Fantastic write-up on Ellenbogen's approach. The Walmart example really drives home how ruthless power law distibutions are in practice, one bad exit erasing dozens of correct calls is a humbling math. I've learned that conviction in outliers needs both patience and nerve, since trimming winers early feels safe in the moment but compounds into massive oppurtunity cost. Act 2 founders seems like a practical filter to improve base rates.
GREAT 1
Fantastic write-up on Ellenbogen's approach. The Walmart example really drives home how ruthless power law distibutions are in practice, one bad exit erasing dozens of correct calls is a humbling math. I've learned that conviction in outliers needs both patience and nerve, since trimming winers early feels safe in the moment but compounds into massive oppurtunity cost. Act 2 founders seems like a practical filter to improve base rates.
agreed this was a great interview and you did a very good job of summarizing the key points.