An entrepreneur aims to exploit existing opportunities and to pursue new ways of doing things. Entrepreneurs will, therefore, only be successful if they can seize these opportunities for innovation when they can. Yet, developing the ability to notice when something can be improved, or when it can be done in a completely different way altogether, is one of the greatest challenges for the modern entrepreneur. But it can be done, and here is how.
In 2009, I was flying back to London from Paris after staying with a friend of mines’ family, when I met a man travelling for work who gave me an insight into overcoming this challenge. His story started when he and his business partner had inherited a large field in the United Kingdom and had no idea what to do with it. So what great idea did they come up with to make money from it? They turned the field into a tyre dump. They offered to take old tyres from drivers, mechanics, and petrol stations for a small price and stacked them high. Within a year they had made £400,000 and had filled the field completely.
But now the field was full, they were left with a new, even more difficult problem: what to do with £400,000 worth of old tyres. The man went on to tell me about his new company which sold rubber flooring to be used at horse racecourses, as an alternative to the wood chip which was currently being used in the warm-up and training areas. Faced with this problem, he had turned to his knowledge of one of his favourite hobbies and had identified the opportunity to use his tyres as durable and comfortable material for expensive horses. So he invested some of the £400,000 on buying a large plastic shredder to cut up the tyres and used them as the material for this new floor. Although I haven’t heard of this company again, and I have no idea whether they were successful, the story shows how having broad interests and learning widely can help you to spot an opportunity.
Those with knowledge and interest in a broad range of topics are becoming known as expert-generalists, a term coined by Orit Gadiesh, chairman of Bain & Company. At the highest level, they have masterful expertise in a range of disciplines, perhaps with one primary expertise and a number of peripherals, and from their diversity and depth of knowledge, they are able to make connections between seemingly unrelated fields of study.
The conventional wisdom of ‘Jack of all trades, master of none’ is contrary to the expert-generalist logic. It is often encouraged to narrow your interests and focus on one to develop an expertise, and through that, you will get obtain a well-paid career. However, this has led to academic fields that have become so specific and isolated that they have become partly irrelevant to anyone but the very few within their field. However, the idea of generalist makes sense when looking at the research on diversity.
The benefits of team diversity in the workplace have been studied: research by McKinsey & Company positively related workplace diversity (ethnic, gender, racial, age, and experience – such as a global mindset) with increased financial results and a competitive advantage.
“Our latest research finds that companies in the top quartile for gender or racial and ethnic diversity are more likely to have financial returns above their national industry medians.”
How can this relate to you as an entrepreneur? The McKinsey study suggests that expanding your experience and fields of expertise will increase your chances of success. Often entrepreneurs are working independently and have to rely on their own skills to keep their business going. Expert-generalist study widely allowing them to understand more culturally, academically and experientially, this diversity of knowledge creates a diverse individual – a one-man team.
As an entrepreneur, this individual diversity could increase your chances of success in another way. Those with a naturally entrepreneurial mind will automatically be connecting the dots to solve problems and look for improvements. Honing this ability is paramount for innovation, and for the business owner faced with an unexpected problem, that one article you read, the documentary you watch, or microeconomic theory you studied might spring into mind and save your business. Having the ability to adapt your knowledge to the situation, starts with having a broad knowledge base in the first place.
Evidence from famous inventors demonstrates how existing knowledge can be applied to a new area to create innovative products. Edwin Land, founder of the Polaroid Corporation in the late 1920s, was walking the streets of New York City after dropping out of his chemistry degree at Harvard when he thought of using light polarisation to reduce the danger from the glare of the headlights and street signs in the City. Land developed the idea in the New York Public Library before breaking in through a window in a laboratory in Colombia University to conduct experiments. The polarising filter had many applications beyond those originally intended, including in colour animation, lenses in sunglasses, tinted windows, and 3-D movie glasses.
Just after WWII, the Polaroid Corporation took a step into a yet another area, Land adapted his knowledge for cameras. Whilst on a family holiday, his three-year-old daughter asked him why she couldn’t see the photos that they were taking on the trip right away. She didn’t want to wait for the film to be developed, so Land took the problem to his laboratory and him and his team applied their knowledge to create the Polaroid instant camera. Land was a visionary entrepreneur, he brought together art, science and business and continuously saw ways in which to transfer his knowledge from one area to another.
Further famous expert generalists include Steve Jobs and Elon Musk. Jobs practised Zen Buddhism all his life (Read about the extent of his deep history with Buddhism here.) Zen’s influence on the simplicity of the design of Apple’s products and even it’s circular shaped headquarters (a circle is a symbol in Zen that conveys the nature of existence, among other things) is clear. Famously, Jobs attended a Calligraphy lecture whilst at university, one that he has said had a great influence on the first Mac interface.
“It was the first computer with beautiful typography,” Jobs said. “If I had never dropped in on that single course in college, the Mac would have never had multiple typefaces or proportionally spaced fonts.”
Elon Musk, CEO of Tesla, SpaceX, Neuralink, founder of SolarCity, and co-founder of Paypal, has such a diverse range of companies that he is required to have an insanely broad range of in-depth knowledge.
“His expertise ranges from rocket science, engineering, physics, and artificial intelligence to solar power and energy.” states Michael Simmons and Ian Chew in an article.
According to Musk’s brother, Kimbal, a young Elon would read two books a day. According to Simmons, Musk read philosophy, science fiction, biographies, programming, business, technology, energy, product design, and engineering. His continuous consumption of knowledge exposed Musk to a range of topics that allowed him to develop an unfettered vision that is seemingly a major factor in his success.
As a last example, in the academic world, one which usually encourages the narrowing of research interests to a high degree, has seen numerous breakthroughs as a result of academics reaching over and taking ideas from other subjects. An example from historical economics is David Hume’s price-specie-flow model in the 1700s. Hume used the principals of water dynamics in his essay ‘Of the Balance of Trade’ to theorise about price inflation and international trade. He argued that if a country exported more goods than it imported (meaning that more money came into the country than left through spending abroad) then the increase in wealth of those in the country would lead to an increase in prices, thus resulting in the domestic traders looking to buy abroad where prices were reduced. As a result, the country would then begin to import more than export, and prices would again fall. Hume argued that money, like water, could not be heaped in one location but would flow to lower areas. In other words, he used theory from the natural sciences to explain and develop a theory that contradicted orthodox thought at the time.
Irvin Fisher, in the 1900s, actually built a functioning hydraulic machine in order to understand, teach, and develop how hydraulic principles governing the behaviour of liquids are analogical to those laws governing the behaviour of money (Mary Morgan, 1996). Both of these economists changed economic thought and were able to create innovative ideas by using knowledge from one field and applying it to another.
What can entrepreneurs and business owners learn from these economists, inventors, and businessmen?
- Think like the Polaroid family and change your ‘don’t know how’ into ‘don’t know how, yet’. Lands daughter saw what she wanted without knowing why she was unable to have it. We can learn a valuable lesson from her, to question the limits we put upon ourselves. Just because you don’t know a way to improve something that you wish could be improved does not mean it can’t be. She was lucky that her father took the idea to his team and said, how can we do this? The more you know, the more you know that you don’t know.
- Read broadly and deeply, and start with the basics. Ideally start broadly and see what interests you, and then go deeper into as many of those you can. Elon Musk, when questioned on his ability to learn so much and so quickly in a Reddit AMA, gives one piece of advice “it is important to view knowledge as sort of a semantic tree — make sure you understand the fundamental principles, i.e. the trunk and big branches, before you get into the leaves/details or there is nothing for them to hang on to.”
- Get out of your comfort zone for innovation. Knowledge transfer across fields applies in a cultural context, too. You don’t have to become a Buddhist to be like Steve Jobs. You can read books on multiculturalism, attend an event you would never normally attend, make friends with someone completely different from yourself, or maybe read a book on Zen Buddhism. Gaining a new perspective on life may create a spark in your mind.
- Just like with the analogy economists, sit for a moment and think about how what you’re reading could apply to business. Read with intent to innovate and you’ll be surprised how often ideas arise. I have found that reading or doing things with a specific goal (such as to come up with a business idea) allows your mind to broaden its focus and create connections that help toward achieving your goal.
For those worrying about their ability to learn enough information, here is a useful link that teaches you how to improve the way you learn. For improving memory, I am working on an article that explains and summarises all the theories on memory enhancement and effective use. Until then I suggest the first few chapters in Dale Carnegie’s ‘How to develop self-confidence and influence people’, which you can buy or read easily online free here.