The problem with people, is we don’t think that we are wrong nearly enough. It seems the more we consider ourselves an expert in something the less we think we will be wrong in that subject.
Imagine you are a Harvard Business School graduate, it’s safe to say you would be an expert in business. Having spent years of studying case studies by some of the best business minds in the world.
Professor Amar Bhide studied 400 Harvard Business School graduates, who went on to start their own companies.
Anyone who has studied business knows that startup businesses are quite unlikely to succeed. As expected, most of the Harvard graduate’s companies did fail.
But the few companies that did survive had an interesting thing in common.
93% of these successful companies had to completely abandon their original strategies in order to stay viable.
That basically means they were wrong. What they thought was going to work when they started the company, didn’t actually work at all.
I can certainly relate to this finding. Being wrong is quite normal and is more common than we think.
I’ve just finished watching Ken Roczen win the Glendale Supercross race in California. Ken was aboard a Honda CRF 450. Honda has been a dominant force in off-road motorcycles for decades.
But Honda’s beginning into the dirt bike market was a complete accident and a great example of how the original assumptions and strategy was wrong.
Honda had been very successful in making 50cc commuter motorcycles that were very common in Japan & other parts of Asia.
But Honda had a grand vision of taking on the American market. They felt they could capture 10% of the US market and increase it by 5% per annum.
Their market research indicated that Americans wanted big highway motorcycles and that cost was not important to the US motorcycle consumer.
So in 1959 Honda developed the Dream 250cc and 305cc motorcycles and tasked Kihachiro Kawashima to sell them to Americans.
Things did not go well. Dealers wouldn’t even consider selling a Japanese motorcycle. But Kihachiro did manage to sell a couple of hundred motorcycles.
But then the problems really started. The Japanese had underestimated how demanding the US consumer was on these motorcycles. They were horribly unreliable and the warrantee repairs bills were costing Honda a fortune.
In the weekends, Kihachiro and his three coworkers would take their Honda commuter motorcycles into the California desert and ride around the hills. Every time they did this, they were stopped by other motorcyclists who inquired about the 50cc super cubs they were riding.
They started making sales of these 50cc commuter motorcycles. They were light and manoeuvrable and 70% cheaper than existing motorcycles.
Offroad motorcycles were not yet a thing in the 1960s. The closest thing to a dirtbike that most people had seen was Steve McQueen jumping a heavy Triumph over a barbed-wire fence in the movie The Great Escape.
A new form of motorcycling was emerging and it was a new kind of customer that Honda had not considered. These were casual motorcyclists, they were not enthusiasts who committed large chunks of their income to their hobby.
These new customers just wanted to have some fun. Honda had lots of expertise in making cheap manoeuvrable motorcycles which were a perfect fit for these new consumers.
Eventually, Kihachiro Kawashima was able to convince the managers in Japan to change their strategy. It started with the 50cc super cub, but Honda stopped trying to copy Triumph, Moto Guzzi & Harley Davison at their own game.
They instead embarked on a completely unique journey only they could pull off. That of low-cost manufacturing combined with new types of motorcycles.
A lot of successful things happen by accident because we can’t see everything in the future and our assumptions are often wrong.
That’s fine, as long as we’re willing to change our minds & our strategy.
Next time you’re in a debate with someone about politics, religion, the environment or the kid’s bedtime routine.
Just consider that maybe the probability of you being wrong is higher than you think.