It’s better to imagine the future and work backwards, down through the aspects that must be true for that imagined future to become real rather than observing the past and incrementally adjusting a view of the future. The most influential utilize both practices. They ask: What is unchangeable? What is malleable? Yet, they begin by working backwards from an imagined future. This is a rare and beautiful procedure. They ask: What is our exposure? What is our opportunity? It’s an unusual practice –therefore, scorned by most people.

Imagine wanting to provide every person on the planet a moment or two of joy every day. What must be true? What must not exist? Well, it would have to be a shared thing, we all do, every day. Perhaps drink fluids. Then, we’d have to divide that “drinking of fluids” into categories that produce moments of joy. What drink might do this? Water? With flavor? What type of flavor? Sweet? Low after taste? Balanced? Sure. Carbonated? Probably. Then, you’ve got to go through other things, like economics. What portion of a person’s daily income would be paid to have a couple moments of happiness each day? A 15 minute break is probably worth it, right? Would someone trade 15 minutes of monotonous work for a few minutes of joy? Probably. If a person works 40 hours a week 50 weeks a year that equates to 120,000 minutes per year. Tippecanoe County, Indiana median household income is about $53,000 per year. That’s 44 cents per minute. Across 15 minutes that’d be about $6.62 of value. So… can we produce, distribute and market carbonated sugar water for something 30-50% less than 15 minutes of work and still generate an attractive profit? It turns out that Coca-Cola can.

Some call this value based pricing. While I like that model this is more than that. It’s reasoned design, working from an imagined future backwards. What is of value? Can I fulfill that value at a price to the customer that is less than what they receive? Do they get a good value? And can I generate an attractive profit versus my alternatives? Will that profit aide us in doing more of what is good and moving toward that vision? How quickly? How securely?

A lot of thinking goes forth thinking about past practice and then moving just a little this way or that way. Trim here. Improve there. Coke is an easy example because it exists now for more than 100 years. But it didn’t start as a global juggernaut. It started very small. And it changed a little more early on than it does now. I’m all for lots of iterative experiments seeking the ideal product-market fit. I like continuous improvement. There is joy in that, too! But, most really great insights started by asking a big question, like, “how could we organize the world’s information for faster discovery?” What would have to be true? What could not be true in that world?

Let’s consider the other side of the argument.

Consider Bayesian probabilistic thinking. One begins with prior data and makes some assumptions about the likelihood of two outcomes. As new data and new experiences come in the model is updated. This works. This doesn’t work. Adapt. Repeat. Progress. Iterate. Improve. Over a large enough data set, and fast enough iterations (OODA loop) you can begin to predict the likelihood of various outcomes and respond more quickly, with greater effect. You disrupt the previous situation and shape a new future. However, you are never 100% sure the sun will rise tomorrow. The odds are very strong, but you cannot be absolutely certain. Likewise (but less extreme), you cannot be certain of the size of a hurricane or earthquake. You can go back through all the data that has ever been collected, even include Noah’s flood. Still, this outcome is incomplete about the potential exposures. It provides limited insight. Is it helpful? Sure. Is it absolute? No. Continue on downward from extreme exposures that might wipe you out of your iterative process. Ultimately, you cannot know them all.

Machine learning, artificial intelligence and good old statistical models are very useful. They get us closer. There is an alure to them –a promise of precision or of reduced error rates -nay, even continuous improvement. Can they ever make us pure? Holy? Free from error? No. And, in many instances their complexity often takes on an unintelligent life of their own and goes haywire thanks to overfitting. The data shapes the model, but then the model doesn’t shape reality. Reality smashes through. Life finds a way to surprise. How? The unimagined occurs.

Therefore, the imagination trumps the past. It is more capable of omnipotence because it has fewer dependencies. It is fundamentally less dependent upon error. It can be reduced. Alas, here is the rub. Imagination is often ill-formed. It proceeds with assumptions in tow –baggage that encumbers it. It forms itself as a hypothesis to be tested given constraints that are poorly organized. It presupposes that the largest hurricane possible would be x% of the largest ever –but, based upon what? Rather than asking: What causes water to conjoin and disperse within the air? Is it possible that all the world’s water could be gathered together in the atmosphere? I suppose it is possible. But, what must be true? No other matter? Could this ever happen? Sure. It is imaginable.

Is it likely?

No. Chances are other matter will persist in solid enough form to produce gravity and break the water tension. Do I appear to be a mad man by imagining such an environment? Yes. Why? It’s unlikely. What good does that do anyone? Can I present this to a group of my peers and expect any good? Unlikely.

The good that can be done from this line of thinking is break through. It won’t occur incrementally –at least not at first. Reasoning from imagination down and first principles forward can produce alternate futures that are dramatically different than today, and potentially, miraculously better (or worse.) In some ways then the motive (for good or evil) begins to shape imagination, which produces words that effect action and direct the cosmos.

In business, the creative spirit sees opportunity, assembles resources, and attempts productive advance. The assembly may seize gain or disperse loss. The assembly begets concentration or dispersion. It originates in the imagination and is usually but not always executed incrementally from the recent position. Others buy-in.

It is, for this reason, that many entrepreneurs obscure the disparate steps of their assembly. The draw on experience of one portion of people, combine with experience of another portion of people, and conjoin them into a well-fit team, that otherwise, and individually, would never reason themselves forward into a collective. They would seek like-kind.

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