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Blink 3 of 8 - The 5 AM Club
by Robin Sharma
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New to Big summary
How Companies Can Create Like Entrepreneurs, Invest Like VCs, and Install a Permanent Operating System for Growth
22 mins
Brief summary
'New to Big' by David Kidder and Christina Wallace is a guidebook for entrepreneurs navigating their startups' growth. The authors offer insights, strategies, and real-world examples for scaling up successfully.
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New to Big
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Key idea 1 of 8
In the mid-twentieth century, the corporate world got stuck in some seriously bad habits.
Let’s go back in time to the dawn of American capitalism. In the late nineteenth century – the days of the Rockefellers and Carnegies, of venerable mustaches and top hats – big business behaved itself. These were civic-minded, patriotic enterprises, which served customers and country. Businesses looked to provide a reliable product – say, good whiskey or a trusty tricycle – and preserve a connection with the consumers who bought their goods.
Then, in the middle of the twentieth century, something changed.
By the 1960s, American mega-corporations were focusing on accumulating profit rather than serving consumers’ needs. By this time, they were now more concerned with paying corporate executives massive sums than with fixing customer problems. The economist John Kenneth Galbraith diagnosed this situation in his book The New Industrial State, which claimed that big corporations raked in enormous profits at the expense of the betterment of society.
In response to this book, two economists, Michael C. Jensen and William H. Meckling, published an influential paper titled “Theory of the Firm: Managerial Behaviour, Agency Costs and Ownership Structure.” They also railed against the state of American capitalism. But rather than encouraging corporations to serve customers better, they told them to look after their shareholders. Shareholders, who had been the lowest priority, were growing disgruntled when business suffered a dip in the late 1960s. Worried that their discontent could blow up the economy, many businesses took the advice of Jensen and Meckling and decided that they would prioritize shareholders above all else.
The shift to gratifying shareholders meant that business became completely detached from public or consumer needs. Many businesses became obsessed with shareholder appeasement, and abandoned any activity that didn’t boost stock prices. This meant that, naturally, rather than investing capital into developing that new car, computer or fashion line, businesses focused on cutting expenditures. The more efficient they became, the better the ratios were for shareholders.
There’s a great metaphor to illustrate what happened next. Picture a small mother-bird with a huge cuckoo chick in her nest. She forgets her own chicks, choosing to feed only the cuckoo, which grows ever more enormous. Similarly, businesses that once looked to serve their customers and grow their enterprises became consumed with tending to their shareholders. Consequently, they stopped innovating and stopped growing.
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What is New to Big about?
New to Big (2019) maps out how established companies can install a supercharged growth model at the heart of their enterprise. By adopting the structure of new start-ups or first-time entrepreneurs, they can fend off stagnation, reignite their creative flair and innovate to solve the problems of the future.
New to Big Review
New to Big (2020) is a guide that helps aspiring entrepreneurs take their startups to the next level. Here's why this book is worth reading:
- Packed with practical strategies and insights from successful entrepreneurs, it provides a roadmap for navigating the challenges of scaling a business.
- Featuring real-life case studies and interviews, this book offers valuable lessons and inspiration for anyone looking to grow their venture.
- By highlighting both the successes and failures of startups, it offers a realistic and balanced perspective on the journey to building a big business.
Best quote from New to Big
The future technologies, trends, and markets are not yet known, and they are changing far too fast for a traditional business-planning approach.
—David Kidder, Christina Wallace
Who should read New to Big?
- CEOs of big organizations facing stagnation
- Budding innovators looking to save their companies
- Business journalists seeking to understand the corporate world
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New to Big FAQs
What is the main message of New to Big?
The main message of New to Big is that anyone can successfully navigate the challenges of starting a new venture.
How long does it take to read New to Big?
The reading time for New to Big varies depending on the reader's speed, but it typically takes several hours. However, the Blinkist summary can be read in just 15 minutes.
Is New to Big a good book? Is it worth reading?
New to Big is worth reading for its valuable insights on navigating the world of entrepreneurship. It provides practical advice and inspiring stories.
Who is the author of New to Big?
David Kidder and Christina Wallace are the authors of New to Big.
What to read after New to Big?
If you're wondering what to read next after New to Big, here are some recommendations we suggest:
- Equity by Minal Bopaiah
- The Leader's Guide to Unconscious Bias by Pamela Fuller & Mark Murphy with Anne Chow
- Leading Without Authority by Keith Ferrazzi with Noel Weyrich
- Radical Humility by Urs Koenig
- How to Talk to Anyone by Leil Lowndes
- The Replaceable Founder by Ari Meisel
- Free Speech by Jacob Mchangama
- A Brief History of Time by Stephen Hawking
- Make Your Mark by Jocelyn K. Glei
- Relativity by Albert Einstein