Inversion
Instead of asking how to win, ask how you would lose and avoid that.
- Instead of asking how to win, ask how you would lose and avoid that.
- Operating: Amazon's leadership reportedly writes 'press releases from the future' before launching anything.
- Investing: Howard Marks (Oaktree) built a career on inversion: focus first on what could go wrong, not on the upside.
- Everyday life: A common piece of marriage advice: don't ask 'what makes a great relationship?', ask 'what would slowly poison this relationship over 10 years?' The list usually points to contempt, secrets, neglect, and resentment.
Charlie Munger has been the loudest advocate of this model, and the line that stuck with me is "All I want to know is where I'm going to die so I'll never go there." It sounds morbid but it's the cleanest summary of why inversion works.
Most planning starts with "how do we succeed?" That's a useful question but it has a problem: there are usually many possible paths to success and you have to choose between them with limited information. Inversion turns it around. "How would we fail?" usually has fewer answers and they're often more obvious. Avoiding the failure modes leaves you on a much narrower path, which is easier to walk down.
Three places this is unusually useful:
Strategy. "How do we beat the incumbent?" has a hundred answers, most of them wrong. "What would make us lose?" usually has 3-4 answers (run out of cash, miss the technology shift, get crushed on price, fail to attract talent). Plan around those four and most of the strategy becomes obvious.
Hiring. "Who's a great candidate?" is wide open. "What kind of person would be a disaster?" usually has a clear answer (dishonest, defensive, unwilling to learn, low energy). If you can rule out disaster, you usually end up with a strong hire.
Personal decisions. "How do I have a good career?" is impossibly broad. "What would make me miserable for 10 years?" is much sharper. Most people's career advice would improve if it focused on the second question.
The reason inversion works is that the world has more ways to go wrong than to go right. Avoiding the obvious failure modes gets you most of the way there. Optimising for excellence on top of that is the bonus round.
A small caveat: inversion is great for risk reduction. It's not the right tool for ambition. If you're trying to do something that's never been done, "how would I fail?" doesn't get you all the way there. You need a positive thesis for what you're trying to build, then inversion as the safety check.
Examples in the wild
Amazon's leadership reportedly writes 'press releases from the future' before launching anything. They write the failure version too, asking 'what does the press release for the failed launch look like?' The exercise often kills bad ideas before they get budget.
Howard Marks (Oaktree) built a career on inversion: focus first on what could go wrong, not on the upside. His memos are essentially long inversion exercises. Oaktree's distressed-debt fund returns prove the approach works.
A common piece of marriage advice: don't ask 'what makes a great relationship?', ask 'what would slowly poison this relationship over 10 years?' The list usually points to contempt, secrets, neglect, and resentment. Avoid those four and the rest tends to work out.
Inversion is one of the mental models we apply through real cases inside the Pareto MBA — a part-time program for professionals who want to think clearly about business.