Did you design your approach for success — I mean, extraordinary success
I considered titles such as “from fragility to anti-fragility” and “Non-linear success” but finally ended up with a “click-baity” title that you see above.
“Much of modern life is preventable chronic stress injury.” — Nassim Nicholas Taleb
Consider the following examples:
- Same amount of pain killer pills do not provide the same level of relief to two different pain sufferers
- Same COVID-19 virus (or its mutant) does not affect two people the same way — few died and whereas many others didn’t even show any symptoms of bad health
- Same level of training does not elevate the skill level of two soccer (or any sport for that matter) players similarly
- Same player cannot play at the same skill level on two different days
- A porcelain cup does not chip or break when it falls from increasing heights until a (break) point when it breaks
- Commute to work used to 30 minutes when I started at 8:00 in the morning but the same commute used to take an hour when started at 10:00am
- People with similar educational and social backgrounds end up at different levels in their careers — few of them end up as CEOs of large organizations and few struggle to keep a job
- College drop outs end up forming and running biggest companies in the world
- Eating a helping of ice cream could be very gratifying, eating two, even more satisfying but eating five helpings may make one hate ice cream temporarily
- Kingkong can only be a fictional character — its physical size is not sustainable by biological systems => Biological systems also do not scale linearly
Life does not progress linearly. There are activities/pursuits where the upside is limited but downside unlimited, the fragile and the exact opposite — the anti-fragile, where upside is open-ended but the downside is capped. Randomness in nature and life result in the inevitable upside and downside consequences (remember that change is the only constant). So, a perfectly robust approach to anything is only an illusion. Things feel and seem robust only up to a point beyond which they become fragile or anti-fragile.
Given the random nature of complex systems like nature and life, it is hard, if not impossible, to predict when fragility/anti-fragility materializes and affects our plans. So, a practical approach would instead be to focus on decreasing fragility and increasing antifragility than to predict when these fragility inducing factors strike. For example, when planning your drop off to airport to catch a flight, instead of overly optimizing for the best route, it is better to pick the relatively optimal route and then account for buffer time.
Let me illustrate this with an example.
Samir Vartak who founded Sage One investments in Pune, India is a phenomenal investor and his track record backs this up. In his August 2017 Investor Memo, he had presented an interesting analysis on Sensex (India’s oldest stock exchange) returns for the period from 1979 to 2017. During these 38 years, Sensex had grown 251 times (15.5% compounded annual growth rate) and if one missed 1% of the best days, one’s returns would have been ZERO.
This means that all of this enviable upside has come from 1% of the best days — which is great but how does one predict these best days (let alone top 1% of them). No one in the world has been able to predict anything about stock market consistently enough — and yes, not even Warren Buffet. So, here is my tall (but earnest) claim — it is not possible to be able to predict the best days but this should not stop us from being able to capture all of the upside — yes, entire upside can be captured. All one has to do is to be in the market all the days — the bad and the good days. Don’t time the market ! It is tempting to think that inflation is going to be the rage for the next few years and hence corporate profits will fall and hence stock markets will fall. So, avoid the markets for the next couple of years and then get back in to capture the inevitable upside. Well, no one knows when markets are going to fall and when they are going to raise. So long as you have belief that in the long run, they are going to rise (I am very optimistic about rise of Indian stock markets, for example), no point trying to time to market.
To ensure that I’m not cherry picking data here, interestingly if one avoided 1% of the worst days, one’s returns would have been 56,800X (33.4% annualized) — even more temptation to time the markets, I know. In this pursuit of avoiding bad days, the real risk is missing out on the good days.
Career: While a typical career lasts 20–30 years, the inflection points that contribute most to one’s career growth are between ten to twenty (my guess), if that. These inflection points typically hover around organizational changes in the proximity of one’s hierarchy, employer/role change and major educational milestones. Rest of time, one is getting on with the mundane day to day rigmarole of work. So it becomes important to ensure that one hangs around long enough to experience such inflection points and it is equally important to take advantage of them as they materialize. So, I think one of the most important things that one can do to help one’s career is to ask this question oneself regularly: Am I doing enough to take advantage of an inflection point as opposed to trying to force an inflection point? Career progress is never linear!
Entrepreneurship: Similarly, notwithstanding how an entrepreneur defines success, it is my belief (and observation) that a successful entrepreneur’s journey is marked by a few handful of inflection points — onboarding that special client, getting right funding/funding partner, changing product direction early enough (fail fast) etc
In all, it makes lot more practical sense to productively bide time and be ready to jump on the rare inflection points that inevitably come your way than to force (one too many) inflection points to occur.
“I want to live happily in a world I don’t understand.” — Nassim NicholasTaleb
PS: For an in-depth understanding of these concepts, please do read “Antifragile” by Nicholas Nassim Taleb — an absolutely must-read.
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Thanks for your time. In this newsletter, I share my learnings that can help you improve your decisions and make meaningful progress on your goals and desires. I share stuff that I have personally experimented with. To this extent, this is not traditional “self-help” advice.
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