What would Warren Buffett’s OSS look like?

Lethargy bordering on sloth remains the cornerstone of our investment style.”
Warren Buffett in his 1990 Chairman’s Letter

It’s been said that 90% of Warren Buffett’s immense wealth has been derived from just 10 deals. That’s 10 deals in roughly 60 years of investing.

Warren undoubtedly gets to see many opportunities but only invests in a select few, bypassing many great opportunities to bet big on the ones that have almost no downside risk.

This is the complete opposite to the way most OSS are treated. We try to do everything and cram more and more into our OSS, even though many features or requirements will never provide much tangible benefit.

I once saw the usage count of an organisation that had paid for around 500 custom tools to be developed on top of core products. Roughly 100 were in common use, some being used thousands of times a month. At the opposite end of the scale, there were around 100 that hadn’t been used in the preceding 12 months. [Have you noticed that the 100 high use tools out of 500 equals 20%, perpetuating Pareto’s 80/20 rule?]

At the time, I’m sure there were good reasons for commissioning the bottom 100 tools, perhaps built for data loads or fixes that were no longer required or used for rare, but important purposes. I’m also sure that some haven’t proven to be worth the time and money invested in them.

In 1998 Berkshire Hathaway acquired a reinsurance company called General Re. “The only significant staff change that followed the merger was the elimination of General Re’s investment unit. Some 150 people had been in charge of deciding where to invest the company’s funds; they were replaced with just one individual – Warren Buffett..”
Robert G. Hagstrom in, “The Warren Buffett Way.”

Buffett made an entire investment team redundant, replacing them with just one man – himself – and proceeded to significantly outperform the high transaction count team with his “slothful” strategy.

Could he achieve similar results in OSS with his minimalist approach? Could we all learn from this quote by Warren, “We don’t get paid for activity, just for being right. As to how long we’ll wait, we’ll wait indefinitely.”

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