There are two modalities we can use to launch, grow or improve a business. Let’s call Mode A “inventive” and Mode B “derivative”.

In Mode A we pursue bold, risky ideas. We have no idea whether they'll take off, so we work from the basis of affordable loss, not ROI. We tinker and experiment, keep what works and kill what doesn’t. It's an inefficient, exploratory process.

By contrast, Mode B is efficient and exploitative. We strategize, analyze, test, refine, calculate returns and optimize.

Those who favor Mode B — the 99% — think Mode A is a wasteful aberration. It seems stupid. Yet, Mode A is essential to the world’s greatest entrepreneurs and leaders, who cycle through both approaches. Why? Because the payoffs from Mode A can be massive, whereas the returns from Mode B are usually incremental.

Amazon’s Fire phone failed, yet Echo — a Mode A product built on the same tech — became a massive hit.

IAC (the owners of match) put $6m into a startup incubator. Everything failed except Tinder, which is worth billions in it’s own right — a result they’d never achieve from Mode B improvements to match.

Ironically Mode B thinkers take the greatest risks of all. Their solutions are too logical and predictable. A single Mode A hit from a rival can sink their whole business.

See this post on LinkedIn