwell writes: "The sense of possibility so necessary for success comes not just from inside us or from our parents. It comes from our time: from the particular opportunities that our particular place in history presents us with."
Many of us know this first hand from witnessing the development and growth of the Internet (something Gladwell doesn't write about), which created massive opportunities for entrepreneurs who used the new technology to sell books online; offer auction services; create search engines; or develop other internet-based technologies and services. Heck, some people got rich speculating in domain names. Shift the development of the Internet by five or seven years and it would have given these opportunities to a different batch of entrepreneurs. Time and place matter.
Gladwell writes about the microcomputer revolution and tells us most successful entrepreneurs during that revolution were born in the mid-1950s. This made them just old enough to take advantage of the microcomputer revolution that began in the mid-1970s.
Gladwell writes: "If you were more than a few years out of college in 1975, then you belonged to the old paradigm [mainframe programming]. You had just bought a house. You're married. A baby is on the way. You're in no position to give up a good job and pension for some pie-in-the-sky $397 computer kit. …At the same time, though, you don't want to be too young. You really want to get in on the ground floor, right in 1975…."
Gladwell concludes: "I don't mean to suggest, of course, that every software tycoon in Silicon Valley was born in 1955. Some weren't …. But there are very clearly patterns here, and what's striking is how little we seem to want to acknowledge them. We pretend that success is exclusively a matter of individual merit. But there's nothing in any of the histories we've looked at so far to suggest things are that simple. These are stories, instead, about people who were given a special opportunity to work really hard and seized it, and who happened to come of age at a time when that extraordinary effort was rewarded by the rest of society. Their success was not just of their own making. It was a product of the world in which they grew up."
Not only is the year of birth important, but, surprisingly, the month of birth is sometimes crucial too. In his outstanding chapter, "The Matthew Effect" ["For unto everyone that hath shall be given, and he shall have abundance. But from him that hath not shall be taken away even that which he hath." Matthew 25:29], Gladwell examines the months of birth of star athletes and shows that when junior sports have eligibility cut-off dates, the effects of those cut-off date propagates all the way up to the professional level of play.
For example, in Canada, most professional hockey players are born in January. The next most popular birth months are February and March. Forty percent of professional Canadian hockey players are born in these months. Thirty percent are born in the next three months of April to June, and only 20 percent are born between October and December. Why is this?
Gladwell explains: "It's simply that in Canada the eligibility cutoff for age-class hockey is January 1. A boy who turns ten on January 2, then, could be playing alongside someone who doesn't turn ten until the end of the year—and, at that age, in preadolescence, a twelve-month gap in age represents an enormous difference in physical maturity. …coaches start to select players for the traveling 'rep' squad—the all star teams—at the age of nine or ten, and of course they are more likely to view as talented the bigger and more coordinated players, who have had the benefit of critical extra months of maturity. …And what happens when a player gets chosen for a rep squad? He gets better coaching, and his teammates are better, and he plays [more games]… In the beginning, his advantage isn't so much that he is inherently better but only that he is a little older. But by the age of thirteen or fourteen, with the benefit of better coaching and all that extra practice under his belt, he really is better, so he's more like to the Major Junior A league, and from there to the big leagues."
The implications of this sort of "self-fulfilling prophecy" are important to parents. Gladwell says parents often contemplate holding children who are born at the end of the calendar year back from kindergarten until they are a bit more mature. Gladwell says many parents probably decide to enroll the kids anyway because they assume any disadvantage the child suffers will go away with time. "But it doesn't. It's just like hockey. The small initial advantage that the child born in the early part of the year has over the child born at the end of the year persists. It locks children into patterns of achievement and underachievement, encouragement and discouragement, that stretch on and on for years[,]" concludes Gladwell.
Gladwell writes about the academic and career advantages children born to richer parents have over children born to less affluent parents. Richer parents and financially poor parents have markedly different parenting styles. Richer parents tend to cultivate their kids, shuttle them between different activities, encourage them to interact with the adult world, and advocate strongly for them. Gladwell says poorer parents often believe children will just grow up and develop on their own. They also view the child's world as relatively inconsequential and separate from their adult world. Impoverished parents are often intimidated by authority, so they don't seek special privileges for their children. Children from more affluent homes learn social skills that help them succeed in life. On the downside, children from more affluent homes are often more self-centered and, literally, spoiled.
What about the role of public or private education in determining how well children do? Gladwell addresses this in detail in a well-woven chapter titled "Marita's Bargain." He tells us the story of a young girl named Marita who attends an intensive school in the Bronx called KIPP Academy. The students put in massive amounts of time, and they do exceptionally well, especially in math. It reminded me of the film Sand and Deliver. Come to school early, stay late, come in on Saturday, and work through the summer. Yep, that'll do it.
While many politicians talk about the need to improve schools in impoverished areas, Gladwell tells us the achievement gap between poorer and richer students actually occurs during summer vacation, when poorer students lose ground academically. Gladwell concludes: "Virtually all of the advantage that wealthy students have over poor students is the result of the differences in the way privileged kids learn while they are not in school. … For its poorest students, America doesn't have a school problem. It has a summer vacation problem…" It becomes clear the majority of American students would benefit from much shorter summer vacations.
To be good in math requires effort. And, the cultures of many countries encourages students to work hard and instills the belief that if they work hard, they will learn. All students are expected to succeed. In America, by contrast, there is more of a false belief that talent in math is innate. Gladwell shows us that cultural differences can affect learning. Drawing upon the book "The Number Sense" by Stanislas Dehaene, we learn that Asians may have a built-in cultural advantage in learning math. In particular, the Chinese have shorter words for numbers, which allows them to remember more numbers.
For example, Gladwell tells us that only about half of Americans can remember the sequence of 4,8,5,3,9,7,6 after 20 seconds of study. Yet, nearly all Chinese can remember the sequence, because the Chinese language allows all those numbers to be said in a two-second period.
Gladwell doesn't mention the weakness of the Chinese language: They don't have a freaking alphabet. Memorizing forty numbers probably isn't tough, if you need to memorize 10,000 different characters for 10,000 different words! Gladwell's observation that language can facilitate or hinder math is interesting. [OK, Mister Smarty Pants, why do children from India do so damn well at spelling bees? Perhaps, he'll answer that in his next book.]
Outliers has a great chapter, "The Ethnic Theory of Plane Crashes," which discusses how culture affects communication. We learn that some cultures are more supportive of social hierarchy than others. Koreans, for example, have a deep respect for their elders and for authority. Americans, much less so. Yet, what seems like a plus can become a negative in certain situations. For example, Korean co-pilots are much less likely to speak up to the plane's higher-status captain or to the control tower, if it seems like it could be interpreted as being rude or disrespectful. This can lead to errors that can lead to plane crashes. I can understand shyness and politeness, but if you're a co-pilot on a plane running out of gas, it's shocking to believe you wouldn't clearly communicate to the control tower that you're running out of fuel and that you're in an emergency situation. Using actual black box transcripts, Gladwell relates precisely this heartbreaking event.
There are a few points in Outliers where I'd take a slight exception to Gladwell's apparent beliefs. For example, Gladwell seems to associate winning a Nobel Prize with the pinnacle of achievement saying it takes "brilliant" and "imaginative" work. First, politics is sometimes associated with these awards (even the scientific ones). Second, the exact case Gladwell is making in Outliers about how circumstance affects achievement very frequently applies to the specifics of how these awards are won. For example, look at the award for unraveling the structure of DNA. Was it really "brilliant" and "imaginative," or was it the availability of newly-developed imaging technology? When we examine the specifics of these awards, we realize many of these awards are further proof of Gladwell's conclusion that opportunities are time and place specific.
I highly recommend Outliers by Malcolm Gladwell. The book is very well written and packed with insight.
This book is also available from BarnesAndNoble.com: Outliers: The Story of Success