I finally finished Antifragile: Things That Gain From Disorder, by Nassim Taleb, and I devoured every page of it, word for word. It’s been some time I enjoyed diving deep into a book. Hence, would like to really share what I took away from it, and later try to apply the key lessons into my work.

Sharing them here as reference for myself, and for anyone who might find it useful. This is not a book review, just raw notes lifted directly from the book, with some minor edits, interpretations and categorisations of my own. This is part of my reading list for a new season.

Read past notes:

• (1) Prologue
• (2) Book 1: Intro to antifragility
• (3) Book 2: Antifragility on a systems level and interventionism
• (4) Book 3: Be 90% accountant, 10% rock star - the bimodal strategy of antifragility 
• (5) Book 4: Tinker, have options, don’t be axiomatic in business ?

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Antifragile, Book 4

Options are antifragile

An ability to switch from a course of action is an option to change. An option is what makes you antifragile and allows you to benefit from the positive side of uncertainty, without a corresponding serious harm from the negative side. “If you’re right, you earn big time. If you’re wrong, you lose small.”

Option without shame

Like Britain in the Industrial Revolution, America’s asset is, simply, risk taking and the use of optionality, this remarkable ability to engage in rational forms of trial and error, with no comparative shame in failing, starting again, and repeating failure.

Antifragile options means less knowledge

The vacation resort with the most options is more likely to provide you with the activity that satisfies your tastes, and the one with the narrowest choice is likely to fail. So you need less information, less knowledge, about the resort with broader options.

Options like dispersion of outcomes and don’t care about the average too much

An option doesn’t care about the average outcome, only the favourable ones (since the downside doesn’t count beyond a certain point), or the dispersion around the average. Authors, artists are much better off having a small number of fanatics behind them than a large number of people who appreciate their work. Growth in society may not come from raising the average, but from increasing the number of people in the “tails”, the extremes - a very small number of risk takers.

Be stupid with optionality

If you have optionality, you don’t have much need for what is commonly called intelligence, knowledge, insight, skills. For you don’t have ti be right that often. All you need is the wisdom to not do unintelligent things to hurt yourself (some acts of omission) and recognize favourable outcome when they occur. This property allowing us to be stupid, or allowing us to get more results than the knowledge may warrant, is convexity bias. An option is a substitute for knowledge. Antifragility supersedes intelligence (mostly - some intelligence is needed).

Implementation doesn’t necessarily proceed from invention

It too requires luck and circumstances, randomness to help us out. Greeks had an operating version of a steam engine—the aeolipyle— but it took the Industrial Revolution for us to discover this earlier discovery. To identify the option (against option blindness). 

Simplicity doesn’t lead to discovery

The simpler and more obvious the discovery, the less equipped we are to figure it out by complicated methods.

Trial and error as investment

Trial and error is not really random. Thanks to optionality, it requires some rationality, some intelligence to recognize the favourable outcome and knowing what to discard.

A non-narrative view of things

The causal arrow - does education create economic growth? Or economic growth lead to education? Both sides have examples, and most conflate the correlated for causal.

Difference between narrative and practice

Sometimes even when an economic theory makes sense, its implications cannot be imposed from a model, in a top-down manner, so one needs the organic self-driven trial and error to get us to it. Difference between narrative knowledge versus antifragile, optionality-driven tinkering, trial and error knowledge:

- hates uncertainty vs domesticate uncertainty 

- looks at and overfit to past vs looks at future

- teleological action vs opportunistic action

- psychologically comfortable vs psychologically uncomfortable but a sense of thrill and adventure

- concave (visible known gains, unknown errors) vs convex (small known errors, large possible gains)

- subject to turkey problems (mistaking evidence of absence for absence of evidence) vs can benefit from suckers and turkey problems 

- narrative is epistemological vs narrative is instruction

- trapped in story vs no meaningful dependence on story, narrative used for motivation 

- narrow domain, closed space of action vs broad domain, open space of action

- needs to understand logic of things vs little understanding needed; just rationality in comparing 2 outcomes to exercise better option

Tinkering is not necessarily devoid of narrative

Tinkering can use narrative but not overly dependent on narrative being true. It’s just instrumental but epistemological, eg a myth or folk story might not be true but it might get you to do something convex and antifragile you otherwise would not do.

Ideas and competition

And idea does not survive because it is better than the competition, but rather because the person who holds it has survived.

Not an axiom-centric world

We tend to believe the world works in an axoim-centric way - axioms, first principles, formulas, theory, knowledge first. But the opposite is true - jet engines, architecture, medicine, technology. Romans built aqueducts without mathematics. But many relied on heuristics, empirical methods, via apprenticeship. Experimentation can make people much more careful than theories. Just look how the new is increasingly more perishable than the old. The role of formal knowledge is over-appreciated (even if it does account for some invention). There’s no direct causal arrow from science to the boom of the computer and Internet.

Rules for business

- Look for optionality, rank things according to optionality 

- Preferably open-ended, not closed-ended, payoffs

- Don’t invest in business plans but people (someone capable of changing 6-7 x over his career) because of backfit narratives

- Ensure you are barbelled, whatever that means in your business