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Anti-fragile


Anti-Fragile systems not only withstand shocks but improve as a result. They learn from adversity, adapt to changing circumstances, and evolve to be more robust. For example:

  • Exercise builds. Exertion burns.
  • Vaccines and some exposure to diseases improves overall immunity.
  • Regular bubble bursts overall weeds out the weakness in the economy

In contrast: Most systems are either fragile or at best resilient.

  • Fragile things and systems are vulnerable to shocks and disruptions. For example, glass, weak minds, unprofitable businesses, etc.
  • Resilient things and systems can withstand shock and return to their original state after being disrupted. For example, buildings that are designed to withstand earthquakes.

How to build anti-fragility:

  • Mindset: See uncertainty and volatility as opportunities to learn.
  • Prepare: Actively do things that enhance margin of safety (resilience)
  • Take risks, but within your margin of safety, i.e., avoid making bets that, if unsuccessful, could lead to the Risk of Ruin.
    • Subject your system to controlled levels of stress (variety, volume or velocity) and pressure.
    • Do a pre-mortem, i.e., imagine what scenarios would lead to failure.
  • Learn: Observe failures objectively to identify weaknesses and areas of improvements. Work on them.
    • Build feedback loops across the system to enable information flow.

Footnotes

  • Nassim Nicholas Taleb
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