moats
Capacity to suffer
The rule
The willingness of an owner-run business to show poor profits for years while it builds something that only pays off much later.
Where it flips
This patience is only worth it if a real reward waits at the end; otherwise it is just suffering. Where it misleads: you praise pain for its own sake. The fix: check there is a real, named payoff, not just endless loss dressed up as patience.
Family- or founder-run firms can bear near-term pain, like a decade of losses to open a new market, that a company chased by quarterly numbers cannot. That patience is itself a lasting edge. It buys time that rivals do not have.
A worked example
A firm spends on building its brand in a new region for six years before it turns a profit. Its reported margins sag the whole time, on purpose. [illustrative]
How to spot it
- ·ownership that is concentrated and pulling one way
- ·the spend tied to a clear, named future payoff
- ·past cycles where this patience actually paid off
Thomas Russo · interviews and letters