Smartcuts: The Breakthrough Power of Lateral Thinking

by Shane Snow

Finland made teaching jobs more desirable and job competition increased. Its standards for teachers became higher than other countries. “The whole teaching profession has been re-invented there,” Wagner said. “They have much much better working conditions to prepare lessons, to collaborate with colleagues, to meet with parents and students.” Teaching in Finland became a prestigious profession where master’s degrees were required to teach on every level. And only 10 percent of applicants are even chosen to begin teacher training. Once they had jobs, teachers often stayed in the profession until they retired.

(Roughly half of American teachers leave in the first five years.)

Instead of abstract theory, students got hands-on practice. Instead of a surface-level understanding of every topic ever, they went deep in fewer. And as you may have guessed, Finnish schools allowed students unrestricted use of calculators. “Kids there have much more sense that they’re going to have to construct their own future,” Wagner says. They’re taught to be entrepreneurs of their own lives. Instead of standing passively on an education assembly line and being handed reams of facts and figures, they are thrown into rooms of bricks and asked to build castles. By teaching tools and problem solving instead of memorization and by hiring only teachers with master’s degrees, Finland created a higher educational platform that gave its kids an advantage. That’s how its school system shot to number one.* For so long, “innovation” in education has amounted to more class time, more memorization, more tests. Smaller classes, but the same classes. Finland actually got better, through lateral thinking.

Edward de Bono, who coined the term “lateral thinking” in 1967, put the “Einstein” quote a bit differently: “You cannot dig a hole in a different place by digging the same hole deeper.”

More innovation, creativity, and art per person happens in large metro areas than other places; what Jonah Lehrer calls “urban friction” and Richard Florida calls the “creative class” turns cities into higher platforms for success-seekers.* Platforms are why so many aspiring actors migrate to Los Angeles and why budding fashion bloggers move to New York. Platforms are why Harvard Law graduates have easier times finding jobs than those from other schools.

“You can build on top of a lot of things that exist in this world,” David Heinemeier Hansson told me. “Somebody goes in and does that hard, ground level science based work. “And then on top of that,” he smiles, “you build the art.”

“The whole emo/post-hardcore trend exploded because of the Internet,” Richter says. “You go to school all day and still deal with the food-chain mentality, but with the Internet you could be whoever you wanted and anti-mainstream.”

as one of the event announcers, Leila Hurst, points out, world championships aren’t won by surfing skill, and this heat was no exception. “It’s really not about surfing and practicing,” Hurst says, on air. “It’s just a matter of waiting for the right wave.”

Luck is often talked about as “being in the right place at the right time.” But like a surfer, some people—and companies—are adept at placing themselves at the right place at the right time. They seek out opportunity rather than wait for it. This chapter is about hacking that process.

There are two ways to catch a wave: exhausting hard work—paddling—and pattern recognition—spotting a wave early and casually drifting to the sweet spot. “There are people who make careers based on the fact that they know how to read the ocean better than others,” says Pat O’Connell, ’90s surfing legend and trainer. “It’s just about knowing the ocean. It’s timing.”

The surprise came on the analytical test, where the high- and low-expertise students scored nearly the same, and better than the high-expertise students’ intuition. The low-expertise students who used their guts to guess at a shot’s difficulty did poorly, as expected. But when these same students used thoughtful criteria, they outperformed the intuition of experienced players.

In a given domain—be it surfing or accounting or political fund-raising—the familiarity that leads to pattern recognition seems to come with experience and practice.

“Intuition is the result of nonconscious pattern recognition,” Dane tells me. However, his research shows that, while logging hours of practice helps us see patterns subconsciously, we can often do just as well by deliberately looking for them. In many fields, such pattern hunting and deliberate analysis can yield results just as in the basketball example—high accuracy on the first try. And that’s where, like the dues-paying presidents or overly patient programmers, what we take for granted often gets in the way of our own success. Deliberate pattern spotting can compensate for experience. But we often don’t even give it a shot. This explains how so many inexperienced companies and entrepreneurs beat the norm and build businesses that disrupt established players. Through deliberate analysis, the little guy can spot waves better than the big company that relies on experience and instinct once it’s at the top. And a wave can take an amateur farther faster than an expert can swim.

“20% Time” is not Google indigenous. It was borrowed from a company formerly known as Minnesota Mining and Manufacturing, aka 3M, which allowed its employees to spend 15 percent of their work hours experimenting with new ideas, no questions asked. 3M’s “15% Time” brought us, among other things, Post-it Notes. Behind this concept (which is meticulously outlined in an excellent book by Ryan Tate called The 20% Doctrine) is the idea of constantly tinkering with potential trends—having a toe in interesting waters in case waves form.

The best way to be in the water when the wave comes is to budget time for swimming.

Over the years, entrepreneurs and academics have suggested that first movers in business—the first to catch a commercial wave—enjoy an unfair advantage over their competitors. In 1988 Stanford professors Marvin Lieberman and David Montgomery popularized the concept, suggesting that the first competitor to move into a market has the opportunity to gain proprietary learning, snatch up patents, and build up buyer switching costs. Later researchers added that first movers receive outsize branding benefits, that a reputation for being “the original,” often enjoys a marketing advantage over copycats.

According to Lerer, when we look at history—and emerging competitions—we ought to expect the first mover to win a disproportionate amount of the time. Except if we did, we’d be wrong.

business world of the phenomenon of first-mover advantage, they qualified their conclusions, saying, “Pioneers often miss the best opportunities, which are obscured by technological and market uncertainties. In effect, early entrants may acquire the ‘wrong’ resources, which prove to be of limited value as the market evolves.”

the research showed that 47 percent of first movers failed. Only about half the companies that started selling a product first remained the market leader five years later, and only 11 percent of first movers remained market leaders over the long term. By contrast, early leaders—companies that took control of a product’s market share after the first movers pioneered them—had only an 8 percent failure rate. Fifty-three percent of the time in the Golder and Tellis study, an early leader became the market leader in a category.

Fast followers, on the other hand, benefit from free-rider effects. The pioneers clear the way in terms of market education and infrastructure and learn the hard lessons, so the next guys can steal what works, learn objectively from the first movers’ failures, and spend more effort elsewhere. The first wave clears the way for a more powerful ride.

The way to predict the best waves in a proverbial set is established by researchers Fernando F. Suarez and Gianvito Lanzolla, who in Academy of Management Review explain that when market and technology growth are smooth and steady, the first mover gets the inertia and an advantage. When industry change is choppy, the fast follower—the second mover—gets the benefits of the first mover’s pioneering work and often catches a bigger wave, unencumbered.

Sonny certainly wasn’t the first mover in either genre, as artists had been pioneering—struggling to break ground on—emo, screamo, EDM, and dubstep for years before the styles reached an inflection point with listeners. He hopped on board for the second wave and paddled hard for it each time.

casual observer might conclude that Sonny just happened to be in the right place at the right time, two times. That he was just lucky. But that’s not what happened. Sonny actively experimented with trends when they were still early—the Web, social networks, scream-singing, EDM—sticking his toe in different waters until he recognized incoming waves. And it should be noted that he tried some things that didn’t work (a solo career as a rock singer) and was quick to shift strategies.

Her secret, and Sonny’s (and Google’s and 3M’s and General Motors’), isn’t practice—though that certainly helps. It’s going to the beach to watch the waves and getting into the water to experiment.

WHICH IS EASIER—MAKING FRIENDS with a thousand people one by one or making friends with someone who already has a thousand friends? Which is faster—going door to door with a message or broadcasting the message to a million homes at once? This is the idea behind what I call superconnecting, the act of making mass connections by tapping into hubs with many spokes. It’s what Castro needed to do if he ever wanted to convert the Cuban people to his cause. Imagine you’re at a party and you don’t know any of the other guests. You look around at the dozens of people and, if you’re extroverted, you’ll probably strike up a conversation with someone nearby. If you’re a little more timid in unfamiliar territory like I am, you might wander around in hopes that someone strikes up a conversation with you. Now imagine that a friend of yours shows up. She happens to know everybody at the party and she decides to take you around and meet everyone whom you should know. You soon meet a dozen people, with very little effort. Your friend is a superconnector.* That’s the role that mass media has played in our lives for the past two centuries—superconnecting sources of information to relevant audiences all at once and superconnecting businesses to millions of potential customers through advertising. Before newspapers could reach hundreds of thousands of people in a day and before radio and television and Internet publishing could reach millions at once, there were few national- or international-s...

Revolutions are a slow, deadly business. Before radio, 300 outcasts hiding in the jungle could not have overthrown a powerful military dictatorship. But with radio, those outcasts could connect to the 5 million oppressed Cuban citizens who secretly shared the rebellion’s dissatisfaction, and turn the tide against the dictator, tanks and planes and all. The radio had superconnected the revolutionaries with the Cuban people, and together they achieved victory in astonishingly short time.

In his bestseller, Give and Take, he presents rigorous research showing that a disproportionate number of the most successful people in a given industry are extremely generous. From medical students to engineers to salespeople, his studies find givers at the top of the ladder.

Initially, Abrams helped out better-connected people than himself, and doing so helped him superconnect.

Jack Canfield, from chapter 2, similarly superconnected into networks when he released his book, Chicken Soup for the Pet Lover’s Soul. He partnered with a national pet supply retailer to offer a half-price coupon for the book to anyone who bought a 50-pound bag of dog food. The company promoted the deal across the United States. “The principle was partner up with somebody who is already a gorilla, that has huge reach and impact, and create a win-win,” Canfield explains. Eager for a deal, dog owners bought half a million books—and in the process, a lot of dog food. It was one of the fastest book launches of Canfield’s career.

Instead of interrupting people with ads, Mint decided it was going to become a media company that taught people to better understand finances. It started a blog on which it posted helpful articles about money management and savings. The blog chugged along, slowly winning audience members to its free content, and then it found a way to tap into a large broadcast channel: social bookmarking. Social bookmarking sites were all the rage in the mid-2000s. Here people shared links to content they liked, while others “voted” on which links they liked best. The highest voted stories every day surfaced to the front pages of bookmarking giants like Digg.com and Reddit.com, where millions of people saw them. So Mint started making blog posts its editors thought were likely to be voted up by the bookmarking crowds. Its editors commissioned infographics* (illustrated stories that made sense of data) explaining economic trends in terms a normal person could understand. These were entertaining, informative, and visually striking stories, and they helped people grasp money management in a fun and noncondescending way. Some of the most influential Digg and Reddit users fell in love with the Mint blog, which gave them content that would make them look good to their own fans. Those influential users shared these stories, sending millions of visitors to Mint.com. Thus Mint built relationships with an enormous number of people—by helping them. Over the next two years, 1.5 million people who dis...

people with lives and families tend to favor predictability even in the worst of circumstances. Revolution would probably mean deaths—all the worse if the rebels lost—and surely the upending of what meager livelihoods many peasants already struggled to cling on to.

Their countrymen’s basic needs had to be met, and trust had to be gained. So, Guevara started teaching peasants how to read. The revolutionaries, largely an educated bunch, walked into villages and set up classes. They taught the poor how to farm, how to be self-sufficient. They taught them self-defense. The villagers began to see the rebels as their allies—people actively improving their immediate circumstances. The rebels’ service spoke much louder than Batista’s pompous speeches. Radio Rebelde became a tool for reinforcing that service, for teaching and inspiring during the day, and reporting the news at night. Guevara was adamant that everything Radio Rebelde broadcast be 100 percent true.

And although Fidel has turned out to be a less-giving ruler than a younger version of himself might have hoped, the octogenarian Castro’s approval rating in Cuba remains higher than the percentage of Americans who approve of their own Congress.

The movement harnessed the power of the superconnector by giving service as a publisher and educator. J. J. Abrams built his career by collaborating with talented, fast-rising, and well-connected people and by making them look great. And Mint grew business via its own broadcast on the Web, tapping superconnected people and then helping the members of those people’s networks through meaningful content. No matter the medium or method, giving is the timeless smartcut for harnessing superconnectors and creating serendipity.

Michelle Phan, a 23-year-old Vietnamese American makeup artist, posted a home video tutorial about how to apply makeup to re-create music star Lady Gaga’s look from the recently popular music video “Bad Romance.” BuzzFeed gushed, its followers shared, and Lady Gaga’s massive fanbase caught wind of the young Asian girl who taught you how to transform into Gaga. Once again, the Internet took the video and ran with it.

There were certainly multiple factors contributing to these men’s post-moonwalk slump, but the question What do you do after walking on the moon? became a gigantic speed bump.

this is the same reason that only one-third of Americans are happy at their jobs. When there’s no forward momentum in our careers, we get depressed, too. As Newton pointed out, an object at rest tends to stay at rest. So how does one avoid billionaire’s depression? Or regular person’s stuck-in-a-dead-end-job, lack-of-momentum-fueled depression?

Steven J. Kramer suggest in their book, The Progress Principle, businesses need to help their workers experience lots of tiny wins. (And as we learned from the bored BYU students in chapter 1, breaking up big challenges into tiny ones also speeds up progress.)

They don’t have to do something Bigger or Better to be happy. They just have to keep moving.

Happy astronauts catch waves that lead to the moon, and then use the momentum to switch ladders to fulfilling careers on earth. Depression-avoidant entrepreneurs use levers to get massively rich, then parlay the momentum to build more things. But when Bear Vasquez tried to parlay his momentum for more, he got nowhere. What did he do wrong?

As soon as the Oreo tweet received some traction, 360i folks e-mailed bloggers the stats. When the blogs wrote, the agency made sure the growing story worked its way up the chain to bigger writers and publications, continuing to escalate things by making all the press coverage (earned media impressions) the story, rather than the relatively low number of Twitter shares. And so on, until the Cannes International Film Festival handed 360i a Silver Lion, and I, the ten-Oreos-at-a-time guy, felt I had to deliver an impassioned speech to the other Digiday judges about how that picture of an Oreo cookie on a black background was actually pretty run-of-the-mill creative work. Didn’t matter. Oreo’s momentum had already taken it into orbit. My fellow judges voted Oreo the winner. I threw my hands up,

360I HAD BEEN CLEVER to direct the award judges’ attention away from the Oreo tweet’s absolute economics and toward the momentum the tweet had in the press. And rather than cross their fingers like many of us would, 360i’s publicists had taken the tweet’s initial momentum and pushed it along like sweepers in a curling match. If 360i hadn’t kept swinging, it certainly would not have won all those Clios. The Oreo tweet case study proves that the perception of momentum is often as good as momentum.

Phan, on her first day at Ringling, encountered a street team which was handing out free MacBook laptops, complete with front-facing webcams, from an anonymous donor. Phan later told me, with moist eyes, “If I had not gotten that laptop, I wouldn’t be here today.”

That same year, 2009, Lady Gaga released her now-iconic “Bad Romance” music video. It quickly became YouTube’s most-watched. Phan decided to capitalize on the wave by posting a tutorial of how to re-create Gaga’s makeup from the video. Then, like Oreo, she tried to manufacture some momentum. Like a surfer arriving hours before a competition to watch the waves, “I would study the algorithm of YouTube’s front page” for months, Phan says. “I noticed that they only would post up videos with a lot of views [on the home page], and you only have 2 days to capitalize off of all these views.” However, YouTube didn’t update the home page on weekends, she realized. If she managed to get a video on there on a Thursday, “I [could] be there for an extra 2 days.” So she uploaded her Gaga video at the optimal moment and then notified her little group of fans to watch it at once. It was enough to reach the home page. This was the tiny nudge that got the snowball rolling. And, as the video hung on the homepage for those extra days, a writer from BuzzFeed noticed it and wrote a story about it.

“Most YouTubers just kind of drop off around a certain time; it’s hard to keep that momentum,” Phan says. “I [had] to strike while the iron’s hot.” AS WE’VE LEARNED FROM Michelle Phan’s story, the secret to harnessing momentum is to build up potential energy, so that unexpected opportunities can be amplified. On the playground, it’s like building a tower to stand on, so you can start your Olympic ring with more velocity. Phan’s tower was a backlog of quality content. This is how innovators like Sal Khan (who published 1,000 math lessons online before being discovered by Bill Gates, who thrust him into the spotlight and propelled him to build a groundbreaking digital school called Khan Academy), and musicians like Rodriguez (a folk singer whose amazing, but largely unrecognized music work from the 1970s was featured in a 2012 documentary, which then catapulted him to world fame) became “overnight” successes. None of them were overnight successes. But each of their backlogs became reservoirs, ready to become torrents as soon as the dam was removed.

Michelle Phan, on the other hand, spent years building up potential energy. She worked hard to hone her craft, stealing from the master tutorialist Bob Ross, studying the wave patterns of YouTube’s homepage, and superconnecting with media companies and the fans of famous pop icons by giving and teaching. She hacked the ladder from blogger to YouTube star to makeup spokesperson to cosmetics designer to entrepreneur. The 30-million-view Lady Gaga tutorial was not Phan’s first great video, but it was her inflection point. She had been winding up for a big swing for a long time. “Success is like a lightning bolt,” Phan once declared in an interview with Mashable. “It’ll strike you when you least expect it, and you just have to keep the momentum going.”

Eventually, she ended up at Stanford Business School studying “Design for Extreme Affordability,” or how to create products for people who live on less than a dollar a day.

“We realized something was wrong,” added Naganand Murty, the engineer, “and asked ourselves: do we need a cheaper glass box or something that will save babies’ lives?” CHEN’S TEAM STEPPED BACK to reassess its approach. What features did the babies actually need to survive? they pondered.

The answer, they discovered, was primarily just warmth. NICUs kept premature babies nice and toasty.

To prevent the majority of preterm infant deaths, her team realized, they just needed to figure out how to keep a baby at a constant 98.6 degrees. And that was something you ought to be able to do for less than $20,000. From that realization came Embrace, which Chen describes as, “a sleeping bag for babies.” It’s a tight, insulated pouch with two compartments: one for the baby and one for a hot pad that’s heated in a small box—something like a toaster. It worked.