cannonballs. Southwest bought Muse Air in the early 1980s, a big move outside its proven model; it failed.

Intel made an uncalibrated bet in the 1990s to push the personal computer industry to a new memory technology from RAMBUS; it failed. But in the rare instances in which the 10X cases fired uncalibrated cannonballs, they quickly learned from their mistakes and returned to a bullets-then-cannonballs approach.31 For most of its history, Progressive Insurance lived by an explicit guideline to prevent uncalibrated cannonballs: limit any new business to 5 percent of total corporate revenues until fine-tuned for sustained profitability. Progressive broke this rule in the mid-1980s when it moved into selling insurance to trucking companies and transitbus systems, jumping from zero to $61 million in net premiums written (almost 8 percent of total Progressive premiums) in less than two years. It multiplied the trucking-insurance staff nearly ten times in a single yeardespite an underwriting loss of 23 percentand then nearly tripled premiums again the next year. We thought the market was just bad drivers with bigger cars, said a Progressive executive. But the business turned out to be very different; trucking companies had much greater power to negotiate prices than individual drivers, and they had armies of sophisticated lawyers to battle claims disputes. A financial disaster, said Lewis of the $84 million loss that followed. Im ashamed for how we got into that position, he admitted. Then he pointed in the mirror to apportion blame: I truly am responsible for that.32 Even 10Xers make mistakes, even sometimes the big mistake of firing an uncalibrated cannonball. But they view mistakes as expensive tuition: better get something out of it, learn everything you can, apply the learning, and dont repeat. Whereas comparison cases often try to recover from the calamity of firing an uncalibrated cannonball by firing yet another uncalibrated cannonball, 10Xers recover by returning to the discipline of firing cannonballs only when they have empirical validation. Progressive vowed never to make the uncalibrated-cannonball mistake again and subsequently applied the lesson in its move into standard insurance. Progressive had built its success primarily upon non-standard insurance, selling to high-risk drivers shunned by traditional insurers. Should Progressive move into standard insurance, selling to the broad spectrum of drivers? Progressive executives didnt know, but they knew how to find out: fire bullets.33 In 1991, Progressive crafted experiments in a handful of states it knew well, such as Texas and Florida. Two years later, it continued firing bullets, testing standard insurance in more states. Bullet, bullet, bulleteach one showed results, each one validated the concept. Then in 1994, with empirical validationweve proven we can do this!Progressive concentrated a whole bunch of gunpowder, firing a cannonball, committing fully to standard insurance. By the end of 1996, Progressive offered standard insurance in all 43 states where it operated. Within five years, standard insurance accounted for nearly half of Progressives overall business, eventually catapulting it to the #4 spot overall in the American auto-insurance industry by 2002.34 In an interesting contrast to both the uncalibrated trucking cannonball and the calibrated standardauto-insurance cannonball, Progressive decided not to fire a cannonball on homeowners insurance. At first glance, the idea of selling homeowners insurance made sense. After all, why not enable customers to bundle together car and home insurance? We can envision reams of analysis demonstrating the synergies and strategic rationale for such a move, perhaps even making the case for a giant acquisition. But Progressive had learned: you can only know if something will actually work if you gain empirical validation, no matter how many slide decks support the idea. So, Progressive turned again to bullets, just like the move into standard auto insurance, testing in a handful of states. However, unlike the bullets fired into standard auto insurance, the homeowners-insurance bullets hit nothing, and Progressive pulled the plug.35 Progressives three strategic decisionstrucking insurance (uncalibrated cannonball), standard auto insurance (calibrated cannonball), and homeowners insurance (bullets followed by the decision not to fire a cannonball)all underscore one very big lesson. In the face of instability, uncertainty, and rapid change, relying upon pure analysis will likely not work, and just might get you killed. Analytic skills still matter, but empirical validation matters much more. And thats the underlying principle: empirical validation. Be creative, but validate your creative ideas with empirical experience. You dont even need to be the one to fire all the bullets; you can learn from the empirical experience of others. Southwest Airlines became one of the most successful startup companies of all time by betting on an empirically validated model that it copied from PSA. Roald Amundsen built his strategy on proven techniques, such as the use of dogs and sleds, thatd been honed for centuries by Eskimos. (Robert Falcon Scott, in contrast, bet big on his

newfangled motor sledges, which had never been fully tested in the most extreme polar conditions.) More important than being first or the most creative is figuring out what works in practice, doing it better than anyone else, and then making the very most of it with a 20 Mile March.36 Collins, Jim; Hansen, Morten T.. Great by Choice (Kindle Locations 1514-1565). HarperBusiness.