How to Make Your Business “Antifragile” (and Why You Must)
- Corey Pemberton
“Change is the only constant in life.”
That’s what my mom has told me ever since I could remember. The longer I live, the more I see the truth in it. This goes for health, relationships, and especially business.
As small business entrepreneurs, we have this stereotype that we’re fearless. That we aren’t satisfied unless we’re reaching out of our comfort zones every day or risking it all on a new venture.
I think that stereotype is overblown. Entrepreneurship is exciting and rewarding, but it can be scary too. Unexpected events can throw us off and leave the audiences we’ve worked so hard to build high and dry.
But it doesn’t have to be like that for you. Instead of worrying about what might happen, you can focus on connecting, engaging, and inspiring your growing audience. You can design your business to thrive in the face of uncertainty.
Perfect Planning and Execution Aren’t Enough to Avoid the Unexpected
Unexpected things will happen, despite all of our best-laid plans and good intentions.
Say you were a realtor working in the U.S. market a few years ago. You could’ve been closing deals and raking in commissions, but you couldn’t have kept the housing market from drying up. There’s nothing you could’ve done to stop the mortgage crisis.
These unpredictable events happen in every industry. Things move even faster online, where you’re exposed to constant changes in technology and a competitive, evolving marketplace.
A lot of entrepreneurs don’t know how to react. Their instincts tell them to be more cautious. But being too timid and trying to take all the risks out of business actually does them more harm than good. They fall into a nasty pattern: psyching themselves out of taking action.
You can’t stop unpredictable events from happening. And that’s okay. It’s how your business responds to these events that will ultimately define you and chart your path to success.
Why Most Businesses Struggle with Uncertainty
Small business owners like us are more familiar with craziness than most, but we still struggle to deal with it.
A lot of us treat this stuff like the monster that lived under our beds when we were five. We try not to think about it, and we definitely won’t look at it. Some of us just wish things were different; we think a bigger budget or more employees would make our problems go away.
These “strategies” are self-defeating, and they miss the bigger picture.
It’s not the events themselves that are the issue. It’s how your business is set up – its structure – that determines whether each event will create a disaster or an opportunity.
You might not be in a great position to avoid the harmful effects from unpredictable events right now, but you can be. You can streamline your business to thrive on uncertainty instead of suffer from it.
Accept Uncertainty and Use It to Make Your Business Stronger
You can’t stop the unexpected from happening.
It’s time to stop driving yourself crazy trying to account for every “what if” and remove every risk.
You have another option. You can set up your business to thrive in chaos. Doing this will help make your business profitable and sustainable. It’s a recipe for rising to the top of your niche … and actually getting a decent night’s sleep for once!
How in the world can you do it?
Make Your Business “Antifragile”
It’s time to meet Nassim Taleb.
Taleb is a former options and derivatives trader who made a killing on Wall Street before becoming a professor and author. He’s smart, entertaining, and undoubtedly controversial.
Taleb’s latest book, Antifragile: Things That Gain from Disorder, examines why certain organizations crumble after unpredictable events while others only seem to get stronger.
Antifragile breaks down different systems into three categories:
- “Fragile” – systems that get weaker when unexpected events happen. An example is a wine glass that shatters when you drop it.
- “Robust” – systems that don’t change when something unexpected happens. An example is dropping a bowling ball onto a pillow; the bowling ball doesn’t get any stronger or weaker from the fall.
- “Antifragile” – systems that get stronger under stress and strain. An example is lifting weights, which breaks down muscle tissues but builds them up even stronger.
Antifragile is a massive book, with topics ranging from medicine and mathematics to economics and evolution. But there’s plenty of actionable advice you can apply to make your business more resilient against the unexpected.
5 Unconventional Strategies to Make Your Business Thrive on Change
Here are 5 concepts from Antifragile you can use to design your business to thrive in the face of uncertainty and change:
1. Use The “Barbell Strategy”
The basic idea of the barbell strategy is to invest the vast majority of your time and resources into safe bets and the rest into high-risk, high-reward activities.
Taleb developed this strategy trading on Wall Street. He put about 90% of his money into secure investments and the remaining 10% into speculative ones. He says this causes a slight amount of “stress” that maximizes the potential upside without opening yourself up to a ton of risk.
It’s a lot like going to the gym and trying to lift more weight than last time. You have to keep pushing yourself to make small, gradual improvements. But if you try to add too much weight all at once, you’ll overload your body and probably hurt yourself.
Applying It to Your Business
The barbell strategy is useful for entrepreneurs because we have the power to choose how we invest our time and resources. It’s up to us to do make these decisions, because a boss isn’t going to make those decisions for us.
Using the barbell strategy means focusing 85-90% of your time and money on core business activities – things like engaging your audience, developing better products and services, and finding new customers. Then you can spend what’s left – 10-15% of your time and money – on high-risk, high-reward activities like paid traffic campaigns or exploring new niches.
Avoid putting too many eggs into baskets that might pay off. Using most of your resources on core business activities helps you grow at a sustainable rate. You get the rewards if your risky investments pay off, but you’re still in good shape if they don’t.
2. Resist the Urge to Fix Minor Problems Right Away
Taleb warns us to watch out for excessive “interventionism.” He describes our tendency to want to fix problems right away, even if they’re minor. Our instant gratification culture only makes this worse.
A lot of times it’s easy to see the immediate, short-term benefits of taking action to fix a problem. It’s harder to understand the potential negative consequences because they don’t show up right away; they develop gradually, and the effects compound over time. So our rush to “take action” might put us in a worse position than before.
Taleb gives the example of acne treatment. One form of aggressive treatment – using radiation – can create much more serious health problems like leukemia.
Sometimes the best solution for a minor problem is leaving it alone. Unless you’re certain that acting won’t create worse consequences later on, letting the problem be and watching it closely might be a better strategy – at least for now.
Applying It to Your Business
Say you’re an online health coach, and you’re looking for more clients.
You notice your toughest competitors have started podcasts (listen to Danny’s if you haven’t already, it’s excellent!). Your competitors are seeing success from their podcasts, and you’re eager to get into the game.
So you jump in. You buy the expensive equipment and start recording without ever really considering if you’re able to commit the time and effort into making your podcast great.
You scratch your itch, and you might see short-term benefits in the form of more traffic from the iTunes store. But it takes longer to realize you’ve spread yourself too thin. The content on your blog suffers, leaving you with a mediocre blog and mediocre podcast. “Fixing” your podcast problem left you in a worse position than before.
These kinds of things can be avoided. If your business is doing well overall, resist the urge to rush in and fix the little stuff. Plenty of challenges will come to you all on their own. The last thing you want to do is go out and accidentally create them!
3. Do More with Less
There’s always more to do online. More ways to get traffic. More social media platforms to be on. And so on. A lot of us believe the answer is always to just do more stuff. We beat ourselves up for not working hard enough, and we get swept up in all the latest technology and tools.
Taleb gives us his diagnosis: we have “neomania.” We just flat out love shiny new things, and we want to be a part of all the latest trends.
But sometimes it works much better to stop something you’re already doing than to start something new. Quitting smoking, for example, is one of the most effective ways to improve your health. You get a lot more bang for your buck doing that than trying to eat more vegetables or starting a walking routine.
Applying It to Your Business
Instead of beating yourself up for not squeezing enough new items into your workflow, consider a business “elimination diet.” This is similar to how people find out which foods are causing their allergies. You simply cut out one little activity at a time and watch how it affects your business.
If you’re feeling overwhelmed, ask yourself “What little thing could I stop doing right now?” It might be going from three social media platforms down to two. Or cutting down on your blog posts to spend more time promoting content you’ve already created.
Stop trying to do it all. Your results might shock you. Doing less shows you what’s really important, and you can use the extra time and money you free up to focus on that.
You can reverse these little decisions; don’t be afraid to tinker until you find a combination that works best.
4. Recognize That The World is Non-Linear
There’s a minimum height where you could drop a glass and it would break. But if you dropped the same glass from just a centimeter lower, it wouldn’t.
Minute differences can create two completely different outcomes. The outcome isn’t proportional to the height of the drop. Taleb calls this concept “non-linearity.”
In other words, the devil’s in the details. The slightest change could make the difference between a failure and a great success.
Applying It to Your Business
What does this mean for your business?
Simple. Treat every visitor like they’re the most important one you’ve ever had. For all you know, they could be! You never know when someone will stumble onto your website and lead you to a life-changing opportunity.
This happened to Danny when he was just getting started. Back in 2011, he wrote a guest post on Copyblogger that mentioned a book by Guy Kawasaki. Kawasaki noticed the post and was impressed enough to send Danny an email. This sparked a relationship, and they even worked together on Engagement from Scratch!
Bottom line: work hard to create the best products and services you can, and treat every visitor with the respect and attention they deserve. Paying attention to the details makes you strong in the face of uncertainty. And the slightest margin over your competitors can take you to the top of your niche.
5. Separate Signal from Noise
This section hit me hard.
The more information we take in, the more “signal” we get. So it makes sense to consume as much information as we can, right?
There’s a catch. Looking at more data gives us more signal, but it also gives us more noise. And we don’t get more signal on a relative basis.
This means that the more you look at data, the more noise you’ll see. It’s easy to misinterpret the data and think something’s working when it isn’t, or to overreact and pull the plug on a project just before it takes off. Too much information can lead to bad decisions.
Applying It to Your Business
Checking your analytics is essential to see how you’re doing and spot areas where you could improve. It’s addictive, and it’s easy to take it overboard.
But watching your analytics data too closely makes you more likely to overreact and make bad decisions. Because you look at your data so often, you over exaggerate the importance of short-term changes that aren’t important in the grand scheme of things.
It’s easy to get caught up in checking this stuff all the time, but what really matters? The basics. A loyal audience, customers, and revenue. All of which you could spend more time getting more of if you weren’t so wrapped up in data!
Limiting how often you check your data helps you keep things in perspective. You could set a rule for yourself to only check your analytics 2 or 3 times a week. Or you could set a “cool down” period for yourself where you can’t act for a certain amount of time after looking at your data.
How Will You Handle Uncertainty?
You can’t stop unexpected events from happening, but you can take action now so your business will thrive when they do.
If you follow Nassim Taleb’s strategies from Antifragile, you can turn your size into your greatest asset. You can adapt and learn from change better and faster than your larger competitors.
Designing an antifragile business gives you the confidence you need to stick with your entrepreneurial dreams. Crazy things will happen along the way, but they won’t stop you from connecting, engaging, and inspiring your audience. You’ll handle them just fine.
Thinking about the future can go from a nightmare to something to get excited about … but only if you take action!
How do you overcome the fear of uncertainty to chase your business goals? Do any of Taleb’s tips give you new ideas about what you can do differently going forward? Leave a comment below and let me know!