One of the critical tools that will serve you well throughout your career as an entrepreneur… is being a contrarian.
The term “contrarian” came from the financial markets, initially. It means, basically, that when everyone else is going right, you go left. It’s an investment strategy that assumes the “crowd” is almost always acting mindlessly, and following everyone else like skittish sheep. And, therefore, the cooler head should always — always — check for opportunitiies in the opposite direction first.
This philosophy was made clear to me back in the 1980s, when “everyone” suddenly developed gold fever. The price of gold shot up to over $800 an ounce… and more gold traded hands at that bloated price than at any other time in the previous decade.
People just went nuts.
And lost their shorts, when the price finally stabilized back around $300. The whole panic took just a few weeks. (Confession: I own two Krueggerands, which I purchased for $450 each.) (I have learned most of the major lessons in my life by getting burned first. Pain is a damn good teacher.)
Contrarians, watching the panic and not seeing any good reason for it, were happy to sell their own gold at super-inflated prices, go short on gold stocks… and then buy it all back, at a bargain, after the fever broke.
Anyway, in business, a contrarian attitude gives you a different way of looking at markets. You WANT to find markets crowded with people all more or less doing the same thing. Because you can then waltz in and — armed with your knowledge of what the market truly wants — offer something outrageously different. Twice the guarantee, twice the info at half the price, better service, a whole new paradigm, whatever.
A big market means there are people with needs supporting it. But it doesn’t mean the businesses doing the supplying are any good at giving people what they want.
As a contrarian, you say “Why would I sell hamburgers just like everyone else, for the same price? I’ll sell gourmet burgers for twice the normal amount!” It’s the same with music: Everybody’s doing techno-pop? I’ll bring back punk ska.
Or with reaching customers. Everyone’s going online? I’ll go back to direct mail and radio.
Everybody’s suddenly moving to the beach? I’ll go find a bargain in the mountains.
Every time “everybody” is doing something… it’s a pretty safe bet it’s because the “sheep instinct” has kicked in. At that point, following the herd is NOT the prudent or safe thing to do.
You offer more, you offer better, you offer faster, cleaner, easier, simpler, more risk-free or more guaranteed. You look for the ignored need, the overlooked opportunity, the hidden goldmine.
Your path is clear — you’re doing what everyone else is NOT doing.
Contrarianism has a practical benefit, too — in a crowded theatre that’s on fire, you never rush with the crowd for the exits… but rather wait calmly and look for the way out no one else has noticed. Just assume the crowd is wrong, most of the time. Gives you all sorts of amazing options in life.
Side note: Contrary to “common wisdom”, you do not have to be a curmedgeon or spoil-sport to be a good contrarian. I, myself, am a nice contrarian, with a lively sense of humor and lots of friends who find me entertaining (or irritating, when I’m right). I find that the simple act of refusing to be bullied by majority rule gives me a nice patina of danger. I don’t need to mash anyone’s face in it.
Many people are uncomfortable around contrarians, because they’re uncomfortable with independent thought.
That’s not your problem. It’s theirs.
And yes, it’s true that civilization as we know it might collapse if “everyone” became a contrarian. But that will never happen. There’s a very strong urge to follow the crowd in all of us. It takes effort to break free of that urge.
We’ll always be in the minority. Snug, smug, and raking it in from the niches ignored by the mainstream marketers.
So here’s to us — you, me, and every other bastard out there making their own way in a world that despises independence.
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John… contrarian’s bought gold in the early 70’s for $35.00… and bailed at 800. History is about to repeat it’s self.Gold has been a store of value for 5000 years…you will see gold at or above 1650… silver will be a big winner also… the sheeple haven’t started buying yet.How many fiat dollars have been printed since 1980? Trillions… gold will have it’s day in the sun.
I always wondered about this. “The herd” seems to go wrong most of the time (that’s pretty scary when you think about that we’re living in a democracy… but then there’s no better alternative around).
But they specially seem to go wrong when they do something in an extreme manner.
However, I think the best way is not to be a contrarian for the sake of being a contrarian, but because you strongly feel different about the subject. But that’s when you need to possess that “contrarian stubbornness” because everybody and his mother will tell you why what you think is wrong – and when you hear the same thing repeated a hundred times from 30 different people, that’s a strong river to swim upstream.