The Advantage Of Productive Paranoia

Over the years of speaking to audiences all over the world about what’s changing, what this means and how to maximise opportunities, I’ve witnessed a spectrum of responses that range from inspiration to paranoia.

Over the years of speaking to audiences all over the world about what’s changing, what this means and how to maximise opportunities, I’ve witnessed a spectrum of responses that range from inspiration to paranoia. I’m always honoured to discover that what I’ve said has expanded thought, especially when it triggers positive action, yet it’s the paranoia that I find most interesting. I don’t set out to make people paranoid, but it seems that some of the themes I detail are quite contrary to what is commonly understood within a company or an individual’s thinking, and this counter-intuitive state breeds paranoia quite often.

As it happens, I believe that a healthy dose of paranoia can be a saving grace, provided it is used productively. This is what I call ‘Productive Paranoia’.

In this post I will cover:

1. An example of modern commentary that essentially argues against Productive Paranoia.

2. Reasons why Productive Paranoia should be a priority.

3. Advice for everyone on how to apply Productive Paranoia in the most powerful way.

On the 22nd January 2015 an article appeared in TechCrunch relating to the claimed demise of a social network called Ello. Here is the first main paragraph of the article:

“Ello hoped to dethrone Facebook by not having ads. But while hipsters had fun hating on Zuck’s creation for a few days, they all went back to it and promptly ditched Ello. Now it’s left with $5.5 million squeezed out of some gullible investors and no reason to exist.”

The article then continues to challenge the validity of Ello’s battle against Facebook, specifically commenting on whether Facebook is, in fact, able to be competed with at all.

“For Facebook to get beaten at its own game…someone will have to build something much better. And Facebook will probably buy it before it gets even close…Facebook’s probably going to be around awhile.”

And then, in one final analogy: “Beating Facebook at its own game is like punching a wall 1.35 billion bricks thick.”

This triggered a number of online commentators to claim that this could be “the end of disruption”, where any potential competition simply can’t win due to the size of one player. I find this point quite surprising, not least because the entire history of competition shows quite clearly that disruption shows no respect to existing structure or success. I’m not talking about Ello here – I’m interested in the opinion that any particular company is more or less likely to be disrupted.

Whether you refer to Chapter 17 in the first Book of Samuel where Goliath was beaten by David, or consider how Airbnb grew over a few dozen months into being a higher valued company than almost all hotel chains, there is a hefty volume of evidence that suggests that the very last thing you can assume is that a company is unbeatable. In fact, the biggest disruptions happen when a company is so large – and this is because under that circumstance the company (and commentators) are convinced they cannot be harmed. In reality, the thing that will disrupt Facebook is the thing that is currently perceived as a low threat, if it is visible at all. For that disruptor, the “1.35 billion bricks” will be as irrelevant as the majority market share that Nokia once enjoyed, prior to the iPhone and the saturation of smart devices.

From studying centuries of disruptive market shifts, I created something called the ‘DNA of Disruption’ to describe what happens, in order. The DNA has 4 main stages:

1. A fundamental change in production, delivery and/or consumption
2. A low perceived threat rating
3. Growth by network effect
4. Inflection point into mainstream

The biggest danger point is number 2 and it is extraordinarily common. Almost all opinion of whether Facebook is hard to beat, resides on an assumption that they will spot the potential disruptor and either buy them or wipe them out.

That’s not what happens though.

What happens is that the low perceived threat rating enforces comfort and arrogance within the company, only until it’s too late. Then everyone looks at each other and asks “Who could have seen that coming?”

Is the Facebook disruptor out there? I’d imagine so…but so is the Google disruptor and the Amazon disruptor. Do any of us know who the disruptor(s) will be? I’d imagine not. Due to the DNA of Disruption.

You see the challenge?

To stand the best chance of succeeding and lowering risk, I would advise the following action points to all companies, regardless of size and fortune:

1. Investigate what you are discounting as being unthreatening – whether it is because you see something as currently sub-standard, too futuristic, or any other shortfall.

2. Identify what things would disrupt your business – not just in terms of competition but also in terms of changing contexts (for example, the landscape shift from bricks and mortar shops to e-commerce).

3. Integrate the above findings into your strategies moving forward – at the very least in terms of how things are constantly monitored, but ideally in how innovation is directed and developed.

If you successfully achieve a massive advantage in this way, the final thing to consider is that your business is still under threat of disruption, regardless of how rich you become, so therefore the 3 action points remain as a constant consideration.

“Just because you’re paranoid doesn’t mean they aren’t after you” – Joseph Heller, Catch-22

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