Nick Saban added yet another national championship to his resume on Monday night. College football coaches, assistants, and agents everywhere celebrated. Why’s that? The answer is simple: Saban’s brilliance as a head coach raises the price of hiring every coach and assistant not Saban. Other schools, seeing what Saban has achieved, spend fortunes in a frequently fruitless search for the next Saban. Paraphrasing Warren Brookes, in every walk of life we’re blessed by the genius of the very few.
The Saban Effect reveals itself in the business world all the time. In a year when the shares of “Big Tech” companies soared, so did IPOs for much smaller ones. So did VC investments in even smaller tech firms. The three situations are related. Rising valuations for the Big Five or Six or Seven technology companies redound to the smaller ones. That’s because investors are relentlessly searching for the next “Big Techs.” What lifts the very few generates intense interest among investors in their eventual replacements. Stress replacements. Please read on.
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