Following our posts on the Fourth Revolution being the realm of the exponential, this nice blog by Paul Graham (a famous Venture Capitalist investor), “Black Swan Farming”, brings closer the related issue of the fact that today, success is extremely rare – and extremely successful. And that as much as the exponential is not intuitive to us, this situation also escapes our common sense. It makes it in particular difficult to take action and put our stakes on the right candidates.
In the case of startups this expresses itself by the fact that only a very, very, very small handful of startups will make it really, really, really big (1,000x the initial investment or more); and they dwarf almost every other investment – they dwarf hundreds of other investments which either outright fail, or just live on with a nice but limited growth.
This is difficult enough to apprehend; where to invest in is equally counter-intuitive: it is mainly in ideas that seem at first view utterly pointless, and that are not popular.
The important idea in this blog is the fact that the situation is so counter-intuitive that we would need in fact to suspend all kind of intuition about whether a startup could be successful to increase our chances of final success – by taking more risk and capturing more of these freak Black Swans.
We already live in a world which is counter-intuitive through exponential and freak events – we absolutely need to change our frames of mind to thrive in the Fourth Revolution. What are you doing to change from the linear vision of the Industrial Age?
