[One of the more technical (and optional) chapters, at the end of Skin of the Game]
Rory Sutherland claims that the real function for swimming pools is allowing the middle class to sit around in bathing suits without looking ridiculous. Same with New York restaurants: you think their mission is to feed people, but that’s not what they do. They are in the business of selling you overpriced liquor or Great Tuscan wines by the glass, yet get you into the door by serving you your low-carb (or low-something) dishes at breakeven cost. (This business model, of course, fails to work in Saudi Arabia).
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.
Click through to read the rest of Bain’s article.