9 May, 2015 0 No tags 0

Designing a predictive type is a waste of time, an incredible source of frustration, wasted resources, and finally, suicide. A random fact supports better opportunist strategies. Strategies that are prepared to explore and exploit the opportunities that will provide the environment.

The best strategy is to create a system/ working model that allows to explore opportunities as they arise, making general plans. This implies establish general guidelines and rely on the judgment of those who have to execute them.  And that’s scary, because it means letting go of control to manage under the premise of trust.

Give space for decision making to the people who are on the ground. It is they who can best decide on tactical issues. They are the ones that can detect:

  • Opportunities and options that can mean for us new markets and unmet needs.
  • Tastes, fashions, and needs that change daily. The classic way to plan is unable to discover and manage these daily needs.
  • The resources that accounts (limitations) to address these opportunities.

The basis of the plan should have the two perspectives, the cost (which is what you always teach) and income:

  • They need to generate minimum margins for the project to go on foot. To cover costs, and how long we have to get it.
  • With current products that we can get, and contribution margins generated.

If we change the perspective, it will allow us to prove:

  • New products / services that we think may work.
  • New communication actions and / or promotion.
  • New forms of management associated with the above.
  • In short, new ways of interacting with the environment around us.

This approach will allow us to:

  • Explore new markets that allow us to stay in the game when current markets have disappeared.
  • Having a less suicidal vision for the future. It will let us to build each year on a conscious and consistent minimum base.
  • Browse = invest a small amount of resources and money to develop a battery of tests to prove that a hypothesis is valid.

Develop predictive systems is to assume that the theoretical economic models (and therefore strategies based on them) work in reality. And they do. They are models with manual an imaginary, abstract and free world of friction and the interrelationships of the real world (the unpredictable texture of reality). As they do not, the financial rather than changing their models or accepting these limits have the idea that the world has to adapt to its conclusions.

Economic thought is currently delusional. To sustain this delirium, it has been developed a narrative system that makes the core belief not altered by actual experience. This steadily developing stories as narrative fallacies that always clear retrospective, fail to explain what happened.

The old manual says: make predictive plans. Always projected growth, this ensures you get a budget steering committee and push people to achieve the objectives. If then it does not, we’ll know to explain convincingly. For that we are masters of retrospective narrative.

The new way of doing things says: Plan in order to find that minimum survival that will have you  cover in case of zombie apocalypse, and from that point project development of your project based on a consciously defined and executed system test form / mistake. This ensures that if the plans (and forecasts) do not come, we will be able to try again next year. We will be able to stay in the game while waiting for better opportunities to explore and exploit, some allow us to hit. The approach is summarized: Restrict and assume potential losses and risks for small maximum possible gains.

If we like the old manual it says: we will project a future we do not know about in the future growth illusion that only exists on paper.  And most suicide: we will project and commit investments that can not cover on this illusion, nonexistent in the real world. “This year will grow 10% more ….” You do not ever ask why, because many times the answer is. “Because it has always done it” Or something more fun: “Because I say so”


2 May, 2015 0 No tags 0

As I said before: The carrying capacity of a species is the maximum population size that the ecosystem can support without the species that inhabits the system to be damage.

The load capacity of a market would be the maximum number of companies (product offering) that can compete in that market, without having to start to disappear.

And really, the ability to load a new market has no way to be predicted. Surely in mature markets, with mature products, with many years of development, the same situation, if you can reach any reliable estimate, would be a miracle. For new products in new markets, forget it, do not waste time trying to figure this out. Use test / fail.


25 April, 2015 0 No tags 0

It is a reproduction strategy identified in some natural environments valid for stable environments with a  low rate of natural ecosystems disorder. Typical large bodies, long half-life and late reproductive age. Species are based balance and adjust their population dynamics in populations around the K value or capacity (the maximum number of individuals that the ecosystem can support without being damaged species).


Stable systems generate highly developed species, which in turn generate this strategy with great success. Large mammals use this strategy: they have few offspring, allowing them to invest heavily in their care and development. This maximizes the chances of success of the next generation. We as a species, are the culmination of the development of this strategy.

The problem with this strategy is that survival depends very stable environments, which makes the species that inhabit them are very sensitive (fragile) to unexpected changes in the environment. A change in market trend, new technology, fashion, or a legislative change, can end up with a whole market, and the companies operating in it. A specialized liked the stability, and therefore does not like changes.

A further specialization increased fragility. Specialization is an advantage only to defend niches (or survive in natural areas) very small. The turntable needle manufacturers and bearded know well what I mean.

To summarize: The population of R-dependent species that reproduce quickly, as quickly as added chance of survival by creating or identifying opportunities. The type K depend on the carrying capacity of the habitat, i.e. is the maximum population size that the ecosystem can support without the species that inhabit it from damage, depend on the ability of the market to absorb the supply and of its competitors.


18 April, 2015 0 No tags 0

It is a reproduction strategy (r) identified in natural ecosystems valid to changing environments with a high degree of disorder. Typical in organisms whose habitat is unstable.

The organisms that colonize these ecosystems are speies adapted to colonize virgin or unstable environments. They are opportunistic species, that, due to their nature, use all their energy in a continuous population growth. Have a high reproduction rate, producing a large number of offspring. By not provide parental care, the mortality rate is huge. They are usually small species, with huge exposure to survival (generate thousands / millions of seeds / eggs or use the speed of playback, such as rodents.) Know that most fail, but keep the few surviving species . In bad times, suffer large declines in population.

A new segment or niche market is an ecosystem to colonize where new companies will come to develop products and services to try to cover this (alleged) demand. At the beginning only few companies arrived, exploring this new market requires a hypothetical based on the error test strategy, with fast cycle times, to check what works and what is that  and what is not. Only this will allow them to adjust products and services to real demand and not a demand invented in an Excel.

As the disclosure of the market becomes lucrarive, the entry of new competitors will be fierce. Some will fall and others will survive. These small species will become a food source for species considered K-strategists (next post). Some of the small businesses that survive because they detected a new niche market will be absorbed or bought by larger ones.

Small businesses that survive, will be under worse pressure of the larger ones, which ultimately end up buying the (engulfing) or driving of that segment (ecosystem). It is a dynamic concentration, all for the winner. Finally if the market (ecosystem) changes, so will lose big if they can not adjust in time.


11 April, 2015 0 No tags 0

The free market system survives because it allows people to take the initiative they want. The system “knows” that most do not survive, much less succeed, but those who survive will create work and generate new opportunities in a system that is self-replication.

The system is constantly creating new sectors, subsectors, markets, segments and sub-segments, and initiatives that see opportunities in them, and try to do business on the ground of current needs and tastes that change on a daily basis. The system is potential therefore fractal: by any scale replicates itself *. This means that the free market system is made up of small market segments with the same behavior and limitations. Each market segment is in itself a small market system, which when viewed together, form the mainframe market.

The bet today may be tomorrow’s success. Some of these sectors will be predominant in the future, which will allow companies that are positioned there, more likely to succeed than those in mature or declining industries.

Today’s success is the mature market of tomorrow. Inevitably the successes will dilute over time, as new needs, fashions and lifestyles are generated.

Note: Once a big market disappears, can be very profitable niche if you know how to handle. A current example would be stereos tube and needle´s turntables manufacturers.

The new sectors / segments are always chaotic, wild and unstable (lack of regulation, law, business experience, mountebanks selling their magnificent projects, competitors entering sack …) is in these areas where understanding how a R Strategy works, can help us survive (coming soon).

The sectors / segments mature, more stable, more regulated and better adjusted to the supply and demand. In these sectors is where understanding how a K Strategy can be appropriate (coming soon) works.

* Of course the reality around you (the universe in which you live) has a fractal nature.

Note: r and K are two strategies of survival identified in different ecosystems of our planet. All the different ecosysems, are at the same time part of the system you live in.