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How to build an antifragile business that gains from disorder, uncertainty, and failure

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The Incredible Hulk is a pretty bad*** superhero.

When he gets angry, he becomes indestructible.

Actually, better than indestructible; the more people piss him off (shoot him with bullets, RPGs, lasers, whatever), the STRONGER he gets.

At one point, Hulk even went up against Superman (supposedly the strongest / most invincible hero in comic-world), and it ended up a draw.

Talk about one nasty honey badger.

But this begs the question…

How can something be better than indestructible?

Better than Indestructible

The answer is simple: better than indestructible is antifragile.

Antifragile, a term coined by Nassim Taleb (who wrote a book by the same name), refers to things that gain from disorder.

Another way to understand this concept is to start with its opposite:

The porcelain tea cup is fragile.  It doesn’t like being thrown around.  In fact, it is hurt from such volatility (throwing the porcelain tea cup onto cement is a catastrophic event for the tea cup).

A bunker (and Superman) is robust.  Drop bombs on it and it can withstand the impact (up to a point).

The average person may believe robustness is the opposite of fragility – that there are only things in this world that are destroyed by disorder and things that can withstand disorder (up to a point), and our job is to avoid the former and build the latter.

But robust is not the opposite of fragile.

The opposite of fragile is its inverse – something that gains from disorder, volatility, uncertainty; something that wants to be shaken, thrown, and disrupted.

Like options traders, haters, or the Incredible Hulk – the more you throw at them, the stronger they becomes.

The Antifragile Entrepreneur

There’s another thing that is, by its nature, antifragile.

Entrepreneurship, by its nature, is a disruption-seeking enterprise.  If everything were consistent, proven, and complete, entrepreneurship could not exist.

But the entrepreneur exists because things are chaotic, disordered, and broken – and because there is room (and need) for change, improvement, fixing, and redesign (and new design).

Of course, just because entrepreneurship is antifragile doesn’t mean all entrepreneurs are antifragile.

On the contrary, many are as fragile as employees at the robot factory, prone to the dips and busts of the market.

Many, but not all.

Some entrepreneurs are antifragile – they thrive on uncertainty, chaos and disruption – and their businesses benefit from such volatility.

This is the type of entrepreneur you want to be (if you care about survival or success).

Of course, to become antifragile requires that you build your businesses in a particular, often times unconventional way – what I like to call “Incredible Hulk-style businesses.”

Here’s how:

7 ways to build an Incredible Hulk-style business (or: how to build a businesses that gains from disorder)

*note: this is my interpretation of Taleb’s Antifragile and my attempt to apply his logic to the world of entrepreneurship.

I would encourage anyone who reads this and finds it interesting to consider reading Antifragile as the book is full of incredible information (that is domain independent and extends beyond science, math, and economics).

1. Start (and ship) often

When it comes to the world of entrepreneurship, some projects you start (and ship) will flop – bad.  Most will have marginal success, but not much (not enough for you to retire off of).  And a few, just a few, will blow up.

Therefore, the more projects you start (and ship), the better, as you will increase the odds of creating something that hits big.

If you only start (and ship) one project – one book, one novel, one album – you are essentially putting all your eggs in one basket and rolling the dice.  It might work out.  If it does, good for you.

More than likely, it won’t (or at least it won’t hit big).

You can’t know unless you continue to start (and ship) – often.

2. Limit downside exposure

Survivability in entrepreneurship, as in life, is less about scoring a big win, as it is about mitigating the big loss.

The hunter doesn’t increase his odds of survival by killing the biggest elephant, but by avoiding snakes, lions, and poisonous berries.

In order for the hunter to limit his exposure to these catastrophic things, he must (1) know what they are, (2) know where they are, and (3) create systems (or easy to follow guidelines) to avoid them.

For example: don’t set up camp in the high grass; don’t hang out by the watering hole; only eat the berries the rest of your crew eats, etc.

In the same way, a business should avoid the snakes, lions, and poisonous berries of their operation: high-barrier-to-entry businesses, fierce competition, and debt.

As a rule of thumb:

High-barrier-to-entry businesses are any businesses that employ lobbyists; you’ll know a fierce competition market when you receive lots of warnings about consulting an attorney, etc.; and debt is, well, debt (don’t go into it to build something).

The following are some systems (or easy to follow guidelines) that will help you limit your downside exposure:

3. Bootstrap everything you can

Bootstrapping means building something (product or service) with limited financial investment (internal or external).

The less money you put into an unproven product or service, the less downside risk if it doesn’t work.  On the contrary, the more heavily you invest in something, the more you NEED it to hit big (remember the John Carpenter Effect?)

When we bootstrap, we automatically limit downside (you can’t bootstrap a high barrier to entry business, nor can you go in debt), yet we can still expose ourselves to unlimited upside depending on what we’re building (more below).

4. Rapidly validate your idea

The sooner you can test your product (or book, blog, movement, etc.) with an audience, the faster you can find the answer to the most important entrepreneurial question: will this work?

When the reverse happens – when we take our time building and perfecting the product before we validate, we run the risk (arguably, the certainty) of going over budget and designing something no one wants.

This is the single thing that cripples more businesses (and dreams) than anything else.

What’s worse, the longer we spend fondling our great idea, the more we fall in love with the solution, and the market hates entrepreneurs who fall in love with their solutions.

So how do we fix it?

Get over yourself: ship fast and ship often.  Create a minimum viable product (service, anything) – something stripped of every feature you think you need (but don’t) – and sell it to someone.

Another rule of thumb: there’s no validation unless money exchanges hands.

5. Create for unlimited upside

The desk-jockey is linear.  In exchange for (supposed) safety, security, and a consistent paycheck, the white-collar worker becomes fragile.  Any sudden movement in the market and there goes his job (and all the – supposed – safety, security, and consistent paychecks).

The entrepreneur, by his nature, is nonlinear.  Meaning: there is an asymmetry to his actions.  1 more hour at work does not mean another $17.25 (plus overtime depending on the time of day) in his pocket (like it does for the linear robot factory employee).  It could very well mean $0.  Or negative (as in – we finance ourselves and lose money because we haven’t made a sale).

But it could also mean $22,105.00 like it did for my friend John Lee Dumas, whose newest product made that from a new webinar (approximately one hour long).

John has embraced nonlinearity by creating products with unlimited payoff.  What is the most John can make from his digital ecourses?  Exactly.

*note: there’s another way that John has leveraged nonlinearity, which is by creating a product that requires very little to scale.  If it blows up, he may need new hosting, maybe a new server to rent…but no new offices, nor new employees are necessary to scale these products.  He has created a very positive, nonlinear business, and it shows.

6. Increase your optionality

Success equals options.

Simply put: successful people have more options than less successful people.

You might disagree with this at first glance, but think about it.

If Richard Bronson, Steve Jobs, or Alexander the Great thousands of years ago wanted to start a new enterprise, could they?  Of course they could.  They could start a dozen.  Money creates options.

Aladdin the street rat, however, is limited in his options (until he finds the genie, which, naturally, increases his optionality and thus his success).

Make sense?

Before you get bummed and throw in the towel because you have no money, realize this: skills create options too.

The skilled copywriter can take on all sorts of new jobs (and charge a premium).  So can the skilled artist, magician, and brain surgeon.  The more skilled we become, and the more skills we learn, the more options become available to us.

Three ways to increase your options:

1. Make lots of money (or be born into a trust fund, which is more common)

2. Make lots of friends (a strong network with skilled people increases your options and opportunities)

2. Acquire and perfect new skills.

The former may seem the most desirable, but in reality, money without skills leads to no money (and still no skills) very quickly.  So if you’re born at the bottom, take comfort – you have the incredible opportunity to learn necessary and essential skills that will increase your optionality as an entrepreneur (and help you create real wealth that lasts).

7. Say yes to projects that abide by these guidelines

This rule is particularly geared toward solo entrepreneurs who are trying to bootstrap a business.

One of the best ways to increase your optionality, limit your downside risk, increase your upside potential, and become antifragile is to take part in as many entrepreneurial projects as possible (to the point where you can still deliver impact in each project).

This works for the same reason that shipping often works: some things you do will work.  Most won’t.

Better to have a 5% stake in 100 companies than a 100% stake in one.

The former makes you antifragile, the latter a slave.

This doesn’t mean throw away the work you’re doing on your startup.  Keep at it.

What I’m saying is: increase your optionality (and antifragility) by teaming up with other entrepreneurs on other projects.  Ones that can leverage your strengths without consuming a ton of your time.  And make sure you have an equity stake if possible (in not, make sure the project itself will lead to growth in your other businesses or expand your network in a positive way).

Want More?

I’m writing a book on collaboration and how to take advantage of this principle (and other antifragile principles) in more depth.

If you’re interested, sign up for the mailing list here to get updates on the book (and get exclusive access to the material as I create it).

Are you antifragile?

So what’s the verdict in your business – are you antifragile?

If not, what can you do to become antifragile?

Leave a comment and let us know how you leverage antifragility in your business – or how you plan to in the future.

Started, finished, and shipped in Windhoek, Namibia.

Total Writing Time: [2:57] hrs.

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