How much physical infrastructure anchors the org in place. Every dollar locked in physical assets is a dollar that can't move. Every building or refinery is a bet on a specific future that gets harder to unwind every year.
WEIGHTLESS VS ANCHORED
Minimal physical footprint. Scaling doesn't require building anything new. The org's commitments live in code and contracts, not concrete.
Executives are measured on returns from capital already deployed. Changing direction means writing down assets, which means admitting the prior bet was wrong. So the prior bet runs until it can't.
Capital intensity determines how fast you can change direction. Not because you can't see where you need to go. Because you've spent decades building the road that goes the other way.
When assets are worth more running than written down, the org optimizes for utilization. Rational at the asset level. At the org level it means strategy is shaped by what you already built, not what the market needs. The asset starts making the decisions. You're along for the ride.
Capital/revenue ratio for software companies
Capital/revenue ratio for oil refiners
Purely digital. Infrastructure cost scales with revenue. No physical constraint on what to build next.
Software layer on top of financial rails. The business can grow without proportional capital.
$124B in revenue tied to infrastructure that takes decades and billions to replace. Broadband is the business and the constraint.
40-year refineries. Physical infrastructure priced at original investment. Unwinding it means taking losses nobody wants to authorize.