Longevity as the Moat

`2:12:03`

which is like a... You know, oak trees are very stable. They can withstand a lot of storms. They don't grow very fast. They're actually quite slow-growing. Some are faster than others. But in the Midwest, where I came from, a bur oak is a very slow-growing tree, but it lasts a long time, can weather a lot of storms. And I've always found that to be a very appealing kind of tree to be, versus a cottonwood, which grows really fast, makes a lot of noise. Like, you can hear cottonwoods when it's windy. They make a big mess. Everyone notices them because there's cotton all over the place, and they die in about 75 years, or something like that. And they come down hard. It's just not as interesting to me. I don't need to be flashy. I don't need to leave signs all over the place that I've been here. Just going to be nice and quiet, build a great business, keep a solid foundation, add a little bit every year, so it just feels more stable,

`2:12:50`

and weather storms. Over the years, in the tech world, there's a lot of... If something comes out, it's like, "It's a killer. It's a Slack killer. It's a Basecamp killer. It's a whatever killer." When you've been around for a long time, you see that played over, and over, and over. There's a lot of things that are killing, supposed to kill something else, but very few of them can withstand and outlive the storms that come. So, you can be hot for a while. But the hardest thing is just to stay around, to stick around. So people are like, "How do you compete?" Well, we just stay around longer than everybody else. — Yeah, the line I have on this that's repeated over and over again in these biographies is, "You just stay in the game long enough to get lucky." There's going to be- -Yeah. —... something that happens in year five, 10, 15, 20.

`2:13:35`

— Yeah. — Usually, an innovation invented by somebody outside your company- Right. —...you can take advantage of. — Right. The example of this, like, Coca-Cola with refrigeration, they didn't invent refrigeration, — Uh-huh. but it drastically expanded their market. — Yeah. Yeah. — Tobi! — Tobi's interview with COVID, in a sense. Like, COVID saved Shopify in a lot of ways, right? — He needed that difficult time period- — Yeah. —...to then grow, and to realize all the things he was doing wrong- — Yeah. —...and he realized... — And people were shopping online more, and all that stuff, too. — Well, he had that huge spike in- — Yeah. —...stock price which he talked about, and then, it going down. — Yeah. — But it's when he realized, "Oh, like, I'm cosplaying." — Right, yes. — "I'm a public company CEO, and this is what I do." — Yes. — He's like, "No! There's still..." I love what he said in the conversation where he's like, "There's not one right way to do something. There's probably 100." — I believe that. — "At least 100." — Yeah. I think the way you did it, if you had to do it again,

`2:14:22`

you'd do it the same way. But there are 100 different ways to do that same thing. — I want to go back to what you just said, though, "Something can be hot, it can be a fad." The maxim I have for this is, "Time is the best filter." It's the only filter I trust for businesses- Mm-hmm. —...for ideas, for books. I usually read a lot of old books, but it works for people, too. Because a huge influence on my thinking is, like, Charlie Munger and his whole thing. It's like you need to build a seamless web of deserved trust with high-quality people. — Yeah. — And the only way you know if somebody's high quality is time. — Yep. — And him and Warren's case, they knew the same people for decade after decade after decade. -Right. — I'm rereading the book "The Snowball." — Uh-huh, oh. —...of Warren Buffett right now. It's the 700-page biography- And the amount of friends that he accumulates in his 20s, 30s, 40s, that are still around when they're in their 70s and 80s- — Yeah. —...is absolutely remarkable.

`2:15:10`

For a business, time carries most of the weight, as another maxim. I got that from Munger because, when you read "Poor Charlie's Almanack," his thing is that you should master... There's only a handful of big ideas in all these different disciplines, so, you know, biology, physics, economics. — Right. — He's like, "And if you just master the big ideas," he says, "those few handful of big ideas carry most of the freight." — Mm. — And reading that and thinking about his... He prioritized durability in a business. — Yes. — And I was like, "Oh, so time carries most of the weight. You just have to survive, which goes back to your blubber, having a margin of safety. — Blubber and small units. — Yeah. -That's a big part of it, too. This is a bit of an aside, but it's tied to it, and I think it's important to talk about, is pricing.