If you think you know the story of David and Goliath, think again.

In his new book, "David and Goliath: Underdogs, Misfits, and the Art of Battling Giants," Malcolm Gladwell says most people get this famous Biblical yarn all wrong because they misunderstand who really has the upper hand. It is because of, and not despite, David's size and unorthodox choice of weapon that he is able to slay the lumbering giant. In other words, Gladwell says, most people underestimate the importance of agility and speed. 

The same misunderstanding happens in David vs. Goliath fights in business, which Gladwell substantiates with numerous case studies and research examples in his recently published book. Most fail to recognize the advantages an underdog brand has when it faces off against a competitor who has strength, size, and wealth. And that's exactly why nimble, upstart companies, with their new solutions to old problems, often can best Goliaths.

I recently sat down with Gladwell in Inc.'s headquarters to discuss his counterintuitive new book and how its lessons apply to the ostensible underdogs of the business world: entrepreneurs.

How did this research for "David and Goliath" grow out prior research you've done for books like "Outliers"?

"Outliers" is about understanding the kind of things that account for success. This is a book that does ask a similar kind of question, but in a very different way. When I was doing "Outliers" I was struck by how often when successful people described their lives, they would talk about the things that went wrong or the things that were hard, as opposed to the things that were easy or went right. I decided to do another version of this question, but starting with people's stories, and looking at this question: To what extent can disadvantages be advantageous and vice versa?

The basic premise of the book is that the story we all think we know about David and Goliath isn't really how it went down. Can you explain?

First, David's sling is a devastating weapon. It's one of the most feared weapons in the ancient world. The stone that comes from his sling has the stopping power equivalent to a bullet from a .45 caliber pistol. It's a serious weapon. And second, there are many medical experts who believe that Goliath was suffering from acromegaly, which causes you to grow. Many giants have acromegaly, but it has a side effect which is, it causes restrictive sight. Goliath in the biblical story does, if you look closely, sound like a guy who can't see.

So here we have a big, lumbering guy weighed down with armor, who can't see much more than a few feet in front of his face, up against a kid running at him with a devastating weapon and a rock traveling with the stopping power of a .45 caliber handgun. That's not a story of an underdog and a favorite. David has a ton of advantages in that battle, they're just not obvious. That's what gets the book rolling is this notion that we need to do a better job of looking at what an advantage is.

How have you seen stories like this play out in the business world?

This is the classic story of the business world. The very same thing that appears to make a company so formidable--its size, its resources--serve as stumbling blocks when they're forced to respond to a situation where the rules are changing, and where nimbleness, and flexibility, and adaptability are better attributes. Which is the story of David and Goliath, right? David had nimbleness. He changed the rules. He brought in the superior of technology.

Are there any common threads you found between successful underdogs?

They're defined by their disagreeableness, which is not obnoxiousness, but rather they are not people who require the social approval of their peers to go forward with an idea. I give the example in the book of Ingvar Kamprad who was the founder of IKEA. In order to save IKEA at a certain point, he starts to make his furniture in Poland in 1961. Imagine going to a communist country to make your product at the height of the Cold War. The only way you can do that is if you are indifferent to what the world says about you. That's the crucial part about why he was able to do this incredibly disruptive, innovative thing because he wasn't someone who spent anytime worrying about his reputation.

You write that underdog strategies are hard or at least harder than giant strategies. Why is that?

I have a chapter about a software mogul in Silicon Valley, an Indian guy who coaches his 12-year-old daughter's basketball team, and they are without talent. He takes them all the way to the National Championships. He does that by instructing them to play the full court press every minute of every game and defend every inch of the court. It requires that everyone in your team expend maximum effort every minute of the game. You have to be in really good shape and you have to run yourself ragged, and you cannot let up.

Effort is the route available to the underdog. I may not be able to outspend you, but I can outwork you. Anyone who has worked in a start-up knows that's one of the stressful parts of it.

Another big theme of the book is that there's such a thing as a "desirable difficulty." Can you explain what that is and why it can be advantageous?

This really interesting notion comes from this husband and wife psychology team at UCLA called the Bjorks. And they started with learning. They were very interested in learning, and the conventional notion with learning is to the extent that I make your task easier, you will learn more. They say, "Well, you know that's true, but there are exceptions." There are also cases where if I make the task slightly harder for you, you'll learn better because you'll be forced to concentrate more or maybe you will have to read it three times instead of once.

So, I began to explore all these areas where you could distinguish desirable from undesirable difficulties. Dyslexia would be a classic example. I have a whole chapter in the book about dyslexic entrepreneurs. A much larger percentage of successful entrepreneurs are dyslexic than in the general population: Richard Branson, Paul Orfalea, Charles Schwab, John Chambers at Cisco, David Neeleman at JetBlue. And if you talk to them, they will explain to you that they don't think they succeeded in spite of their disability. They think they succeeded because of it.

You note there are also a disproportionate number of dyslexic people in prison, though. So what needs to happen to make a difficulty desirable?

That's the million dollar question. That's the kind of conversation I want to start with this book. We require a certain level of adversity. The trick is, figuring out what that adversity ought to look like. Gary Cohn at Goldman Sachs is dyslexic, but he probably has an IQ of 150 and had a pretty strong family around him. He can go through a lot of hell in school and still come out okay. But now imagine someone who didn't have a stratospheric IQ, whose family wasn't supportive, and who had other disadvantages, like they woke up every morning hungry. Now, it's hard to see that their dyslexia would as easily be a desirable difficulty.

One alarming theme of the book for a lot of business owners is that once you reach a certain point of success or a certain point of wealth, it actually can work against you and become a disadvantage. How do you figure?

I remember having a conversation with Bob Lutz at General Motors about why is GM so big. This was even after the bailout. And he was like, "You know, it probably is too big." There are clearly advantages of scale, but they cap out. You need to make X number of cars a year in order to be an efficient producer. But beyond that, extra size just gets in your way. What GM suffered with in terms of decision making and innovation was that they were on the wrong side of this curve. 

What about being a big fish in a little pond? I think a lot of start-ups emphasize this to attract the best talent. How can this position work against you?

Our sense of our own self-worth and our own self-confidence is derived from judgments about our peer group. So, if you put someone in a very, very highly competitive pond, they are going to reach very different conclusions about who they are and what they are capable of than if you put them in a less selective pond, a smaller pond.

For instance, your likelihood of dropping out from science and math is not a function of your intelligence, it's a function of the intelligence of those around you.

Some critics say that the examples in the book are ones that specifically back up the thesis of the book. What do you say to that?

I think everyone, anyone who's ever made an argument in, since arguments began, has chosen evidence to support their arguments. So, I would hope I did that. If I chose evidence that didn't support my argument, I'd be writing a very funny kind of book, wouldn't I? I think that's a fancy way of saying that they disagree with things in the book, which is fine.

Why should entrepreneurs read this book?

Because this book is fundamentally about the weapons of the spirit. It's about how the things that are in your heart or your soul or your imagination are every bit the equal of the material advantages that you've been given. Unless [your start-up] is some kind of special case, you don't have material advantages. What you have are your ideas, your motivation, your perseverance, your excitement, your faith. This book is an attempt to appreciate those gifts for what they are, and I think that's something that every entrepreneur would be interested in.