PREDICTIONS – 10 Years Later - Santa Fe Institute

2. NEEDLES IN A HAYSTACK
is the one who does something new and different, especially if it turns
out later that this new direction was a hidden gold mine.
Successful businesspersons use their instincts to “smell out” profitable
directions. Instead of systematic methodologies, they use their
intuition—”my tummy tells me”. Those who are gifted that way succeed
more often than not. Those who turn to educational institutions for their
competitive advantage have been sparingly rewarded. The know-how
transmitted through a masters in business administration has rarely
proved an effective weapon against a gifted tummy. Unlike renowned
professionals in the arts and the sciences, successful entrepreneurs have
not usually given much credit to their university professors. Most often
they make references to some popular, folkloric, street-wise education
gained outside schools or to some genetic heritage.
Instinctive performance can and has gone a long way, particularly
during prosperous times and conditions that permit one to “dance” one’s
way through good business decisions. The difficulties show up during
economic recessions, when markets begin saturating, competition becomes
cutthroat, and the name of the game changes from prosperity to
survival. As in the performances of musicians or acrobats, heavy psychological
stress results in insecurity, panic, and mistakes. William Tell
may have been the rare exception, daring to take aim at the apple on his
son’s head. Most good archers would have hands shaking too much under
the stress of what was at stake.
Stress was quite evident among the executives who have said to me,
“We had no difficulty positioning our products back when business was
booming, but now that it has become of crucial importance, how can we
be sure we are not making a mistake?” They were simply expressing
their need for systematic guidelines in order to continue doing what they
had been doing, apparently by instinct. Are there such guidelines? I believe
there are. By quantifying the learning from past successful
decisions, marketing executives can devise a means for positioning future
products.
A Real Case
The performance of a computer is gauged by how many millions of instructions
it can execute per second (MIPS.) A figure of merit then
becomes the ratio performance/price expressed in MIPS/$. 2 I studied
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