Innovation is About Breaking the Conventional Principles - Compromise Curves

We have received many Chinese New Year blessings and wishes for the last few days. 

But having a prosperous or a breakthrough 2026 needs us to know the how to --- or "Innovation".

Here is a post about how to have breakthrough innovations:

Innovation and the Compromise Curve

Innovation often begins by challenging conventional trade-offs—the compromise curve.

Take the audio speaker as an example. If you want mobility, the speaker must be small and light (like earphones). Yet the laws of physics tell us that rich, high-quality sound typically requires volume and mass. The breakthrough, therefore, lies in achieving both: a compact form factor that still delivers powerful sound. Here is an award-winning thumb speaker XMI

This illustrates a key insight:

The source of innovation is to identify accepted trade-offs and question whether they are truly immutable.

Below are ten widely observed “laws” or principles that describe how the world tends to operate.

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Ten Common Laws of the World

Understand and master the forces that shape outcomes.

Law / Principle	Core Meaning
Matthew Effect	The strong tend to get stronger; the weak fall further behind.
Entropy Increase	Systems naturally drift toward disorder without input.
80/20 Rule	A small portion of efforts drives most results.
Survivorship Bias	Visible success hides the many unseen failures.
Opportunity Cost	Choosing A always means forgoing B.
Compound Interest	Small gains accumulate exponentially over time.
Broken Windows Theory	Small neglects can escalate into major failures.
Law of the Jungle	Competition persists because resources are limited.
Black Swan Theory	Major disruptions often come unexpectedly.
Conservation of Energy	Every gain carries a corresponding cost.

Conventional wisdom teaches us to work within these laws.

True innovation—and deeper wisdom—often comes from reframing or bending them.

With today’s generative AI, we can easily produce first-order countermeasures. For example, Gemini suggests the following strategies to navigate each law.

Here is how to navigate or disrupt the course predicted by each law:

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1. The Matthew Effect

• The Prediction: The rich/successful get more, while the poor/struggling lose what they have.
• The Counter-measure: Break the Zero-Sum Game. Focus on "Niche Dominance." If you can't compete in a massive pond where the big fish get everything, create or find a smaller pond where you can be the "strong" one first, then leverage that momentum to scale.

2. Law of Entropy Increase

• The Prediction: Without effort, everything falls into disorder, laziness, or decay.
• The Counter-measure: Negative Entropy (Negentropy). This requires a constant "energy input" from outside the system. In life, this means scheduled reviews, continuous learning, and strict routines to prevent your skills or organization from rotting.

3. 80/20 Rule (Pareto Principle)

• The Prediction: 80% of your results come from 20% of your activities; the rest is mostly waste.
• The Counter-measure: Ruthless Elimination. Don't just work harder; audit your time. Identify the "Vital Few" and aggressively delegate or delete the "Trivial Many."

4. Survivorship Bias

• The Prediction: You will make bad decisions by only looking at "winners" and ignoring the "graveyard" of losers.
• The Counter-measure: Study Failures. Instead of just reading biographies of billionaires, look for post-mortems of failed businesses. Understanding why others crashed tells you where the hidden mines are located.

5. Opportunity Cost

• The Prediction: Every "Yes" is a "No" to something else.
• The Counter-measure: The "Hell Yeah" or "No" Rule. To avoid losing out on great opportunities because you are busy with "okay" ones, raise your threshold for saying yes. If an opportunity doesn't make you say "Hell Yeah!", the cost of your time is too high.

6. Compound Interest Effect

• The Prediction: Small actions don't look like they matter until it's too late (for better or worse).
• The Counter-measure: Extreme Patience and Consistency. The "bend" in the curve happens late. To change the course, you must resist the urge to quit when you don't see immediate results in the first 90% of the timeline.

7. Broken Windows Theory

• The Prediction: Small neglects (a messy desk, a minor lie) invite major collapses.
• The Counter-measure: Zero Tolerance for "Small" Errors. Fix the "broken window" the moment it happens. By maintaining high standards for small things, you reinforce a culture (or a mindset) that prevents large-scale failure.

8. Law of the Jungle

• The Prediction: It’s a dog-eat-dog world where only the fittest survive through competition.
• The Counter-measure: Radical Collaboration. Humans survived not because we were the strongest individual predators, but because we optimized for cooperation. Move from a "competitive" mindset to an "ecosystem" mindset where you create value for others.

9. Black Swan Theory

• The Prediction: High-impact, unpredictable events will eventually ruin your plans.
• The Counter-measure: Anti-fragility. Don't try to predict the "Swan." Instead, build systems that benefit from volatility or have enough "redundancy" (savings, multiple skills, backup plans) so that a single shock doesn't break you.

10. Conservation of Energy

• The Prediction: You can't get something for nothing; there is always a hidden price.
• The Counter-measure: Conscious Sacrifice. Instead of being surprised by the "cost" later, choose what you are willing to give up upfront. By deciding your "price" (e.g., giving up leisure for a degree), you stay in control of the transaction.

 

Now is the real stretch for your innovative thinking --- challenge the GenAI's answer.

For example. I picked the 20/80 rule against the Gemini's answer: 3. 80/20 Rule (Pareto Principle) The Prediction: 80% of your results come from 20% of your activities; the rest is mostly waste. The Counter-measure: Ruthless Elimination. Don't just work harder; audit your time. Identify the "Vital Few" and aggressively delegate or delete the "Trivial Many." Do not agreed to go further in 90/10 etc. But rather, from the missing 80, find the breakthrough innovation, and how to bring the 80 into the 20 to increase the total pie.

 

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Challenging the Conventional Countermeasures

Let us examine one case in depth: the 80/20 Rule.

Conventional View (Efficiency Mindset)

Prediction:
80% of results come from 20% of activities.

Typical Countermeasure (Gemini):
Ruthlessly eliminate the low-value 80% and focus on the vital few.

This is sound—but incomplete.

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A More Innovative Reframe: Expand the Pie

Your insight is powerful:
Do not merely cut the 80%. Mine it.

Instead of treating the 80% as waste, treat it as unexploited territory.

This shifts the mindset:

• From efficiency → expansion
• From subtraction → value creation
• From optimization → discovery

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The Expansion Framework: Mining the 80%

1. Hidden Assets in Friction

The neglected 80% often contains repetitive work, maintenance tasks, or small customer requests.

Innovative question:
Why is this 80% so heavy?

Breakthrough move: Productize the burden.

Example:
Amazon’s internal infrastructure was once “overhead.” By externalizing it, they created Amazon Web Services (AWS)—transforming cost into a major profit engine.

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2. Positive Outliers in the Noise

Within low-yield activities often hide anomalous signals:

• unexpected user behavior
• edge-case customers
• partially successful failures

Strategic shift: Replace ruthless elimination with strategic curiosity.

The next wave of growth often begins as statistical noise.

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3. Standardize to Subsume

The 80% remains low value largely because it is too bespoke and labor-intensive.

Breakthrough move:

• automate
• template
• systematize

If the 80% can run on 5% of your attention, you have effectively absorbed it into your high-efficiency zone.

You are not shrinking work—you are lowering its metabolic cost.

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4. The Inverse Pareto Scan

Ask a provocative question:

What if part of the 80% is only “low value” because it is under-served?

By applying 20%-level focus to a neglected segment, you may discover an uncontested market.

This is where many blue ocean opportunities originate.

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Efficiency vs. Innovation

Dimension	Traditional 80/20 (The Scalpel)	Expansion 80/20 (The Bridge)
Primary Goal	Efficiency	Innovation
View of the 80%	Waste	Raw material
Core Action	Delete, delegate, defer	Automate, standardize, harvest
Risk	Over-optimization	Managed exploration
Long-Term Result	Lean but potentially brittle	Larger, more resilient system

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Final Insight

Over-applying efficiency thinking can create the stagnation trap—you become so optimized around today’s 20% that you miss tomorrow’s breakthrough.

The deeper discipline is dual:

• Exploit the 20% for current performance
• Explore the 80% for future advantage

Innovation lives in the tension between the two.

Wishing you a breakthrough Chinese New Year 2026!