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Brian Pallas: when the Idea becomes Action

Italian version: here

1) An unusual life for a young 28-year-old, who lives in Milan and New York. Does Brian Pallas feel different from his peers? Why?

I do not consider myself particularly different from my peers. What may be different is the path I have undertaken to achieve my objectives. I’ve never had just one specific target, but I always allowed myself to keep the maximum options open.
In Philosophy there is the concept of ‘degrees of freedom’, thus when the degree of individual’s freedom increases there will be the opportunity to get more results that are different from the standard.
My philosophy as an individual, not simply as an entrepreneur (this was one of the various options), has always been to keep open as many options as possible, so I have always chosen one school and not another one, a first job as a consultant just to expand the range of options available to me.
Also, the additional choice of the MBA was to continue to expand my optional range, because I believe that, rather than specializing yourself, it’s better to have not only a plan A to move forward but also a plan B, C and D even within the same thing that you are doing. Obviously this requires more time and effort but it allows you to use the value of the option and a higher degree of freedom.

2) Do you think that now flexibility should be an important feature of young people?

Yes, absolutely.
It is a matter of personal flexibility. Often when you say the word ‘flexible’, people tend to think about accepting an unpaid work or bowing to external requirements.
For me, being flexible means not to bind to an identity, an ‘exoskeleton’ that is placed around you by society, but to live with the minimum fluidity that is required to get the best opportunities, because every choice comes from a function of two main features:
1 – the large number of available alternatives
2 – the forecast capacity of the outcome of each alternative.

This means that if you have five choices and you know what results they bring, then you know what to choose and so you will do a rational choice; so what is the problem?

However, we work with two elements that are incomplete because:
1- the large number of choices is due to our imagination and our ability to see them, as well as to what we built before.
2- to know the outcome of our choice in advance is difficult because this is given by intelligence and predictive power, which are the result of experience.

From this point of view the flexibility of our behavior must serve to expand the number of available choices in order to have a great number of options and then, if we can predict the possible outcome of these choices, decide to approach an optimality’s paradigm.

3) You had the IDEA. For you, in this contemporary scene, should winning ideas be considered as the result of the Intellect, (so independent because at the top of everything) or are the result of reason, (therefore “built”, so you start with some elements and then you build the winning idea?)

Winning is a context- related concept and an idea is winning as much as serving the utility of someone. We know that humans react according to utility functions and if something does not add value to anyone is not to be considered a winning idea.
If we look at the whole problem from this perspective, we should not focus on the idea but on the utility that is generated; the latter, in my opinion, is inherent to the social structure of a country’s economic system, in its incentives’ system, while the former simply consists of seeing how to adjust this incentive system in a way that adds value to all the stakeholders.
From this point of view there is a moment of creativity in understanding how this added value can be made by modifying a complex, existing system, but at the same time it is not creative itself since it does not lead to the production of something new, but it simply generates a new interaction among existing elements.

4) From the idea to the project to the start-up: a journey that seems to be the common denominator of new companies. Yet many of these fail at the second stage or little after the birth of the startup. Is it only bad luck or the lack of ‘something’ that would overcome difficulties?

From my point of view the world is full of good ideas and I’m sure that a thousand people have had my same idea before. There are seven billion people in the world and it would seem very anti – statistical if this were not the case.
For me, what leads to success is always execution that is to say the ability to transform ideas into action.
In a world like ours success is rarely related to a process of transformation but it is increasingly linked to the propagation of a concept among individuals and who make it grow with their work, their capital, and everything that is around it. When we talk of success we speak about the ability to foster a sense of utility, ensuring that this utility is perceived and embraced by all major stakeholders in a sufficiently strong way to overcome inertia from their current state. There must be perceived a value to bring the stakeholders from a state of inertia to a state of change.

5) Today we talk a lot about start-ups’ incubators and enterprises’ accelerators. They are born with the purpose of generating a change and while in Europe they are creating the development, in Italy things appear to be very different. Although Italy has the record for the number of incubators, (about 4 times more than in Germany), the conversion rate idea- enterprise is very low in our country. (9.6% in 2012) What does distinguish American incubators from ours?

There are three elements really distinctive in Italy.
One is the lack of alternatives for young people: if you are young and you haven’t a solid and rewarding job you may say “I’m going to create a start-up”. If the opportunity-cost, the lack of alternatives is low, the initial filter has to also be low. Thus if an idea or the ability of execution are not very strong, the attempt, provided the rational attitude of the actor, is still worthwhile. If you have a low opportunity-cost ratio, the failure risk is higher.
The second element of difference is the question of ‘openness’. Many people are afraid to have their ideas stolen if they share them with others. What it is not considered is that, on the contrary, sharing one’s own ideas leads to have more people who could help rather than hinder. This is because if the communication is effectively structured, the incentive system for the counterpart is built in order to foster the collaboration rather than competition. If we are able to create such mindset, we can accelerate our growth much more and leverage, not only on the people we know but also on a much larger network (which is what has allowed my project to grow so quickly) This is a very common thing in the USA, that the only way to do a start-up is just to shout the idea to everyone and then see what happens.
The last element of difference is that in Italy we lack a system of mentorships and successful entrepreneurs who mentor beginners, helping them to make decisions. The lack of this leadership from someone who has been successful and has already met and overcome the same difficulties is a detriment and will cause to repeat the same mistakes due to the lack of information.

6) What would you suggest to one of your contemporary with an innovative idea? Who should he contact?

I would suggest him/her to try the idea concretely. Ideas have their own legs only if they can change, in a positive way, the utility function of a sufficient number of people to justify their existence and clearly enough to bring these people to change their habits.
Even before writing a business plan or trying to raise capital, I suggest to try the idea in a small way, with known people, trying to see if it works in practice and to edit it on the basis of the market needs, since no idea is born right. We started a long way from where we are now and, without having tested and changed many things, we would not be able to do anything even with an outstanding amount of capital or mentorship.
You have to test your idea on field before going to look for accelerators.
Once the idea is tested concretely and you have something that really works, those accelerators or incubators tend to come to you saying ” I see you have something that works! Let’s make it together.”

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7) Opportunity Network, a new tool at the service of companies involving more countries. How does it work and why did you have the need to develop this network?

Opportunity Network was born from a family’s need because my father is an entrepreneur.
I have always seen that his whole business comes from personal contact with others, but this is not always enough and potentially transferable to future generations. So I thought that if I had created a network of people that could trust each other, this could have boosted my father’s chance to get opportunities not only from his own network, but also from mine and many other people.
The hard part of this project was not to bring together companies but to make them trust each other: to solve this problem of reliability, rather than being us to say whether a company was good or bad or if a CEO was reliable or not, we decided to leave this function to who, for hundreds of years, has made the reliability’s screen its business model, banks. Since banks decide whether to provide loans or warranties to their clients, we tend to think that they perform an efficient screening. We have started using bank customers as proxy for reliability and to ensure that the banks themselves bring their customers to our platform. We can not give membership but our trusted partners proselytize our platform in their users’ and clients’ network.

8) Behind every project there is a philosophy like an accurate reflection on what we are going to build, on the values, on the ethical principles. What is the philosophy of Opportunity Network?

When I created this company I had some ideas. Despite I gave life to a group of people I did not want to be a father-master who imposed an idea or a philosophy to all; when we started to be a sufficiently large group we sat together around a table and we reflected on what were the values that we really felt ours. Each of us proposed a list of values and from these we chose those that we truly felt ours. Today our four values lead every choice we make.
They are:
-People FIRST
-Trust
-Simplicity (let’s do one thing and get it right)
-Symbiosis: instead of entering in a system and create disruption as other start up that remove a piece from a chain of values replacing it with something cheaper or more efficient, we enter in the values’ chain by feeding each element of it.
Our aim is just not to take off anything to anyone, but to add something. This is why we are not the natural enemy of any of the economical giants with whom we go to compare but we are a part of the system that goes to feed everything in it.

9) A company of 30 people at the age of 28, an experience that definitely helps to mature yourself and to develop skills and responsibility; it is something anomalous in our country, is it also in the USA? Why in Italy are we surprised when young people have ideas like yours?

For me the issue of prejudice in the general sense of preconceived assumptions is due to
the amount of the data points that you have in front of you.
If I see a ball falling down at 9.8 m / s in acceleration for hundred years, I expect that the
ball continues to fall in the same direction!
The wonder is when the ball, instead of falling, goes up! Because the more something is abnormal in the system, the more it generates amazement or the more is an outlier the more it surprise us. Therefore, if in the USA each month there are 10 new start-ups and there are already a hundred million, the eleventh start-up does not cause astonishment! Of course if in Italy there is a new one every ten years or every five years this generates much amazement. Thus the prejudice is nothing more than a shortcut that the mind uses to derive a general rule from something, which is obviously not generalizable, not being a physical law. This is only a matter of unbalance between probability and actual implementation, that is: every time there is something contrary to the prediction, this leads to amazement so the wonder is the way the human mind adapts the odds.

 
10) Philosophy in Italy is mistreated and considered useless. What do you think about this matter?

There are, in my opinion, two categories of philosophers.
– Those who see philosophy as a method, like Socrates who adopts the Socratic method
to get results, solutions and different behaviors as a response to the same stimulus on the basis of a complex reasoning. This is the philosophy that I tend to really appreciate because many other philosophers, using complex reasoning, achieved results very counter-intuitive.
– The cataloging philosophy that I like less, as Aristotle and Hegel who used philosophy as a lens to pigeonhole all reality and not to generate a specific result, but to provide a rational explanation of everything.
The first type of philosophy leads to a true impact with reality, the other one simply leads to a system that you can like or not.
For me there is a big split between the two groups and from Hegel onwards I only see a continuation of the second type of philosophy, going to turn it into something that is the history of philosophy.
If I think back to high school I did not study philosophy but the history of philosophy, then
the thought of other people in relation to a specific problem. Philosophy, like everything else, is a product, a human mind’s product and like every product it has to justify a service, then its existence by generating utility for users, because if utility is not produced it is a useless tool.
So the question becomes: how can philosophy add value to those who use it?

11) Do you think that philosophy, as the development of complex questions, answers, and solutions, could join the company as a support to each specific area? Why?
I think that we did it in Opportunity Network and if we think well in a company everyone who makes strategy is not very far from making a philosophical reasoning; simply this step is called ‘strategy’ because the ‘company’s philosopher ‘ would not be a term that would give satisfaction to someone, being a concept that is sometimes used in a negative way.
However, I believe that any role in strategy or strategic advice is deeply linked to philosophy.
Strategy, as the complex study of all the future possible alternatives of a company, is like philosophy, which studies the origin and structure of the human being, for its way to evolve itself from the tactical choices to the strategic ones.

 

Valeria Genova

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