At the time, I did not know that what I was doing had a name. However, now I realize the power of "backcasting" as a way of helping companies prepare for long-term success.
A Futurist's Role in Corporate Growth
I recently had an enlightening conversation with Steve Fisher, an old friend who is a professional "futurist". His clients pay him to think beyond the 6-12-month timeline of their traditional "strategic plan". Why is this so difficult that they need to bring in a specialist? Well, anyone who has done any strategic planning knows that the further out in time you try to look, the less reliable the plan becomes. As weeks become months and months become years, too many unknown variables get introduced into the model, creating uncertainty in the plan. However, looking out far into the future has been quantitatively proven to increase a company's chance of long-term success, so one way or another we HAVE to do this in our companies.
"Forecasting" versus "Backcasting"
One clear advantage that futurists like Steve have when it comes to developing extremely long-term plans is that they tend to be experts in the practice of "backcasting". Until he explained it to me during our conversation, I had never heard of this particular term. Fortunately, it seems that I have been doing it unknowingly for years in my various ventures.
Essentially, "backcasting" is the inverse of "forecasting", which is how most strategic plans are developed. When you develop a forecast, you start with everything you already know about the current and near-term situations in order to extrapolate into the future and predict longer-term outcomes. Of course, the further out you look, the less confident you are in your predictions, mostly because the additional time allows increasing opportunity for new variables to be introduced and completely throw off your initial assumptions. It is the whole reason we have "budget v. actual" in our financial reports.
When you backcast, however, you do everything in reverse. First, you start with your desired end-goal. Then, you work backwards through all of the dependencies that would have to occur in order to create that desired future. Eventually, you work all the way back to the present. This allows you to scope out your immediate next steps toward that vision. Backcasting will not necessarily ensure that you reach your end goal, but it certainly identifies the milestones that need to be reached along that path.
Backcasting to Launch "Space Angels Network"
Steve helped me see that--without realizing that I was "backcasting"--this is exactly what I did when I founded Space Angels Network in 2006. That story is an interesting case study of "backcasting" in action.
After selling my first startup in 2001, I decided that the next phase of my life would be dedicated to pursuing my childhood dream of colonizing other planets. However, I did not know exactly what my first step on that journey should be, especially since I had long ago missed my chance to become a NASA astronaut.
So ... I started by trying to visualize what I thought humanity might look like in the year 2100 ... a full century in the future.
I imagined that by then our major urban centers would be transformed into sprawling vertical mega-cities. I also imagined that we would have numerous floating and underwater cities (nations, even!), which seemed like a no-brainer given that so much of Earth's surface is covered by water. Finally, I imagined that by the end of the 21st century humanity would have expanded off-world with permanently occupied "space colonies" and settlements on the Moon, Mars, and perhaps even Venus. In backcasting-speak, this was my desired future state.
Focusing specifically on the off-world settlements, I started working backwards to identify each major step that I believed would have to occur along the way toward my "Vision 2100". Eventually, I made my way back to something I could wrap my head around in the immediate near-term of 2001-2002. I was convinced that "space" needed to transition from the exclusive purview of a handful of national government programs to a global private space economy. (This was certainly not my original idea, since there was already a growing movement pushing in this direction.) I knew that this transition would take place over the next few decades, so I had to find *something* I could do within that ecosystem.
Like many others, I believed that entrepreneurs and their startup ventures would play a critical role in pushing this transition on a global scale. Working backwards even more, I zeroed in on the need for early-stage capital to fund those visionary founders. In order to devise something actionable, I needed to get granular, and eventually I came up with the idea to create a network of high-net-worth individuals willing to invest in risky space-focused startups. I ran the idea past several trusted and experienced advisors, who all enthusiastically encourage me to forge ahead.
In April 2006, onstage at the International Space Development Conference in Los Angeles, I announced the culmination of my "backcasting" efforts: "Space Angels Network".
Success!
Today, Space Angels (as it was later re-branded) is part of the Space Capital family of businesses, and it is the most active early-stage space investment group in the world. I will be the first to admit that this was not my doing. The current success was made possible mostly through the visionary efforts of my successors, especially my co-founders Burton Lee, Eric Anderson, and Joe Landon, and most certainly the current CEO, Chad Anderson, as well as so many other volunteers, staff, advisors, investors, and entrepreneurs. However, I would like to think that my initial launch played a key role in getting the ball rolling.
While Space Angels Network has been successful in its own right, it also has had the much broader impact that all of us involved at its formation hoped it would have. In the almost 15 years since that LA stage, "space" has undergone a significant transition toward that global private space economy I envisioned during my backcasting exercise. Every year there are now billions of dollars of venture capital investment poured into hundreds of space ventures in countries all over the world. There are even several space-focused venture capital funds and angel investor groups.
This is *exactly* the kind of expansion we hoped Space Angels Network would spark. And this is *exactly* the path that I took when I backcast from my vision for humanity in the year 2100.
Lessons Learned
My main lesson learned from the Space Angels Network experience is the power of backcasting ... even if I didn't realize that was what I was doing at the time.
There is NO WAY that in 2001-2002 I could have created a "forecast" model that would have led me to launch a space-focused angel investor group. Even if that had happened, there is NO WAY that we could have kept the organization going through the early years, especially since so many of our initial assumptions proved to be off, delayed, or flat-out wrong. We were able to keep going only because of our steadfast conviction that we were working on something extremely important along the critical path toward a long-term vision that we all believed in and wanted for humanity.
Given my current role as an Independent Corporate Director, I also believe that backcasting is a critical element of successful strategic planning. More important, companies cannot rely on the CEO to do this, mostly because s/he is too focused on near-term execution of the mid-term strategic plan. Rather, it falls upon the Board members to individually and collectively keep looking to the future. This may be one of the most critical ways that Boards can help position our companies for long-term success.
Finally, on a more philosophical note, I believe that backcasting is one of the best ways for all leaders to inspire their organizations. Starting with a desired end-state and backing into a near-term plan helps keep teams focused on the importance of their daily efforts, even during times of crisis or uncertainty.