Ben Gilbert: uncertainty

Transcript context

…Right, and there's been statistical work just buttressing that point more generally. The industry attractiveness doesn't explain a lot of firm differences and profitability. Another one was Christensen's work on disruptive technology, which is just phenomenally interesting and highly erudite, but this example is perfect. Disruptive is actually not correlated with long-term profitability. It has to do with product/market fit. It basically says you've come up with a better way of doing something that takes out the incumbent. It disrupts it. Very interesting in that frame but not for the Bowmar or iPod problem. Then there's a whole strain of thought around capability analysis. You can do a lot of things with capabilities, but it's not common that that's the basis of why you build great business models. Other people have those capabilities as well. What that meant from a concept development framework is that I had to go back to square one and say, okay, I'm thinking about pattern recognition for entrepreneurs. What's simple but not simplistic? One of the keys to that question is persistence, which is that, if you were to say Apple's profitability next quarter, it's not a random draw. It's highly persistent, and there's statistical work on that that suggests that's generally true for very successful companies. Importantly, not just next quarter, but four quarters from now and eight quarters from now. You have a pretty high level of confidence. We don't know 10 years from now, and that's what we're going to get into on this episode, but we know a year from now. Bezos always used to say the line, this quarter is already baked. This quarter was baked three years ago. I'm working on a quarter, five years from now.…

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