What it Means to Be a Contrarian (and why it pays)

how to be a contrarianAlternate title: Climb to the top or stay with the flock.


I’m a contrarian.

You can tell by the way I look–like a James Bond Villain (albeit without a white cat in my lap).

But being a contrarian is not about looking cool. . .

Being a contrarian means doing and thinking in unconventional ways.

And that, I’ve always done.

Contrarianism is often thought of as an investor mindset, but you don’t need to be an investor (of money) to benefit from it.

Let it be known: Investor mentality is all-encompassing.

(And the same goes for being a contrarian.)

You can see it this way. . .

what it means to be a contrarian

Herd mentality is the default state of being, and it is never any good in the modern world, except if you just want to fit in.

–It works if you are a cheerful, attractive woman, without any particular ambitions in life. But that’s about it.

Being unreactive–like a stoic–is mandatory for above-average success.

Being a contrarian is typically necessary to be highly successful in all areas of life today.

But… being a contrarian does in no way guarantee success.

Being a Contrarian is NOT about:

  1. Trying to think up a super smart theory or a unique idea 1.
  2. Being opposite or different just because–like a rebelling teenager.

Being a Contrarian IS about:

  1. Avoiding the stupidity of the vulgar crowd 2.
  2. Avoiding common easy-to-commit mistakes.
  3. Actively seeking out new or alternative viewpoints of a topic.
  4. And, challenging yourself to think more and/or better.

–At first, this is something you do; something you practice. Then it becomes who you are. (Hopefully while you are young, and your brain is at its peak.)

Why it Can Pay to Be a Contrarian

  1. Because most people don’t know how to think.
  2. Because even when people do think, they only go with the principle of least effort and skip to conclusions 3.
  3. Because conventional wisdom and mainstream thinking only ever leads to mediocrity, and never success.

How to Be a Contrarian

In my last article about former hedge fund manager Mikael Syding there were a few comments about contrarianism.

Commenter Abgrund said something smart:

abgrund 1

To which I responded:

abgrund contrarian 2

Abgrund is someone who has a very contrarian standpoint, and earlier when a commenter on SGM wondered, “what does it take to be a contrarian?” he wrote this answer:

abgrund contrarian

I agree with this almost entirely, but I would phrase it a little bit differently:

  • You don’t necessarily have to be smarter than other people–although it definitely helps–you just have to be willing to THINK MORE about some topic than other people.
  • Yes, you have to be mentally unreactive. I call it autonomy of mind 4.
  • You have to always do battle with confirmation bias. When you’re young, because you’ve been socially conditioned. When you’re older, because it grows stronger with age and hinders you from breaking out of your mental homeostasis and thinking outside the box.

In addition to that, to be a successful contrarian, you must also be

Pure of Heart

 

How to Be Pure of Heart

Being pure of heart means that:

  • You are aware of the existence of homeostasis.
  • You know how to distinguish homeostasis from “intuition” with decent accuracy (this will be dealt with in detail in my upcoming book Breaking out of Homeostasis).
  • You have conditioned yourself to act on inspiration and creativity instead of letting homeostasis justify inaction.

I don’t know how many people are pure of heart.

I’m guessing maybe 1-5%, tops.

People who are pure of heart generally are doing something they enjoy, and they’re above average at it. 5

A Contrarian Must Have Both of These Characteristics

For as the military strategist Carl von Clausewitz said: 6

If the mind is to emerge unscathed from this relentless struggle with the unforeseen, two qualities are indispensable: first, an intellect that, even in the darkest hour, retains some glimmerings of the inner light which leads to truth; and second, the courage to follow this faint light wherever it may lead.7

John D. Rockefeller Had Both

Edward T. Bedford, one of the top executives of Standard Oil (and later a successful businessman in his own right), said this about Rockefeller:

 Mr. Rockefeller was really a superman. He not only envisaged a new system of business upon a grand scale but he also had the patience, the courage, and the audacity to put it into effect in the face of almost insuperable difficulties, sticking to his purpose with a tenacity and confidence [that were] simply amazing.

The Contrarian is Real in a World of Fakes

The contrarian accepts the complexities of life. He is perfectly OK to say “I don’t know” when he doesn’t know. He does not cling to comforting illusions:

Having his own identity, he has no need for the security of an ideology or a panacea. He knows that life is a quest for uncertainty; that the only certain fact of life is uncertainty; and he can live with it. He knows that all values are relative, in a world of political relativity. Because of these qualities he is unlikely to disintegrate into cynicism and disillusionment, for he does not depend on illusion.

–Saul Alinsky, Rules for Radicals

Lee Kuan Yew Was a Contrarian

Lee Kuan Yew was the “founder” of Singapore. Like Rockefeller, he was a superman contrarian. He had both the intelligence and the backbone to stand up to the idiocy which passes for politics in most countries 8.

Thanks to his life’s work, Singapore is now the most economically successful country in history. But its success–as explained by Lee Kuan Yew–is NOT conventional by any means:

….it requires a GROWN-UP election. One that understands that there ARE trade-offs, that there IS a price, that this is NOT what comes naturally. We are here because we did MANY THINGS which went AGAINST THE GRAIN. But which were NECESSARY to make a cohesive, coherent people out of a disparate, often conflicting, often colliding multi-ethnic, multi-religious, multi-linguist groups.

Lee Kuan Yew was one of the most important men in the last 100 years, and what thanks does he get? People in the mainstream either have no idea who he was, or they think he was an “evil dictator”. Ugh.

“Why,” you ask?

Because they’re idiots.

Because what he did was SO DIFFERENT from the thinking of most people that they (in their ignorance) cannot help but to mistake it for being “wrong”.

But if it WORKS, then it’s not “wrong”.

Ted Turner, the Creative Contrarian:

Ted Turner is the founder of CNN and a “serial-pioneer”.

Ted is another exemplary contrarian:

Confronted with a problem I’ve always looked for an unconventional angle and approach.

Here are 5 examples of how Ted solved problems in unconventional ways.

1) Ted Turner vs Debate Team

Ted was on the debate team in high school. They were given a question. Everyone immediately started talking about what arguments to use.

Except Ted. . . who said:

Let’s see if we can interpret the question differently.

It turned out they could, and then they won the championship because they caught everyone by surprise. All the other teams had interpreted the question in basically the same way, but with minor differences 9

I hope they thanked Ted for winning.

2) Ted Turner vs Angry Widow

When Ted had just started working for his dad’s billboard business, there was an angry widow who had a big house in an optimal location for placing a billboard. Every billboard company had tried to convince her, but failed, and  given up.

But Ted didn’t give up.

He made it a part of his weekly routine to go and talk to her until he had built rapport.  She then would let him into her home. After spending a considerable amount of time there, he realized that her house had really poor air circulation.

So he asked her if she wanted some top-of-the-line air conditioners. She agreed. In exchange, he just wanted to put up billboards on her house.

That’s what real salesmanship looks like.10

3) Ted Turner vs TV Stations: Round #2

Ted studied his industry and saw that every one of his competitors were putting out mind-numbing shit for dumb people:

From watching the competition I believed that most of what the networks were airing was garbage, full of gratuitous violence, sex, and stupidity. Knowing how quickly TV viewership was growing, it troubled me to see how much junk people were watching.

So he decided to put out content for smart people instead. . .

. . . Just like I’m doing with Mikael Syding in the Swedish podcast industry, with our show 25 Minuter. And guess what? 11

4) Ted Turner vs Networks

Other networks aired talk shows in the evening. So Ted decided CNN would show movies instead.

When other networks aired religious programming on Sundays., Ted decided CNN would show ordinary shows.

Sometimes it pays to do things differently.

Ted said:

I look around to see what the competition is running, figure out whose tastes aren’t being met, and provide them with an alternative.

5) Ted Turner vs Hiring Employees

When Ted started CNN they hired 300 employees in one batch!

That was a big undertaking, and employees had to move to Atlanta for the job.

This was a problem, because the people already in the TV industry were entitled and didn’t want to do it. But Ted found a way to get around it–by hiring married couples.

Again, CNN was first to do this in the the TV industry, and it worked great.

Is Ted Turner awesome, or what?

Paul Graham, Software Entrepreneur Contrarian

Paul Graham is a smart artist/software/investor guy who’s a serial entrepreneur. Here are some examples of how he’s done things in a contrarian way:

  • People were writing software for desktop computers using Windows’ programming language; Paul refused to do that and ended up creating the world’s first server-based software12. His company Viaweb then created the world’s first online store, and got acquired by Yahoo for $50M.
  • People were (still are) writing short, gossipy blog posts on sites (this was way before WordPress was around). Paul then started writing longer and more serious essays. They are now popular.
  • Investors in Silicon Valley (still) follow the traditional model for venture capitalism. Paul created Ycombinator (now the largest VC firm in the world), with a revolutionary new business model for “batch financing” IT companies.

Now… Paul’s a clever guy, but he didn’t (intentionally) set out to do all these things from the start. He simply followed contrarian principles:

I deliberately ignored these things because I knew they weren’t interesting. You can do a lot by avoiding as opposed to seeking good.

YCombinator is Contrarian

The major difference between Ycombinator and other Silicon Valley venture capitalists is that a typical VC funds 50-80 companies over an entire career, whereas YC funded 250 startups last year alone!

Paul Graham gives another example of how they do things differently from conventional VCs:

One of the most fascinating things that we have done with scale is figured out how short a time you can interview someone in order to decide whether to fund them or not. We decide in 10 minutes.

By now, you’re probably thinking, “damn, it seems pretty cool to be one of those snappy contrarian fellows!”

But It’s Not Easy Being a Contrarian

. . . because it’s rarely the popular thing to do.

And it takes effort too!

How to be a contrarian

[Pictured: A contrarian to the left, Homeostasis Dwellers to the right.]

And. . .

. . . sometimes the viscous stupidity of the vulgar crowd wins ANYWAY (during your lifetime), like the guy who came up with the idea of continental drift.

It has been said13 that all great ideas are first ignored, then ridiculed and resisted, and finally they’re accepted or rejected.

But, even when a great idea is accepted…

…its victory is almost NEVER unanimous.

Take the physicist Max Planck, for example.14

Poor fellow (not really, but in the Misunderstood-Genius-Kind of Way).

In Summary

Being contrarian is a way of life.

This is a fascinating topic and I could go on forever about it. . .

–But I won’t.

I gotta go now.

Next time I’ll tell you about some cool ways to “profit from contrast”.

Adios amigo.

P.S

One more thing.

You want to be a contrarian, but you also want to keep it to yourself.

For, as the philosopher Baltasar Gracian said:

One has to live with others, and others are mostly ignorant.


Question:

Have you thought about this sort of thing before? If so, what’s your opinion?


UPDATE:

Since writing the article, years ago, we made an International podcast and made an episode about contrarians. You can read it here.

Future Skills Podcast: Contrarians vs Herd Animals

 

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  1. those things are nice, and if you can do that, that’s awesome. But it’s not fundamentally what being a contrarian is about.

  2. . . .which typically stems from mental laziness combined with negative crowd psychology.

  3. (so when you skip to conclusions you’ll typically end up in the same camp as most others are. Which is often wrong.).

  4. and it is the #1 criteria I look for when filtering new acquaintances, as to whether or not they are worth my time

  5. This is not necessarily because they’re intelligent, it’s just because they take more action than the average person (who dulls his instincts by numbing and dumbing himself down).

  6. about what it takes for a commander to deal successfully with risk and uncertainty

  7. The same could be said about (successful) scientists. Like Pasteur or Einstein.

  8. Lee Kuan Yew was successful in:

    (1) Creating a unified culture with shared core values,

    (2) keeping a stable political climate (without a bunch of oppositional parties tearing apart the unity and solidarity of the country, making it slow and hard to reach important decisions),

    (3) thinking ahead and preventing problems (as opposed to lazily reacting to them after they’ve happened, and cannot be stopped),

    and (4) to run the country like company and pay his ministers top-of-the-line salaries, like CEOs of big corporations.

     

  9. which basically always happens when you have a majority decision.

  10. Ted found a problem which was genuinely bothering her, he proposed a solution, he solved it without any effort required on her part, and she compensated him for this.

  11. It works. We’re #1 in iTunes’ New and Noteworthy categories for Business and Education and #2 in Sweden altogether.

    25 Minuter contrarian

    I guess the smart people have just about had it with listening to dumb-ass talking heads (who do nothing but gossip and glorify mundane life, conformity and mediocrity).

     

  12.  “web based app”, the PR department started calling it to increase its coolness factor.

  13. by the philosopher Arthur Schopenhauer originally, I think.

  14. He was right, but he was never acknowledged for it by his ideological enemies. “We didn’t beat them, they died,” he said, with bitter disappointment.

Comments

  1. NIRANJAN NITHYANADHAM says

    Contrarian is another narrative.

    It appear Contrarian is intrested about the future based on the happenings in the past but speaking about contrarain ideas in the present.

    The question is whether the happenings in the present can ever be contrarian and if yes to what?

    I wonder whether Contrarian has any relevance to the happenings in the moment because naked happenings minus narrative is reality.

    It appears there is a fundamental contradiction in the article :

    “The Contrarian is Real in a World of Fakes and The contrarian accepts the complexities of life and He is perfectly OK to say “I don’t know” when he doesn’t know and if does not cling to comforting illusions”

    My question is then why call him a contraraian. Why not call him a Realist?

  2. This post reminds me of a Mark Twain quote “whenever I find myself on the side of the majority, it is time to pause and reflect.”

    And I agree with Abgrund. I have a long time acquaintance that loves to be a contrarian just for the sake of it…he looks like a tool most of the time doing so.

  3. I am glad I stumbled upon this reading. Being a teacher there are so many algorithms that we are expected to pass onto our students, however, if my mind does not want to follow those algorithms it would be an injustice for me to make my students follow them. Each persons mind works in its own way and it’s my job as a teacher to expose my students to as many ways as possible so they are comfortable thinking even if its not how the rest of the class is thinking. I think the best thing is when a student brings to my attention an algorithm that I have never seen before. Success…confidence to think differently, to think correctly, the way their mind works and accurately passing it on to others.

  4. Boom – being a contrarian it is. Good stuff brotha.

    Keep it up.

  5. Thanks for your thoughts.

    This essay reminded me of a passage from”Charisma Myth”(great book, by the way) that one way to set the expectation to be followed is being willing to be independent. At some visceral, evolutionary level we’re all just looking to follow an example. Being able to go without a model is what makes a leader.

    But the difference between a charismatic contrarian and ignored eccentric is giving off the cues that you know what you’re doing. And I think that’s the framework for all of your above points. It’s not so much the level of brilliance but the signalling of brilliance that gets anyone anywhere–e.g. Tesla/Edison.

    Somehow you’ve pulled off a tone of “I act superior, because I am superior.” And I say that sincerely because I followed you here from Startup Bros. You’re signalling is obviously effective.

    Which is the long way to say, I’d be interested to read your thoughts on Showmanship since its kind of implied with a reference to Bond villains and I think it’s a critical second half to the success or failure of being a contrarian.

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