Antifragility of Starting Up
I've been reading Nicholas Naseem Taleb's Antifragile. I like the concept of antifragility but some of the arguments are contradictory.
W.r.t starting a new business,
- It would be considered antifragile because there is limited downside (loss of income for x years before shutdown or profitability) and unlimited upside (the business has unlimited upside of making money)
- it would not be considered antifragile because you are subject to adverse outcomes due to small change in your financial situation (like a health crisis or covid economy where you do not have the income to withstand the impact).
I'm trying to articulate this argument in my head and cannot seem to structure this. What are your thoughts?
2 comments
First of all great book! Second I think the postulation of Taleb is that anti-fragility means you benefit from chaos or uncertainty. I think the relationship this could have with starting a new business is most evident in technology or software development.
Well designed designed code brings the developer optionality. While legacy enterprise software packages gives you stability or yield. It just works and has proven to work for a long time. The turkey that just wakes up every day to get fed. He is not incentivised to change its behaviour. But what if the time change, what if the market changes? The legacy software is rigid hard to change. You cant just implement a paradigm shifting technology cause your design doesn't facilitate it. The startup on the other hand has optionality. It hasn't relied on the same database technology for the last 10 years. It hasn't implemented a certain programming language because it was not hot when they started 20 years ago. They can shift what they are doing and fully gain from the changing wind.
This event has given the startup the edge it might need. Think of NVIDIA vs Intel. Who would have thought GPUs would be important. They just for gamers right? Change by lack of a better word is good. If you are anti-fragile that is.
Well designed designed code brings the developer optionality. While legacy enterprise software packages gives you stability or yield. It just works and has proven to work for a long time. The turkey that just wakes up every day to get fed. He is not incentivised to change its behaviour. But what if the time change, what if the market changes? The legacy software is rigid hard to change. You cant just implement a paradigm shifting technology cause your design doesn't facilitate it. The startup on the other hand has optionality. It hasn't relied on the same database technology for the last 10 years. It hasn't implemented a certain programming language because it was not hot when they started 20 years ago. They can shift what they are doing and fully gain from the changing wind.
This event has given the startup the edge it might need. Think of NVIDIA vs Intel. Who would have thought GPUs would be important. They just for gamers right? Change by lack of a better word is good. If you are anti-fragile that is.