So before I read Antifragile I had read Black Swan by Nassim Taleb because I wanted to get into finance. So her’s the summary:
In Mediocristan, the total number of giants or dwarfs is zero the population is evenly distributed along a bell curve e.g the distribution of height in a population. Hence there are not many tycoons and also not many failed business. They scale well. Examples of such businesses are bakeries, butcheries, accounting firms e.t.c. The common theme in all these is that the more money you want to make the more work you have to put in. Therefore to become rich from these you will have to spend your lifetime working to make it big and most probably only your kids will reap the benefits. This is why we see families like the Waltons make money from the Walmart stores in the second genereation but the founder started off humble and only in his old age did he reap the fruits.
In Extremistan, natures laws are thrown to the wind there are very many dwarfs and maybe 1 or two giants. These businesses do not scale, think of them as write once read many type of ventures. The problem with these types of ventures is that you’ll need what is called a black swan: an event that is characterised by being high impact but ridiculously low probability what people may term as luck. Examples of such businesses are tech, finance, entertainment, writing a book. For example you could write 10 books which don’t even make it to the shelf but you’re eleventh one eclipses the losses that the previous ten had made before that. Same thing with tech startups, you always hear of the ones that have huge success like airbnb but you never hear of the billion dollar loses VC firms make from most tech startups, however what you don’t know is that the losses are dwarfs compared to the giants like airbnb. Same thing with entertainment where an actor may get rejected and only make it after hundreds of auditions.
So the question you’re probably asking is, how will this help me, well it might not if you are risk averse or if you have a family to support but if not this article is just right for you. If you took a list of rich young people who are self made they’ll be in showbiz tech or finance or in another cutthroat industry with giants and dwarfs.What you have to do is look for opportunities in extremistan to gain from black swans that charcterise these industries whether it’s collapses of titans or new technologies that multinationals are too slow to adopt. These industries are highly risky but also have high rewards and can make you a giant, however they require a lot of sacrifice, discipline and an appetite for risk and that is how you can live in extremistan and become rich enough to enjoy your wealth. However you have to remember that this means you have to bootstrap, be ready for many losses (some huge) and give up the middle class lifestyle and also don’t try to reduce the risk because artificial smoothing of risk makes black swans more deadly. Learn to gain from disorder, bureaucracy of others, human greed and reap benefits. On another note this is how you can know that most young rich people are lying about their wealth because their businesses are in the mediocristan realm.