You Can Never Outplay Someone Who Masters Reverse Thinking

In 1995, Charlie Munger said during his speech at Harvard Law School: “When I was suffering from low self-esteem due to poverty, three habits changed me.”

One of them was: “Invert, always invert.”

Whether in speeches, interviews, or autobiographies, this phrase has been repeatedly mentioned by Munger.

What does this mean? Let me share a few stories first.

01

In the late 19th century, a British businessman planned to establish a wildlife park on the African savanna.

To better showcase the wild nature of animals, the biggest challenge was how to build cages that were larger and more secure.

The businessman consulted many experts and construction companies, but reached this conclusion:

Unless the cages were built so large that their boundaries couldn’t be seen, the zoo wouldn’t reflect the wild and natural characteristics, but the required cost would far exceed the budget.

At this time, an unknown young man suggested: “Why not reverse the positions of humans and animals?”

He then promised to undertake this project at an extremely low price.

The businessman smiled contemptuously after hearing this, thinking the young man was being unrealistic, and ignored him.

Later, the businessman continued investing in cage construction until he was on the verge of bankruptcy and had to give up.

However, the young man found investors and designed a special sightseeing vehicle that released animals from cages and put humans in cages instead.

With this sightseeing vehicle, he established the largest, most cost-effective, and wildest private zoo of that time, making enormous profits. He was Carl Hagenbeck, the legendary British businessman.

02

In 1853, San Francisco was swept by a gold rush fever.

Suddenly, workers threw down their tools, sailors abandoned their ships… even missionaries left their pulpits, all rushing toward the gold mine source.

A young man also came to San Francisco, fantasizing about getting rich through gold mining.

However, there were simply too many gold prospectors. Even in peripheral areas, there were dense crowds of people, and he couldn’t find any gold for several consecutive days.

The young man then thought: I’m prospecting for gold to make money, but gold mining is too competitive now, with prospectors everywhere. Why not change direction and do business with the gold prospectors instead?

He noticed that gold mining work required long periods of crouching by the shore, and people’s clothes were often torn, causing great suffering.

So he purchased a batch of sturdy denim and canvas, made them into specialized gold mining work clothes, and made a fortune.

This young man was Levi Strauss, who made his fortune from the gold rush and built the Levi’s jeans commercial empire.

03

In the 1960s, 90% of American families had televisions, making movie theater business decline.

Most movie theaters’ profit points were no longer movie tickets, but profits from selling popcorn and beverages.

David Wallenstein was an executive at a chain theater company, worrying daily about this marginal industry.

To increase the sales of profit items, he tried many strategies, such as: matinee specials, buy-one-get-one-free offers, etc., but with minimal effect.

One day he suddenly thought: Could the problem not be about price, but about environment?

In public places, few people would want others to see them eating continuously, not to mention the noise from rustling packaging bags.

So Wallenstein changed his strategy, transforming the question “how to increase popcorn sales” into “how to make it convenient for customers to eat.”

He first changed popcorn from bags to buckets, then dimmed the lighting inside the theater.

With these changes, the sales of profit items indeed continued to grow.

Wallenstein’s theater also survived that difficult period.

04

In the first story, Carl Hagenbeck put humans in cages and let animals roam in the wilderness.

In the second story, Levi Strauss changed from making money through gold mining to making money from gold miners.

In the third story, David Wallenstein replaced the conventional price-reduction thinking with the idea of creating an environment.

They all gained enormous benefits from this, demonstrating the powerful leverage of thinking.

When the main road is congested, it’s better to return to the starting point, find alternative paths, and break through via side roads.

This is the concept proposed by 19th-century mathematician Carl Jacobi: reverse thinking.

This is also why Munger often says: “Invert, always invert.”

05

“Reverse thinking” was originally a mathematical concept, but it has gained followers among wealthy individuals like Charlie Munger and Elon Musk.

Musk has also proposed that 99% of people are forward thinkers, and only reverse thinking can make you stand out and be different.

When encountering problems, instead of rushing to respond, cast your eyes on the overall situation and think both positively and negatively to find the best solution.

However, most of us in reality are like that businessman who only knew how to reinforce cages, stubbornly wrestling with immediate problems, hitting our heads bloody but refusing to take a different path.

This is typical linear thinking.

There’s a line in “The Genius on the Left, the Madman on the Right”: “If thinking is a wall, the world is on the other side of the wall.”

This world never has dead ends; what blocks you is only your rigid thinking.

When you encounter problems and walk into a dead end, why not turn around? You might find yourself in a place where “the willows are dark and the flowers are bright.”

How to develop “reverse thinking”? Here are two suggestions:

1. Treat the Result as the Starting Point

Experience is a double-edged sword. It makes us more efficient in handling problems, but it can also trap us in thinking patterns.

Tencent Vice President Qi Xiaohu, when working at Google years ago, was responsible for improving ad conversion rates.

At that time, China’s conversion rate was very low. He and his colleagues tried methods like enlarging ad fonts and changing background colors to solve this problem, but none were effective.

Just when the entire department was at a loss, Qi Xiaohu began to ponder: How would users use it?

He started imitating user habits and discovered: Because many websites often placed dense advertisements at the top, Chinese users would often skip the top section when opening web pages and browse directly below.

Google’s ad display position happened to be at the very top.

So at Qi Xiaohu’s suggestion, the company moved the ads to the bottom, and soon the conversion rate improved.

With his outstanding thinking ability, Qi Xiaohu gained his supervisor’s appreciation and was quickly promoted to manager.

As Meadows said:

When looking at problems, please spend a little more time standing in an advantageous position that allows you to have a commanding view and see the overall situation, rather than being limited to the specific problem that initially attracted you.

Trace back to the source, focus on the overall situation, treat the result as the starting point, find the key nodes of the problem, and you can achieve victory with one strike.

2. Don’t Let Your Hands and Feet Move Before Your Brain

We habitually assume that every problem corresponds to a standard answer.

So when encountering problems, we always act immediately without thinking, rushing to solve the problem.

This linear thinking will trap you in a cage, exhausting you with responses, always in a passive position.

But reverse thinking tells us that sometimes the problem itself is the key.

There’s a story in “This is Human Nature.”

Hassan lent 2,000 yuan to a businessman but lost the IOU.

As the repayment date approached, Hassan was extremely anxious, as IOUs were not legally recognized at that time without documentation.

His friend Nasreddin gave Hassan an idea: write to the businessman urging him to repay the 2,500 yuan he owed as soon as possible.

Hassan was puzzled: Having lost the IOU, it would be difficult to get the businessman to repay 2,000 yuan, so how could he ask for 2,500 yuan?

But Hassan did as suggested.

Soon he received a reply from the businessman: “I borrowed 2,000 yuan from you, not 2,500 yuan. I’ll repay you when the time comes.”

Finally, Hassan successfully recovered the debt based on this letter.

When encountering situations, don’t fall into reactive actions, but ask yourself more about the ultimate purpose.

As writer Jin Weichun said: “The answers to all problems can only be found at higher dimensions.”

Charlie Munger said: “Think forward, but also learn to look backward.”

Truly excellent people not only know how to work hard with their heads down, but also understand how to look up and see the road ahead.

If you’re currently feeling stuck in moving forward, why not try reverse thinking and try a different track?