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Work and Think Backwards

22 May 2023

TL;DR: Find the goal, work backwards, research, and execute.

It's embarassing to admit how many times I've messed up in my life. I tend to build a "plan", execute it, only to then understand that I was fundamentally wrong. From accidentally deleting my entire blog that was on its rise, to being catastrophically wrong about my choice of education.

After a lot of mistakes, we tend to get fed up with ourselves. I began to get sick of myself more and more often. I'm talking about 2016-2018 (on education) and a bit more during 2021-2022 (on business).

So I started becoming scared of making mistakes. That led to me not making any decision at all, which was way-way worse.

For a couple of weeks I was in a state of limbo. I was scared of doing anything serious, but I was also sick of not making serious progress. Then I went on a 24-hour learning. I specifically went on to learn about managerial principles.

I had no idea that I would learn something that would change my life. The logic is very simple, and profound. I do not know what it's actually called, but I call it "backward-working".

The idea is to start from the end. What is the end goal? What is the aim? After visualizing the end goal, you start working backwards. What is the last step before the end goal? What is the step before that? And so on.

It's great when I say it, but it's really frustrating when implemented. You start to see everything in bland grey. You think "What? This is not a great projection" when calculating EBITDA growth rate "that is sane", for example.

But it never fails me to think this way. Apparently, by thinking this way, you lift the veil of "what is possible" and stop self-questioning every day, which was torture if your job is to make business decisions that often self-sabotages.

Let's take an example: I am trying to grow my $100k ARR to $1M ARR. How long will it take, how much will it cost, and what will I need to do?

The first variable should be calculated first. Time. How long will it take? Seriously think and think. If the annual average growth rate is 30% across my industry, is it even "sane" to think the growth will exceed 1000%? Not a rhetorical question, but a real question.

If we follow the 30% growth rate, it will take around 30 years. And for the companies growing at 30% ARR, what did they do? Figure out all the things they do to maintain a relatively stable growth.

Can you handle and bear that burden? If so, now onto the next step: speeding up. What do you do to tenfold the improvement to reduce timeframe from 30 years to 3?

Do you do 10x your personal effort? Spend 10x the marketing budget? Scale production by 10x? 3x your price? And no, you can't go with "I'll go with everything and see which one sticks." You have to choose one.

After you choose one (let's say you increase marketing budget tenfold), lay them all on a spreadsheet. Write the "normal" spending and the "10x" spending. Calculate the difference. Is it worth it? Is the risk manageable? Can you halt marketing when things go south? What are all your risks?

After you've done all that, you will have a clear picture of what you have to deal with, to get what you want. The problem is, you will face even more issues. Clear logic does not grant you a red carpet.

But this way, I minimize risk, set a better sight on expectations, and have a clear picture of what I have to do. I now have the luxury to tune out of the incredibly loud noise of the world, and focus on what I have to do.