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Gladwell's recent study on the highly successful can be summarized like this: be ultra-fearful of loss, to the point that only a few of the most sure-shot, huge-upside opportunities get your total focus. Today, I read this interview with Charles Faulkner in The New Market Wizards that echoes the same idea:

The benefits of Toward motivation seem pretty obvious, but how would an Away From motivation be beneficial?

Your question reflects a common perception. The benefits of Toward motivation are more obvious. People who move toward goals are greatly valued in our society. You can see it in the language of the Help Wanted ads, which liberally use terms such as "self-motivated" and "go-getter." However the Away From direction of motivation has gotten a bad rap. Another way of thinking about this motivation is that it is away from problems. Many people who use Away From motivation are problem solvers. You can hear it in their language. They'll say, "Excuse me, but we have a problem here." They see a problem and have to solve it. Sometimes they get so involved in the problem that they may forget where they are going, but they will solve the problem. The Toward motivated people are so motivated toward their goals that they might not even consider what problems they might run into or what difficulties to prepare for along the way. Therefore, both types of motivation are useful.

Are you implying that people with Away From motivation are likely to be as successful as those with Toward motivation?

That's right. The Toward motivation may be enshrined in success magazines, but the less appreciated Away From motivation individuals can also be very successful. A perfect example is Martin Zwieg, the famous stock forecaster. He manages over a billion dollars in assets. His stock letter and books are among the most respected in the industry. When Zwieg talks about strategy, he says, "DON'T fight interest rate trends. DON'T fight market momentum." He uses Away From motivation to minimize loss. Many outstanding traders reveal an Away From motivation when they talk about "protecting themselves" or "playing a great defense." They're only willing to take so much pain in the market before they get out. As Paul Tudor Jones said in your interview, "I have a short-term horizon for pain."

Makes me think Gladwell is really onto something.

I'm such an evangelist for innovation, but is there a way to test the impact of innovation? Theoretically, innovative companies should perform better, right? What if I took the Fast 50, which are Fast Company's annual lists of the 50 Most Innovative Companies, and checked their stock's performance?

The theory is that innovative companies should release interesting products and services within a year, and that should boost stock price. Here are the results:

These charts imply that if innovation leads to stock growth, it certainly doesn't show it convincingly.

Clearly this is just a rough historical analysis. Ideally, I would average these performances in proportion to the market caps of each company (or should they be inversely proportional to represent innovative upstarts?). And we'd want to see this over fifteen years. And maybe it just says that innovation didn't matter as much during the downturn. Because I'm sure during the boomtimes, people couldn't throw enough money at innovative companies. And who knows how good Fast is at identifying "innovativeness."

But look again. Run your eyes over the individual companies. It's like nearly half did worse than the S&P 500. You'd expect, that if innovation is the godsend we claim it is, that maybe two-thirds or three-quarters of these companies would outperform the S&P.

Notes:
I started with 2007's list because the previous lists aren't sophisticated enough. It wasn't until 2007 that it looks like Fast started evaluating the innovativeness of whole companies. I chose US stock symbols because realistically, I'm only going to invest in those. Also, not every item listed had a stock symbol. For example, "Team Obama" is not listed on any stock exchange last time I checked.

This article in Fast Company seeks to burst Malcom Gladwell's bubble by upending whatever we know about "viral marketing." The first, and easiest, part of the dismantling is to show that what we imagine as newfangled "network marketing" theory is a decades-old theory about "Influentials." Actually, the theory is probably older than that, but it just never had a catchy name.

The second phase of the dismantling is to trot out a scientist:

In the past few years, Watts--a network-theory scientist who recently took a sabbatical from Columbia University and is now working for Yahoo --has performed a series of controversial, barn-burning experiments challenging the whole Influentials thesis. He has analyzed email patterns and found that highly connected people are not, in fact, crucial social hubs. He has written computer models of rumor spreading and found that your average slob is just as likely as a well-connected person to start a huge new trend. And last year, Watts demonstrated that even the breakout success of a hot new pop band might be nearly random. Any attempt to engineer success through Influentials, he argues, is almost certainly doomed to failure.

I think Watts is onto something. I don't think targeting a supernode alone is enough to spark the wildfire. Recently, I tried doing some @-spamming on Twitter and finally Tim O'Reilly retweeted my post to over a million followers. This created a flood of retweeting that lasted for about two days. But then it dropped off. My link didn't achieve enough escape velocity to bounce from one Twitter heavyweight to a new one. And then the link faded into obscurity.

But that could simply mean that I need a hybrid of Gladwell and Godin, and make my product or pitch extraordinary enough that it can jump from supernode to supernode. Hell, I could slap a catchy slogan to this, call it "Purple Cow Tipping," and voila, I'm an overnight marketing guru.

My point is that after the fact, it's easy to imagine a pattern, call it something new, and arrive at a new marketing theory.

My guess is that when we actually observe the foot soldiers in marketing departments, for every success that was begot through viral marketing, there's a handful of other ones through ol' fashioned mass exposure.

In other words, all marketing theories are a wash, and the real principle of marketing is to simply try everything.