The Ghost, The Darkness and Rational Exuberance

I was presenting at a business conference last month, and started my piece with this home-edited five minute clip from a favourite 90s film, The Ghost and The Darkness.



This broke the tedium of hour after hour of Power Point presentations. But that apart, this film clip did try to make a point. The Ghost and The Darkness is about an engineer who is desperate to protect his people from man-eating lions. He has an idea to trap the man-eaters. The idea doesn't work out. Regardless, it remains a very good idea. The point is, in real life, most good ideas don't work out.

It is easy to think ideas that don't work out are bad ideas. Yet, the difference between ideas that work out and ideas that don't are usually small tweaks, timing, or pure dumb luck. I loved this NY Times article published in February 2010, when Apple was making waves with the iPad launch. It is by Dick Brass, a former Microsoft executive who worked on building a Windows Tablet PC way back in 2001. This project failed. The tablet group at Microsoft were eliminated. Regardless, the potential for tablets remained as good as ever.

My presentation went on to describe how my employer's products and services help companies institutionalize innovation, which is not an appropriate topic for this blog. But zooming out, this thought does feel relevant to the zeitgeist.

In the aftermath of the dot com bubble, and then the housing bubble, it is easy to be negative. Most people been stung by too much optimism, too much faith, by irrational exuberance. Rational cynicism feels like an antidote. It is easy to believe that every girl or guy who comes up with a crackpot scheme to catch man-eating lions is stupid, or a self-serving crook, or both. "It will never work" feels intelligent, prudent, a good default setting.

The trouble is, dominant black hat thinking is becoming a self fulfilling prophecy. Kick-starting growth has to start with an act of faith; with believing that lion-catching contraptions are worth building, even if many of them are going to fail. John Maynard Keynes, like Wodehouse's Psmith, described this act of faith as "animal spirits". A metaphor I prefer in today's cautious climate is Leon Walras' tatonnement, French for the trial and error process of groping for a handhold while climbing a rock face. Either way, moving on is going to involve a fair bit of rational exuberance.