Introduction
In keeping with the snowstorm weekend here on Cape Cod I am continuing yesterday’s discussion on The Snowball which is the biography of Warren Buffett. As a refresher, three pertinent points were identified from this book:

1. Accumulating wealth may be likened to building a snowball
2. Zig when everyone else zags
3. Marry up, not down

Yesterday in Snow & The Snowball Part I we discussed how building anything of quality, whether it is wealth, a business, or an individual or company brand, may be likened to building a snowball, by adding to it a little over a time it gradually accumulates significant value. Today I will continue and discuss why following the crowd is not always the best approach.

Zig When Everyone Else Zags
At first glance this may seem to defy logic. Is it not a good thing to follow the crowd? Considering today’s society of increasing peer pressure is it not wise to follow the crowd and not upset the status quo? Is this not why more books on the topic of the wisdom of crowds are being written and why we watch the news and participate in social media outlets – to see what everyone else is doing and follow suit as the group must know best? Warren Buffett argued against this logic in his biography and I tend to agree.

I am not arguing against the wisdom of crowds. There are a number of interesting books on the subject, one of which I had recently read titled The Open Brand by Kelly Mooney and Dr. Nita Rollins, and another I am currently reading called Groundswell by Charlene Li and Josh Bernoff, neither of which I am going to elaborate on here as they will be the topics of future articles. What I am arguing against is blindly following crowds. Crowds are useful insomuch as gathering information on one’s target market and your brand. They may also serve as a valuable predictor of your business future or the economy in general.

One should monitor crowd behavior, plan accordingly, and adjust their strategy. However when taking action I advise against taking the popular or mainstream action and following the path less traveled. Consider a couple relevant examples. First, in Warren Buffett’s biography a consistent theme was his investment strategy of looking for bargains, whether it was an individual stock or even whole companies. As individuals were offloading, he was buying. The second example, and pertinent to many out there is real estate investors, savvy investors have been known for purchasing while others are having to offload and receive tremendous bargains as a result. Consider both examples in light of today’s economy – especially the state of company, real estate, or stock investments and the wisdom of following the crowds should immediately come into question.

To Be Continued…
In Part III I will conclude the series by discussing the concept of marrying up.

Watch the crowd but never blindly follow!

-John R. Sedivy of Cape Cod Branding