Experience Curve

Ever wonder why some businesses thrive while others falter? It’s because of scale. Business schools teach the "experience curve"—a phenomenon where increased volume leads to improved efficiency.

As Munger puts it, "The very nature of things is that if you get a whole lot of volume through your operation, you get better at processing that volume." This isn't just a minor edge; it's an "enormous advantage" that can determine a company's fate.

When motivated individuals tackle complex tasks in increasing quantities, they inevitably find ways to streamline and perfect their processes.