Big Tippers

The factors that push businesses over the edge and into the type of growth there's no coming back from
Magazine Contributor
7 min read

This story appears in the December 2000 issue of Entrepreneur. Subscribe »

Market research and competitive intelligence have always been a minor part of the services provided by Steve Rice, a Florham Park, New Jersey, environmental management consultant. However, after reading a book about a concept called the tipping point, the 48-year-old former corporate environmental executive plans to revamp his strategy, pushing a little harder to pitch competitive intelligence and thinking more about whom to pitch to in hopes that these offerings may lead to a growth surge for his business. "The tipping point got me to thinking," Rice says, "whether this could be a bigger part, if not the biggest part, of my business."

The basic idea behind the tipping point is that things can happen fast. The tipping point is the point at which a situation that may have seemed stable or only very slowly changing suddenly goes through a massive, rapid shift. "It's the boiling point. It's the moment when the line starts to shoot straight upwards," explains , author of The Tipping Point (Little, Brown), a book that explains the concept of the tipping point and ways it can be used in business and in life.

Gladwell chronicles numerous examples of tipping points, ranging from the effect of Paul Revere's midnight ride on American history to the way Hush Puppies shoes suddenly went from out of fashion to very chic. In each case, he shows why and how the situation quickly and dramatically changed due to the effects of some powerful tipping-point activators.

Rice's hopes for increasing business from what had previously been merely a sideline service aren't so farfetched when you consider the possible effect of hitting the tipping point. And there are many other benefits of understanding it, according to Arlyn J. Melcher, a management professor at Southern Illinois University in Carbondale, who has used the tipping point to impart management concepts in his classes.

"It's particularly relevant for entrepreneurial firms," says Melcher. The tipping point idea helps entrepreneurs understand why they don't always get the hoped-for results immediately with a new marketing campaign or management policy, and it encourages them to continue their efforts until, with luck, they reach their tipping points and suddenly experience rapid progress toward their goals, he adds.

Tipping Back

"Tipping point" is a term drawn from the field of epidemiology, the study of the spread of diseases through a population. The tipping point in an epidemic such as AIDS is the point at which there are enough carriers of a disease or some other factor influencing the contagion to allow an explosion that will infect a large number of people. Similar concepts are used in the social sciences, where ideas that spread through cultures like germs are called memes.

Gladwell presented his ideas, which add examples and analysis from business areas such as advertising and television broadcasting, in a 1996 article in The New Yorker magazine, where he is a staff writer. They met with a ready reception, and, since then, the concept of the tipping point itself has tipped. Gladwell's book became a bestseller, and the journalist has been the subject of numerous articles since its publication.

Part of the tipping point's appeal is the simple way in which Gladwell describes it. He says there are just three basic rules that govern how products become hot sellers, ideas become popular, and other epidemics come into being. One of the rules, which he calls the "Stickiness Factor," states that an idea has to be memorable or a product has to be of durable value to effect a tipping-point change. Another of Gladwell's rules, the "Power of Context," essentially states that nothing happens in a vacuum, and the surrounding environment has a lot to do with when tipping points are reached and what happens when they are.

Perhaps the most interesting of the rules is the "Law of the Few." It refers to the fact that, generally, most of the effect of anything is produced by a relatively small number of the effectuators. It's better known as the 80-20 rule, or the "Pareto Principle," which explains why, for instance, roughly 20 percent of a typical company's customers produce approximately 80 percent of its profits. Rather than leave it at that, Gladwell identifies three types of people whose influence is out of proportion to their numbers. In other words, these are the few you need to reach if you want to pursue your own tipping point.

The Few

According to Gladwell, the people who count are "connectors," "mavens" and "salespeople." Connectors are those exceptionally well-networked colleagues, employees, customers and other people who seem to know everyone everywhere. They aren't difficult to identify, and if you can influence them to relay your message by word-of-mouth, whether it's about a new product or a new policy, you can be certain they'll carry it far and wide. "When you think of leaders who effect change, they're amazingly well networked," says Mabel Miguel, a management professor at the University of North Carolina, Chapel Hill. "They know everybody, and they know the right people."

Mavens, on the other hand, might not know everyone, but they appear to know everything. And they're eager to share all that information with other people. Mavens are opinion leaders with expertise and the ability to impart it, which marks them as the people others go to for advice. And their advice is usually followed. For an example, Gladwell describes a particular friend whose restaurant recommendations he follows automatically. The influence of this maven, he says, is evidenced by the fact that, when frequenting an eatery suggested by his friend, he often sees other people acquainted with that person dining at the same place. The point is that mavens can be used to powerfully influence people if you can get them to accept your ideas.

Then there are salespeople. They might not be all that well connected or even that incredibly knowledgeable, but the fact that they're extremely persuasive makes them stand out-and makes them especially useful to entrepreneurs in search of a tipping point. Although Gladwell's analysis of exactly what makes these people so persuasive is thorough, he doesn't need as lengthy an explanation to convey the source of their value. Quite simply, if you're able to get a powerful persuader on your team, you'll persuade more people to go along, whether you want employees to endorse a new benefits package or customers to accept a new pricing plan. "Clearly," agrees Miguel, "a very strong element of management is persuasion and being able to influence people."

You should try to recruit these three types of people any time you're trying to effect change, Miguel says. But don't stop with just a connector, a maven or a salesperson-get all three on board, and your chances of approaching a tipping point will significantly increase. The importance of the concept is ratified by studies of change-management processes in companies, Miguel says. "Forming the guiding coalition of opinion leaders is critical," she says. "If you don't do that, the change isn't going to take."

Tipping Trends

The tipping point doesn't explain everything. It's still no cinch to know whether you're barking up the wrong tree with a new policy or product, or whether you're about to approach a tipping point when suddenly everything you wanted to happen will take place with blinding speed. While the tipping point has been well supported by scientific studies in fields such as epidemiology, no similar studies have taken place in business, so the theory's validity in this area is still based on anecdotal evidence, notes Melcher.

Yet Gladwell's explanation of how things work is simple, attractive and flexible. While the tipping point probably won't solve every problem you encounter, it will address many of your business issues. "People who understand the tipping point," Gladwell says, "have a way of decoding the world around them."

Mark Henricks is an Austin, Texas, writer who specializes in business topics.

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