Archive for August, 2011
A great article in Britain’s CAR magazine about Jonathon Ward and his company, Icon, which hand makes custom 4X4s based on early and elemental Toyota Landcruisers and Jeep CJs. These aren’t kit cars, they are passionately engineered using the latest and best automotive, marine and aircraft parts. They’re better than any Jeep or Toyota you can buy on the market today and the price shows it. At more than $100,000 for a base FJ Series, more than $80,000 for the CJ Series, these are finely tooled industrial objects.
Here’s the quote that caught my attention: “The market needs brands with clarity of intent, and brands that aren’t afraid to not be for everyone. It’s not for everyone and that’s the point. That’s part of the fun.”
And then he goes on to talk about what he thinks is wrong with the automotive industry.
“Our industry at large thinks it’s Doomsday, but without any bullsh*t, I really do think at my level it’s an amazing time. It’s like a dot-com era for opportunities. Never in my career has the public been more disenchanted with the offerings from the big players, nor more open to hearing about a passion-based product.
Passion-based product with clarity of intent: think about that. How many products do you come across that fit that description? What does it feel like when you find one that connects to your own passion? How would you like to be part of a team that created and delivered a product like that?
What if, instead of creating products you customers were willing to settle for, you could create something they were crazy for? Something that would make them camp out in front of your doors waiting for the product release?
There has never been a time when the market was more ready to see your passion revealed in your products.
This column by Peter Daniel Haworth caught my eye and reminded me of the Theory of the Black Swan, the rara avis (that means rare bird) of events, the unthinkable thing that can never happen. At least, that’s what it meant in 16th London, where it was believed that all swans always were and always would be white, based on the sound empirical evidence that no one had ever seen one in another color, at least not until the British landed in Australia.
Today the meaning is changing and we’re heading to the moment when a black swan will refer to the outlier event that can never happen but probably soon will anyway. Here’s what Haworth said in his excellent and horrifying column (don’t read it, it’s really too scary).
The concept and the above three-characteristic definition of “black swan” events were recently made famous by Nassim Nicholas Taleb (investment theorist and author) in his book, The Black Swan. Taleb discusses how many events in history actually qualify as black swans, and the list includes the world wars, the rise of Islamic fundamentalism, the spread of the internet, etc. According to Taleb, the irony is that most important changes in the world are actually black swans, but, yet, there is so little focus on them qua black swans in the social sciences. This is, in part, due to the conventional methodology of focusing on statistically probable phenomena, rather than the possibility of outliers. Taleb, moreover, goes beyond mere theory. He also describes how investors have and can employ black-swan analysis in their work; anticipating and preparing for the improbable can bestow significant rewards. Thus, his insights about outliers have practical implications for how people prepare for the future.
People talk a lot today about the increased pace of change, but change has almost always been fast, in the sense that we tend not to see it coming. I’m in Santa Fe for the month and in talking to a friend at the Santa Clara Pueblo, heard the story of the arrival of the Conquistadors in the Espanola Valley in 1598. People came running up from the river saying, “There’s new people in the valley, they have funny clothes, come look.” And within a couple of years, 95% of the population was dead, not from warfare but from infectious diseases. They could never have seen that coming.
No one could see an earthquake triggering a tsunami that knocked the power and cooling off at six nuclear reactors, but it happened. No one really saw the iPhone or the iPad coming, either. Even after the iPad was announced, a lot of people didn’t understand how it would change their lives. Until it did.
When the Nano was announced in 2003, competitors laughed at the idea of a great little car people would love to drive that cost about the same as a scooter. Suzuki, in particular, who had a near monopoly on the low end of the market with a super cheap car called the Maruti, laughed the loudest. And then their black swan moment came and they had no defense against it. They discontinued the Maruti, gave up their enormous, first-mover market share and walked away.
Black swans aren’t always negative, not by a long shot. Reading glasses were first manufactured in Italy in 1286 and within 20 years spread across the continent. I’ll make the bad pun that no one saw them coming but the fact is, for all our ingenuity and imagination, we have a tough time imagining something that hasn’t been imagined before.
Like a competitor suddenly launching a better product than yours at half the price.
What’s your black swan? What’s the impossible thing that could never happen to your company? You better identify it, because you know what? It’s likely to happen to you and sooner than you think.
(The reason Haworth’s article is so scary is that he asks what would happen if the unthinkable “black swan” happened and the United States political system really came apart at the seams. Don’t read it.)
I NEVER, NEVER discuss politics in a business setting, much less blog about them. Instead, I discuss wine, noting that there are vineyards in the South of France (Chateau Ausone, for one) that have been more or less in constant production since the Roman Empire. If you want to talk about businesses that get it, these might be people to look at.
One wine writer I like is Jon Rimmerman, who sources unexpected and unknown wines that he finds while rambling around Europe and offers — one offer a day — via his company Garagiste. His daily e-mail offerings are a delight to read and none more so than his post today, the best thing I’ve read yet on our current position. Enjoy!
A Fly on the Wall
It’s interesting to be a fly on the wall when locals in Europe speak of the US economy, government quagmire and overall state of their “friend” on the other side of the Atlantic. Most will tell you Europe is in a worse position and the Euro is no stronger than the Dollar. When a currency is tied to so many complex and different countries and cultures, it’s nearly impossible to keep a steady hand on its true value.
With the dollar, it’s just us – our triumphs and our sorrows.
Right now, while the world is waiting for us to bring everyone closer together, it appears we want to rip ourselves apart.
No one is perfect, not even a country…we make mistakes as everyone does. What makes the US so special is our ability to get ourselves out of a mess, to get off the floor and continue running up or downhill.
The main problem right now in the mind of many outside observers (that I chat with on foreign soil, as I did today in Umbria) is that, for the first time in many generations, the phrase “when the going gets tough, the tough get going” has an uncertain final word for the US. For many Europeans, the US was always been the last line of everything – “when the going gets tough, the US will somehow find a way to help, to make it right” – now that phrase seems to be “when the going gets tough, the tough get…?”
That makes Europe and the world nervous.
If we can’t even settle our own internal king-of-the-hill grudge matches like sensible and rational world-watchdog adults, then doesn’t it make things more precarious for new nations, those about to set up shop with democracy?
The world wants the awe-inspiring creative culture the US is known for – they crave the Spirit of St. Louis again. They still want to look up (way up) to us with a big sigh of relief that their strong older brother is there if need be. We can complain all we want about having to police the world, having to spend billions of unnecessary dollars on military infrastructure and replenishment on “wars” that few of us have two sentences of a grasp on but it’s about more than that.
The point is, with human nature such that man will always try to overpower man (or woman) with physical, mental, religious or ingenious might, someone has to tell the rest of the world to stop, not to worry, that we’ve got their back. For 100 years, that someone has been us (whether by our own insistence or realization that if we didn’t, the consequences for the entire world would be so grave, we had to). For over a century, we’ve earned the trust of a world searching for a modern direction but trust is fleeting and it has to be fostered day in and day out, regardless of past success.
Right now, the world sees our home run champs as more like Barry Bonds rather than the ideal of Roger Maris or Babe Ruth. For most of the world, the “Roger Maris” that the US has (had?) is the spark that made us sparkle. Out of nowhere, without creatine or other, we just may hit 61 out of the park when no other nation could come close.
Circa August 8th 2011, a majority of the world is nervous that the US has lost that edge.
Let’s not give them any reason to be.
All it takes is determination, an old wood bat, a leather glove and a sandlot -
Who knows, any of us – let me repeat that – any one of us (out of nowhere) just may hit 62 the old fashioned way…
…but it takes both the right and left hand firmly on the bat to do so.
Garagiste – August 8, 2011