The Black Swan as a foreseeable market opportunity

A black swan is a high-impact, hard-to-predict, and rare event that is beyond the realm of normal expectations in history, science, finance, and technology. Preparing for the unexpected turns a Black Swan into a Foreseeable Market Opportunity

White swans are the norm 🦢- Black swans are a foreseeable market opportunity.

black swan south africa 2018

When unexpected events cause economies and capital markets to tumble, politicians, economists, and asset managers like to speak of a “black swan.” These animals are scarce and, therefore, also stand for improbable events in economic theory, which throw the familiar out of balance. I took a picture of the two black swans on the photo in Knysna, South Africa 2017, a beautiful place with amazing animals. As we know, these beautiful animals are rare, but they exist – and as we could find out while traveling in South Africa, sometimes you meet more than one of them.

New York Professor Nassim Taleb used the term in his book “The Black Swan to outline the meaning of this in Innovation, and Crisis Management. The power of highly improbable events”. Nassim Taleb uses a Thanksgiving Turkey to describe why expectations built on historical events can fail dramatically.

“Consider a turkey that is fed every day. Every single feeding will firm up the bird’s belief that it is the general rule of life to be fed every day by friendly members of the human race ‘looking out for its best interests,’ as a politician would say. “On the afternoon of the Wednesday before Thanksgiving, something unexpected will happen to the turkey. It will incur a revision of belief.”

The black swan event has killed the turkey – or in a business context, it can stop your competitors´ ability to execute strategy. | Nassim Nicholas Taleb

Is the Covid19 crisis a black swan event?

The worldwide Covid19 crisis shows us in 2020 how vulnerable our complex globalized social and economic system with its interdependencies is. We realize that the pandemic disrupts global supply chains and little capacity reserves and redundancies in the system.

Pure software companies are less exposed to supply chain disruptions and might even see an exciting market opportunity. Traditional companies have banned all non-essential travel. Travel companies and companies that depend on in-person meetings are affected.

The pandemic was foreseeable.

In a guest article for the “Neue Zürcher Zeitung” (NZZ), he and his co-author Mark Spitznagel explain why the corona crisis should by no means be considered a Black Swan event, “for which being unprepared is excusable.

Nassim Nicholas Taleb and his co-author Mark Spitznagel explain why the corona crisis should by no means be considered a Black Swan event. On the contrary: The global pandemic is a white swan – an event that will undoubtedly occur in the future. 

A global pandemic will undoubtedly occur in the future. The government of Singapore, which called on us as consultants at the time, had already been preparing for a pandemic since 2010 with a detailed plan.

Nassim Nicholas Taleb, NZZ 2020

The Foreseeable Market Opportunity 💥

With change comes opportunity because certain events will damage your competitor’s ability to execute strategy. The challenge is to look out for when these events will occur. The black swan event has killed the Thanksgiving Turkey – and it can stop your competitors’ ability to execute strategy. 

There is always a risk in the business plan, and at the same time, a massive business opportunity. Each shift in spending creates a foreseeable market opportunity. Taleb writes that Singapore took action and already started projects in 2010. The opportunity lies in defining these scenarios and execution models before they occur. Search listening and social listening helps us understand when the time is right – and what we have to do. When the event arrives, you should be ready.

👉  How to find out about the next battlefield, understand its impact, and prepare for it?

👉 How to spot a company worth buying or sell your own company before it´s affected? 

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