Writing for Family Capital, David Bain talks about the Lindy Effect, as elaborated upon by Nassim, in terms of family businesses and their longevity.
Could something called the Lindy Effect help to understand why family businesses often survive for so long? Possibly – but one thing is for sure, the Effect offers an intriguing explanation for why some businesses survive longer than others.
The Lindy Effect says that the observed lifespan of a non-perishable item like a business is most likely to be at its half-life. So, if a business is 100 years old, it should expect it to be around for another 100 years. And a business that has been around for 10 years should be around for another 10 years. Under the Effect, the mortality of a business actually decreases with time.
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You who caught the turtles better eat them (Ipsi testudines edite, qui cepistis) goes the ancient adage.
The origin of the expression is as follows. It was said that a group of fishermen caught a large number of turtles. After cooking them, they found out at the communal meal that these sea animals were much less edible that they thought: not many members of the group were willing to eat them. But Mercury happened to be passing by –Mercury was the most multitasking, sort of put-together god, as he was the boss of commerce, abundance, messengers, the underworld, as well as the patron of thieves and brigands and, not surprisingly, luck. The group invited him to join them and offered him the turtles to eat. Detecting that he was only invited to relieve them of the unwanted food, he forced them all to eat the turtles, thus establishing the principle that you need to eat what you feed others.
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