Tacit knowledge often is localized. It works on a specific set of conditions - might it be contextual, geographic, or other. Though we want to believe in predictable repeatability (pleonasm intented). Valuation models are constructed this way: the past becomes the reference we build upon. Enters the “extrapolation fallacy”. Oftenly, business is not replicable and conditions can’t be recreated at a larger scale: new processes must emerge, new teams & skills are necessary for the next business development phase.
Repeatability is more common in engineered-based business, be it hard assets that keep on giving - think of toll roads; or scalable software business that solve mission-critical processes. Turning around a company is not repeatable. Expanding internationally most often can’t be done with the same playbook - each country has its peculiarities, culture and language.
“Though these complex repertoires appear well designed to meet local challenges, they are not primarily the products of individuals applying causal models, rational thinking, or cost-benefit analyses.” (source)
The topic is more current than ever. This covid19 chaos reinforced the value of structuring theses based on similar and adjacent industry/market players, as it was an event with no previous history to support us on the scenario analysis - so, no predictable repeatability at all