The Power of Inductive Reasoning for Breakthrough Businesses

Does the difference between deductive and inductive reasoning sound puzzling?

Let's make it clear. Deductive reasoning uses facts and rules to draw conclusions, while inductive reasoning identifies patterns to arrive at a conclusion.

When interviewing potential clients with an eye to building a venture, inductive reasoning is your hidden ace. Here's Dave Blakely 's personal experience of the power of induction.

The time to start is now. Enjoy.

By Elke Boogert, Mach49 Managing Editor

The Power of Inductive Reasoning for Breakthrough Businesses

By Dave Blakely , EVP of Mach49 Growth Institute

Inductive logic and inductive reasoning are skills that all entrepreneurs, without exception, must master. Coupled with a method for validating insights, these methods will provide you the opportunity to zero in on venturing success.?

Where do great new business ideas come from? Inspiration can strike anywhere — while traveling, reading, or just daydreaming. I know a venture capitalist who dictates a new business idea into his phone about every eight minutes. (It’s impressive and irritating at the same time.)?

I’ve noticed that my insights don’t come from a vacuum. Each of my patents came from inspiration drawn from observations and dialog with different people going about their days, from large-animal veterinarians to astronauts. I realized that creativity requires inspiration, and inspiration comes from other human beings.?

The world’s most successful entrepreneurs don't sit around waiting for ideas to pop up. They actively hunt for problems to solve and customer issues to tackle. All the hottest entrepreneurs I know have sharpened their ability to find inspiration by diving deep into industry trends, emerging technologies, and changes in consumer behavior, and coupled those with skills at interviewing and observing.

Ideation Through Interpretation

Entrepreneurs use these creative sparks to inform their intuition and make educated guesses about potential new ventures. Reading trends and signals in the market to spot promising opportunities takes skill and entrepreneurs need to piece together many separate inputs to find meaning and direction. This is why I know that inductive reasoning is an essential skill for entrepreneurs: they go from specific observations to general insights.?

Entrepreneurs rarely apply deductive reasoning to land on amazing opportunities, proceeding from high-level business principles down to specifics. Why? Deductive reasoning sounds compelling but will never yield breakthrough businesses.

Organizing and formatting a ton of research isn't nearly as valuable as the ability to filter out irrelevant information and pull out key insights. Entrepreneurs develop inductive reasoning skills to link separate observations into unexpected insights. This inductive leap guides them to make intuitive decisions on where to focus their energy and resources. I live for these moments!

Validating Ideas Through Action

The team of pear.ai, led by CEO Sukhjinder Singh, is a prime example. Sukhjinder’s team took in a lot of information from initial customers when they started an incubation with Mach49 for German energy giant RWE . But instead of taking comprehensive notes of everything they saw, the team sifted and interpreted to find the biggest opportunity — validating energy bills and checking them for errors. Sounds simple to come to conclusions like this, but I assure you it is not.?

This customer-focused insight led the pear.ai team to a virtual energy assistant model based on an AI-driven analytics platform. The virtual assistant, named Sam, made natural language questioning of energy data possible. Sam's ability to instantly access and analyze energy information brought huge benefits to customers (and led to the successful sale of pear.ai to Constellation, a retail supplier of power, natural gas and energy).?

Sukhjinder’s team didn't just rely on process or market research. They spoke directly with customers, made assumptions about their needs, and quickly tested their theories. This build, validate, learn approach allowed pear.ai to swiftly zero in on a product-market fit that really resonated.

The magic mix of inspiration, ideation, and validation takes relentless work. But venture builders who are driven by their mission, stay flexible. They adjust as they go and turn raw ideas into ventures that grow quickly and deliver real value.

Care to find out more? Get in touch.

As EVP of Mach49’s Growth Institute, DAVE BLAKELY leverages his time with two successful startups and innovation firm IDEO, and his background as an instructor at Stanford and UC Berkeley, to cultivate dynamic new paradigms of training and distance learning, to transform a global network of professionals into successful venture builders and venture investors. Dave works to always be completely present in whatever he’s doing. When he's working, he's 100% present for his clients, and when he's spending time with friends and family, work is the last thing on his mind. As a husband and father, he cherishes his tight-knit group of friends and is deeply involved in his local community.