In praise of tall poppies

Here in the States we have deeply rooted twin myths of meritocracy and egalitarianism, both springing from profound ideals enshrined in our founding documents.  As we head into Independence Day celebrations this week, it’s worth taking a moment to consider how we might better inhabit those ideals, even if only in our own self-interest.
 

What kind of garden do you come from?

As the inimitable entrepreneur, author, and speaker Leila Janah is often quoted, “Talent is evenly distributed. Opportunity is not.”

But don’t take her word for it. In a study of inventors undertaken by researchers from MIT, Stanford, and Harvard (and summarized by Inc.), the study authors concluded that rates of invention (as measured by patents) were determined principally by a combination of family economic status and neighborhood effects, and moreover that, “factors that affect children before they enter the labor market, such as childhood environment and exposure to innovation, drive much of the gaps in innovation we uncovered.”  This echoes research into economic, health, and life expectancy data that has been characterized as your zip code determines your destiny.
 

Some things have to be believed to be seen. — Madeleine L’Engle

These and other findings categorically refute the American narrative that pathways to success are egalitarian or merit-based, and that those who are left behind are simply not sufficiently intelligent, hard-working, or deserving enough. Moreover, they also underscore the ways in which rags-to-riches stories are so often used to denigrate those who don’t manage to escape, by painting the protagonists as more determined or having greater drive or stronger work ethic than their peers.

That is not to say, of course, that success does not require effort, particularly for people who come from families, communities, and gender identities outside established power circles.

However, for those who are willing to look at the evidence, there is no shortage of data illuminating just how poor “pattern matching” can be for spotting talent, particularly when that talent shows up with a different accent, gender, skin color, background, or other presentation than we are accustomed to recognizing.

It’s a super bloom

The expression tall poppies refers to those individuals who stand out from their contemporaries, like the blooms that stand above the rest of the field. More to the point, the complete expression is tall poppies get cut down, meaning that those who stand out should expect to be pruned back to the norm — or lower.

Simply put, those who don’t conform to our preconceptions are frequently viewed with antipathy, especially if we perceive them to be more attractive or more successful than we wish ourselves to be, or we think they deserve to be. We want to believe there is something unfair about someone outshining us, and so we disparage those we might otherwise envy — or emulate. Remember the “don’t hate me because I’m beautiful” shampoo commercial? Or perhaps you have more recent firsthand examples in your social media feeds.

Like people everywhere, and in every era, Americans have a zeal for cutting down tall poppies — especially those who defy and disprove our preconceptions, outperform their peers or rise above their origins, or otherwise challenge the status quo. But while cutting down people who make us uncomfortable is definitely not meritocratic, it’s not egalitarian either.

It’s not even in our own interest.

Perhaps if they were exceedingly rare, tall poppies would be less threatening to our notion that our society is just, and proper, and beneficial [for more on that, see https://www.annleckie.com/novel/ancillary-justice/], or that we truly value human equality and celebrate merit.

But tall poppies aren’t even hard to find. They exist in every segment of society, from elementary school to the United States Congress. And even though most pattern matching filters seem to be optimized to block them out, here at Reinventure we see tall poppies everywhere we look.

[There’s no shortage of tall poppies in the investment world. We’ve spotlighted many tall poppy managers and founders in past blog posts, and will continue to do so. Please peruse our blog archive to find a variety of excellent examples.]
 

Who is a tall poppy?

As Steve Jobs famously preached and practiced, the tall poppies we should be most enthusiastic about celebrating aren’t necessarily identifiable by the usual credentials or track records. On the contrary, they are often initially recognizable because they don’t conform to those typical narratives. More importantly, not only are they uninterested in meeting expectations by following the prescribed path or adhering to conventional “best practices,” they see the potential to leapfrog over incremental progress, and are actively — even impatiently — working to dramatically redefine “best.” Their lack of allegiance to the way things are done particularly irritates, alarms, and offends those who have invested significant time and energy in mastering navigating the status quo, and with good reason: tall poppies redefine the status quo.
 

Want to win? Choose some tall poppies.

In the investment world, not long ago impact investors were roundly derided (and in some rearguard spaces still are) for demanding and pursuing more than merely financial returns.

New managers with unconventional backgrounds or contrarian investment theses continue to be discounted compared to established managers with long track records, which defies rational justification in a time in which the pace of change itself is widely agreed to be a primary threat, outstripping a host of other fast-evolving existential threats. In such rapidly shifting circumstances, surely investors and asset allocators would recognize that in an increasingly complex context, the future is unlikely to smoothly perpetuate — or even resemble — the past.

Instead, the preponderance of investment committees, boards, and trustees take satisfaction and comfort in choosing well-known and familiar quantities over newcomers and dissenting voices, reassuring themselves they are being prudent and responsible, even as they repeat the litany past performance is not indicative of future results.

This is a recurrence of the fear-based decision-making justly derided by the adage nobody ever got fired for buying IBM — or as Nia Impact Capital quoted Syntrinsic’s Akasha Absher last week at the Confluence Philanthropy Advisors Forum, “You don’t get fired if you hire Goldman Sachs and underperform, though if you hire an emerging manager, you take that risk.”  Otherwise sophisticated, responsible professionals repeatedly make this (mis)calculation with unruffled confidence, even though on some level intellectually they know that choosing the illusion of safety is a recipe for reverting to the mean, or worse.

The irony, of course, is that any prudent investor should be actively seeking new talent, differentiated investment strategies, fresh insights, and untapped opportunities, at least for a portion of a well-constructed portfolio. But that takes what my high school biology teacher called intestinal fortitude: stepping out from the widely approved norms of investing in managers with multiple-year track records and large sums under management — or founders who fit a narrow stereotype — means becoming a tall poppy yourself, and just maybe risking getting your own blossom lopped off.

Which do you choose: tall poppies to win, or regular poppies in hope to not lose? Wouldn’t it make sense to have some of each?
 

Better yet, join them.

The best opportunities are not behind us. They are right in front of us. But they demand that we rethink egalitarianism and meritocracy: in order to capture those opportunities we have to adapt our investment selection criteria and processes to recognize rising talent and nascent opportunities now, and not wait until they have passed us by.

For our part, Reinventure Capital is investing in overlooked, undervalued founders leading companies that are profitably taking advantage of shifting conditions and solving unmet needs.

Specifically, we are focused on working with US-based expansion stage (breakeven or so) companies led by people of color and/or women, to grow the economic engines that will transform sectors, societies, markets, and lives.

The Reinventure approach is proven effective at creating real, measurable social impact through profitable enterprises at scale, and as a result, delivering non-concessionary returns to investors.*  But we aren’t looking backward. We are looking for the tall poppies of this moment, recognizing that they may not look like the tall poppies of even the recent past. And we are proud to be in extraordinary company of many others who are also choosing to recognize opportunity and allies among the people and companies “pattern matching” and “best practices” dismiss.

We are actively recruiting LPs, and new allies are always welcome. We would be delighted to help you make your first social impact investment, or your first ever investment in a first fund — and to welcome you to the community of tall poppies. Yes, it takes courage. But the alternative is increasingly untenable.

Are you already standing out as a tall poppy? Are you actively investing in other tall poppies?  Congratulations! Please share and bring others along.

And wherever and how ever you celebrate it, we wish you a safe and happy 4th!

*While there’s no such thing as a guarantee in investing and no one can reliably predict the future, Ed’s prior track record provides direct evidence that it is indeed possible to consistently invest for both financial returns and social value creation. If you are an accredited investor and would like to learn more about investments that can advance social, racial, and gender equity by supporting high-value companies led by women and/or people of color, please contact us to start that conversation.

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