How to beat the (supposed) odds
By: Gavin Christensen
In April, it will be 6 years since we had our first close on K1. This has been an epic voyage. There has been a lot of hard work along the way and the support of some talented and visionary people;thanks to each of you for the role you have played in helping us get to this point.
I reflected on our voyage recently as I read David and Goliath by Malcom Gladwell. The book resonated with me as it really got to the essence of my own entrepreneurial journey and the experiences of many of our companies. Gladwell uses the Biblical story of David and Goliath as a metaphor for ordinary people taking on Giants (powerful people, companies, entrenched industries, etc.) and elucidates his perspective with some fascinating examples in typical Gladwell fashion. The key point from my perspective is related to our discussions of both Moneyball and the Mongols. How did the A’s have such success with a bunch of over-weight, slow players that no one wanted and how did the Mongols conquer the known world with an army made up of 100,000 illiterate horseman who didn’t want to fight hand to hand? Giants of the day had become victims of their own success. The reality is that underdogs win all the time but they do so by playing a different game than the Giants. Gladwell points out that Giants are often not what we think they are and often the experience of growing up a David can create the opportunity to learn, gain unique experience and have insights that others miss which can lead to outcomes that change the course of industries and history. Let’s take a look at a few underdog examples and explore how they relate to Kickstart and our portfolio companies.
David and Goliath. On the surface the battle looks entirely one-sided. Goliath is a giant in size, strength and weaponry and such an intimidating 1-on-1 warrior that absolutely no one in the Army of King Saul has the courage to face him in battle. Goliath has a set of specialized skills such that, if faced on his terms, make him effectively invincible. The Israelite army is amazed that young, un-warlike David volunteers to go down and face the Giant. David on the other hand is young, inexperienced and unarmed with traditional weaponry and he refuses the sword and the armor offered by King Saul. Deflecting insults from Goliath, he confidently fits a smooth stone to his sling and promptly strikes Goliath on the forehead and proceeds to cut off Goliath’s head with his own sword. This is the underdog story for which the book is named. But was David a true underdog? Maybe, maybe not. David never intended to fight the battle the way that Goliath wanted. Once David decided to fight Goliath from a distance with an accurate, powerful, ranged weapon of the sling (with which he was very skilled) the balance shifted to David’s advantage. Without armor, he could move quickly, strike first and catch Goliath off guard. Gladwell quotes historian Robert Dohrenwend who argues that Goliath had as much chance of victory, “as any Bronze Age warrior with a sword would have had against an opponent with a .45.”
Kickstart Implications. Invest in David; Don’t listen to King Saul. The entrepreneurial journey is often a David and Goliath story. David, like many entrepreneurs, is young, somewhat inexperienced and has no real stake in the status quo (he has no skill with a sword, no reputation with the army to uphold, etc.) and so instead he just focuses on how to solve the problem at hand most efficiently (head shot with a smooth stone). The “expert” or “thought leader” on the scene was King Saul. King Saul was a very successful military leader in his own right (i.e., a big shot large company executive, industry luminary, even proven entrepreneur). If David had listened to King Saul, despite his own courage and faith, he would have likely been unceremoniously impaled by Goliath’s massive spear. In our world, King Saul represents the prevailing wisdom about how things are done. When confronted with the challenge of Goliath, King Saul’s solution is more of the same. Despite his youth and lack of experience, David saw the situation clearly and wasn’t afraid to defy the “experts” and to get the job done in a way that turned the strengths of Goliath into weaknesses.
Lawrence of Arabia. Another classic example is T.E. Lawrence or Lawrence of Arabia. I actually got so excited about this story that I also read Lawrence in Arabia by Scott Anderson to really understand the details behind this compelling historical event. Lawrence was a bookish Oxford scholar who, because of his incredible grasp of Arab culture, language, and terrain, became the leader of the Arab revolt against the Turkish army occupying Arabia near the end of the First World War. With limited financial backing and even less support from the British command structure, he was able to lead an Arab revolt that helped to turn the tide of the Great War in the Middle East. This was a true underdog situation. The Turks had a formidable modern army which had repeatedly defeated the British on the battlefields of the Middle East. The typical manner in which these attacks would proceed would be as follows: the two armies would dig massive trenches and fortifications and then continuously shell each other, while slowly dying of disease and boredom as they waited for the fateful order for the murderous assault on the enemy’s position. In this manner, the British had tried and failed to defeat the Turks through numerous frontal assaults, amphibious invasions etc. Lawrence, by contrast, commanded an unruly band of Bedouin who were a loose collection of tribesman with no love for the British and little for each other. Needless to say they were not skilled troops. Gladwell quotes Sir Reginald Wingate, a leading British commander, who called Lawrence’s army “an untrained rabble, most of whom have never fired a rifle.” Lawrence’s army lacked on any traditional metric for an army but they were tough and they were mobile. They could travel as much as 110 miles a day across the desert, even in the summer. They carried no more than a pint of drinking water, since they were so good at finding water in the desert. “Our cards were speed and time, not hitting power,” Lawrence wrote. After some time of stabilization of his band of misfits, Lawrence began to attack and harry the enemy in a way that crippled their ability to make war. The Turkish army required long supply lines and railroads to transport them to the battlefront. Lawrence’s army had camels and rifles and could operate comfortably behind enemy lines for weeks. The Turkish army just wasn’t flexible enough to deal with Lawrence. Lawrence used the speed and courage of his band to attack remote outposts and railroad tracks to cut off, confuse and distract the enemy. Arguably Lawrence’s greatest achievement was an assault on the port town of Aqaba. The Turks were expecting an attack from the British on the West. Assuming that no army would be crazy enough to attack from the desert in the east, especially in the summer, the Turks left that side of the city completely unguarded. Lawrence attacked from the east, coming at the city like a mirage from the unprotected desert sands, which required a nearly impossible six-hundred-mile loop — up from the Hejaz, north into the Syrian desert, and then back down toward Aqaba. When they finally arrived at Aqaba, Lawrence’s band of several hundred warriors routed the Turks and lost only two men. These were the same Turks who had repelled the elite soldiers of the British multiple times. Like David, Lawrence refused to play by the rules of Goliath (i.e., the European powers.)
Kickstart Implications. Be audacious like Lawrence; Lack of resources can be an advantage. There are two sides to every coin. Many Goliaths have been on top for a while and can’t imagine a world in which their assets don’t dominate, which can create a really nice opening for the David and Lawrence’s of the world. Clearly the weapons and soldiers of the Turks were an advantage, but it also made them immobile and kept them on the defensive. Lawrence’s band had none of these resources, but they did have courage, endurance, speed and deep knowledge of the terrain and most importantly, the brilliant leadership and strategic mind of Lawrence. Despite the advice of his superior officers (more King Saul advice) Lawrence new that he had to fight the battle on terms that would turn his enemy’s strengths into weaknesses. As Gladwell aptly puts it, “There is a set of advantages that have to do with material resources, and there is a set that have to do with the absence of material resources — and the reason underdogs win as often as they do is that the latter is sometimes every bit the equal of the former.” There are few constants in the life of a startup more universal than the lack of material resources. That nagging lack creates the urgency, necessity and the inspiration for the David and Lawrence-like entrepreneur to change the game. An entrepreneur can never win a competitive battle with a frontal assault. He or she needs to disregard the advice of the proven generals and King Sauls to really solve the problem in the most efficient way possible. When it works, this will often lead the entrepreneur to a place that Goliaths can’t follow.
