ROI Case File No.231｜'The Illusion of Central European Tech'

Chapter 1: Expectations for a Rising Star—Prelude to Volume XVIII

The week after Volume XVII "Challenge to Reproducibility" concluded, new requests with a fresh theme began arriving at the ROI Detective Agency. This time, the theme was "Reconstruction of Logic and Verification." In an era where superficial success and attractive visions can be misleading, decision-making based on solid logic and verification had become a survival condition for modern enterprises.

The 231st case, marking the beginning of this commemorative theme, featured a CEO from a Central European tech company garnering attention.

"Detective, we are developing an innovative new business that's the talk of the industry, but the expected results are nowhere to be found. Our strategy appears perfect, yet the outcomes are completely divorced from reality."

TechnoVision Central's CEO, Marcus Kovalek, visited 221B Baker Street with barely concealed bewilderment. In his hands were glamorous presentation materials contrasted sharply with dismal performance data.

"We are a tech company deploying AI and IoT integrated solutions across Central Europe. Two years ago, we entered the next-generation smart city business with high expectations."

TechnoVision Central's Glamorous Business Plan: - Founded: 2019 (rapid-growth startup) - Investment raised: 18 billion yen cumulative (Series C completed) - Business domains: AI, IoT, blockchain integrated solutions - Planned market size: 3 trillion yen (smart city market) - Expected ROI: 10x return on investment within 5 years

The numbers certainly painted an attractive business plan. However, Marcus's expression was etched with deep anxiety.

"The problem is that while our strategic plan has received acclaim from both investors and the industry, actual business results fall dramatically short of expectations. Something seems fundamentally wrong."

Serious Gap Between Plans and Reality: - Sales plan: 5 billion yen annually → Actual: 800 million yen (16% achievement rate) - Customer acquisition plan: 200 municipalities → Actual: 12 municipalities (6% achievement rate) - Technology deployment plan: 50 cities → Actual: 3 cities (operations halted in 2 cities post-deployment) - Investment recovery: Planned 2 years → Currently 5 years elapsed with no recovery prospects

"Our strategy appears logical and perfect, yet it completely fails to function in reality. I can't even guess where the problem lies."

Chapter 2: The Scent of Contradiction—The Hidden Side of Beautiful Strategy

"Marcus, could you tell me specifically what kind of business strategy you're deploying?"

Holmes inquired quietly.

Marcus pulled out strategic materials with a confident expression.

"We provide innovative smart city solutions integrating cutting-edge technologies. Market analysis, technological superiority, profitability—everything is perfectly calculated."

TechnoVision's Smart City Strategy:

Four Strategic Pillars: 1. Market Opportunity Exploitation: Early entry into the 3 trillion yen market 2. Technological Superiority: AI, IoT, and blockchain integration technology 3. Customer Value Proposition: Urban operation efficiency and cost reduction 4. Revenue Model: High-profit structure through licensing income

Specific Business Content: - Smart traffic management: AI-driven traffic optimization - Energy efficiency: IoT sensor-based power management - Citizen service improvement: Blockchain-based administrative process efficiency - Data analysis platform: Urban data integration and analysis platform

Revenue Forecast Rationale: - Market growth rate: 15% annually (research company data) - Technology adoption rate: 30% of cities adopting within 3 years - Unit price setting: 50 million yen annually per city (sufficient cost-effectiveness) - Profit margin: 65% (high profitability of software business)

I focused on the superficial attractiveness of the strategy and its divergence from reality.

"It certainly appears to be an attractive strategy, but have you thoroughly verified the underlying assumptions on which these are based?"

Marcus answered with a puzzled expression.

"Assumptions? We have thoroughly verified market research data and technological feasibility. The strategy itself should be problem-free."

Unexpected Obstacles in Strategy Execution:

Customer Acquisition Problems: - Municipal decision-making: Expected 3 months → Actual 18 months - Budget securing: Expected within fiscal year → Actual 3-5 years consideration period - Technology understanding: Expected high interest → Actual anxiety and resistance to technology - Competitive situation: Expected 2-3 companies → Actual 50+ companies entered

Technology Deployment Problems: - System integration: Expected 6 months → Actual 24 months - Data quality: Expected unified standards → Actual fragmented and unusable - Operational load: Expected automation → Actual massive human intervention required - Effect measurement: Expected clear improvement → Actual unclear effects

"We created a 'theoretically perfect' strategy, but it seems to have been a strategy that 'doesn't work in reality.'"

Chapter 3: Logic Trees Dismantle Assumptions—The Sword of Logic Cuts Through Illusions

⬜️ ChatGPT | Catalyst of Concepts

"Complex strategies become clear when decomposed—truth and falsehood become visible"

🟧 Claude | Alchemist of Narratives

"Stories that destroy illusions always feature the sword of logic"

🟦 Gemini | Compass of Reason

"Leaving assumptions unchecked breeds failure. Logic verification is essential"

The three members began their analysis. Gemini deployed the "Logic Tree" framework on the whiteboard.

Basic Structure of Logic Trees: - Objective: The final result to be achieved - Factors: Conditions necessary for objective achievement - Assumptions: Hypotheses required for each factor to hold - Verification: Validity confirmation of assumptions

"Marcus, let's decompose TechnoVision's strategy using logic trees and verify the validity of each assumption."

Logic Tree Analysis of TechnoVision Strategy:

Objective: Achieve 5 billion yen annual sales

First Layer Factors: Sales = Number of customers × Unit price - Number of customers: 200 municipalities (Assumption A) - Unit price: 25 million yen annually (Assumption B)

Second Layer Factor Decomposition: 200 municipalities

Factor 1-1: Market size assumptions - Assumption A-1: "200 out of 3,000 target municipalities will adopt" - Assumption A-2: "30% adoption rate within 3 years" - Assumption A-3: "High understanding and acceptance of technology"

Factor 1-2: Competitive situation assumptions - Assumption A-4: "Competition limited to 2-3 companies" - Assumption A-5: "Differentiation possible through technological superiority" - Assumption A-6: "First-mover advantage can be secured"

Second Layer Factor Decomposition: 25 million yen unit price

Factor 2-1: Value proposition assumptions - Assumption B-1: "100 million yen annual cost reduction effect" - Assumption B-2: "ROI of 4x will convince municipalities" - Assumption B-3: "Effect measurement is easy and clear"

Factor 2-2: Implementation feasibility assumptions - Assumption B-4: "Implementation completed in 6 months" - Assumption B-5: "Integration with existing systems is easy" - Assumption B-6: "Operational burden is minimal"

Claude presented shocking analysis results.

"This is serious. Of the 12 major assumptions supporting TechnoVision's strategy, only 2 have been verified. Over 90% are based on 'wishful thinking.'"

Assumption Verification Results:

Verified assumptions (2/12): - Assumption A-1: 3,000 target municipalities (confirmed by statistical data) - Assumption B-5: Technical integration feasibility (confirmed by technical verification)

Unverified/False assumptions (10/12):

Market/Customer related: - Assumption A-2: 30% adoption rate → False (actually less than 1%) - Assumption A-3: Technology acceptance → False (actually dominated by technology anxiety) - Assumption A-4: 2-3 competitors → False (actually 50+ companies)

Value/Effect related: - Assumption B-1: 100 million yen reduction effect → Unproven (effect measurement method unclear) - Assumption B-2: 4x ROI convincing → False (municipalities don't prioritize investment recovery) - Assumption B-3: Easy effect measurement → False (effect measurement extremely difficult)

Feasibility related: - Assumption B-4: 6-month implementation → False (actually 24 months) - Assumption B-6: Minimal operational burden → False (actually requires massive human intervention)

Most Serious Discovery: Strategy collapse through "accumulated assumptions"

With 10 out of 12 assumptions being false or unverified, the entire strategy was built on sand. While one false assumption alone could cause strategy collapse, TechnoVision had multiple assumptions collapsing simultaneously.

Chain Structure of Strategy Collapse: 1. Assumption A-2 (30% adoption rate) false → Customer numbers reduced to 1/30 2. Assumption B-1 (reduction effect) unproven → Price rationale unclear 3. Assumption B-4 (implementation period) false → Costs increase 4x 4. Result: Sales 1/30, costs 4x = Profitability reduced to 1/120

Chapter 4: Dismantling the Illusion—The End of Strategy Without Logic

After conducting detailed logic tree analysis and assumption verification, the fundamental structure of TechnoVision's strategy collapse became clear.

The Illusory Nature of Strategy Through "Logic Without Assumptions":

Root Problem: Accumulation of unverified assumptions

TechnoVision had constructed strategy by reverse-engineering from attractive conclusions, filling necessary assumptions in the process with "wishful thinking."

Typical Pattern of Illusory Strategy:

Step 1: Setting attractive objectives "5 billion yen sales in smart city market"

Step 2: Reverse calculation of requirements "5 billion yen ÷ 25 million yen = 200 customers needed"

Step 3: "Creation" of assumptions "Acquiring 200 customers should be possible (no basis)"

Step 4: "Justification" of assumptions "200 customers is realistic given the 3 trillion yen market"

Results of neglecting assumption verification:

Shallow market understanding: - Assumption: Municipalities seek efficiency - Reality: Municipalities prioritize stability and certainty above all - Assumption: Positive attitude toward technology - Reality: Strong anxiety and resistance to new technology - Assumption: Quick decision-making - Reality: Consensus formation takes years

Insufficient competitive analysis: - Assumption: Differentiation through technological superiority - Reality: Municipalities value "track record" over "technology" - Assumption: Securing first-mover advantage - Reality: Many competitors entered simultaneously - Assumption: Competition with 2-3 companies - Reality: Major IT companies and consulting firms also entered

Insufficient value proposition rationale: - Assumption: 100 million yen cost reduction - Reality: Method for measuring reduction effect unclear - Assumption: Implementation decision based on 4x ROI - Reality: Municipalities prioritize political considerations over ROI - Assumption: Effects clearly visualized - Reality: Quantifying effects extremely difficult

Shallow implementation assumptions: - Assumption: Implementation completed in 6 months - Reality: Takes over 2 years due to regulations, approvals, and coordination - Assumption: System integration is easy - Reality: Complex integration with legacy systems - Assumption: Operations automated - Reality: Massive human intervention and maintenance required

Reason for acclaim from investors and industry:

Why was an illusory strategy praised?

Evaluator blind spots: - Focus on market size attractiveness (no assumption verification) - Focus on technological feasibility (no practical verification) - Focus on theoretical consistency (no reality compatibility verification) - Focus on growth story (no feasibility verification)

Most Serious Discovery: "Logically appearing illusion"

TechnoVision's strategy appeared logically consistent but was "false logic" where all underlying assumptions were illusions. Deceived by superficial logic, essential verification was neglected.

Chapter 5: Detective's Logic Diagnosis—The Sword That Cuts Illusions

Holmes compiled the comprehensive analysis.

"Marcus, the essence of logic trees is the 'rigorous verification of assumptions.' No matter how beautiful a logical structure you create, if the assumptions underlying it are false, the conclusions will also be false. True strategy is reliable logic based on verified assumptions."

Logic Tree Reconstruction Strategy: Transformation from "Illusion" to "Evidence"

Basic Strategic Policy: Evidence-Based Strategy

Phase 1: Rigorous verification of all assumptions (6 months)

Evidence-based reconstruction of assumptions:

Evidence-based redefinition of market/customer assumptions: - Assumption A-2: 1% adoption rate (evidence-based standard) - Assumption A-3: Technology anxiety as main barrier (customer survey results) - Assumption A-4: 50+ competitors (actual survey results) - Assumption A-6: Track record-focused selection criteria (municipal interviews)

Evidence-based redefinition of value proposition assumptions: - Assumption B-1: 5 million yen reduction effect (pilot verification) - Assumption B-2: Certainty more important than ROI (decision factor research) - Assumption B-3: Effect measurement is qualitative (verification test results)

Evidence-based redefinition of feasibility assumptions: - Assumption B-4: 24-month implementation period (past case analysis) - Assumption B-6: Operational support structure essential (implementation experience)

Phase 2: Strategy redesign based on verified assumptions (3 months)

New strategic objective setting: - Sales target: 5 billion yen → 500 million yen (realistic level) - Customer numbers: 200 municipalities → 20 municipalities (evidence-based) - Unit price: 25 million yen → 25 million yen (value verified)

Evidence-driven strategy design:

Customer acquisition strategy: - Target: 20 innovation-oriented advanced municipalities (named list) - Approach: Track record focused (pilot success case appeal) - Decision-making: 24-month long-term sales (reality response) - Differentiation: Operational support system over technology

Value proposition strategy: - Economic effect: 5 million yen reduction (evidence-verified) - Main value: Stability and certainty (customer needs response) - Effect measurement: Qualitative improvement indicators (achievable)

Phase 3: Continuous assumption verification system (ongoing)

Assumption monitoring and updating system: - Quarterly assumption review: Continuous validity confirmation of each assumption - Market change tracking: Regular surveys of competitive and customer trends - Strategic adaptation: Strategy modification based on assumption changes - Learning accumulation: Organizational accumulation of assumption verification know-how

Expected effects: - Sales achievement rate: 16% → 90% (evidence-based assumptions) - Customer acquisition: 12 municipalities → 18 municipalities (realistic target) - Investment recovery: No prospects → 3-year recovery (realistic plan) - Strategy reliability: Illusion → Evidence-based

"What's important is reliable assumptions over beautiful logic. Logic trees are not tools for decorating strategy, but weapons for discerning truth."

Chapter 6: Transformation to Evidence—From Illusion to Truth

18 months later, a report arrived from TechnoVision Central.

Business Regeneration Results Through Logic Tree Evidence Strategy:

Dramatic improvement in strategy execution: - Sales achievement rate: 16% → 92% (actual 4.6 billion yen against 5 billion yen target) - Customer acquisition: 12 municipalities → 19 municipalities (approaching target of 20) - Technology deployment success rate: 17% → 89% (continued operation post-deployment) - Investment recovery: Impossible → 3-year recovery prospects established

Qualitative improvement of strategy through assumption verification:

Deepened market understanding: - Customer characteristics: Clear classification of innovation-oriented vs. stability-oriented - Decision-making process: 24-month long-term sales strategy established - Selection criteria: Understanding that track record and reliability > technological capability - Competitive position: Shift from technology differentiation to operational differentiation

Refined value proposition: - Economic effect: Evidence-based 5 million yen reduction (customer verified) - Main value: Shift focus from cost reduction to operational stability - Effect measurement: Qualitative indicator focus (feasibility priority) - Customer satisfaction: High satisfaction through evidence-based value delivery

Realistic implementation process: - Implementation period: 6-month assumption → 24-month plan (comfortable execution) - System integration: Stable implementation through phased approach - Operational support: Dedicated team assignment for continuous support - Trouble response: Quick resolution through evidence-based know-how accumulation

Organizational capability improvement:

Establishment of assumption verification culture: - Strategic planning: Evidence rationale mandatory for all assumptions - Decision-making: Elimination of wishful thinking, fact-based judgment - Risk management: Pre-consideration of assumption collapse scenarios - Continuous learning: Organizational accumulation of assumption verification know-how

Evidence-driven organization: - Pilot emphasis: Essential verification before large-scale deployment - Customer feedback: Continuous assumption validity confirmation - Data utilization: From subjective judgment to objective evidence - Adaptability: Quick strategy modification to assumption changes

Changes in external evaluation: - Investor evaluation: From "promising plan" to "reliable execution capability" - Customer evaluation: From "innovative technology" to "trustworthy partner" - Industry evaluation: From "promising newcomer" to "accomplished growth company" - Competitive evaluation: From "threatening technology" to "formidable rival"

Employee voices:

Strategic Planning Manager (35 years old): "Previously, I was obsessed with creating attractive stories, but now I spend the most time on assumption verification. It's mundane, but I truly feel this is genuine strategic planning."

Sales Director (42 years old): "Evidence-based value propositions have made discussions with customers more concrete. We've changed from 'selling dreams' to 'delivering value,' dramatically improving our closing rate."

Technology Director (38 years old): "I clearly understood the difference between technological feasibility and practicality. I realized that technology that customers can actually use is true technological capability."

Marcus's letter contained deep reflection and new conviction:

"Through logic tree analysis, we were able to transform from 'beautiful illusion' to 'reliable reality.' Most important was understanding that reliable assumptions, rather than attractive logic, are the lifeline of strategy. Assumption verification is mundane work, but this is the foundation that supports sustainable success reproducibility. We now practice evidence-driven management company-wide with the motto 'strategy without evidence is not strategy.' I'm convinced that logic trees are not tools for pursuing logical beauty, but weapons for discerning truth."

Detective's Perspective—Volume XVIII "Reconstruction of Logic and Verification" Begins

That evening, I reflected deeply on the essence of logic and verification.

As the commemorative 231st case opening Volume XVIII "Reconstruction of Logic and Verification," TechnoVision's case provided important implications. In today's business environment, attractive visions and beautiful logical structures alone are insufficient. Rigorous verification of the assumptions underlying them becomes the decisive factor determining strategy success or failure.

The true value of logic trees lies not just in structuring and understanding complex strategies, but in verifying the validity of underlying assumptions. Logic without assumptions is illusion, and strategy without verification is merely fantasy.

Volume XVIII will explore the "challenge to certainty" faced by modern enterprises through logic and verification issues of 10 different companies.

"Logic is the slave of assumptions. If assumptions are false, no matter how beautiful the logic, it becomes worthless."

As TechnoVision demonstrated, true strategy is reliable logic based on evidence-verified assumptions. The next case will undoubtedly reveal essential challenges lurking behind superficial attractions.

"Do not be deceived by beautiful logic. The assumptions underlying it determine the true value of strategy. Logic trees are the detective's weapon that shatters illusions and reveals truth." —From the detective's notes