Failure Science, Why Good Companies Drift and How to Avoid Catastrophe | Durable Value Ep 79

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In this episode of Durable Value, we talk about the science of failure—why even great companies and properties can drift off course, and how to recognize and prevent the subtle missteps that lead to bigger problems. We discuss the difference between luck and skill in investing, the dangers of narrative reinforcement, and practical strategies for building resilience in your business. Whether you're a real estate investor, entrepreneur, or leader, you'll find actionable insights to help you avoid common pitfalls and turn failures into stepping stones for long-term success.

Timestamps:

00:00 - Introduction: The Science of Failure

01:26 - Luck vs. Skill in Investing

02:20 - Information Machines & Signal vs. Reality

02:57 - Luck as Skill: The Genius-Idiot Cycle

03:15 - Real Estate Market Cycles as Levelers

03:38 - Execution Engine: Buying the Right Assets

06:20 - Navigating Seller and Broker Dynamics

07:03 - Macro Understanding from Multi-Market Experience

09:05 - Short-Term vs. Long-Term Thinking

10:33 - Capital Pressure and Market Cycles

11:25 - Institutional Capital and Volatility

12:07 - Raising Capital in Down Markets

13:31 - John Boyd’s OODA Loop: Orienting to Reality

13:50 - Failure as a Path to Success

14:32 - Red Teaming & Pre-Mortems

15:12 - Building a Culture of Openness

15:39 - Rebuilding Systems for the Long Term

16:02 - From IRR to NOI: Adapting to a New Decade

16:22 - Building for Stability and Optionality

19:58 - Closing