situations where the upside is uncapped and the downside is limited. The expected value of a decision depends not just on probability but on the magnitude of outcomes in each direction.
The core idea
situations where the upside is uncapped and the downside is limited. The expected value of a decision depends not just on probability but on the magnitude of outcomes in each direction.
Connected
Barriers to Entry
obstacles preventing new competitors from entering a market.
Collective Action Problem
incentives to free-ride undermine cooperation for shared benefit.
Comparative Advantage
where your opportunity cost is lowest, not where you are best.
Creative Destruction
destroys established industries to create new, more valuable ones.
Economies of Scale
scale drives lower unit costs, creating compounding cost advantages.
First-Mover
first creates switching costs and brand recognition but bears exploration risk.