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Sightings: What Does an African Look Like?

HR: You're Doing It Wrong - Your Colleague Smells Bad. And?

How far should your company go to address touchy workplace issues?

Workspace: The Check Is in the Mail

When you don’t pay on time, your business is bound to pay some bad consequences.

Theory to Practice: Thinking With Emotions

Learning new things demands resolving old conflicts between feelings and logic.

Openers: Just Say Yes?

Avoiding groupthink begins with what’s in your own head.

Brilliant Mistakes

Fall 2012

Soundings

Brilliant Mistakes

By Frans Johansson

Frans Johansson is CEO of the strategy consultancy The Medici Group. From The Click Moment: Seizing Opportunity in an Unpredictable World (Portfolio/Penguin). ©2012

When we think of how large companies become successful, we think of what Bill Gates and Steve Ballmer did. They looked at their strengths and weaknesses; they assessed their opportunities and threats; and then they made a logical call: Go for the kill if you can, or team up if you can’t. And in that context, it made perfect sense for Microsoft to partner with IBM to create OS/2.

But great strategies are not based on what makes sense. Rather, they are based on what sets you apart and what you can reasonably defend. Those types of insights are almost never the result of a logical calculation. Instead, small, fortuitous observations can tip the balance. Consider how YouTube developed its main strategy. Today it is the single largest site for uploading and watching videos, and it has been since its inception. In retrospect, the idea seems dead simple and incredibly obvious, almost unbelievably so. There were any number of people in Silicon Valley beating their heads against the wall because they had not figured it out.

But not even the founders of YouTube were clever enough to figure out what YouTube was all about at first. In fact, their company started out as an online dating site called Tune In Hook Up. People would post videos of themselves on the site, and prospective dates could vote on them. The idea didn’t work out, but it laid the technical foundation for another, more potent idea. After two of the founders, Chad Hurley and Steve Chen, were unable to email a video of a dinner party they’d attended, and after the third founder, Jawed Karim, could not find a video of Janet Jackson’s Super Bowl “wardrobe malfunction,” the three made a momentary connection: What if there was a site on which you could upload videos and anyone could see them? The domain name youtube.com launched on February 14, 2005, and took off like a three-stage rocket. Google bought the company eighteen months later for $1.65 billion.

When we hear stories like these, they surprise us because we tend to believe that a great company must have started with a great idea. We want to think that the minds behind the idea were acting in a carefully calculated and deliberate way. Having a plan in place would mean that we could imitate their approach. But in this case, following YouTube’s approach would mean launching a crappy dating site. That seems like a mistake, one that some careful, logical thinking would allow us to avoid. But launching something—even a crappy dating site—is exactly what we should do as long as we are open for click moments that can change our trajectory.

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The Conference Board Review is the quarterly magazine of The Conference Board, the world's preeminent business membership and research organization. Founded in 1976, TCB Review is a magazine of ideas and opinion that raises tough questions about leading-edge issues at the intersection of business and society.