Why Do Entrepreneurs Chase Growth Over Durability?

David Senra says entrepreneurs chase growth over durability because growth is easy to measure and durability is not. Reading Peter Thiel and Blake Masters, he gives Thiel's test of a great business: the ability to generate cash flows in the future. The value of a business today is the sum of all the money it will make in the future. Most of a tech company's value comes at least 10 to 15 years out. Senra's examples are Apple, a multi-trillion dollar company founded in 1976, 50 years earlier, and NVIDIA, where the value arrived 25 to 30 years in rather than 10 to 15. He had just been reading that Jensen has been running NVIDIA for 33 years.

Charlie Munger thought durability was a first-rate virtue. The importance of future profits is counterintuitive. For a company to be valuable, it must grow and endure. Endure was italicized. Grow was not. Measurement mania obsesses about weekly active users, monthly revenue targets, and quarterly earnings. A company can hit those numbers and still miss harder problems that threaten durability.

The question, as Senra reads it, is whether the business will still be around a decade from now. Success for a year or for five years is not the point. Books are not written about people who run a business for five years. The pattern is a business that grows and endures decade after decade.