Avoiding Mistakes… A Master Strategy

“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”

Charlie Munger
Found in Damn Right!: Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger

This Charlie Munger quote has stuck with me since I first encountered it on the Farnam Street blog. While its wisdom is immediate, I haven’t always understood how to apply it.

Then yesterday I came across two real-world examples that brought it to life.

1. While getting my pre-Masters fix on the Fried Egg podcast, I heard an interesting perspective on Rory McIlroy's quest for the elusive Green Jacket. The analysts made a compelling observation: given conditions, Rory could easily make 17 birdies at Augusta. With recent winning scores averaging 11 or 12 under par, he's essentially doing enough to win – if he can just limit his mistakes.

Perhaps Rory's path to victory isn't about being more aggressive or brilliant, but rather about strategically dialling back at critical moments to avoid costly errors. The greatest challenge for such a naturally aggressive player might be knowing when restraint trumps risk.

2. Chatting to a founder of a promising startup the other day, I was reminded of Munger again. They are preparing their marketplace launch and have built impressive momentum by onboarding partners with attractive financial incentives – a smart short-term move.

However, this approach carries hidden dangers:

• They are stuck with unfavourable deals that limits company growth in the future

• Competitors undercut them, potentially triggering partner exodus or a race to the bottom

Instead of competing solely on initial revenue share, they'd be wiser to focus on their platform's unique strengths. Does their technology deliver superior customer retention or lifetime value compared to alternatives? By focusing on these benefits, they’ll avoid relying solely on generous short-term revenue shares, which could cause headaches down the line.

Like Rory, they need to keep a cool head and avoid making mistakes.

If you’d like to chat about go-to-market strategies (or even Masters predictions!), feel free to connect here on LinkedIn or email me at norman@bocaedge.com.