The How-Can-That-Work Investment Lens
Replace reflexive rejection with structured possibility testing
- Difficulty
- Moderate
- Time to result
- ~weeks to results
- Steps
- 6
- Confidence
- 96%
The lens converts an instinctive “that will never work” response into a falsifiable investigation. The evaluator first notices the emotional rejection and replaces it with the question, “How can that work?” The idea is then decomposed into ingredients: technology, expertise, talent, partnerships, customer demand, and operating conditions. Each ingredient may look insufficient alone, but the relevant question is whether a credible founder can assemble them into a coherent system. Domain expertise establishes whether the founder deserves attention, while early customer behavior tests whether the product resonates beyond a presentation. The method preserves imaginative upside without abandoning diligence: evaluators still distinguish a plausible combination with an executable path from a collection of incompatible assumptions.
Origin
David Hall explains the mental discipline he uses when evaluating unusual seed-stage pitches such as converting abandoned coal-mine sites into hydroponic farms. Extracted from Masters in Business.
Core principles
- 01Novel ideas often trigger misleading negative instincts
- 02Possibility must be tested before feasibility is judged
- 03Domain expertise gives founders authority to challenge assumptions
- 04Complementary ingredients can create value absent from each part
- 05Early customer reactions provide evidence beyond a pitch deck
How to run it
- 1
Catch the reflex
Notice when novelty produces an immediate conclusion that the idea cannot work. Suspend that conclusion before it shapes the rest of the evaluation.
Pro tip Write down the specific assumption driving your rejection.
Watch out Suspending judgment does not mean ignoring obvious safety, legal, or ethical problems.
- 2
Invert the question
Replace “Why will this fail?” with “How can this work?” This opens a search for necessary conditions rather than arguments supporting the first impression.
Pro tip Phrase the question as a concrete scenario rather than abstract optimism.
Watch out Do not confuse an imaginable scenario with a probable one.
- 3
Separate the ingredients
List the technology, people, expertise, capital, partnerships, and customer behavior required. Determine which pieces exist and which must still be acquired.
Pro tip Identify dependencies whose failure would collapse the entire model.
Watch out A long chain of unsupported dependencies is a major risk signal.
- 4
Test founder authority
Assess whether the founder has enough domain expertise to explain the difficult parts and recruit missing specialists. Look for precise knowledge rather than confidence alone.
Pro tip Ask questions that expose operational detail and edge cases.
Watch out Charisma cannot substitute for relevant expertise.
- 5
Inspect early resonance
Evaluate the responses of initial customers and users after product-market fit begins to appear but before mass adoption. Use their behavior to update the original hypothesis.
Pro tip Prioritize retention, repeat use, and willingness to pay over compliments.
Watch out A handful of enthusiastic users may not represent a scalable market.
- 6
Judge the assembly
Decide whether the ingredients form a credible, differentiated system with an executable path. Reject the proposal if the combination remains incoherent after investigation.
Pro tip State what evidence would change the final decision.
Watch out Possibility-first thinking must still end in a disciplined investment decision.
In the wild
An investor hears a proposal to transform abandoned industrial land into controlled-environment farms. Instead of rejecting the juxtaposition, the investor maps remediation requirements, hydroponic technology, agricultural expertise, labor availability, distribution distance, and customer demand. Specialists validate the environmental and production assumptions, while pilot buyers demonstrate repeat demand.
→ The investor reaches an evidence-based decision without allowing the unusual premise to end the inquiry prematurely.
Common mistakes
Reflexive impossibility
Rejecting an idea at first contact guarantees that unfamiliar categories and combinations never receive proper evaluation.
Possibility without diligence
Imagining a path is only the beginning; every critical ingredient and dependency still requires verification.
Ignoring domain expertise
A founder without relevant knowledge or access to specialists may be unable to assemble the proposed system.
Is it for you?
Best for
It is best for seed investors, innovation teams, and leaders assessing unfamiliar or counterintuitive proposals.
Not ideal for
It is not ideal as a substitute for technical diligence, market evidence, or risk controls.
From the transcript
“The hardest thing about being a venture capitalist is to always avoid that initial gut reaction of that will never work”
“the question always in that being well, how can that work?”
“How can you assemble these ingredients to to be a cake as opposed to you know, a mudpie?”
From the episode
David Hall Discusses the State of Venture Capital (Podcast)
David Hall