In this episode of Business Lunch, Ronald and Ryan delve into the age-old debate of whether to diversify your team or focus on business, drawing inspiration from Warren Buffett’s latest shareholder letter and the challenges faced by conglomerates like LVMH. They explore the nuances of entrepreneurship and offer valuable insights for seasoned business leaders and aspiring entrepreneurs.
Highlights:
“It’s fascinating that oftentimes good at the opposite of good advice is more good advice. Like, so good advice, you should diversify. Good advice, you should focus. Those are both good advice.”
“Diversification is a luxury, not a right. Your ability to diversify is going to be a function of how good of a job have you done with the core business that you have today of getting it systemized and getting it scalable.”
“If you’re going to diversify, be sure that you are number one thinking about what are you diversifying? Are you diversifying your existing company and team, or are you diversifying your own investment portfolio?”
TIMESTAMPS
- 00:00 – Post-Lunch Business Banter
- 02:22 – Warren Buffett’s Success Story
- 03:42 – The Paradox of Good Advice
- 05:03 – Challenges at LVMH: Diversification vs. Focus
- 06:45 – Navigating Entrepreneurial Decisions
- 08:28 – Transitioning Roles: Inventor to Capital Allocator
- 10:22 – Berkshire vs. LVMH: Different Approaches to Investing
- 12:12 – The Pitfalls of Diversification without Focus
- 14:14 – Personal vs. Organizational Diversification
- 15:36 – Applying Diversification Strategies
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