Paul Saffo’s six rules for effective forecasting

At times, my blog has drifted into becoming a Paul Saffo fan-blog. That’s due to hearing him say things 20 years ago that I’ve later noticed have become reality.

Recently, I re-posted a clarification of something Paul said many years ago. That led to some off-line conversations with Paul that helped me fill in some blanks. Earlier today, he sent me a link to an article he wrote for the current Harvard Business Review that, and I thank them, is “free” and available for reading if you click through a few “acceptance” buttons. (And it’s probably just a temporary “free,” so hurry.)

The article is Paul’s examination of what he calls, “The Six Rules for Effective Forecasting.” I highly recommend it to anyone who is in the business — or hobby — of spotting trends and trying to figure out what will stick.

It’s easy, really easy, to maintain a blog — or be a columnist or reporter — and spout off predictions on whether something will succeed or not — typically based on about ten-seconds of hearing about it. Think back to the six months of hype before the iPhone went on sale. In addition to the hype, consider how many blog posts, news articles, podcasts and TV shows were devoted to forecasting whether or not the iPhone will succeed — that were totally focused on reasons that seem so lame now. Whether it succeeds of fails has little or nothing to do with its keyboard, for example. Yet millions of words were devoted to that subject by people who had no way to understand how the keyboard actually works.

Reporters are the worst forecasters I know. They make their living reporting on what’s happening today. However, forecasting — and true trend spotting — requires a 40-to-60-year horizon. You need to know what has happened during the past 20-30 years that leads up to today, and you need the wisdom to weigh the considerations necessary to determine if the “new thing” will have an impact 20-30 years into the future. Paul’s article examines what those considerations are.

I heard Paul talk about a 20-year horizon, strangely enough, about 20 years ago. Whenever I hear experts telling me how rapidly things are changing, I tend to ignore such conventional wisdom — things don’t move as rapidly as we believe they do, and often, in an historical context, things move remarkable — and frustratingly, achingly — slowly.

For example, about a year ago, I pointed back to a 20-year-old concept video Apple (during the Sculley-era) produced on a “futuristic device” called the Knowledge Navigator. Twenty years ago, they were describing a device that is very iPhone-like: but with more features. I’ve been waiting for the Knowledge Navigator for two decades and if they increase the size of the iPhone to 8X10 and put a camera facing the user, they’ll have it: just 20 years later.

When it comes to forecasting, never confuse your opinions with forecasts. Opinions are like looking up at the clouds and saying, gee it looks like rain. Forecasts are like having a network of satellites, a bank of computers and the training to crunch real-time data with historic data — and then saying, gee it looks like there’s a 50 percent chance of rain.

Here’s just one of the great quotes from Paul’s must-read article:

“Even in that hotbed of rapid change, Silicon Valley, most ideas take 20 years to become an overnight success. The Internet was almost 20 years old in 1988, the year that it began its dramatic run-up to the 1990s dot-com eruption. So having identified the origins and shape of the left-hand side of the S curve, you are always safer betting that events will unfold slowly than concluding that a sudden shift is in the wind. The best advice ever given to me was by a rancher who reminded me of an old bit of folk wisdom: “Son, never mistake a clear view for a short distance.”