A Complicated Business is a Bad Business

By: Bradley Binversie

“I would rather step over a 1 foot hurdle than climb an 8 foot fence.”

I’ve heard Warren Buffet and Charlie Munger say something to this logic many times when it comes to business and investments. This is a great lesson for running a business or buying a business.

The research in Neuroscience says our brains are going to be attracted to complex and difficult things. It’s our brains’ way of constantly being distracted and therefore never having to work. However, in business we don’t get extra rewards for the complexity or difficulty of the problem.. So we must fight this urge.

In math or engineering problems, more complexity and variables make it difficult to get consistently get the correct answer. If a business requires too many complex and difficult decisions then it’s a bad business. Complex decisions have too many variables and too many question marks. This makes it feel like the stars must align absolutely perfectly for the business to be successful. Is it possible? Yes, but why would anyone want a business like that? It’s difficult, exhausting, and the probabilities of sustained success are very low. A complex business has too many 8 footers to climb.

Great businesses are easy to understand and the decision making becomes increasingly simplified. Stop climbing 8 foot fences, seek out more 1 footers.