In Nassim Taleb’s most recent book he introduces the concept of Antifragility and its numerous applications. In this article I will discuss how you can use the ideas discussed in your own approach to online learning and starting a business.
One of the core components of anti fragile behavior is Optionality. This concept simply means taking opportunities with a limited downside and potentially infinite upside. Nowhere is this more evident than in online learning. This has been covered previously in our guide to investing in yourself.
Think about it like this if a course costing £100 could teach you a new skill that could earn you thousands or even more in the long term what do you have to lose. Often people write the wrong things off as a loss and an investment- your education is an investment but that expensive piece of furniture you just bought is unlikely to offer the same return in spite of what the salesman told you.
Another interesting concept from the book is domain dependence. This describes a situation in which you only understand a theory within the narrow confines of where you first learnt about it. For example most people consider leaving a margin for error when making financial decisions but not when managing their time. If a journey takes 20 minutes they leave exactly 20 minutes before not considering the potential for unexpected traffic. While this is a straightforward example by applying concepts to new situations you can discover opportunities others have overlooked.
Taleb also argues that there is a difference between academic and practical knowledge. Those who take action and test different approaches often find profitable situations where those that focus purely on theory would miss. Academics often explain things in hindsight and add narratives that were never completely true.
“Yogi Berra said, “In theory there is no difference between theory and practice; in practice there is.””
This brings neatly into the next section which looks at applying these ideas to starting a business.
Starting a Business
When actually starting a business optionality is even more relevant. There is no shortage of material on lean methodology and this approach is also advocated by Taleb. Like the ideas mentioned above you need to set up small cheap experiments to test the demand for your product. If you buy a few cheap samples and none of them sell then you learn your lesson cheaply. That way you can also test a variety of items at the same time and quickly. Make sure you note your findings and make adjustments as nothing is ever really a loss if you learn from the experience.
“A loser is someone who, after making a mistake, doesn’t introspect, doesn’t exploit it, feels embarrassed and defensive rather than enriched with a new piece of information, and tries to explain why he made the mistake rather than moving on.” N Taleb
This idea is all about benefiting from volatility. Vital to ensure you have a limited downside if things dont work out but a near unlimited upside if they do. Starting a business is a risk so you want to make sure the reward is suitably attractive, don’t get started in something where even if you are successful you wont make that much money.
This is a crucial distinction that many people overlook and waste their time on money on starting a business with such small margins that even when it works out they hardly make any money. This is often the case when people import a random product from China to sell on Amazon without making any improvements. Their idea is quickly copied by another seller and their small profits quickly disappears.
Goal Setting and Rest
In order to be successful in any endeavour you need to set clear goals. The book recommends a novel approach called the Barbell strategy. This involves coming up with a conservative and aggressive outcome for each of your goals. When deciding how much you study each day have to appreciate that you are unlikely to always meet your most aggressive goal of studying 3 hours a day. Instead have a conservative goal as well to ensure you do at least fifteen minutes a day and make sure you always meet this no matter what. Aim for most aggressive goal but have a conservative one that you commit to always achieving.
When trying to achieve your goals most people either dont put in enough effort or try to sustain 16 hour days and quickly burn out. In your working life and anything else you need to have periods of high intensity followed by downtime to allow yourself to rest. Instead of doing poor quality work over several hours try to really focus on one task for a shorter period of time and then spend time recovering before starting work again. This gives new ideas and thoughts time to percolate and removes the need people have nowadays to constantly feel busy.
These are just a few of the ideas discussed in the book which perfectly aligns with the philosophy we try to advocate on the site which is learning through taking action. Ideally you use resources online learning to solve problems then test out the strategies they offer and reevaluate. Always question what you are learning and find out what strategies work for you.