#21/25: Copy Hackers: Book 1 to 4

Initially, I bought copy hackers at its released. Sometimes I looked into it and thought how cool it was but never worked through it. Now its finally time!

Book 1: Where Stellar Messages Come From

  • You need a clear gasp of your message before you begin writing
  • General principles
  • Some visitors want to read a lot, others don’t
  • Provide social proof
  • Support concepts with videos
  • Try to prove your claims
  • Clarity above cleverness
  • Your strategy don’t have to be set in stone. Update it if you get new useful information about your customers.

Your massage can be divided into

  • What you say
  • How you say it

It’s not about crafting beautiful sentences, it’s about writing copy that sells.

Every message needs to be a message your ideal visitors want to see, i.e. you have to do research first.

  1. What’s your target market?
    • Ask your email subscribers
    • Ask people in the streets
    • Get involved in forums
    • If you got tons of money – buy reports
    • Use CI tools like compete
    • Get demographic details
    • Learn about their behavior + language
  2. Create actionable segments – high likelihood of visits + compensation
  3. What are your customer’s pain points?
    • Check your competitors’ sites
    • What phrases are your audience searching?
    • Check your own traffic: PPC, organic, etc.
    • Monitor social media for your customer segment
    • Ask your customer
  4. What is your customer’s primary motivation?
  5. Why are people coming to your site?
    • Remind the visitors that you solve their problem
    • Get them to nodding along with what you’re saying
    • Confirm their intent
    • CTA

If you try to appeal to every visitor, you will end up appeal to nobody.


Product positioning document

  • Features: all features you have
  • Unique to us: check this if you are the only one that offers that feature, otherwise write competitors name here
  • Customer Pain solved: see previous customer research
  • Benefits: write at least one benefit (see below) per feature, if you have none – erase the line
  • Priority


Benefit – value your customer derives from your product

Benefits don’t have to be liked to features; things like design and corporate values can also play a role

  • You don’t have to write everything – use images and video!
  • Positive or negative benefits?
  • Keyword research
  • Brainstorm and collect keywords
  • Use Adwords to refine your keywords
  • Use them in your copy
  • Do a small content audit with your keywords
  • Content Audit
  • Understanding existing messages
  • Value proposition / headline
  • Top message
  • CTA – language, design, position
  • Additional elements, like social proof
  • Stuff that wows you
  • Build a logical ranking for your messages.


  • Start with writing a lot and then cut it back
  • You don’t need to explain every statement you write
  • Keep your offers simple
  • Write believable copy
  • People want solutions that work
  • Use news to your advantage
  • Positioning is important
  • Writing is hard but hang on

Book 2: Formatting & the Essential of Web Writing

Format your copy to be scanned


  • Capitalize Important Words
  • Trade periods and commas for dashes in long sentences
  • Use 1, 2, 3 instead of one, two, three
  • Replace and with &
  • Make the font large enough
  • Use periods. More often than normal.
  • Group text chunks together
  • Bold – only bold stuff that matters
  • Bullet list – use it for things that are strongly related; put the 2nd/3th important point at the bottom (people think it’s your least important one)
  • Buttons – don’t limit yourself to traditional buttons; use individual images; two lines of text, etc.
  • Coloring – use it sparkly
  • Arrows – use them to point to important things, e.g. CTAs
  • Font size – use large enough font size, it’s easier to read
  • Highlighting – special attention
  • Icons & Images – special attention
  • Line Spacing – more for smaller font sizes
  • Paragraphs – should be under 4 lines
  • Links – should look like links
  • Typography – cool types get noticed
  • Web-Writing details
  • Write copy with substance otherwise don’t write it at all
  • Use 3 groups to describe things
  • Get rid of intro words, e.g. “Little did they know
  • Start with a verb
  • Keep your sentences / lists short
  • Address one idea per chunk
  • Write meaningful headlines
  • Use elements with strong colors
  • Expose critical information
  • Provide proof
  • Use customer feedback as copy
  • Ask questions
  • Use keywords
  • Be concrete
  • Write in your attitude – if you’re funny, write funny
  • Copy kids’ books – big font, clear language, small chunks of text


  • Keep quiet about what you are doing
  • Focus on you instead your customer
  • Overuse one type of formatting
  • “Welcome to X”
  • Write generally
  • Use big words
  • Making it hard for the user
  • Providing too many different things / widgets
  • Using generic stock photos
  • Relying on best practices
  • Don’t test
  • Don’t proofread
  • Don’t put unnecessary limitations on yourself


  • Your headline is the most important copy – if you test copy, test your headline
  • Images can be better than text
  • Copy is important on the web
  • Write for a sixth-grader
  • Use active voice

Book 3: Headlines, Subheads & Value Propositions

The purpose of your headline is to keep the visitor on the site

Headlines have to

  • Match visitor expectations
  • Intrigue the customer
  • Communicate the page goal
  • Appeal to the customer

The subhead should hold their attention, expand on the headline and attract them to continue down the page

You should write unique headlines for each page and follow the characteristics above. For example, “How it Works” page’s headline shouldn’t just be “How it Works”.

Tips for great headlines

  • Make an almost(!) unbelievable promise – which you can prove
  • Use time limit in which your claim will be realized
  • Reject the most common objection
  • Use unexpected elements, e.g. analogies, references, questions, words
  • Appeal to visceral human motivations – greed, lust, pride, power, revenge
  • Use trigger words, like secret, worth, instantly, feel, #1


How to choose one? Imagine three prospects reading the headlines – which one will make them completely excited?

Formulas for headlines

  • Desirable thing + time limit + consequence if not delivered, e.g. “Your dream house blueprints in 7 days or they’re free”
  • “Now” + desirable thing + “even if”
  • Use numbers as social proof, e.g. “59,000 people already …”
  • Use numbers in list, e.g. “X ways to … “
  • Use “why”, “when” or “how”
  • The + adj, adj + “way to …”

Don’t overdo headlines – always answer: What can a person do and what will be their benefit from doing that?


Possible tasks of the supporting line

  • Expand on benefit / feature
  • Introduce a new benefit
  • Clarify the claim on your headline
  • Subheads in the text
  • Transition from one point to another
  • build credibility and prove claims
  • short, clear and benefit-focused


  • Test every headline
  • Target pain
  • Try to be bold
  • Avoid . and ! at the end
  • Be realistic


Value Proposition / Unique benefit statement

What is unique and important about your solution?

For startup / small business put the VP / UBS on your homepage and blog respectively the page that get the most traffic.


  • Highlights the benefits for your best prospects
  • Is Unique
  • Is a single clear statement
  • Is memorable

Also remember: your message must be honest and believable

The VP helps your team also focus on the most important things

Book 4: Buttons & Click-Worthy Calls to Action

Every page should have at least one clear CTA.

Primary CTA should be a button

Secondary CTA button or text link


  • Imperative
  • Use articles or prepositions
  • Be specific
  • Show benefits if useful

Make it easy to do the CTA, i.e. position it on the top, bottom and somewhere between (if the text is long).

What will be the headline on the following site to the CTA?

Things to put in multilines buttons

  • Discounts
  • End-dates
  • Length of time to complete action
  • Shipping info

Sales Objections

I don’t really need this

I don’t have the authority

I don’t want to be sold to

I have more important things to do

My existing solution is good enough

Your company isn’t capable / credible

Your price is too high

I can’t convince others of my decision

Consumer Anxiety

Appearance should match your visitor’s visual biases – “This site looks like a site for X”

Loss aversion

Click Triggers

convince people to click the nearest button

simple ones like “free returns”, “save $60”, “top-rated”, etc.

aggressive ones like “Absolutely Zero Risk”, “We always ship via FedEx overnight”, etc.


Make them explicit and with instructions

CTA can be videos / demos

Also inform your visitors, what to do next

There’s a new book released called Writing Long-Firm Sales Pages with about 250 pages it is longer as all the previous books together but also quite expensive (about $50).

Originally, I bought the first 4 books at launch for about $20 and I think that’s a good price. At the moment, all 5 books cost about $60 together – and because I haven’t read the 5th one, I can’t say if it’s a good deal. However, if you see one of the sales of this series for maybe $20-30, go get it. It’s an excellent series, lots of examples and no fluff, which I love. Recommendation

#14/25: Brainfluence


  • Try to minimize pain
    • Bundling helps, e.g. car sales
    • Less transactions, e.g. flat rates
    • Don’t show money, e.g. menu 12 instead of $12
  • Higher price paid can lead to higher satisfaction, esp. for premium products
  • $499 works better than $500 because of precision
    • $500 could be $499 to $599
    • $499 could be $499.00 to $499.99
  • Don’t offer too many choices
    • Help the customer choose
    • Recommendation engines, sorting, reviews
    • Avoid similar choices
  • Familiary breeds likability
    • Repeat your offerings in a consistent way
  • Customers can sense passion – include this in your employee search process
  • Compare people not products
  • Pictures of babies get attention
  • People will look at where the person in a picture is looking
  • A model’s eyes that are visible and dilated are more attractive to men
  • Be specific – include photos of actual people
  • Loyality program works because of points
    • Illusion of progress works great
  • Tell people what to think of you
    • “You can trust us to do the job for you”
    • Trust score jumped up 33%
    • People thought company is more caring, has a higher quality and a fairer price
  • Smile to people – in person & on the phone
  • Start with a small favor first then it’s easier to get a bigger one done
  • Stories work
  • People love their own name and birth date
  • Expectation will shape the real experience
  • A tiny positive surprise can improve one’s outlook
  • Don’t argue with a customer about who’s right – offer a sincere apology and offer solutions
  • Use scarcity
  • Avoid the lower right corner in screen designs


Scents can affect behavior and consumer perceptions. One experiment showed that nightclub patrons danced longer when the venue was scented with orange, peppermint, and seawater. […]
A test in a casino found that people gambled 45 percent more money in a slot machine when a pleasant scent was introduced into the area.

To beat these ingrained consumer perceptions, Nestle first launched upscale coffee shops in major cities for the primary purpose of creating the high-intensity sensory experience people expect […]
The second thing they did was modify the home espresso-making system to release more aroma. This is brilliant and, I can testify, often overlooked strategy.

A classical sound track caused a 233 percent jump in bank goer’s perception of the bank as “inspiring”, compared with their perception when no music was playing.

Researchers found that scent enhances a product’s distinctiveness. They had subjects evaluate pencils that were unscented, had a common scent (pine), or had an uncommon scent (tea tree). They found that the subjects remembered the scented pencils to a much higher degree than the unscented pencils, and this differential increased over time.

The researchers found that guys studying bikini-clad girls make worse decisions when presented with a monetary offer.
To begin with, this effect seems to be a short-term one that would be most effective at the point of purchase. The ideal selling situation, no doubt, would be to have bikini-clad babe selling to the guys in person.

Researchers at Northwestern University and the University of California, Berkeley, led by Hal Ersner-Hershfield found that having subjects visualize historical alternatives made them more patriotic. Similarly, reflecting on the shaky origins of a company made its employees more positive about the firm.
But, if you avoid the ham-fisted approach and are subtle in introducing alternative scenarios, you will produce the desired positive boost in loyalty and emotion without alienating the other person.

Assuming your product or service is purchased frequently enough, offer your customers a loyalty program. They do work. In addition, keep your customers engaged by letting them monitor their progress and, if possible, reminding them about the program if they haven’t bought in a while.
Beyond the loyalty effect, merely exposing customers to point values at the time of purchase can amplify the effectiveness of the loyalty program. Want to encourage sampling of a new produce or drive upgrades? Try something along the lines of, “1000 extra Rewards Points with every purchase”. Note that bigger numbers may seem more important to consumers, so a little pint inflation could be a good thing.

In Blink, Malcom Galdwell notes that most people who suffer an injury due to doctor negligence don’t use. Based on extensive interviews of injured patients, it turns out that patients who sue have often felt like they were rushed, ignored, or otherwise treated poorly by their physician.
This belief, in turn, is based on the quantity of time spent and the quality of that interactions.

In marketing situations you can still stay honest by using targeted pitches. For example, “As an owner of a Platinum Class suit, you showed you are an individual who can recognize sophisticated styling and superb quality …”

Those seated in hard chairs judged their negotiating partner to be less emotional. Most significantly, the “buyers” in soft chairs increased their offer by nearly 40 percent more than those in hard chairs. In short, not only did a hard chair change the buyers’ perception of their negotiating partners, it made them harder bargainers.

If you want to convey a positive message, use real numbers, not percentages.
Good: 90 percent of our customers rate our services as “excellent”
Better: 9 out of 10 customers rate our service as “excellent”

It turns out that the way companies respond to bad online reviews makes a difference too. A Harris survey showed that 18 percent of those who posted a negative review of the merchant and received a reply ultimately became loyal customers and bought more.
In addition, nearly 70 percent of those consumers receiving replies reversed the negative content either by deleting the bad review or posting a second positive one.

Peck and Shu found that touching an object immediately improved both the level of perceived ownership and positive emotion.

It turns out that reciprocity strategy can work better; give visitors the info they want and then ask for their information. Italian researchers found that twice as many visitors gave up their contact data if they were able to access the information first.

Peck and Shu concluded, “Online retailers who can encourage ownership imagery among potential buyers may be able to increase both perceived ownership and valuation. In the no-touch environment, ownership imagery was powerful in increasing both the feeling of ownership and the amount a consumer was willing to pay”

Brainfluence is such a great book, it’s nearly unbelievable. I would recommend this book to everyone who’s interested in marketing, customer service or just plain psychology. It’s a nice read, the chapters are short and backed by data. Awesome book & recommendation!

#13/25: The Halo Effect

The Halo Effect talks about business (research) fallacies. The book is extremely insightful and if you like to learn more about fallacies in business, this book is the right for you.

The book starts to talk about management failures and especially practicing core competencies. Often the definition of a core competence is rather fuzzy it isn’t clear where they begin and end. However, in retrospective it can be rather easily defined as “core competence is where success was” – this fallacy can easily lead to decisions which are more motivated by randomness than by action.

A rather interesting observation is that baseball managers, industry analyst, etc. often say that you need to be both: e.g. be innovate and be conservative – saying this is like saying nothing. It doesn’t matter. And it isn’t the only problem. People don’t like randomness – however, a lot of things are influenced by randomness. One prominent example are stock market movements.

Rosenzweig attributes success of companies, like Wal-Mart, in their scientific rigor which doesn’t longer depends on gut feeling and more on data. Wal-Mart was among the first retailers that studyed pattern in consumption and actually applied that knowledge to their operations. The same methodology is used by successful internet companies, like amazon or eBay.

There were some studies in the military where generals rated soldiers subjectively – often they looked if the men where handsome, had a good posture or polished their shoes nicely. However, these weren’t indicators for being a superior soldiers. It was just the Halo effect: thinking that being good in one thing means that you are great in an other (Thorndike). The same fallacy was told in Moneyball.

Once people — whether outside observers or participants — believe the outcome is good, they tend to make positive attributions about the decision process; and when they believe the outcome is poor, they tend to make negative attributes. Why? Because it’s hard to know in objective terms exactly what constitutes good communication or optimal cohesion or appropriate role clarity, so people tend to make attributions based on other data they believe are reliable.

  • Wide variety of behaviors can lead to good decisions => no “optimal” way
  • James Meindl (leadership scholar) found that there’s no satisfactory theory of effective leadership that is independent of performance
  • The Halo Effect is not inevitable => blind interviews, standardized tests
  • Often proxies instead of the real data – be careful
  • Validity only if you don’t try to measure performance directly
    • Don’t ask “Do you have good leadership?”
    • Or “Do you think this is a great place to work?”
  • Also: longitudinal Design – better data, but more time consuming

One recent study, by Benjamin Schneider and colleagues at the University of Maryland, used a longitudinal design to example the question of employee satisfaction and company performance to try to find out which one causes which. […] Financial performance, measured by return on assets and earnings per share, has a more powerful effect on employee satisfaction than the reverse.

  • Problem: single explanation for performance – assumption: no intercorrelation

Anita McGahan at Boston University and Michael Porter at HBS set out to determine how much of a business unit’s profits can be explained by the industry in which it competes, by the corporation it belongs to, and by the way it is managed. This last category, which they called “segment-specific effects,” covers just about everything we’ve talked about in this chapter: a company’s customer orientation, its culture, its human resource systems, social responsibility, and so forth. […] McGahan and Porter found that “segment-specific effects” explained about 32 percent of a business unit’s performance. The rest was due to industry effects or corporate effects or was simply unexplained.

  • Industry and strategy most important
  • Long-term out-performance is very unlikely

Delusion of Connecting the Winning Dots:
Peters and Waterman studied a sample made up entirely of outstanding companies. The scientific term for this is sample selection based on the dependent variable — that is, based on outcomes. It’s a classic error.

Foster and Kaplan wrote: “The last several decades we have celebrated big corporate survivors, praising their ‘excellence’, their longevity, their ability to last.” But companies that last longest usually aren’t the best performers. Enduring greatness is neither very likely, nor, when we find it, does it tend to be associated with high performance.

  • High profits decline thanks to imitation
  • Delusion of Absolute Performance: Company performance is always interdependent on other companies
  • Long-term planning doesn’t work. Flexible views are more successful
  • The Delusion of Organizational Physics: There’s a underlying theme in management
  • Tom Peters, Bobwaterman, Jim Collins and Jerry Porras are great storytellers
  • Assumption: There’s an underlying story / meaning in everything in business => Fallacy
  • “We have just to do X and we will be rich and famous”
  • Add together these three factors – uncertain customer demand, unpredictable competitors, and changing technology – and it becomes clear why strategic choice is inherently risky.

    Successful companies aren’t “just lucky” – high performance is not purely random – but good fortune does play a role, and sometimes a pivotal one.

    • Strategic choices are very important but risky
    • There is luck involved in everything
    • If the data is full of Halos, further analysis is futile
    • Long success is often based on selection after the fact
    • Strategy involves risk – there is no foolproof strategy
    • Chances play often greater roles than we like to think

    I utterly enjoyed The Halo Effect – it is full of business research and shows how it fails or can fail. The three most important lessons are probably:

    1. Avoid the halo effect
    2. Strategy is more important than operational excellence
    3. There is randomness

    It was a bit long but insightful. I would recommend the book to everybody who is interested in business research or is active in management or as a consultant. Recommendation!

#8/25: Megamistakes

Megamistakes was published in 1989 – so, it’s especially interesting to look at a book about forecasting which is over 20 years old. Most of this article will be quotes of the book. Enjoy!

The most prominent reason why technological forecasts have failed is that the people who made them have been seduced by technological wonder.

The forecasters who construct them are blinded by their emotions and lose perspective of commonsense economic considerations.

A key premise of forecasting is that a passionate focus on technology for its own sake spells disaster. No doubt, many of the same errors are being repeated today.

How much I love these three sentences. Year and year again we see some people praising some new technology to be the “next big thing”, “bigger than the internet” or whatever and a few years later nobody remembers about that technology.

As one expert noted: “We can build all kinds of mass-transit vehicles, but no one has yet found what’s going to make people want to get out of their cars and ride them”

A common technological trap. I thought for the most part of my life that technology can solve practically every problem. But if you look deeper, the problem is often psychological or cultural. Today, we see that lots of young people don’t necessarily need a car – forty years ago this was unthinkable.

Computer forecasts are exceptional in this regard. IT is one of very few industries where optimism was warranted.

This is really exceptional. Even the overoptimistic forecasts became true.

The method did not matter. Asking the right questions did. Nuclear ships had no effect on the industry. Lower-cost international competitors did.

This was a common theme in the last decades. Especially, in the US people thought about technology but neglected international developments.
Look at the flight industry. Flights didn’t really got cheaper because Boeing developed an innovate air plane. It got cheaper because of deregulation and lower barriers to entry.

It is good advice to be skeptical of any forecast that calls for a new age.

The lesson to be learned here is that although we read so much today about how things will change rapidly, the home of the future will probably look pretty much like the home of today

If you exclude computers then not so much has changed in the last 10 – 20 years. We pretty much life in the same houses, shower in the same shower, eat practically the same food (also people buy much more organic today). Cars haven’t really changed – the most change came through computers. Things like notebooks, smart phones, car navigation systems, etc.

In 1987 Tyzoon Tyebjee conducted some experiments on biases in new product forecasting. […] He found that the very act of participating in the new product planning process led to overly optimistic forecasts.

This is an interesting result for especially for technology startups, or more so for investors.

He [Nigel Calder] is particularly impressed with the performance of Barbara Wooten, a social scientist who made prediction in the 1964 study. She made “forecasts that seemed damp and depressing at the time.” In hindsight, however, they turned out to be remarkably accurate. Why? According to Calder, because she presumed “that the pattern of social life would not be remarkably different”

Later there’s more about demographic forecasting and it works pretty well.

There is absolutely no evidence that complicated mathematical models provide more accurate forecasts than much simpler models that incorporate intuitively pleasing rules of thumb. In growth market forecasting it seems less important whether the model is fancy or not than whether the model incorporates the right assumptions.

In the excellent book Forecasting (a newer version is freely available) they basically came to the same result. Often simple methods like exponential smoothing work better than highly complicated models.

In a 1985 article in Management Science, Everette Gardner and Ed McKenzie proposed a simple mathematical model that incorporates a “damped” trend. […] They and others, including myself, have tested their model in many different types of applications. Almost universally, it has been found to be more accurate.

And dampend trends work even better. You can read more about them int he same book as above for free: 7/4 Damped trend methods.

A central thesis of diffusion of innovation is that some initial group of customers purchase new products. They are called the innovators. […] After a while, a second group of customers, opinion leaders, enters the market. Rapid market growth ensues as many other consumers imitate the purchases of these respected members of society. […] Then growth slows, as nearly everyone is using the product.

The problem with using research arising out of the diffusion of innovations, the product life cycle, and market growth curves is that they ignore the fact that market growth is not guaranteed, or even likely.

Like the quote says the big problem is that the diffusion of innovation models only explains successful products, so it’s not of much use pre-success.

The Zeitgeist concept is used to explain the fact that inventions and discoveries tend to be made simultaneously by researchers working independently.

Consequently, the Zeitgeist means that inventions and discoveries are due less to the power of individual genius than to the spirit of the times.

The Zeitgeist also casts doubts on the merits of consensus forecasts. It implies that a consensus forecast is not difficult to obtain, but that the consensus may be more indicative of present beliefs than of actual future outcomes.

We’ve seen a lot of inventions happen simultaneously. Schnaars also notes that not only inventions are covered under the Zeitgeist concept but also forecasts. It’s interesting that each decade had its own Zeigeist and the forecasts mirrored it dramatically. Even Schnaars himself contributes to this by emphasizing the industrial strength of Japan and other non-US countries which was a big topic in the mid-late 80’s.
Here are some excerpts from Megamistakes:

Cars would also move into the jet age. All three American automakers spent heavily on turbine cars using jet technology. The transfer of technology from airplanes to autos failed to generate a growth market. It was an impractical idea.

All in a setting where children wanted to grow up to be astronauts rather than computer wizards. People were fascinated by space travel.

Imagine yourself in the late 1970s forecasting that energy prices would decline throughout the 1980s. For one, it never would have happened. Such a forecast would have been preposterous at the time. All the indicators of the day pointed to ever higher oil prices. Some even talked of the end of the petroleum age. Even if you had made the forecast, who would have believed it? It was inconsistent with the beliefs of the day.

The last two sentences are insightful. It’s hard to argue against the general belief. In science, there’s the observation that beliefs don’t die, but the people having them. It’s probably the same for normal people. In 10 or 20 years we will look back and saw some stupid belief we have today.

What to do?
Start with a simple price-performance analysis:

* What additional benefit does this product offer over existing entries?
* Will consumers have to, and be willing to, pay extra for it?
* Does the product offer a benefit over existing products that justifies a higher price?

This will filter out easily half of the promising technologies. In this book, Schnaars applies these three questions to a lot of different technologies, like moving side walks and video conferencing.

Predicting social trends is one of the most difficult forecasts to make. Social trends involve people, who, unlike physical quantities, do not behave according to physical laws.

In the permissive 1960s, for example, who would have predicated that a conservative President would be overwhelmingly elected in 1980? Radical college students in the 1960s saw a revolution in this country as a real possibility. In the 1980s, those same persons flocked to business schools and coveted highly paid careers in investment banking.

Demographic forecasts that sought to predict birthrates and other events that had not yet occurred often proved mistaken.

There are two different things here. Forecast of social trends and demographic forecasts. Social trends are extremely hard and probably more random than most of the things. Demographic forecasts, however, can be rather accurate if they people are actually born, yet.

For example, in 1960 Business Week analyzed census data and concluded: “During the next twenty years the number of Americans over 75 will increase to 9 million.” This forecast of the elderly segment of the population proved close to perfect. The 1980 Census counted 8.94 million persons over the age of seventy-five.

However, a problem is if you assume demographic and cultural forecasts behave identically.

Forecasts are particularly vulnerable when they assume that a growth market will result when a large group of consumers enters the primary age for heavy demand of a product category. Such forecasts assume that the younger group will follow the pattern set by its parents.

Like Elster said, either the young will do the same as the parents or something different. Don’t assume that younger people will do the same as their parents.

Are forecasts possible?

Yet a Business Week editorial foresaw the oil crisis about two years before the actual event. It stated that “the stage is being set for an energy crisis in the U.S. by the end of this decade. […] In a time of international crisis, oil supplies could be cut off.”

This is one example. There were a people who foresaw the 2008 financial crises and there were a ton of people who questioned the sustainability of Groupon.

Surprisingly, firms holding a commanding share of their market are often among the last to foresee potential threats to their bread-and-butter products. As a result, market leaders often miss the opportunities that they themselves should have created.

Remarkably, time and time again, in industry after industry, market opportunities have been more apparent to outsiders than to those with a dominant position in the industry.

We see this time and time, again. Schnaars describes one of the slide rule manufacturers. A giant – then came the micro chip and they though that this doesn’t really influence their market. A decade later they shrunk into a small business.
A similar thing happened to IBM where they declined the possibility of creating (enterprise) software, etc. etc.


  • Avoid technological wonders
  • Ask fundamental questions about markets:
    • Who are the customers?
    • How large is the market?
    • Will the new technology offer them a real benefit over existing and subsequent substitutes?
    • Is the technology cost-effective relative to those substitutes?
    • Is the derived benefit worth the price you will have to charge?
    • Are cost efficiencies probable?
    • Are social trends moving toward or away from this market?
    • Does the innovation require users to do things differently?
    • Does the innovation go against customs, culture, or established business practices?
  • Be suspicious of trend projections
  • Avoid extrapolating the issues of the day
  • Challenge Assumptions

There are some alternatives to “traditional” forecasting:

  • Scenario Analysis – I would recommend Solving Though Problems as a nice book on scenario analysis
  • Follow rather than lead – be innovator
  • Perpetual innovation: always innovate -> start small, try, then scale
  • Assume that the future will be similar to the present

Such an awesome book. I really loved reading Megamistakes. It’s full of insights. Schnaars shows different forecasts from different time periods. It’s astonishing how strong the Zeigeist influenced their forecasts. Furthermore, a lot of time he quotes other forecasters and their experiences. And you can get a used copy for under $5. It’s a fantastic book and should be read by nearly everyone! Recommendation!