Innovation Begins with Outsiders

Do the most innovative ideas come from the fringes? The stories of eminent innovators such as Katalin Karikó - a Hungarian scientist who, after years of scorn and marginalisation for her theories on messenger RNA (mRNA), played a key role in the rapid development of a vaccine against COVID-19 and was awarded the 2023 Nobel Prize in Medicine - or Jack Ma - an English teacher and founder of Alibaba, one of the world's largest technology companies - show that entrepreneurial, artistic and scientific innovation often starts with outsiders. Free from the constraints and expectations of insiders - those who belong to the system and share its cultural codes, norms and established practices - outsiders can see what others cannot and disrupt the status quo. However, the very freedom that gives rise to innovative thinking can also be an obstacle: if it is true that outsiders are the bearers of new perspectives, it is also true that they usually have to contend with the resistance of those who are entrenched in the context in which they are trying to make a place for themselves, and in which they have neither credibility nor cultural custom. As Y Combinator's visionary founder Paul Graham put it: "great new things often come from the margins, and yet people who discover them are looked down on by everyone". This contradiction lies at the heart of what Graham calls the "outsider paradox".

So how do successful outsiders overcome Graham's paradox and influence a world that resists them? What lessons can we learn from the successes of people like Katalin Karikó? How can organisations not only identify original outsiders but also empower them, amplify their voices and create the necessary environment for their ideas to flourish?

These are some of the questions that Simone Ferriani, professor of Entrepreneurship and Innovation at the University of Bologna and Bayes Business School in London, has been trying to answer for over fifteen years, and to which the MIT Sloan Management Review (Spring 2025 issue) has dedicated its cover article.

"There is a recurring pattern in the stories of innovation that we have analysed over the years," says Professor Ferriani, "outsiders are almost always the bearers of skills and ideas that are unheard of in the worlds where they land, precisely because these ideas mature in contexts different from those of their destination. It is where different worlds meet that something new is born. "A few years ago," Ferriani continues, "we mapped the intricate network of collaborations among some 12,000 Hollywood artists to understand whether creative success was concentrated at the epicentre of this network or dispersed at its edges. The results show that the most creatively successful individuals are neither at the edge nor at the centre of the system, but in a liminal zone between centre and periphery, where legitimacy meets novelty". 

Importing innovation from the outside can lead to extraordinary innovative outcomes, but it brings with it a number of complications. The pressure to conform to the group, as demonstrated in the 1950s by a famous series of experiments conducted by the psychologist Solomon Asch, can paralyse any desire for change, particularly when you are expressing the sole voice that goes against the mainstream. "Fortunately," Ferriani continues, "Asch's studies also suggested a mechanism for 'defusing' this social paralysis: the presence of a second dissenting voice. An appealing illustration of this idea was offered a few years ago by Derek Sivers, founder and former president of CD Baby, one of the world's leading online stores for independent musicians. During a popular TED talk, Sivers showed a video of a young man at a party dancing solo with abandon. At first, he seemed a little strange in his solitude, but then something extraordinary happened: another boy joined the dance. This simple gesture of solidarity made all the difference in making the marginal mainstream: within seconds, dozens of other young people joined in, and a collective dance broke out.

"Time and again, history has shown us the crucial role of an unexpected internal ally," says Professor Cattani of New York University, co-author of the study. "Consider the extraordinary case of John Harrison, a self-taught watchmaker with no formal education from an unknown village in Lincolnshire. Harrison challenged the academic establishment with an innovative approach to solving the age-old problem of determining longitude at sea. After years of relentless struggle to prove the validity of his marine chronometer, Harrison's fortunes changed dramatically when he attracted the attention of King George III, who shared Harrison's passion for horology'. Allies, according to the study, are usually driven by an emotional or cognitive alignment with the unlikely innovators they choose to support.

Another key aspect of penetrating the system is language. Outsiders are unfamiliar with the cultural codes of insiders. "Our experiments," Ferriani continues, "show that if the outsider uses a language that is aligned with the context in which he is trying to establish himself, his probability of success increases significantly”.

The study also looks at the biases that hinder the ability of organisations to grasp the potential of outsiders. Ferriani and his collaborators analysed the cognitive conditioning that results from the intensity with which a group recognises itself as part of a collective identity. "We conducted an experiment with two groups of scientists at the University of Bologna who were asked to evaluate the same idea, in one case proposed by an insider and in the other by an outsider from their disciplinary community. We also manipulated the scientists' sense of belonging to the group in two alternative ways: by stimulating their collective identity and by stimulating their individual identity. Predictably, when the salient identity of the group is the collective, the same idea is evaluated more positively when proposed by an insider. However, these results are reversed for the group of scientists whose salient identity is the individual. In this case, it is the idea proposed by the outsider that shines the brightest.

This intriguing flip side suggests that even a small identity stimulus aimed at encouraging group members to value their personal point of view is enough to make the organisation more inclusive and permeable to external proposals. An interesting illustration of this principle can be found in the industry that perhaps more than any other makes the search for breakthrough ideas its raison d'être: Venture Capital (VC). At Sequoia Capital (one of the world's leading VC funds), for example, investment decisions are made through a selection process in which the fund's partners first meet independently with the founders under consideration for potential investment. In this way, they form an opinion based solely on their own personal assessment of the merits of the proposals they are analysing. Only after the independent assessments have been gathered do the partners come together for collective deliberation and a decision on whether to invest. In this way, Sequoia seeks to promote open-mindedness by valuing independent thinking and encouraging possible voices outside the choir.

The studies also focus on exogenous changes that can facilitate or hinder the rise of outsiders. "Our research," explains Ferriani, "suggests that the outsider often succeeds in moments of strong and sudden change, what we call 'inflection points''. Think of Katalin Karikó: the planetary shock caused by Covid-19 catapulted her ideas into the centre of global scientific attention and made her a central figure in the fight against the pandemic.

In short, if the greatest innovations are often hidden at the fringes of the system, an outsider's perspective can be the key to unlocking them. As Alan Turing reminds us: "Sometimes it is the people who no one imagined anything of who do the things no one can imagine".