I am not sure where I got this piece of advice, but it has served me in times past. When everyone is going in one direction, and you are able to notice that, there will most assuredly be a market in heading the opposite direction. It is hard to compete when everyone is going in the same direction; it is hard to get noticed, and it is hard to differentiate. When you are swimming in the opposite direction, you stand out clearly. People naturally want to know why. What are you seeing that no one else can see?
This concept has the most applicability in the investment world. If you find something that you are right about, and what you believe is not the general consensus, then this can lead to large returns. The general thought is that pricing often includes consensus. Often the price you see reflects more consensus than actual value, so if you find something that has great value that no one has seen yet, you will gain by eliminating the price adjustment that happens when other people start to take notice.
One particular concept of note is the idea that you can often be tremendously successful by creating blue oceans and not red ones. This was the topic covered in the book called “Blue Ocean Strategy,” which I found fascinating. The idea is that instead of jumping into a head to head battle where the seas will run red with competition, you sail out into open waters where there is no one around to fight you. However, finding that open water is daunting when you cannot even find a way out of your crowded harbor.
I have a book sitting on my shelf that I only read a few pages of; it is called “Purple Cow,” by Seth Godin. That book is highly noticeable because it looks like a milk carton and uses a purple cow hide pattern. I see it every time I walk into my office. I bought it in an airport years ago, and the only reason that I did was the cover. The premise of the book is summarized by one quote from the author: “Today, the one sure way to fail is to be boring. Your one chance for success is to be remarkable.” He effectively says that in the modern world the only real way to be successful is to build a remarkable product and target it at a select audience that will spread the word for you. I am not sure that he is one hundred percent correct; I think advertising still works, but it certainly would not be hurt by this theory. As I have learned over time, successful marketing is all of the above, not just a single option.
This brings me to another idea. When I was in college I read several papers on cognitive bias, and perhaps the most memorable was by Hedwig von Restorff while at the University of Berlin on what she referred to as the isolation effect. This theory came from a series of experiments in 1933 that gave participants sequences to remember over the span of three days. The experiments supported the core of her theory, which was that when multiple stimuli are presented, the one that differs the most is more likely to be remembered. A common example is a list of fruit: apples, oranges, strawberries, honeydew, pears, red squirrel, grapes, and mangoes. You will remember red squirrel because it stood out. This von Restorff effect has become so commonplace to us that we take the idea for granted. Clearly, if you want people to remember you, you have to be different.
A while ago I found myself in the middle of middle management at a large company. I had no idea how I ended up there; it just happened, and there I was, being herded like all the other cattle slowly, ever so slowly, toward the presupposed direction of “growth at scale.” By the way, if someone uses this phrase growth at scale, they are either trying to sell you software that you do not need, or they are a middle manager trying to justify their lackluster sales results. I started to realize that there were so many organizations, divisions, and service departments that I had no hope of getting my team to focus on what I felt was the most important. That was when I remembered the von Restorff effect. I started doing things that were absolutely crazy, completely out of left field. Everyone was doing one thing; I started doing the opposite. By doing so, I was able to gain visibility, attention, and ultimately what I was looking for, memory. They remembered what I was trying to tell them. It was amazing how much effort it took to rise above the fray of everyone swimming in the same direction and get the message noticed.
This is an obvious yet powerful concept. Whether you are trying to get a startup off the ground, as I am, or working in a corporation, the principle is the same. You could be a young person trying to get a date on your college campus, or a sign twirler trying to bring traffic into your store. The same principle is at work. If you want people to notice you, and then remember you, you have to be different. Different in a meaningful and exceptional way, but different.
