antifragility

What Is Antifragility? Antifragility In A Nutshell

Antifragility was first coined as a term by author, and options trader Nassim Nicholas Taleb. Antifragility is a characteristic of systems that thrive as a result of stressors, volatility, and randomness. Therefore, Antifragile is the opposite of fragile. Where a fragile thing breaks up to volatility; a robust thing resists volatility. An antifragile thing gets stronger from volatility (provided the level of stressors and randomness doesn’t pass a certain threshold).

Understanding antifragility

In his book Antifragile: Things That Gain from Disorder, Taleb described antifragility as follows:

Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure, risk and uncertainty. Yet, in spite of the ubiquity of the phenomenon, there is no word for the exact opposite of fragile. Let us call it anti-fragile. Anti-fragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the anti-fragile gets better.

Taleb suggests human society be made antifragile so it can benefit from black swan events.

These events, which are unpredictable and can have severe consequences, are traditionally managed by suppressing randomness, chaos, and volatility.

While black swan events are impossible to predict, Taleb argues that a better strategy is to accept their inevitability and take advantage of the disorder that ensues.

Indeed, Taleb’s antifragility strategy thrives during black swan events because it assumes there is more to gain than there is to lose.

Conversely, the fragility strategy where randomness is suppressed perishes during a black swan event because it assumes there is more to lose than there is to gain.

The concept of antifragility can be applied to almost any industry, including transportation planning, physical fitness, aerospace engineering, project management, risk analysis, and computer science.

For the individual, antifragility helps them navigate a world full of random and unpredictable stressors intent on altering their life trajectory. 

One of the best examples of fragility in action can be seen in fire management, where the systematic prevention of forest fires under the guise of safety makes an evitable fire outbreak much more catastrophic.

Another example is the immune system of the human body, which needs regular contact with pathogens to be capable of defending the body during a serious infection.

If the immune system does not interact with pathogens early in life, it can become hypersensitive, react with sometimes harmless substances, and cause chronic allergies.

The antifragility triad

To explain the difference between fragility, robustness, and antifragility, Taleb used the example of three ancient myths:

  1. Fragility – Damocles is fragile because his life depends on a thin hair that holds a sword above his head. The slightest weakness in the hair means the sword will kill him.
  2. Robustness – Phoenix is robust because whenever he dies, he arises from the ashes and returns to the same state. Stressors do not harm him, but he does not benefit or grow from them either.
  3. Hydra – whenever one of Hydra’s many heads is cut off, two new heads grow back in its place. Hydra is more than robust because she grows stronger as a result of stressors. She is antifragile.

Principles for leading an antifragile life

As you might have guessed, an antifragile way of life involves finding ways to benefit from the chaos and disorder we will inevitably experience. 

Generally speaking, individuals who embrace antifragile principles are playing the long game.

They do not optimize for today or tomorrow, sacrificing short-term efficiency for long-term antifragility.

To achieve this, they engage in second-order thinking where the consequences of their decisions are analyzed for their future impact.

Here are ten simple principles for leading an antifragile life:

  1. Adhere to simple rules and procedures.
  2. Ensure contingency plans are in place so that no single failure can ever be catastrophic. 
  3. Resist the urge to suppress randomness. 
  4. Keep your options open.
  5. Look for traditional habits and rules that have been effective for a long time.
  6. Focus on avoiding what doesn’t work rather than trying to discover what does work.
  7. Take lots of small risks through experimentation.
  8. Avoid becoming consumed or preoccupied with data.
  9. Ensure you have your soul in the game.
  10. Avoid taking risks with potentially significant negative repercussions. 

Key takeaways:

  • Antifragility is a characteristic of systems that thrive as a result of stressors, volatility, mistakes, attacks, or failures. The concept was explained in detail by author Nassim Nicholas Taleb in his book Antifragile: Things That Gain from Disorder.
  • Antifragility argues that since random and chaotic events are inevitable, society may as well position itself to profit from them. This notion contrasts with traditional approaches that favor risk management and the mitigation of negative impacts.
  • Leading an antifragile life means sacrificing some degree of short-term efficiency for long-term antifragility. Considering the second-order consequences of decisions is one way to embody this mindset. Other helpful principles include taking small risks through experimentation, resisting the urge to suppress randomness, and ensuring contingency plans are in place to avoid catastrophic failure.

Connected Business Concepts

Barbell Strategy

barbell-strategy
A Barbell strategy consists of making sure that 90% of your capital is safe, and using the remaining 10%, or on risky investments. Applied to business strategy, this means having a binary approach. On the one hand, extremely conservative. On the other, extremely aggressive, thus creating a potent mix.

Technological Modeling

technological-modeling
Technological modeling is a discipline to provide the basis for companies to sustain innovation, thus developing incremental products. While also looking at breakthrough innovative products that can pave the way for long-term success. In a sort of Barbell Strategy, technological modeling suggests having a two-sided approach, on the one hand, to keep sustaining continuous innovation as a core part of the business model. On the other hand, it places bets on future developments that have the potential to break through and take a leap forward.

Heuristics

heuristic
As highlighted by German psychologist Gerd Gigerenzer in the paper “Heuristic Decision Making,” the term heuristic is of Greek origin, meaning “serving to find out or discover.” More precisely, a heuristic is a fast and accurate way to make decisions in the real world, which is driven by uncertainty.

Bounded Rationality

bounded-rationality
Bounded rationality is a concept attributed to Herbert Simon, an economist and political scientist interested in decision-making and how we make decisions in the real world. In fact, he believed that rather than optimizing (which was the mainstream view in the past decades) humans follow what he called satisficing.

Second-Order Thinking

second-order-thinking
Second-order thinking is a means of assessing the implications of our decisions by considering future consequences. Second-order thinking is a mental model that considers all future possibilities. It encourages individuals to think outside of the box so that they can prepare for every and eventuality. It also discourages the tendency for individuals to default to the most obvious choice.

Lateral Thinking

lateral-thinking
Lateral thinking is a business strategy that involves approaching a problem from a different direction. The strategy attempts to remove traditionally formulaic and routine approaches to problem-solving by advocating creative thinking, therefore finding unconventional ways to solve a known problem. This sort of non-linear approach to problem-solving, can at times, create a big impact.

Moonshot Thinking

moonshot-thinking
Moonshot thinking is an approach to innovation, and it can be applied to business or any other discipline where you target at least 10X goals. That shifts the mindset, and it empowers a team of people to look for unconventional solutions, thus starting from first principles, by leveraging on fast-paced experimentation.

Biases

biases
The concept of cognitive biases was introduced and popularized by the work of Amos Tversky and Daniel Kahneman in 1972. Biases are seen as systematic errors and flaws that make humans deviate from the standards of rationality, thus making us inept at making good decisions under uncertainty.

Dunning-Kruger Effect

dunning-kruger-effect
The Dunning-Kruger effect describes a cognitive bias where people with low ability in a task overestimate their ability to perform that task well. Consumers or businesses that do not possess the requisite knowledge make bad decisions. What’s more, knowledge gaps prevent the person or business from seeing their mistakes.

Occam’s Razor

occams-razor
Occam’s Razor states that one should not increase (beyond reason) the number of entities required to explain anything. All things being equal, the simplest solution is often the best one. The principle is attributed to 14th-century English theologian William of Ockham.

Mandela Effect

mandela-effect
The Mandela effect is a phenomenon where a large group of people remembers an event differently from how it occurred. The Mandela effect was first described in relation to Fiona Broome, who believed that former South African President Nelson Mandela died in prison during the 1980s. While Mandela was released from prison in 1990 and died 23 years later, Broome remembered news coverage of his death in prison and even a speech from his widow. Of course, neither event occurred in reality. But Broome was later to discover that she was not the only one with the same recollection of events.

Crowding-Out Effect

crowding-out-effect
The crowding-out effect occurs when public sector spending reduces spending in the private sector.

Bandwagon Effect

bandwagon-effect
The bandwagon effect tells us that the more a belief or idea has been adopted by more people within a group, the more the individual adoption of that idea might increase within the same group. This is the psychological effect that leads to herd mentality. What is marketing can be associated with social proof.

Read Next: BiasesBounded RationalityMandela EffectDunning-Kruger

Read Next: HeuristicsBiases, Barbell Strategy, Skin In The Game.

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