Cowboys Like Us: Investor Nick Hanauer on How to Think About Breakthroughs in Business and Society (Part 1)

3/29/10Follow @gthuang

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an obligation. No thoughtful person lets nature take its course with their garden. Otherwise all you get is dandelions. Now in the meantime, the dandelions are making this rocking case for dandelions—go yellow! dandelion wine! whatever—but if the dandelions overrun the potatoes, carrots, and celery, you’ve got a problem. And it’s not just your right, it’s your responsibility to make sure that doesn’t happen.

In a garden, the dandelions don’t deserve to be rich. You may choose to create a circumstance in which they become rich, but they don’t deserve it. Their situation was a consequence of the situation in which you put them. The rich are usually rich as a consequence of the circumstances in which they were put. Those changes in metaphorical understanding of how the world works cascade into fundamentally new ways of understanding how we should arrange society. They can translate into completely new ways of seeing the world that opens you up to transformation.

X: How does all of this translate to the business world?

NH: One of the ways that you know an idea is transformational in business is if the metaphor you use to describe it is new—if people don’t have a ready metaphor for understanding it. “Online” was this weird thing—it came along and, what do you mean, “online,” what do you mean “virtual world,” what are you talking about? And boom, here we are, able to conceive of an entire sort of universe that takes place in this “cloud.” I don’t know where it is, but it is a whole place where we spend most of our time today. People are super comfortable with that.

The other thing that’s happening that’s radical and will have terrific business implications is going from understanding the world atomically, to understanding the elements of the world as networked. For a very long time, we’ve had this atomic world view, that things are atomized, disconnected. The political instantiation of that is to say every man is an island; or I should be able to do whatever I want to do so long as it doesn’t hurt anybody else. Those statements make perfect sense if you understand the world as atomized.

But if you come to understand the world as networked, if you understand every human being as a node on a network, then you have to account for the fact that everything you do affects other people. There’s this landslide of research to show, among other things, behaviors are contagious. If I’m happy, you will be happy. If I’m sad, you will be sad. If I’m a smoker, you will be a smoker. It’s unbelievably predictive. By the way, if I’m poor, you will be poor. If I’m rich, you will be rich.

The network effects overwhelm almost everything else. Now you can’t say I should be able to do whatever I want so long as it doesn’t hurt someone else, because in fact whatever you do affects them. Now we have a mutual responsibility to behave in ways that make our lives better. Courtesy is a great example. If I’m courteous, you will be courteous. If I’m not courteous, that sets off a cascade of discourteous behavior. Society becomes how you behave—this is one of the central findings of understanding complex, adaptive systems. This idea of emergence, that the interaction of the parts create patterns that essentially describe the system. Show me turbulence, and I’ll show you a whirlpool. It’s an emergent property of turbulence.

X: Let’s talk about healthcare for a moment, as it relates to your political activism and one of your recent company projects, Seattle-based Qliance (which delivers primary care without health insurance companies).

NH: I’m super psyched about the healthcare bill. For almost two years I’ve been in Washington DC slagging the healthcare bill as a half-measure and a step that actually doesn’t fix the problem. We’ve taken a broken system and made it bigger. But I think it’s a great step for the country, if you start with the fact that you have an insurance-based system and you’re probably not going to get rid of it anytime soon. Having an insurance-based system that doesn’t include one in five families in America—stupid—that allows insurance companies to kick you off if you get sick—criminal—that allows insurance companies to not take you if you need it—what?! Fix it. It’s crazy to not fix that stuff.

Something Americans have to reckon with is that despite having average incomes on the order of 50 percent higher than many other industrialized countries, by any other measure … Next Page »

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at or call him at 617-252-7323. Follow @gthuang

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