This is the transcript of a talk I gave at a Startup Weekend event in August 2014.
I want to tell you a story I've been trying to wrap my head around for the past few weeks. This will be the first time it's ever told, and it's a story of something that happened 30 days ago today.
It takes place in Toronto, and the reason I've been struggling to understand it is because on the surface it looks like every other tale of genius, but upon digging a bit deeper, it turns out that it's not a story about genius at all.
It's a story about a man who grew up in a small town surrounded by farms. He was a restless young boy, so he got his first job at the ripe age of six - a paper route delivering newspapers to 65 houses - and he held that route for ten years until he was 16. On his very first delivery day, a customer asked him what he was going to do with his paper route money. He replied without hesitation, "I'm saving for university." That was sixteen years ago.
By the end of this story, we'll see that it's possible to take the lessons we've learned from this one man, apply them to today's class of entrepreneurs, and predict their success without knowing a single additional fact about them.
So here's how it goes: thirty days ago and one week before he is scheduled to launch the product he's been working on for a few months, our man writes a blog post called "I'm going to sell you my product before I tell you what it is." He's expecting people to blindly buy his product before they have any idea what they're buying. As it turns out, over those following seven days, he sells thousands of units to these blind consumers, gets profiled by Business Insider and FOX News two times apiece, and has some of the top marketing minds on the planet comparing him to the early stages of Facebook and Twitter. Our guy takes over the Internet, and cashes out. Genius.
Let's think about why it is that we call him a genius.
First, because he created something out of nothing. Second, because he prolonged his 15 minutes of fame into something much larger and more spectacular. But most importantly, we call him a genius because he convinced the world to blindly empty its pockets into his lap. That's revolutionary, and surely deserving of the title of genius.
But is it really genius? Or, as one member of the media put it, is this man "Crazy, genius, or both?" I'm going to suggest that it was only his proficiency in a single activity - making tiny, nearly risk-free bets that hold huge potential payoffs, or as I'll call them, skewed bets - that made him an overnight sensation. To understand this better, let's look closer at the three critical points of traction he achieved during that week of stardom.
The first thing he did right was publish the original blog post, "I'm Going to sell you my product before I tell you what it is." It was an innocent act at the time, and the post could've easily slipped into a solitary online oblivion. But instead, because of the uniqueness of his request, it actually gained legs. Even though all of the odds were stacked against its success, his first skewed bet paid off.
His next big wave of attention came when New York City-based tech blog, Betabeat, wrote up his story. Impressive, right? Well, what's more impressive is how it came about. 24 hours before that story ran, he had cold-emailed his developing story to one of the world's top guerrilla marketers, a man who ironically doubles as an editor for Betabeat. That editor sent the story to one of his writers, and from there it hit the headlines. From the outside, the odds seemed preposterous, but this second skewed bet worked for him again.
And then a third time, a few days after that and the day before he had promised his official product launch, he cold-called a YouTube star with 1M+ followers to ask him to be the one to reveal his mystery product to the world. Without hesitation, the YouTube star agreed. "How could I say no?" he said. "If you're bold enough to call me up and ask, I'll do it for sure." The third skewed bet worked too.
So why, when all the odds were seemingly stacked against him, did each of these skewed bets work out? Precisely because of the thing that nobody understands about such bets: the payout isn't as rare as you think.
We've been conditioned to believe that risk = reward, but time and again, both in business and in life, we're shown that in fact, risks do not scale with rewards. There is less competition at the top because there are so few people shooting for super-ambitious goals; in other words, the best way to perform bigger is to think bigger.
And that's exactly the key characteristic our man, and all successful entrepreneurs, have: they think bigger than their peers.
And oftentimes thinking bigger is just another term for someone who's a little bit crazy. But here's where we missed something earlier: without fail, crazy precedes genius. The two fit together like yin and yang.
Now if you haven't figured it out yet, this story has been about me. And at the end of it all, what every observer believed to be the source of my greatest weakness - my propensity to jump into seemingly-impossible situations with little preparation - has turned out to be the source of my greatest strength.
And there is, in that, a very important lesson for all of us: he who thinks the biggest, achieves the biggest. And no matter how much of a genius someone may seem, there's always a little hint of crazy in there somewhere.