The Lindy effect and betting on things that never change
In the 1960s, comedians often gathered to discuss shows at a deli in New York called Lindy, and observed that the life expectancy of a television comedian is inversely proportional to their frequency of appearance on the medium¹. In essence, they noted that those comedians that had been around longer were more likely to be around in the future, even if they did just did a special every now and then as opposed to the ones that were doing daily acts in the moment. This heuristic which has seen been refined a bit, became known as the Lindy effect because of where it originated.
The Lindy effect is the idea that the future life expectancy of non-perishable things like books, technologies and ideas is proportional to their current age implying that for every additionally period they survive, their life expectancy increases.
As an example, a book such as Pride and Prejudice has been in print for nearly 200 years and so it would be expected it to be in print for another 200 years. Meanwhile, a book published six months ago which is on the NYTimes best sellers list might be the talk of the town right now, but would be expected to survive only six more months. However, if its still around next month, then it would have have a life expectancy of seven more months.
It goes without saying that not everything follows the Lindy effect. For example, for people, as they survive for another year their future life expectancy generally decreases. As Taleb points out in Skin in the game, only nonperishable things can be “Lindy”.
“When it comes to ideas, books, technologies, procedures, institutions and political systems under Lindy, there is no intrinsic aging and perishability. A physical copy of War and Peace can age; the book itself as an idea doesn’t”
One thing that directly follows from the Lindy effect, is that ideas that have stood the test of time, are likely to be the ones that are going to be around in the future. So when deciding whether to read Aristotle’s works or a book published last month, if you are basing that on which books ideas are likely to be relevant five years from now, the answer based on the Lindy effect is obvious.
Lindy as a business strategy
Everyone is always rushing towards new things or things which might result in change. But equally important per the Lindy effect are things which have “survived” for a long time and proven themselves to be “antifragile”.
Jeff Bezos articulates the idea that things that don’t change are extremely important which ties well with the Lindy effect (emphases mine):
“What’s going to change in the next 10 years?” That is a very interesting question; it’s a very common one. I almost never get the question: ‘What’s not going to change in the next 10 years?’
And I submit to you that that second question is actually the more important of the two — because you can build a business strategy around the things that are stable in time.
In our retail business, we know that customers want low prices, and I know that’s going to be true 10 years from now. They want fast delivery; they want vast selection. It’s impossible to imagine a future 10 years from now where a customer comes up and says, “Jeff I love Amazon, I just wish the prices were a little higher.” Or, “I love Amazon, I just wish you’d deliver a little slower.” Impossible. So we know the energy we put into these things today will still be paying off dividends for our customers 10 years from now. When you have something that you know is true, even over the long term, you can afford to put a lot of energy into it
Now, don’t get me wrong — I’m not saying change is bad. Change is very good, and creates a lot of opportunity. And we’re in a time of rapid change on a large scale. But often even when something is changing on the surface, its just replacing something else for a core need that remained the same. For example, when people “change” from shopping in physical stores to shopping online, their behavior may be changing. But their needs have been stable — they wanted low prices, vast selection and convenience, and it so happened that e-commerce was a better means of getting that for them than shopping in physical stores.
The solutions may change, but the needs stay the same since the needs are “Lindy”. Here are some things which we’ve desired for centuries, and per Lindy will likely continue to desire for centuries to come:
- Getting from A to B as quickly/cheaply as possible
- Interaction with others
These are the strategies to base a business on particularly on long term horizons.
¹ Goldman, Albert. “Lindy’s Law.” The New Republic, 1964, www.dropbox.com/s/qripnmgbnvtyx16/1964-goldman.pdf