Mental Models #2: Inversion - Solve Problems and Make Better Decisions

What's up, everyone. This is Alex Lieberman, co-founder, and Executive Chairman of Morning Brew. Welcome back to Founder’s Journal, my personal audio diary, where I give you, the business builder, the tools you need to think better in order to build better, whether that's building a business, a team, or a new product. We're doing things a little differently this week: We are dropping our third mini-series, which means you're getting two episodes today, two episodes Wednesday, and two episodes Friday. You're listening to episode two in the series, but be sure to check out today's classic episode as well. The theme of this mini-series is Mental Models. We are going to talk about some of the most powerful tools you can use to sharpen your thinking, your prioritizing, and your decision-making. Many of these tools have been made famous by leaders like Elon Musk and Dwight Eisenhower. And today I am talking about a mental model known as inversion. Let's hop into it. 

Two common mental models

So what I'm going to start by doing is walking you through the typical way that I solve problems in business in order to introduce inversion, which is a third and really powerful way to solve problems and make decisions. Let's use Morning Brew as an example. If I was to pick something like, let's say, Morning Brew Education, which is a new, but fast-growing line of business for us, here's how I would think about planning for the future of Morning Brew Education. I'd start top-down, where I'd say something along the lines of, okay, let's say we want Morning Brew Education to be a $6 million business in 2023. And today let's say it's a $500,000 business. What would need to happen to close that gap? I would say, well, there are several ways we could find that revenue. First option would be to take our one educational product right now, which is Morning Brew Accelerator. It's an eight-week $1,500 offering. And I would say, how many cohorts do we need for the business to get to $6 million on its own, just using the accelerator?  And so assuming there are 150 people in a cohort, we would need 27 cohorts a year to get to $6 million. Now the second option would be, what new products could we introduce within Morning Brew Education. Say we think Morning Brew Accelerator can only get to $3 million without spreading the product too thin. I then start thinking about what other offerings can we introduce into this line of business to close the gap, the remaining $3 million? And so what I do is work backwards from there and get to a plan that I feel confident about getting to $6 million by 2023, which probably means, say $3 million by 2022, without diluting the product or the brand. And then what I do is, that was tops-down, I'd also think about it bottoms-up. I would talk to the Morning Brew Education team. I would ask them about ideas they have for expanding education at the Brew. We would probably run a survey asking alumni, people who went through Morning Brew Accelerator, what other products would get them interested in staying involved with Morning Brew Education. And basically what we do is we would start at the idea level with the employees and the customers that are most familiar with the education product, and then we would work up from there to ask ourselves, what mix of these ideas are we both most excited about and actually give us a real chance to grow the business to $6 million by 2023? 

Try this third option: inversion

So these are two very common ways of approaching decisions in general, and in business: Understand your end goal; work backwards from there, either from the micro level, so bottoms-up, or the macro level, tops-down. But now I want to give you a third option, and it's called inversion. Inversion is a way of thinking where you invert problems that you're solving or invert decisions that you're making. You just flip everything on its head. Said differently, you envision what would need to occur for failure to happen. Let me give you a few examples. 

So the Stoics who I talked about in a recent episode, when I talked about Stoicism, you should go back and listen to that. They pioneered in version through an exercise that was called premeditatio malorum, which basically just means premeditation of evils. They would ask themselves questions like what would need to happen to lose my job? And the answer would probably be something along the lines of showing up late or not being thoughtful before doing something or not being kind to customers. They would also ask things like, what would need to happen to become homeless or have my reputation ruined or suffer a bad injury? Now, fast forward from the Stoics and one of the most famous investors and billionaires of our time, Charlie Munger, who is Warren Buffett's partner at Berkshire Hathaway, he goes through the same exact process. And what he said is it's not enough to think problems through forward. You must also think in reverse, much like a rustic who wanted to know where he was going to die so that he'd never go there. Many problems just can't be solved moving forwards. And he doesn't just use inversion in his investing approach. He also references it anytime he gives advice to motivated young professionals. So when they ask him, how do you achieve success? He simply asks back, what do you want to avoid? And that question is likely far easier to answer than, how will I be successful? Obviously you want to avoid being unreliable. You want to avoid being lazy. You want to avoid being untrustworthy in order to be successful. And that's why inversion can be so powerful and provide new perspective. All it does is it makes so glaringly obvious what the errors are that you need to make, or the roadblocks that you would face to not be able to achieve your goal. 

And before I get back to Morning Brew Education, the example I was using earlier, without knowing it, we have always used inversion in our process for hiring at Morning Brew. So whenever we're looking to make a final decision about a candidate, we ask ourselves, if we had to fire this person three months from now, what would be the one-to-three most likely reasons why we had to do that. And sometimes I even asked that question to the candidate to see if they're thinking about what they need to do to succeed in the role, by understanding those one-to-three things that we must avoid. It makes it super clear if the person we're considering will likely commit those exact errors. 

Inversion in action

Now to wrap up with the Morning Brew Education example, here's what inversion would look like if we looked at Morning Brew Ed through that lens: Rather than asking the earlier question of, how do we get to $6 million in revenue by 2023, I invert it and I say, what will cause us to fall short of $6 million in revenue by 2023? And there's a few likely answers that come to mind.

And the first answer that comes to mind is there's not enough demand for the product, which makes me think harder about product-market fit and adequate marketing. The second answer would be us trying to do too many things and not having the capacity to execute our plan well, which makes me think harder about are we creating the right hiring roadmap that helps us, or allows us to accomplish our ambitious plan? And the third thing that it makes me think of is, not having a realistic course load. So for example, earlier I said we would need to do 27 cohorts of our Morning Brew Accelerator to get to $6 million of revenue. That's simply too much. And so what that makes me think harder about is, are we being ambitious but also being realistic?

See, that's the power of inversion. It makes clear what you need to think hard about if you want to avoid failure. It’s simply a new lens for looking at problems and decisions. So if you want to put it to the test in your own business or your own work, simply just pick a big decision, like someone you're thinking about hiring or a presentation you're giving to senior leadership and ask yourself the following question: What will cause me to fail? What will cause me to make the wrong decision in hiring someone and have to fire them? What will cause me to not give the presentation that I want to? What will cause me to not be able to sell through the idea I want to sell through? And in this decision or this career move, or this problem make an exhaustive list of the two-to-three most likely answers of what would cause you to fail. By the way, this is the beautiful thing about mental models in general, not just in version. You don't have to just default to using inversion or sum-product thinking or top-down thinking. You can use a patchwork of these models when making important decisions so you give yourself the best chance of removing blind spots when thinking through something.

As always, thank you so much for listening to Founder’s Journal. I hope you enjoyed this one on inversion. And if you did make sure to tune into all six episodes this week that are part of our third mini-series on Mental Models. Also make sure to pound the subscribe button for Founder’s Journal, whether it's an Apple, Spotify, or the podcast player of your choice is the number one way for us to grow our show. And if you do already subscribe, make sure to check out Founder’s Journal content on Morning Brew’s YouTube channel. Just go to YouTube, search Morning Brew, and click on our channel. There, you'll see an entire playlist of Founder’s Journal videos, from how to deal with imposter syndrome, to how we exited Morning Brew for eight figures to why Ethereum matters.Thanks again for listening and I'll catch you next episode. A big thank you to American Express Business, who made today's show possible.