What is the main message of New to Big?

The main message of New to Big is that anyone can successfully navigate the challenges of starting a new venture.

How long does it take to read New to Big?

The reading time for New to Big varies depending on the reader's speed, but it typically takes several hours. However, the Blinkist summary can be read in just 15 minutes.

Is New to Big a good book? Is it worth reading?

New to Big is worth reading for its valuable insights on navigating the world of entrepreneurship. It provides practical advice and inspiring stories.

Who is the author of New to Big?

David Kidder and Christina Wallace are the authors of New to Big .

New to Big Summary of Key Ideas and Review

Name: New to Big
Rating: 4.5 (77 reviews)
Author: David Kidder

Introduction

What’s in it for me? Learn how to innovate like an entrepreneur.

Let’s say that you’re in charge of a great and established company. For decades, customers loved what you offered and recognized your brand from a mile away. Then all of a sudden competitors have outflanked you – a hungry new rival could even make everything you offer redundant. What are you going to do?

Well, you can either wait on the sidelines and hope to find a new market, or you can act radically. In all likelihood, you’ll need to do the latter – stop treading water and start swimming. In the following blinks, we’ll look at how established companies can install a permanent growth mind-set at the heart of their operations by acting more like start-ups. Even creaky fifty-year-old organizations can learn to move with the freshness and agility of first-time entrepreneurs.

In these blinks, you’ll learn

when American capitalism began to rot from the inside;
why Microsoft’s new CEO had to reinvent the organization; and
how Bubble Wrap was invented.

Key idea 1 of 8

In the mid-twentieth century, the corporate world got stuck in some seriously bad habits.

Let’s go back in time to the dawn of American capitalism. In the late nineteenth century – the days of the Rockefellers and Carnegies, of venerable mustaches and top hats – big business behaved itself. These were civic-minded, patriotic enterprises, which served customers and country. Businesses looked to provide a reliable product – say, good whiskey or a trusty tricycle – and preserve a connection with the consumers who bought their goods.

Then, in the middle of the twentieth century, something changed.

By the 1960s, American mega-corporations were focusing on accumulating profit rather than serving consumers’ needs. By this time, they were now more concerned with paying corporate executives massive sums than with fixing customer problems. The economist John Kenneth Galbraith diagnosed this situation in his book The New Industrial State, which claimed that big corporations raked in enormous profits at the expense of the betterment of society.

In response to this book, two economists, Michael C. Jensen and William H. Meckling, published an influential paper titled “Theory of the Firm: Managerial Behaviour, Agency Costs and Ownership Structure.” They also railed against the state of American capitalism. But rather than encouraging corporations to serve customers better, they told them to look after their shareholders. Shareholders, who had been the lowest priority, were growing disgruntled when business suffered a dip in the late 1960s. Worried that their discontent could blow up the economy, many businesses took the advice of Jensen and Meckling and decided that they would prioritize shareholders above all else.

The shift to gratifying shareholders meant that business became completely detached from public or consumer needs. Many businesses became obsessed with shareholder appeasement, and abandoned any activity that didn’t boost stock prices. This meant that, naturally, rather than investing capital into developing that new car, computer or fashion line, businesses focused on cutting expenditures. The more efficient they became, the better the ratios were for shareholders.

There’s a great metaphor to illustrate what happened next. Picture a small mother-bird with a huge cuckoo chick in her nest. She forgets her own chicks, choosing to feed only the cuckoo, which grows ever more enormous. Similarly, businesses that once looked to serve their customers and grow their enterprises became consumed with tending to their shareholders. Consequently, they stopped innovating and stopped growing.

Key idea 2 of 8

Modern start-ups have developed a more dynamic way of doing business.

If a great white shark stops swimming, oxygen can’t pass through its gills, so it sinks and dies. When they stop innovating, big businesses tend to do the same. Stasis leads to a gradual – or sometimes, steep – decline. Modern start-ups understand this, so many foster a very different mind-set to long-established companies.

Unlike established businesses obsessed with shareholder returns, start-ups look to provide new solutions to customer problems. They seek to identify a “pain point” or “friction point” for consumers. Think of the social media giant, Facebook. Back when it was cooked up in Mark Zuckerberg’s dormitory room, he foresaw a pain point. He sensed that many people – far beyond the Ivy League colleges where Facebook was initially tested – would love to keep in contact with family members and friends, to share photographs and stories across the world. We all know what happened next – Facebook grew to become one of the world’s most successful enterprises.

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Key idea 3 of 8

Microsoft is an excellent example of a company that has reinvented itself.

Microsoft is a corporate powerhouse. As we learned in the last blink, in 2018, it was one of the top five companies according to market capitalization. It was on this list back in 2001, too, alongside General Electric, ExxonMobil, Citigroup and Walmart. Between 2001 and 2018, however, Microsoft dropped out of the top five. What happened?

Microsoft lost its spark when Bill Gates stepped down as CEO in 2000. When the next CEO Steve Ballmer took over, rather than continuing the world-changing work of the founder, he applied a staid, incrementalist logic. While other tech firms were racing ahead and breaking new ground (notably, Google and Apple), Microsoft offered a series of drab products that imitated others, rather than stamping their individuality on the world.

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Key idea 4 of 8

Companies should shift from a Total Addressable Market model to a Total Addressable Problem model.

What’s the difference between the dinosaurs of the corporate world and their hungry new challengers? A different mind-set, which runs from top to bottom. This is the difference between the Total Addressable Market model and the Total Addressable Problem model.

Let’s begin with the Total Addressable Market, or TAM, model. This framework has been used for decades – it’s the main religion of the corporate world. Established companies are hardwired to use it. It addresses the problem of how big a market is, and how big a share of that market the business can reasonably expect to command. It works with what is knowable and battles competitors for a market share, modifying their existing products or services only.

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Key idea 5 of 8

To address customer problems, you need to carry out market research differently.

Now that we’ve moved to the TAP model, we need to think differently about all aspects of doing business. That starts with anticipating what customers want.

Rather than simply tweaking an existing product or idea to better suit the customer, those with a growth mind-set need to begin from where the customers are. In other words, you need to look at what customers actually do, rather than what they say they’ll do.

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Key idea 6 of 8

Real innovators and growth leaders need to embrace productive failure.

Every email sent by the venture capitalist Esther Dyson comes with a footer that reads, “Always make new mistakes!” What does she mean by this? Let’s have a look.

The results of productive failure are all around us. Take the lubricant, WD-40. Guess why there’s the number “40” after “WD” (which stands for Water Displacement). That’s right – it took 40 attempts before the company perfected the formula. Or consider Bubble Wrap. It was initially conceived as a futuristic, trendy textured wallpaper. It bombed, and only became a success when the company IBM used it to wrap computer parts for transport. Without this accident, it was destined for the landfill.

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Key idea 7 of 8

To put the New to Big philosophy into practice, you’ll need to assemble the right team to explore new ideas.

If you’re a business leader at a TAM-oriented company who wants to switch to a TAP mind-set, you’ll need a great team to make it happen.

You’ll likely have the employees you need in your organization already. However, the people who’ve succeeded at your company may not be ready for the challenge of innovative entrepreneurialism. These high-performers will probably think according to the way big companies usually operate – which, as we’ve already seen, is incrementalist and risk-averse. Instead, seek out the iconoclasts, free-thinkers and contrarians. These individuals may have been passed over for promotion in the past because they’re considered “interesting” misfits, rather than smooth operators.

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Key idea 8 of 8

Companies need to invest in new projects with more intelligent risk and dynamism.

If you don’t buy a ticket, you can’t win the lottery. When investing in new business ideas, it’s a bit more complicated than this. However, the notion of risk is the same, and you can increase your chances of success by following a few of the following ideas.

Firstly, companies need to make it easier to secure permission to invest in new ideas. Though risk-taking isn’t limited to disruptive new start-ups, it can be tricky to get permission to try new ideas at long-standing companies used to refining their existing business model. This is often because budgets are allocated annually, and the process of securing funding can be incredibly bureaucratic and cumbersome. In fact, many new ideas die before they even pass under the nose of senior leadership.

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