The Psychology of Money - An Investment Manager\'s Guide to Beating the Market

58 THE INVESTOR

of $4.5 billion on eToys and only $4.0 billion on Toys ‘R’ Us. eToys

has surpassed the well-established giant, Toys ‘R’ Us, because of

the former’s creativity, not its capital. Thousands of similar examples

exist in today’s marketplace. One Arthur Andersen ad attempted

to attract business by pointing this out to corporate leaders:

Did you hear the one about the guy who decided to take on the

FORTUNE 500 at home in his spare time?

(It’s not a joke, it’s a nightmare.)

Another stated:

The first thing you have to realize about those wacky kids down

at new-webco.com is they’re not playing by the rules.

Both ads highlight the importance of small startups’ using creativ-

ity to take a bite out of the corporate leaders’ lunch.

What about the experts in the field of investing? Do they see

a need for more creativity?

A recent issue of Forbes magazine had no fewer than 12 ads

that emphasized the creativity of the particular firm as its competi-

tive edge. It seems that Madison Avenue, whose job it is to find

what will connect buyers and sellers, has identified innovation as

the critical factor. In fact, experts within the industry also identify

creativity as the key. In a publication by the Association for Invest-

ment Management and Research, called The Future of Investment

Mechanical Model Natural Model

Newton Einstein

Machines Organisms

Command/Control Articulate vision

Hierarchies Self-organizing teams

Land/Energy Information

Figure 7.2 Business model comparison.

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