Backwards and forwards arrows

The Law Of Inversion: How To Find Creative Solutions To Business Problems

Carl Gustav Jacob Jacobi was a mathematician famous for solving elliptic function problems.

Not that I know what elliptic function problems are, but I do love his method for solving them “man muss immer umkehren” (invert, always invert.)

Many of the world’s wealthiest people desperately seek ways to live longer. Combined, they’re pouring billions into longevity research and cures for aging.

Charlie Munger wants to live longer too. But, when questioned on the topic, he said he just “wants to know where he is going to die, so he never goes there.”

Now that’s a typical tongue-in-cheek answer from Charlie. Still, it is a classic example of inverting a problem and thinking in different directions to find simple solutions to complex problems.

See, we can solve problems by thinking forward and backwards.

We can use a problem as the starting point and walk forward (longevity studies and anti-aging cures) or use a problem as the end-point and walk backwards (avoid going to where you will die).

Many coaches and gurus sell talks and courses on finding happiness. 

They use being unhappy as the starting point and share ways to help you move forward to happiness—the eat-prey-love approach.

Yet we could also use being unhappy as the end-point and work backwards to remove everything that led us there.

What method do you think is more likely to work?

Experimenting with 100’s of hobbies, foods, people and so on to increase happiness or removing the negative shit like social media, alcohol and bad relationships that make us unhappy.

I bet a lot of money that more people will find happiness by removing the BS from their lives than by adding new stuff.

Another Charlie’ism comes to mind here “It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.

Too often, we think we have to solve problems with brilliantly devised creative solutions. But instead, we can just subtract.

This subtractive way of thinking is particularly challenging for intelligent people to adopt because they’re constantly trying to live up to their intelligence.

Even though doctors, unlike happiness gurus and the likes, are hands down the most qualified people in our society to handle our health issues. Until recently, their additive (take this medicine) approach has been life-shortening, not life-extending.

It wasn’t until we discovered penicillin, which only became widely used in the 1940s, that visiting a doctor on average extended our lives rather than reduced them. Until then, on average, Iatrogenic (the name for this failed additive approach) sent us to an early grave.

Their intelligence was killing us.

So what did the doctors not see? Additive solutions, although well-meaning, are problematic because it’s hard to predict second-order effects in complex systems.

In our bodies, businesses and environment, it’s tough to know what our actions’ flow-on effects (2nd order effects) will be.

The effects of subtraction are much easier to predict.

If I hire a new employee – I have no way of knowing how that will affect my business. If, instead, we just don’t do the work said person was going to be hired for, I already know what that outcome is.

If I start running, I’ll likely get fitter, but downstream effects like injuries could be adverse. If I stop smoking, the benefits are beyond doubt.

It’s not obvious in either of these two scenarios which is the better choice, but at least with subtraction, I know what I’m getting.

Walking backwards will not always be the best solution, and just because you walk backwards doesn’t mean you have to subtract to find your answer.

Business Problem And Solution Examples

Here are a few examples from businesses I’m involved with to illustrate.

A year ago at my gym, we were debating how to reduce churn for our Tribe memberships.

We came up with all sorts of reasonable and wacky ideas about how we could fix the problem instead of solving its cause. Like ‘buy this machine’ ‘change the AC to this temperature’ ‘give them this for free when they join’.

We were walking forward from our problem and using addition to solve it.

Instead, after walking backwards from our problems, we realised the cause of our churn was a poor onboarding experience. So we improved that, and our membership churn dropped.

In this case, we walked backwards but then used addition to solve.

Here’s another one.

An Ecom company has hired me to fix their finances.

They’ve been struggling to grow because they have recurring cash flow issues. Essentially they never have enough money to fund new product lines.

They thought they’d solve this by increasing revenue. They’ve increased revenue six months in a row, yet they still don’t have enough cash to introduce new products.

They walked forward from their problem and invested a lot of energy into additive solutions.

We haven’t solved this yet, but I have two hunches here.

First, we need to walk backwards and address the cause, which is poor cash flow management. Introducing a simple system to manage the business’s finances should help here.

Secondly, I suspect they need to do less, not more. Sell fewer SKUs, do fewer promotions, and take on fewer projects.

Walking backwards, I can see multiple causes to address that lead them to this position. And the solutions are both additive and subtractive.

Spending time thinking about the opposite of what you want doesn’t come naturally to most people. And yet many of the smartest people in history have done this naturally. – unknown.

Walking forward and backwards from problems reveals more solutions.

Subtraction isn’t always the solution, but its outcomes are more certain and straightforward to implement than addition.

Remember, when facing a problem – Walk back and subtract.

You can get more actionable ideas like this in our email newsletter. Each week,we share the frameworks, methods and mental models we've used to build multiple 7 figure businesses.

Leave a comment