Resource Allocation
Capital allocation should shift across company life stages.
You can't optimize everything simultaneously. Growth competes with reproduction. Both compete with maintenance. Energy is finite. Every organism allocates.
Trees have limited photosynthate (sugar from photosynthesis) to allocate between trunk (vertical growth), lateral branches (horizontal spread), and roots (below-ground infrastructure). Optimal allocation changes with life stage:
Juvenile phase (years 0-10): 60-70% to vertical trunk, 20-30% to roots, 10% to lateral branches. Priority: Get tall before neighbors shade you.
Canopy establishment (years 10-30): 40-50% to lateral branches, 30-40% to trunk thickening, 20% to roots. Priority: Expand canopy once competitive height reached.
Mature phase (years 30-100+): 60-70% to maintaining existing branches, 20-30% to root expansion, 10% to new growth. Priority: Maintain position, expand slowly into gaps.
Senescent phase (years 100+): Allocation to defense and reproduction increases. Growth slows.
The shift is genetically programmed but environmentally triggered.
Business Application of Resource Allocation
Capital allocation should shift across company life stages. Early stage: invest heavily in core product (trunk). Growth stage: expand into adjacent markets (branches). Mature stage: maintain position, make selective acquisitions. Constellation's fractal capital allocation applies same rules at every scale.
Resource Allocation Appears in 2 Chapters
Trees shift allocation across life stages - 60-70% to trunk when young, then to lateral expansion, then to maintenance - matching strategy to competitive position.
Life-stage capital allocation →Somatic effort versus reproductive effort creates fundamental trade-offs - salmon's terminal investment versus iteroparous organisms' balanced allocation.
Growth vs. reproduction trade-offs →