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This is part of the Capital topic cluster, which belongs to the Business Expertise Triad.

The Expertise of Capital in Business: A Series

Table of Contents

Business expertise consists of two big things: cognitive agility, and a mental model of business that may be best described as three legs of a triad: Operations, Market, and Capital. Broadly speaking, Operations is ‘factors affecting company operations’, Market is ‘factors influencing the market the company is selling into’ and Capital is ‘factors driving business finance and economic climates’.

This series focuses specifically on the Capital side of the triad. What does the expertise of Capital in business look like? What are its forms? Who is good at it? What are some real world case studies that demonstrate the shape of this expertise in action?

Capital is interesting mostly because it is not obvious. To a novice business observer, what is important in business is running things well (Operations) and competing successfully for market share (Market). It’s not immediately obvious that Capital ties into operations and strategy, or that there are as many creative ways to access liquidity as there are ways to run operations and to run strategy. But most operators learn that there is expertise in Capital, and they usually learn this the hard way: they are outcompeted or outmanoeuvred by those who are good at it.

We start with a series of business stories, and then work our way through to explore various instantiations of the expertise in business. Note: this is an ongoing series.


“I am a better investor because I am a businessman, and a better businessman because I am an investor.” – Warren Buffett, probably referring to the Capital leg of the business expertise triad.


“The best managers understand the capital cycle as it operates in their industries and don’t lose their heads in the good times.” – Neil Ostrer, William Arah, Capital Returns, Investing Through the Capital Cycle.


“... the heads of many companies are not skilled in capital allocation. Their inadequacy is not surprising. Most bosses rise to the top because they have excelled in an area such as marketing, production, engineering, administration or, sometimes, institutional politics. Once they become CEOs, they face new responsibilities. They now must make capital allocation decisions, a critical job that they may have never tackled and that is not easily mastered. To stretch the point, it's as if the final step for a highly-talented musician was not to perform at Carnegie Hall but, instead, to be named Chairman of the Federal Reserve.” – Warren Buffett, 1987 Berkshire Hathaway Shareholder Letter


List of Essays in the Series

  1. Dell's Capital Expertise — You might think that the Dell Computer Corporation is the story of smart supply chain innovations and counter-positioning against its larger, better funded competitors. And it mostly is. But Michael Dell also turns out to be a savvy Capital operator, and we trace the development of his skill through two stories from his history.
  2. The Skill of Capital — What is the skill of capital anyway? What does it look like? How do you recognise it? Why is it even important? We walk through three stories, and then we talk about the shape of the skill in practice.
  3. Fundraising Without Investors (members only) — What the skill of capital looks like in a smaller business. Includes two personal stories of capital expertise that was foundational to my business education; this essay argues that financing creativity matters at all levels of business, not just in the large.
  4. Lee Walker and the Dell Growth Plateau — A return to Dell’s early history, in order to test your understanding of capital expertise ‘in-the-small’. As it turns out, Lee Walker was critical to Dell’s eventual success in more ways than one — Walker’s dealmaking expertise was necessary to break through Dell Computer’s most challenging growth plateau.
  5. The Capital Cycle — What can a famous investing framework, built around a simple financial concept, now regarded as part of the modern canon of value investing, teach us about capital expertise in business?

Originally published , last updated .