Inversion as a diagnostic tool

Charlie Munger made inversion famous. The idea is simple: instead of asking how to achieve a goal, ask how to guarantee failure. Then avoid those things.

I use a version of this in almost every diagnostic conversation I have with a founder. Not as a framework — I am not interested in frameworks for their own sake — but as a way of surfacing what is actually true versus what the founder wants to be true.

Here is how it works in practice. A founder tells me they want to grow their sales team from three to eight people in the next six months. I do not ask how they plan to do it. I ask: what would have to be true for this to be a disaster?

The answers are usually immediate and specific. The hiring process is slow and they tend to hire people who are good in interviews but not in the field. The onboarding is informal and depends on the top performer who is already stretched. The incentive structure rewards activity over outcomes. The founder is still closing most of the deals and has not documented what they actually do.

None of these things came up when I asked how they planned to grow. They came up immediately when I asked what would make it fail.

Inversion does not give you the answer. It gives you the real question. And the real question is almost always more useful than the plan.