Counterfactuals

Jan 3, 2023

If I studied more, would I have gotten a better grade?

Counterfactuals, or statements that describe an alternative reality or outcome that did not occur in the past, are a fundamental part of human cognition. We use counterfactuals in many aspects of our lives, from evaluating the consequences of our actions to making decisions about the future. Counterfactual thinking can be an interesting tool, and even more interesting when we have actual data to contrast.

Take GitHub. The product is closed source, but what if it weren't? You would lose the network density (sharing code), but winning enterprise deals with on-prem or air-gapped deployments would be much easier. We know a bit more about the counterfactuals because companies traverse the idea maze (in this case, GitLab).

Sometimes counterfactual thinking can identify great opportunities through causality:

  • Company A succeeded. But could it have been a much more significant outcome?
  • Company B failed. But could the same idea work with a different strategy?

Of course, too much counterfactual thinking can be bad. It can lead to analysis paralysis – always asking, "what if?". But many times, it helps distill what matters.

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