Charlie Munger's four core drivers of non-linear "lollapalooza" business success
David Senra · Les Schwab (Charlie Munger recommended this book) · Apr 17, 2024 · at 1:08:30
David Senra recites Charlie Munger's microeconomic framework from Poor Charlie's Almanack explaining how outlier business outcomes occur.
0:00 / 1:03exact quote · 63.8s
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“Extreme success is likely to be caused by some combination of the following factors. Number one, extreme maximization or minimization of one or two variables. Number two, adding success factors so that a bigger combination drives success often in a non-linear fashion. As one is reminded by the concept of break point and the concept of critical mass in physics. Often these results are not linear. You get a little bit more mass and you get a Lollapalooza result. And of course I've been searching for Lollapalooza results all my life. So I'm very interested in models. That explain their occurrence. And so Charlie's also explaining not just Les Schwab. He uses Costco as a as an illustration of this point, Toyota as an illustration of this point, and Oracle, just some of them, but he mentions many more in Poor Charlie's Almanac. Number three, an extreme of good performance over many factors. That is, jumps right out of the book if you read the Les Schwab book. And finally, four, catching and writing some sort of wave.”
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