old economy” businesses often have low gross margins. Growing wheat is a low-margin business, as is selling goods in a store or serving food in a res… - Reid Hoffman

Years later, Steve Blank and Eric Ries would dub this a “minimum viable product” (MVP). For LinkedIn, the MVP included a user’s professional profile, the ability to connect to other users, a search function to find other users, and a mechanism for sending messages to friends.

What happened? Many things. But the overriding problem was this: The auto industry got too comfortable. As Intel cofounder Andy Grove once famously proclaimed, “Only the paranoid survive.” Success, he meant, is fragile — and perfection, fleeting. The moment you begin to take success for granted is the moment a competitor lunges for your jugular. Auto industry executives, to say the least, were not paranoid. Instead of listening to a customer base that wanted smaller, more fuel-efficient cars, the auto executives built bigger and bigger. Instead of taking seriously new competition from Japan, they staunchly insisted (both to themselves and to their customers) that MADE IN THE USA automatically meant “best in the world.” Instead of trying to learn from their competitors’ new methods of “lean manufacturing,” they clung stubbornly to their decades-old practices. Instead of rewarding the best people in the organization and firing the worst, they promoted on the basis of longevity and nepotism. Instead of moving quickly to keep up with the changing market, executives willingly embraced “death by committee.” Ross Perot once quipped that if a man saw a snake on the factory floor at GM, they’d form a committee to analyze whether they should kill it. Easy success had transformed the American auto

In public market investing, as in many things, you achieve big success when you’re both contrarian and right.