We saw some companies like Zoom that grew their business during the COVID-19 pandemic. Then others failed to understand and pivot accordingly to survive. We\u2019ll discuss more about how to create an antifragile startup<\/a>, why it’s important, and what\u2019s happening in the ecosystem today. <\/p>\n\n\n\n <\/p>\n\n\n\n An antifragile startup is one that\u2019s marked by the following two characteristics:<\/p>\n\n\n\n While there are different ways to buy an antifragile startup, the key is that there\u2019s a need to operate under ambiguous and uncertain situations. Entrepreneurs with an antifragile mindset with keeping focused on staying sane and succeeding through the chaos. These entrepreneurs (and their startups<\/a>) will actually improve as a result of the volatility. <\/p>\n\n\n\n It\u2019s not possible to be completely prepared for every factor and externality that could affect your business. But there are certainly principles that will enable your startup to learn and grow through challenges. <\/p>\n\n\n\n <\/p>\n\n\n\n Nassim Taleb first wrote the book, The Black Swan<\/em> in 2007 where he talked about a world that\u2019s shaped by unpredictable, rare, outlier events. His follow-up book in 2012 was his response to The Black Swan<\/em>, entitled, Antifragile: Things That Gain from Disorder<\/em><\/a>. This book is where the term, \u201cAntifragile\u201d was coined. <\/p>\n\n\n\n In this book, Taleb talked about his theory about how to deal with a world of uncertainty. He proposed building systems that are antifragile instead of trying to predict the unpredictable. As he says in the book, \u201cFragility can be measured; risk<\/a> is not measurable.\u201d<\/p>\n\n\n\n He describes this concept as so: \u201cSome things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventures, risk, and uncertainty. Yet, despite the ubiquity of the phenomenon, there is no word for the exact opposite of fragile. Let us call it antifragile. Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better\u201d. <\/p>\n\n\n\n There are three concepts distinguished in this book: fragility, resilience, and antifragility. These concepts are defined by how they react to stress. <\/p>\n\n\n\n To understand how these three concepts work as relevant to companies. Fragile companies will break under the right kind of stress like glass. This is like what happened to many financial institutions during the 2008 Recession. <\/p>\n\n\n\n Resilient companies will deform when they are stressed, but will bounce back once the stress is removed. These types of companies are like rubber. Not all financial institutions or companies involved heavily with real estate crashed during the financial crisis of 2008. Zillow stashed away $2.5 billion dollars<\/a> as part of its system to withstand downturns in real estate. The company was able to survive through the financial crisis and keep afloat until the market stabilized.<\/p>\n\n\n\n An antifragile company may tear under certain types of stress, but it builds itself back up, even stronger than it was. Antifragile companies are built like muscles. Amazon started as an online book store before the .com bust of the 2000s. However, the company diversified its business, increased demand, and adapted to become stronger than it was. <\/p>\n\n\n\n The concepts of antifragility are relevant to any startup or company that seeks to build a system that can thrive in the face of an unknown future. Startups today are still largely fragile despite the existence of inexpensive productivity technology. <\/p>\n\n\n\n Despite it being easier than ever to start a business, startups continue to be long shots. The reasons why startups have this reputation are commonly answered as due to lack of knowledge, inability to pivot, offering an innovation<\/a> that\u2019s too early or late, or lack of resources.<\/p>\n\n\n\n The real underlying answer however is that there\u2019s a disconnect between expectation and reality at its core. For example, we\u2019ve been told all of our lives that if we go to school and get good grades, we would be on the path to success. Or if your manager tells you that you must accomplish A, B, C, then you\u2019re entitled to that promotion. <\/p>\n\n\n\n But when you’re at a startup, there is no longer this predictable bell curve of what to expect. The good and bad can happen and completely change the trajectory of your business. <\/p>\n\n\n\n <\/p>\n\n\n\n Let\u2019s talk about what a business that\u2019s marked with fragility is first. Fragility has two characteristic<\/a>s: Rigidity (response to volatile events is limited or inflexible) and there are limited points of failure. <\/p>\n\n\n\n A structurally fragile business is the fashion industry. Fashion brands will ride out the current trends<\/a> and when they collapse when these trends go out of style. If the fashion business isn\u2019t able to or refuses to adapt, they often fail faster. <\/p>\n\n\n\n Antifragile businesses share three core fundamentals:<\/p>\n\n\n\n Now let\u2019s discuss these fundamentals in more detail below.<\/p>\n\n\n\n <\/p>\n\n\n\n By building a diversified business, you\u2019re distributing the points of failure. It\u2019s the old adage of \u201cDon\u2019t put all your eggs in one basket\u201d. Hence, if you rely on a few important clients or one supplier, your failure points are strongly tied to that part of your business. So if your most important client leaves, that could leave your business collapsing. <\/p>\n\n\n\n It\u2019s important to consider how it is that you\u2019re diversifying. For example, many companies had their supply chains diversified through having relationships with multiple factories at the start of the pandemic. These factories were all in the same country however. So a lockdown in the country completely stopped the entire supply chain. <\/p>\n\n\n\n The answer to this is using an approach called counter-diversify. During the pandemic, Disney\u2019s travel and theme park businesses were completely devastated. But its streaming business was growing and provided a counter-balance. To add on to the \u201cDon\u2019t put all your eggs in one basket\u201d, you need to go further as the author of Atomic Habits,<\/em><\/a> James Clear puts it: \u201cDon\u2019t put your eggs in too many baskets. The more baskets you manage, the less energy you can put into each one. It\u2019s risky to do things halfway\u201d. <\/p>\n\n\n\n Being diversified in a focused manner, then taking a step further by making an egg in one basket makes all the other eggs more valuable. That is what leads to antifragility.<\/p>\n\n\n\n <\/p>\n\n\n\nWhat is an Antifragile Startup?<\/h2>\n\n\n\n
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What are the origins of the Term?<\/h2>\n\n\n\n
![\"What](\"https:\/\/maccelerator.la\/wp-content\/uploads\/2022\/04\/accelerator-incubators-startups-1024x683.jpg\" "\\"\\"")
<\/figure>\n\n\n\nWho is this relevant to?<\/h2>\n\n\n\n
How to set your startup for antifragility<\/h2>\n\n\n\n
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Built on Diversified, Synergistic Businesses<\/h3>\n\n\n\n
![\"How](\"https:\/\/maccelerator.la\/wp-content\/uploads\/2022\/04\/teamwok-product-development-1024x683.jpg\" "\\"\\"")
<\/figure>\n\n\n\nPrioritize Capacity over Efficiency<\/h2>\n\n\n\n
![\"Trends](\"https:\/\/maccelerator.la\/wp-content\/uploads\/2022\/08\/antifragile-startup-1024x683.jpg\" "\\"\\"")
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