3-6-3 Rule

The 3-6-3 Rule is the old banking joke: borrow at 3%, lend at 6%, and be on the golf course by 3pm. It describes the era when banking was a simple spread business — take deposits cheaply, lend at a markup, and the margin was guaranteed by regulation and limited competition. The model matters because it illustrates what happens when a business is protected from disruption: margins are fat, innovation is low, and incumbents optimise for comfort, not value. When deregulation, technology, or new entrants arrive, the 3-6-3 model breaks. For founders, the lesson is two-sided: fat margins in a protected industry signal opportunity for disruption; and if your own business operates on a "3-6-3" assumption, it's vulnerable to anyone willing to compress the spread.

Scan for industries or business models that operate on a 3-6-3 assumption — wide margins, low innovation, regulatory protection. Ask whether technology, deregulation, or new entrants could compress the spread. If you're in a 3-6-3 business, ask what happens when the spread narrows. If you're entering one, the spread is your disruption surface.

The 3-6-3 Rule: protected spread businesses earn fat margins with low innovation. The model signals disruption opportunity when technology or deregulation can compress the spread. Apply it to any industry where margins are wide and effort is low.