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How do people build successful businesses?
This is something that I have been thinking a lot about lately. And the deeper I go, the more I realize it is not that straightforward.
Abstract problems of such scale require creativity.
For example, think about the opposite.
How do you fail at building a business? Now, this sounds obvious, right.
One way is to focus on efficiency rather than effectiveness. Another way is to ignore the market feedback loops. Or to have awful customer support.
Wait...ruining a business endeavor can be distilled into a set of actions. 🤔
So could it be possible that if we try to avoid these actions, we could build a successful business?
According to Charlie Munger, it is.
This is a famous quote from him:
"Invert, always invert: Turn a situation or problem upside down. Look at it backward. What happens if all our plans go wrong? Where don’t we want to go, and how do you get there? Instead of looking for success, make a list of how to fail instead – through sloth, envy, resentment, self-pity, entitlement, all the mental habits of self-defeat. Avoid these qualities and you will succeed. Tell me where I’m going to die, that is, so I don’t go there."
It's not enough to think about a problem in one direction. We should strive to think in both directions - forward and backward.
This way of thinking leverages a principle (mental model), called "The Inversion Principle", popularized by the same guy - Charlie Munger.Avoid the things that fail X, and you will achieve X.