It is not unusual to come across gurus giving their Gyan on random things in life. Remember when you were in school, there were always some people who gave you their advice on your career. And this keeps happening in your entire life, be it as a student, in a job or as an entrepreneur. It never harms to listen to wise people around you. Makes sense to learn from experiences of others, most of the times. But not always. Firstly, these opinions are based on the experience that the opinion-giver has been through. The environment in their context might be completely different from what we are in. Secondly, even the best of our people might go wrong. Earth used to be flat and was declared so by the wisest men of ancient times. But then it turned out to be sphere. So there are times when we need to listen to these opinions but not act on them. When we need to have conviction on your own thoughts and they might be different from what majority of people say.
Then there is consensus wisdom. “Invest your money in this blue chip stock, this will give you solid return in long-term”. Or “Since year 1982, this company has generated with CAGR of 123%”. Apart from hindsight bias (more on that later), there is a conventional wisdom – blue chips always do good, startups by experienced management always deliver, returns in long-term are always good. Again, most of the times, it is okay to follow the consensus. But, there is an irony – if everybody knows that there is money in e-commerce, why wouldn’t everyone start an e-commerce business. And if everyone gets into an e-commerce business, how can everyone make money. To make a real kill, one needs to go contrarian. Consensus + success is good and might keep you going, but non-consensus+success is what will set you apart. There is always a risk of failure.
This brings to the theory of black swan (please read wonderful books by Nassim Taleb – Fooled by Randomness and The Black Swan. And The Bed of Procrustes). A black swan event is something which has an element of surprise, has a major impact and is not expected. Internet was a black swan event. Nobody predicted it. It had a major impact and an element of surprise. So were many companies that exist today. Infosys was a black swan event in 90s, and so was the fate of Arvind Mills. If everyone knew Facebook would be big, why wasn’t it started by some large company? And anyways, why do new companies become big if there are already big companies with deep pockets and the best talent with them? Because, black swan events are hard to predict. Even by the wisest of us!
So anyways, the point here is that sometimes, to create an impact you need a black swan event and for that one has to go against the conventional wisdom and consensus. Today, the earth is flat.