The Endurance Runner's Guide to Business

Why Valuations Rise on Growth and Fall on Preparation

On 18th of November 2004, a research article was published. “Endurance running and the evolution of Homo.” It says that we are not built to be the fastest animals, but we are unusually well built to keep running for a long time. Read the whole research and my handwritten notes here:

The authors explain this through four features.

First,energetics: our legs work like springs; the Achilles tendon and the arch of the foot store energy when the foot lands and release it again when we push off, like a rubber band, making long runs less tiring than they would otherwise be.

Second, strength: running sends much bigger shocks through the body than walking, so humans evolved larger joint surfaces, stronger lower-body bones, and body structures that can absorb repeated impact.

Third, stabilization: when we run, our body is constantly bouncing and twisting, so our big buttock muscles, strong back muscles, narrow waist, swinging arms, balanced head, and neck ligament help keep us steady, like a bicycle balancing while moving.

Fourth, thermoregulation: running produces a lot of body heat, so we became excellent at dumping heat through sweating, reduced body hair, long, narrow bodies, mouth breathing, and possibly brain-cooling blood flow.

The evolutionary idea is that early humans may have developed these abilities around the time of early Homo, possibly to travel across open terrain, reach scattered food sources, scavenge meat before other animals, or even chase animals until they overheated.

Some businesses evolve in almost the same way. In the first phase, the market notices their energy and strength. Energy is the business equivalent of stored spring power: a sharp product, a strong brand, a repeatable model, operating leverage, distribution muscle, customer love, and the ability to grow without spending fresh effort for every rupee of revenue. Strength is the ability to absorb the shocks of growth, a clean balance sheet, high gross margins, strong cash flows, good execution, and enough organizational muscle to carry scale. When these two features become visible, valuations usually soar because investors can see speed, growth, and momentum. But every enduring runner eventually enters the harder phase. The body is now moving fast, impact is higher, heat is rising, and imbalance can become dangerous. That is where stabilization and thermoregulation matter. For a business, stabilization means professional management, deeper systems, better governance, second-line leadership, better supply chain control, thoughtful capital allocation, and reduced dependence on a single product, founder, geography, or customer. Thermoregulation means releasing internal heat before it damages the business, slowing expansion when needed, taking margin pain to build capacity, correcting bad incentives, absorbing regulatory pressure, writing off mistakes, communicating honestly, and allowing the organization to cool down before the next leg of growth. This is the phase investors often misunderstand. When a company is building energy and strength, the numbers look exciting, and the valuation expands. When the same company starts building stabilization and thermoregulation, growth may look slower, margins may compress, investments may rise, and the stock may derate. But that compression is not always decay. Sometimes it is the business growing the body parts needed for the next marathon.

Amazon is an example. In its early years, the market saw the energy of online retail, customer obsession, scale, selection, and the power of a new distribution model. Later, the company continued to spend heavily on fulfillment, technology, cloud infrastructure, Prime, logistics, and new categories. To an impatient investor, many of these phases looked like margin suppression. But structurally, Amazon was not merely chasing growth; it was building stabilization and thermoregulation, systems that could handle scale, absorb shocks, reduce dependence on one profit pool, and prepare the business for future engines like AWS.

Titan is a useful Indian example. In its early stages, the market first saw the impact of branding and organized retail in watches and jewelry, especially through Tanishq. Then came strength, trust, store expansion, design, sourcing, and execution. But Titan’s long endurance did not come only from growth. It came from repeatedly stabilizing the business, moving from watches to jewelry, from jewelry to eyewear, wearables, CaratLane, international jewelry, and lifestyle categories, while also managing gold price volatility, inventory risk, consumer trust, and retail execution.

There were phases where margins, investments, or valuations could look less exciting, but these were often the business equivalent of cooling the body and improving balance before the next run. Built-to-last businesses are not merely sprinters with high growth. They are endurance runners. They first develop the energy and strength to move quickly, and then they develop the stabilization and thermoregulation to survive the heat generated by their own success. We often celebrate the first two and punish the last two. But in the long run, the companies that endure are usually the ones that know when to run, when to absorb shock, when to regain balance, and when to cool down before running again.

There are 4000+ microcaps (with market caps under 3000 Cr) listed on Indian stock exchanges. A few of them are definitely writing the Endurance Running story for their business all the time. Are you watching closely?

Thanks for reading!

P.S. Read the whole research on Endurance Running and my handwritten notes here: drive.google.com/file/d….