Problems from the present, past and future are not alike, and their solutions not equally valuable

Humans are natural problem solvers. From an evolutionary stand point this has served us well. When a situation is not to our liking or our needs, our creativity is brought to bear and we conceive, test, and implement 'solutions'. This skill has given us a survival advantage and led to 'bigger brains' to solve problems both as individuals and as groups. As they say, necessity is the mother of invention - and problems are the mother of solutions.

Not all problems are alike, however. In addition, the value of the solution varies with the type of the problem.

The most common problem is the one that exists in the present. This stares us in the face and is around for all to see. If resolved there is immediate relief. Examples include poor schools, expensive health care, polluting cars. Aren't these big, high value problems? Yes, but they are well known and well studied. Problems of the present offer the least opportunity for value creation. They aren't the least valuable, just the least likely to solve with a reasonable degree of investment or attention.

The second most common problem is that of the future. This is the one that can be seen coming. It has not yet arrived, not everyone understands its nature, nor does everyone agree that it will arrive in a timely manner. Peak oil, demographic imbalance, and food shortage are a fewexamples. Is the time ripe for solutions like solar power or fuel cell cars? Some companies are placing big bets on these solutions, but there is plenty of opportunity to be 'too soon' - to be 20 years too soon. History shows that energy prices go down as well as up, and that a Malthusian future for food doesn't always arrive. These opportunities are valuable with asymmetric knowledge - of either need or technology - and in this case their solutions can produce attractive returns. But lacking that, discounting for uncertainty in time and likelihood seems a great leveler.

The most valuable problems, surprisingly, are the problems of the past. Sound strange? Historical problems couldn't be valuable at all, could they? These aren't problems that have already been solved, these are the 'problems' that are only apparent after their 'solution' is produced. They make the accepted way of life look problematic by comparison. Did we need cell phones in 1970? There was no 'problem' to be solved. You'd just as soon make a call in your bathtub as phone while driving a car. What a ludicrous idea! Or... why would anyone want a computer? Can't the recipes stay organized in the card file in the kitchen by hand? What's wrong with going to the library to 'look something up'? And why would you want to shop from anything other than a catalog or the yellow pages? Please!

These are the problems of the past. They appeared to be problems only after the fact. And they are the most valuable because no one sees them coming. No one is working on them. Even the solvers may not realize the depth of what they've done. Unless you have a talent for thinking forward and looking back you'll never spot them until it's obvious. And when it's obvious it's too late.

Just like with stock investing, it's not the well run company that's a good buy - it's the well run company nobody appreciates that's a good buy - sometimes even a great buy. And it's the value of that knowledge that's rewarded.