Do you know the term “Black Swan”?
I didn’t know it about it until I read an article recently highlighting how important these things really are, not to our economy but to our entire socio-historical existence. Makes you scratch your head once or twice.
Here’s your primer on what they are:
[…] large events that are both unexpected and highly consequential. We never see black swans coming, but when they do arrive, they profoundly shape our world: Think of World War I, 9/11, the Internet, the rise of Google.
In economic life and history more generally, just about everything of consequence comes from black swans; ordinary events have paltry effects in the long term.
Still, through some mental bias, people think in hindsight that they “sort of” considered the possibility of such events; this gives them confidence in continuing to formulate predictions.
But our tools for forecasting and risk measurement cannot begin to capture black swans. Indeed, our faith in these tools make it more likely that we will continue to take dangerous, uninformed risks.
It made me think of all the events that have happened in my short lifetime that have altered not just the global landscape of how I live and operate but also the the ones that specifically changed my professional endeavors. I know, for instance, that the rise of Google has profoundly shaped my thinking about how I work, how I live, and what I do to earn a living.
It also challenges me to think concretely on how I can not only make the things that I am responsible for thrive through black swans – as the article from which the quote was linked the author is proposing how we should learn to love volatility – it’s not something we wake up every morning and tell ourselves “Love the monkey wrenches today bro!”
It makes me think about my startups and how, if possible, there are opportunities today that we could be taking advantage of that might benefit directly from the black swans that are now noticeable and even, perhaps, become a part of a black swan movement (or be one itself) at some point in the future.
I think the startup economy is all about the black swan – but very few understand the impact (and opportunity) on a very concrete and comprehensive scale.