It's That Old Story of David vs. Goliath

Malcolm Gladwell, writing for The New Yorker, talks about strategies underdogs can take to compete and win against bigger, better skilled and sometimes more complacent "big guys" steeped in tradition or ways of thinking.

Innovation often occurs when the rules are thrown out or used in the opposite way they were intended. Organizations must decide whether "David" actions are supportable and sustainable as a long term strategy, or if they are most suitable for short term goals and tactics.

Vivek Ranadivé is an elegant man, slender and fine-boned, with impeccable manners and a languorous walk. His father was a pilot who was jailed by Indira Gandhi, he says, because he wouldn’t stop challenging the safety of India’s planes. Ranadivé went to M.I.T., because he saw a documentary on the school and decided that it was perfect for him. This was in the nineteen-seventies, when going abroad for undergraduate study required the Indian government to authorize the release of foreign currency, and Ranadivé camped outside the office of the governor of the Reserve Bank of India until he got his way. The Ranadivés are relentless.

In 1985, Ranadivé founded a software company in Silicon Valley devoted to what in the computer world is known as “real time” processing. If a businessman waits until the end of the month to collect and count his receipts, he’s “batch processing.” There is a gap between the events in the company—sales—and his understanding of those events. Wall Street used to be the same way. The information on which a trader based his decisions was scattered across a number of databases. The trader would collect information from here and there, collate and analyze it, and then make a trade. What Ranadivé’s company, TIBCO, did was to consolidate those databases into one stream, so that the trader could collect all the data he wanted instantaneously. Batch processing was replaced by real-time processing. Today, TIBCO’s software powers most of the trading floors on Wall Street.

Ranadivé views this move from batch to real time as a sort of holy mission. The shift, to his mind, is one of kind, not just of degree. “We’ve been working with some airlines,” he said. “You know, when you get on a plane and your bag doesn’t, they actually know right away that it’s not there. But no one tells you, and a big part of that is that they don’t have all their information in one place. There are passenger systems that know where the passenger is. There are aircraft and maintenance systems that track where the plane is and what kind of shape it’s in. Then, there are baggage systems and ticketing systems—and they’re all separate. So you land, you wait at the baggage terminal, and it doesn’t show up.” Everything bad that happens in that scenario, Ranadivé maintains, happens because of the lag between the event (the luggage doesn’t make it onto the plane) and the response (the airline tells you that your luggage didn’t make the plane). The lag is why you’re angry. The lag is why you had to wait, fruitlessly, at baggage claim. The lag is why you vow never to fly that airline again. Put all the databases together, and there’s no lag. “What we can do is send you a text message the moment we know your bag didn’t make it,” Ranadivé said, “telling you we’ll ship it to your house.”