Marc Andreessen, for those of you old enough to remember, was the Wunderkind who did the hard work behind a company called “Netscape” (for those of you old enough to remember). Charlie Munger, now in his eighties, is Warren Buffett’s partner, and old enough to remember a lot.

Munger published a book called Poor Charlie’s Almanack, containing a lot of his writings, and an essay on the 25 key forms of human behavior that lead to misjudgment and error. Marc Andreessen has launched a four-part serial on his blog that comments on Munger’s Top 25, but in the context of starting a business.

In fact, Andreessen’s wisdom is inestimably valuable for anyone in business. I urge you to read it.

A small sample:

…from an incentive standpoint the result of shifting from stock options to restricted stock should be obvious: current employees will be incented to preserve value instead of creating value. And new hires will by definition be people who are conservative and change-averse, as the people who want to swing for the fences and get rewarded for creating something new will go somewhere else, where they will receive stock options — in typically greater volume than anyone will ever grant restricted stock — and have greater upside.

And sure enough, in the wake of shifting towards restricted stock and away from stock options, Microsoft’s stock has been flat as a pancake. The incentive works.