The perfect business.

It doesn't come out of our ass,
it's Warren Buffett & Charlie Munger who say so.

If you want to check, you can read the 378 pages of the University of Berkshire Hathaway (about 10 hours of reading)... or you can believe us and start reading (10 minutes max, pinky swear):

Business is a game. An infinite one. 

The players are both known and unknown. The rules are constantly changing and evolving. There is no agreed-upon goal. The game never ends. The game’s purpose is to keep playing as long as possible.

To ensure “winning,” a business must abandon the pursuit of power and seek to master endurance.

TL;DR: 
Stamina > Power

Next, you’ll find the 7 defining characteristics of an enduring business in theory AND practice.

Principles and philosophy.

Warren Buffet is right: the perfect business costs a penny, sells for a dollar, is habit-forming, and nobody can copy it.

If its CEO is unimpeachable, risk-averse, and a long-term thinker, no one can stop them.

  • Expensive

    A business can only lower its prices to zero but can go infinitely high in the other direction. 

    Whoever wins the “race to the bottom” is bound to lose in the game of business. Lowering your prices to zero is never the answer. The only way to prosper over the long term is to raise your prices.

    (Again) Warren Buffet:
    “Price is what you pay. Value is what you get.”

    To raise your prices, deliver more value to your customers.

  • Low costs

    (Again and again) Buffet: 
    “If you bet poorly small, you bet poorly big.”

    Someone who doesn’t earn much is poor. Someone who makes a lot and spends it all is also poor.

    Making more money doesn’t mean earning more. If a business spends more than it earns, that business is poor. 

    To last, you have to make money AND keep it. Earning more and spending less is the key to lasting and enduring.

  • Sticky

    There are only three ways to make more money:
    Increase your number of customers, sell for more, or keep them longer and bill more often.

    Keeping your customers for life can win you the game of survival. Some habits are hard to break. The perfect business relies on delivering enormous amounts of value at a premium and low cost over generations.

  • Unique

    The perfect business is impossible to copy. You can try to reproduce what it does... but nobody does it like they do.

    Delivering an incredible amount of value in a unique way enables a business to obliterate its competition without even looking at it. 

    The perfect business has no competition because it evolves alone in its own universe. The perfect business doesn't copy what others do. It does what only it can do.

    • Unimpeachable

      Impeccable. Upright. Exemplary. Fair. Honest. Blameless.

      These are the people who aren't in it to make easy money. They're not trying to get rich quick. They're not looking for shortcuts.

      They want to build. They're looking to create lasting value. They aim to forge an enduring business over the long term. They are honest, upright, and incorruptible. They walk the talk.

      They don't just say stuff. They deliver. Their reputation precedes them and speaks for them.

      Succession of people with these attributes enables companies to remain strong for centuries.

    • Cautious

      Zero x Anything = Zero

      A single bet can cost you everything you've built. You can generate millions every week for 50 years and lose it all in one night. You don't want to play the lottery when it comes to your business and your people.

      Every opportunity can be seen as a problem. Every problem can be seen as an opportunity. It all comes down to a decision. The most important thing for a business isn't the number of opportunities available. The most important things are the judgment and sagacity of the people calling the shots. 

      Low risks > High returns.
      In an infinite game, finding a way not to lose is more important than trying to win.

      If you don't lose long enough, you win by default.

    • Visionary

      Visionaries don't have a flawless vision of the future. They allow themselves to visualize it and share their vision.

      Developing a vision is not complex. It's simply a question of scale. Long-term thinkers don't just think in days or weeks. They also think in months, years, and decades. 

      Why do family businesses endure, last, and outlast?
      Because they think in generations. They think “long-term strategy.” They think “long-term investment.” They think “quality”. 

      Visionaries don't look for instant gratification. They don't take the easy way out. They don't give in to their short-term urges. They turn their dreams into a long-term reality.

      From theory to practice.

      It's always easier said than done.

      The theory ends here. Now, let's see what each of the 7 characteristics looks like in practice.

      Grab your zapper. Click on MUTE. Focus on actions rather than words.

      • Expensive

        Bartering isn't practical all the time.
        Swapping all your salmons for beans is a pain if you need beans and crave smoked salmon.

        Every problem has its solution:
        We took malleable pebbles. We flattened them to fit in your pocket. We stamped Caesar's head on them to know they held “value” in the Roman Empire. And boom, we invented something ultra-useful: the dough.

        Money is used to trade something you can find everywhere for something you need but can't find everywhere. That's why we exchange relatively cheap metal or similarly cheap paper for “value.”

        Our explanation shows that charging more isn't rocket science. Asking someone for more money isn't very complicated. If you bring more value, you can ask for more pebbles.

        The real question is: how do you deliver more value?

        The answer is simple. Let's go back to the salmon example. We bring maximum value by addressing all the needs and problems of the guy with the pebbles... without making it difficult, time-consuming, or tedious for him. To make it easy for them to give us their pebbles without complaining, we have to make it easy for them to believe in our ability to help. It's as simple as that.

        Selling high tickets
        = Great business model
        + Great brand image 
        + Great brand experience
        + Undeniable perceived value
        + Outstanding value delivery

        • Low costs

          More is easy. Saying yes is easy. Adding things is easy. 

          But doing less, saying no, deleting, removing, tidying, sorting, simplifying... that's the real difficulty.

          That's the part requiring dedication, attention, and making difficult choices. It's the part that requires love, not just excitement.

          The focus part is the bit everyone hates doing. It's the boring work. It's the hours spent making the optimizations, the tweaks, the little changes. But focus is also your opportunity to shine. This is where your business makes the real difference. 

          Those who don't like doing the grunt work do it poorly. They cut costs where the business needs room to breathe. They cut out essential elements of the business because “they're too expensive to keep around.” They don't try to understand their business. They don't do it with love. They take the easy way out.

          Reducing costs means avoiding paying a heavy price tomorrow for the consequences of today's decisions. Lowering costs means adding comments to your code to help better understand it tomorrow. It means avoiding adding 50 new features when you can improve the 15 you already offer. It's avoiding the need to hire 150 people following a fund-raising when you can hire the right 50 to improve everything. 

          Reducing costs means striving for relevance before succumbing to laziness. Lowering costs means avoiding filling the void created by the fear of losing control. It's about embracing that fear, letting yourself feel it, letting it overwhelm you, and finally braving it.

          Reducing costs is all about doing what is right, not what is easy.

          Reducing costs
          = Great business model
          + Smart production
          + Efficient customer acquisition
          + Relevant and reliable brand

          • Sticky

            As mentioned above, the perfect business is habit-forming.

            To ask your customers for money periodically, you must consistently deliver value.

            To distribute value regularly, you need to think about a system enabling this distribution. For those with a soul, you also need to think about an ethical way of creating habits among your customers that will benefit them as much as you.

            The business model is the complete modeling of your value-delivery system. Your business model describes how you distribute this value, whether or not it is exchanged for money.

            Habit creation enables a business to ensure that it receives regular compensation for the value it delivers. Recurrence empowers a business to live more serenely.

            The fear of dying tomorrow fades. The mental burden is reduced. Minds open up to new ideas and become more creative. Businesses stop trying to secure themselves and can more efficiently serve their customers.

            Predicting the future of your business with ease reduces anxiety. The future is less scary. All that remains is to be present in the moment to serve your customers.

            Recurring value distribution 
            = Great business model

            • Unique

              The taste of McDonald's nuggets. The roar of a Ford Mustang. The purr of a Harley-Davidson. The lines of a BMW grille. The intuitiveness of Apple products. The singularity of a Christopher Nolan movie. The quality of a Birkin Hermès. The refinement of a Cartier jewel. The defiance of a Jack Daniel's. The unique taste of a Coke. The ingenuity of a Tesla.

              Every brand above has competitors on paper. And yet, each has something extra that makes us question all the others.

              Being unique is what makes a business stand out. Anyone can copy what they do, but no one can do it like them.

              By the way, that's how influencers sell their bathwater. Customers don't buy water... they buy Michael Jordan's bath water!

              For your business to be able to sell its bathwater - in other words, to sell something that costs nothing to produce and brings a lot of value in a unique and recurring way - it has to be unique. 

              It couldn't be simpler. Everyone's giving away the tip for free every day. The thing is, nobody does it. You and your business have to be authentic. It's not about doing what others don't do or saying what others don't say. 

              Thousands of people make movies. Thousands of people are trying to make movies that stand out. Only Christopher Nolan makes movies like Christopher Nolan.

              You have to do what only you can do. 

              Being unique 
              = Great business model
              + Authentic and consistent brand image
              + Excellent and different brand experience

              • Unimpeachable

                How can you be unimpeachable in practice?
                In other words, how can we be impeccable, upright, exemplary, fair, honest, and blameless?

                The answer is simple: love. 

                If you love, you respect. 
                You're impeccable if you love what you do. You're irreproachable if you want to do it well because you love and respect your product, services, profession, customers, employees, business, and yourself.

                Iron Man, Captain America, and Thanos are unimpeachable. They each have a different vision of the world. They each have their own style. And yet they try to be impeccable, upright, exemplary, fair, honest, and beyond reproach. It doesn't always work. They make mistakes, go astray, and fail. But they never stop picking themselves up, trying again, and trying to fix their mistakes. That's what makes them so captivating. They constantly repeat behaviors aligned with their core beliefs.

                They believe strongly. They love intensely. They act accordingly.

                Believe in what you want and show it.
                Love what you want and respect it.
                Say something and do it.

                It works for a founder as well as for his business.

                Unimpeachable character
                = Assumed beliefs
                + Intense love
                + Clear actions
                + Meaningful results

                • Cautious

                  How can we avoid taking too many unnecessary risks? How can you avoid losing everything you've built overnight? 

                  All the people and companies who never lose and stay rich have one thing in common. They pass the Marshmallow Test without fail.

                  The Marshmallow Test:
                  You're offered a marshmallow. If you resist the urge to eat it for a while, you're given two more as a reward. Resistance, patience, and self-control allow you to gain more and lose less.

                  The trick for people who avoid unnecessary risks is their ability to defer gratification.

                  You already know this secret by another name.
                  Nobody sticks to it.
                  It's called discipline.

                  The secret is that it can be learned.

                  You need discipline if you don't want to lose long enough and win by default. Nothing else. Everything else is just excuses.

                  Anyone can wait and persevere. It's accessible. What really makes the difference is your level of perseverance and the time you spend deferring gratification. 

                  Winners and losers share the same goals. What differentiates them is their ability to go the distance. Losers make excuses. Winners find reasons. 

                  Unlike the Marshmallow Test, waiting for the right moment in life can take years.

                  In the end, only one question matters:
                  How long will you last before gobbling up your marshmallow?

                  Cautious 
                  = Discipline 
                  + Discipline 
                  + Discipline

                  • Visionary

                    Being a visionary is easy: 

                    1. You overcome the limiting belief that to be a visionary, you must be Steve Jobs, Elon Musk, Albert Einstein, or Thomas Edison.
                    2. You realize these people say a lot of crap and not just genius stuff. They fuck up a lot and shit sitting down, just like you.
                    3. You start doing what they do. You become more human than everyone else. You become a super-human. You poop every day. You say a lot more crap and fuck up a lot more than everyone else... until one day you don't, and change the world a little for the rest of humanity.
                      That's when they'll all call you an overnight success. And if you do it enough times over a long enough period, they'll call you a visionary. 

                    You, on the other hand, will know that you're only human. That, like everyone else, you poop sitting down. And that if you've succeeded, it's because you've spent more time than anyone else:

                    • Defining your dream, believing in it, and following it.
                    • Defining your nightmare and running from it.
                    • Never giving up where anyone else would have.

                    No visionary is an overnight success. 
                    Every visionary is an over-life obsessed.

                    Find your obsession.

                    Visionary
                    = Follow and share a very specific dream
                    + Running away from a clear-cut nightmare.
                    + Never give up. Never quit.

                    Three options.One choice.

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                        • Business Playbook

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                        The initiatives.

                        Your business is only as strong as its weakest link.

                        To help you identify these links, we have designed some singular and slightly more specific resources: