Sultans of scale
Economies of scale is a powerful idea from microeconomics. Some of the largest companies, worldwide have put this to good use.
Category: Mental Models
Network effects – part 1
(Writing is hard. Its been over 2 months since I wrote a new blog, because I suffered from a bit of a block. So this blog has been extra hard for me to write. And therefore it may seem extra hard for you to read and for that I apologize.) I am not a fan […]
Other People’s Money
This article first appeared on capitalmind.in. You know what is better than Debt or Equity? It’s Other People’s Money (OPM). Debt is expensive because you need to pay an interest on it. Equity is technically more expensive than Debt because you need to generate better returns for the extra risk that the shareholder is taking. […]
Chinese Bamboo
For the first three years, Chinese Bamboo doesn’t grow much. And then suddenly it grows nearly two feet a day. Chinese Bamboo is also a metaphor for no growth for long periods of time followed by a burst of extreme growth.
Toll Bridges
This blog is about how Toll Bridges print money for their owners.
Force Multipliers
Levers are an example of a force multipliers.
Game theory
Game theory allows us to understand how people act in situations where they are interconnected.
Russian Roulette
Russian Roulette is a metaphor for gambling foolishly. The Credit Rating Agencies were playing Russian Roulette by not awarding to IL&FS.
Privatized benefits, socialized costs.
A made in India credit crisis is taking place.
Short feedback loops
Short feedback loops are powerful. They tell us what we did right and reward us for it and vice-versa, they tell us what we did wrong and punish us for it. Therefore by rewarding or punishing our behavior, short feedback loops alter our behavior.
Interest upon Interest 