Why Most Businesses Die Young (The Lindy Effect)
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Why Most Businesses Die Young
Most people build businesses destined to fail.
They chase trends. They follow what's hot right now. They build on shifting sands of fleeting interests that will be forgotten in a few years.
Why are you surprised when your business fades into irrelevance?
You're playing the wrong game.
If you want to build something that lasts, something that continues to provide value and generate income for decades, you need to understand the Lindy Effect.
The longer something has already survived, the longer it's likely to continue existing.
This is your unfair advantage over every trend-chasing entrepreneur burning through investor cash to build the next big thing that nobody will remember in five years.
Let me show you how to build a business that actually stands the test of time.
Why Most Entrepreneurs Fail
Look around you.
Most businesses don't make it past the 5-year mark. Even fewer survive a decade.
The problem isn't usually lack of effort or even lack of skill. It's that they're building on the wrong foundation.
You see some hot new trend – crypto, AI, VR, whatever – and think "this is my ticket." You jump in with both feet. You invest your time, money, and identity into becoming the person who's going to make it big in this new space.
Then reality hits.
The market gets flooded. The trend starts to fade. The bigger players move in. And suddenly, your "revolutionary" idea doesn't seem so special anymore.
You were just another gold rush prospector who arrived too late.
I know because I've been there. I've chased shiny objects. I've pivoted businesses because something seemed more exciting. And I've watched others do the same, over and over.
The brutal truth is that building a business around a trend is a recipe for eventual failure. You're starting with an expiration date already stamped on your forehead.
The Lindy Effect Explained
Nassim Taleb coined this term based on a simple observation: non-perishable things that have been around for a long time tend to stay around for a long time.
Think about it.
Books that have been read for hundreds of years will probably be read for hundreds more. Technologies that have persisted for decades will likely persist for decades more.
The opposite is also true. The app that launched last month probably won't exist in five years.
This isn't just some abstract theory. It's a filter for making better business decisions.
The restaurants in your city that have been open for 50+ years aren't surviving because they're trendy. They're surviving because they solve a fundamental human need in a way that continues to provide value, regardless of what else changes in the world.
Which game would you rather play? The one where you're trying to ride a wave that will eventually crash? Or the one where time is actually on your side?
Timeless Problems Are Your Goldmine
Here's the game-changing insight:
Human needs haven't fundamentally changed for thousands of years.
We still need:
Food and water
Shelter and security
Connection and community
Status and recognition
Learning and growth
Meaning and purpose
The methods of meeting these needs evolve. The needs themselves don't.
Want proof?
Warren Buffett has made billions investing in companies like Coca-Cola, American Express, and insurance companies – businesses addressing basic human desires for pleasure, status, and security.
These aren't sexy tech plays. They're businesses that solve problems people have had for centuries and will continue to have.
When Buffett bought See's Candies, he wasn't buying cutting-edge innovation. He was buying a business that understood people will always desire small indulgences and gifts that make others happy.
That's Lindy thinking. And it's made him one of the richest men on the planet.
How To Identify Lindy-Compatible Businesses
Here's a simple test for your business idea:
Would this problem have existed 100 years ago? Will it still exist 100 years from now?
If you answered yes to both, you're on the right track.
Some examples:
People will always need to eat → Food businesses
People will always need shelter → Real estate
People will always want to look attractive → Beauty and fashion
People will always need to move from place to place → Transportation
People will always need to communicate → Communication tools
But be careful. Just because a need is timeless doesn't mean every solution is Lindy-compatible.
A restaurant addresses the timeless need for food. But a restaurant built around a food fad? Not Lindy at all.
A communication platform addresses a timeless need. But one that depends on a specific technology that could be obsolete in a decade? Not Lindy.
The key is finding where timeless needs meet sustainable solutions.
Amazon: The Ultimate Lindy Play
Jeff Bezos gets it.
When he founded Amazon, he didn't just see an opportunity to sell books online. He saw an opportunity to build the infrastructure for commerce itself.
Why is Amazon still dominating when so many other dot-com era companies are dead and buried?
Because Bezos understood that people will always want more stuff with less effort. That's a timeless desire.
In his 1997 letter to shareholders, he wrote:
"We believe that a fundamental measure of our success will be the shareholder value we create over the long term."
While other companies were chasing quarterly earnings, Bezos was playing the long game. He was building a business that could last for decades, maybe even centuries.
The business models have evolved. The technologies have advanced. But the fundamental mission – to be the most customer-centric company on Earth – remains the same.
That's the Lindy Effect in action.
Moving From Theory To Practice
Enough philosophy. How do you actually use this to build a better business?
Here are five practical ways to apply the Lindy Effect:
1. Pick Boring Problems
The sexiest business opportunities are usually the worst.
When everyone is excited about something, too many players enter the market. Competition becomes brutal. Margins get squeezed. And the trend eventually passes.
The best opportunities are often found in boring, unsexy industries that have existed forever.
Look at Brian Scudamore. He built 1-800-GOT-JUNK into a $300+ million business by professionalizing junk removal – about as unsexy as it gets. But guess what? People have always had junk, and they always will.
Boring problems = exciting profits.
2. Study What's Survived
Instead of following the latest business guru on Twitter, study businesses that have been around for 50+ years.
What do they all have in common? How have they adapted while keeping their core intact? What principles guide their decision-making?
Companies like 3M, Johnson & Johnson, and Procter & Gamble have survived world wars, depressions, recessions, and technological revolutions. There's wisdom in their longevity.
Your business education should include history, not just the latest trends.
3. Think In Decades, Not Quarters
Most entrepreneurs are obsessed with quick wins. They want hockey-stick growth and fast exits.
That's fine if you're playing that game. But it's not compatible with building something that lasts.
When you're making decisions, ask yourself:
How will this affect my business 10 years from now?
Am I building something I'd be proud to show my grandchildren?
Is this sustainable if I had to do it for the next 20 years?
These questions change how you think about everything from pricing to hiring to marketing.
As Charlie Munger says, "Take a simple idea and take it seriously." The simple idea here is to build something that gets better with time, not worse.
4. Create Value Through Scarcity, Not Hype
In a world of infinite digital abundance, what remains scarce?
Attention
Trust
Quality
Craftsmanship
Personal service
Peace of mind
Build your business around delivering these scarce resources, and you'll never lack for customers.
The more digital our world becomes, the more valuable the analog becomes.
Look at Etsy. In an age of mass production, they built a billion-dollar marketplace around handcrafted goods. As technology makes certain things abundant, it makes their opposites more valuable.
5. Focus On Being Useful, Not Revolutionary
Most "revolutionary" businesses fail. Most useful businesses succeed.
You don't need to change the world. You just need to solve a problem in a way that's marginally better than what currently exists.
The businesses that last aren't usually the first movers. They're the ones that execute consistently on proven needs.
Google wasn't the first search engine. Facebook wasn't the first social network. Apple didn't invent the smartphone.
They just did it better, with a relentless focus on being useful to their users.
How To Adapt While Staying Timeless
At this point, you might be thinking: "But what about innovation? What about change? Don't I need to evolve?"
Absolutely. But there's a difference between changing your solutions and changing your core purpose.
The greatest companies maintain their core while adapting their methods.
Disney's purpose has always been to create happiness through magical experiences and storytelling. The mediums have evolved from hand-drawn animation to theme parks to streaming services, but the core remains.
Evolution without purpose is just random motion. Purpose without evolution is stagnation.
Find your balance.
Building Your Lindy-Compatible Business
Here's your action plan:
Identify a timeless human need that you're passionate about solving
Study how this need has been met throughout history
Find the inefficiencies or pain points in current solutions
Apply contemporary methods to solve these problems better
Design your business for sustainability, not just growth
Build systems that improve with time and use
Remember, you're not just building a business. You're building something that could outlive you.
That changes everything about how you approach your work.
The Ultimate Competitive Advantage: Patience
Our culture celebrates overnight success.
We worship founders who build billion-dollar companies in years rather than decades. We chase shortcuts and growth hacks.
But the Lindy Effect teaches us something different. It teaches us that survival itself is evidence of fitness.
Every additional day your business survives, it demonstrates its compatibility with reality. Every year it grows stronger, like a tree developing deeper roots and thicker bark.
In a world obsessed with speed, patience becomes your unfair advantage.
LEGO nearly went bankrupt in the early 2000s after expanding too quickly into theme parks, video games, and clothing. They recovered by refocusing on their core product: the brick. Today, they're stronger than ever because they recommitted to their essence while still evolving their offerings.
You don't need to be the fastest growing company in your space. You just need to be the one that's still standing when the others have fallen.
Conclusion: Build For The Long Game
Most people won't follow this advice.
They'll continue chasing trends, hoping to strike it rich quickly, only to find themselves starting over every few years when the landscape shifts beneath their feet.
But I'm not writing for most people.
I'm writing for you – the entrepreneur who wants to build something meaningful. Something valuable. Something that might still exist a century from now.
The Lindy Effect isn't just some academic concept. It's a lens that can transform how you think about your life's work.
Every business you start is a vote for the future you want to live in.
Are you voting for a world of disposable, forgettable businesses? Or are you creating something designed to grow stronger with each passing year?
The choice is yours. Choose wisely.
Thank you for reading.
– Scott