What You Do Not Know
Black Swan logic makes what you don't know far more relevant than what you do know; unexpected events are often caused or exacerbated by their very unexpectedness, so focusing on known risks can leave you vulnerable to the truly impactful unknowns.
THE IDEA
What You Do Not Know
Black Swan logic makes what you don’t know far more relevant than what you do know.* Consider that many Black Swans can be caused and exacerbated by their being unexpected.
Think of the terrorist attack of September 11, 2001: had the risk been reasonably conceivable on September 10, it would not have happened. If such a possibility were deemed worthy of attention, fighter planes would have circled the sky above the twin towers, airplanes would have had locked bulletproof doors, and the attack would not have taken place, period. Something else might have taken place. What? I don’t know.
Isn’t it strange to see an event happening precisely because it was not supposed to happen? What kind of defense do we have against that? Whatever you come to know (that New York is an easy terrorist target, for instance) may become inconsequential if your enemy knows that you know it. It may be odd that, in such a strategic game, what you know can be truly inconsequential.*
This extends to all businesses. Think about the “secret recipe” to making a killing in the restaurant business. If it were known and obvious, then someone next door would have already come up with the idea and it would have become generic. The next killing in the restaurant industry needs to be an idea that is not easily conceived of by the current population of restaurateurs. It has to be at some distance from expectations. The more unexpected the success of such a venture, the smaller the number of competitors, and the more successful the entrepreneur who implements the idea. The same applies to the shoe and the book businesses—or any kind of entrepreneurship. The same applies to scientific theories—nobody has interest in listening to trivialities. The payoff of a human venture is, in general, inversely proportional to what it is expected to be.
Consider the Indian Ocean tsunami of December 2004. Had it been expected, it would not have caused the damage it did—the areas affected would have been less populated, an early warning system would have been put in place. What you know cannot really hurt you.
When to use it
Entrepreneurship: Identifying and pursuing a business opportunity that is genuinely novel and unexpected to most competitors.
Risk Management: Shifting focus from predicting specific events to building robustness against unknown shocks (e.g., redundancy, flexibility).
Scientific Research: Pursuing non-mainstream hypotheses that challenge existing paradigms, as groundbreaking discoveries often arise from unexpected findings.
Personal Strategy: Preparing for career changes or life disruptions by maintaining a margin of safety and adaptability, rather than relying on detailed forecasts.
FROM THEORY TO EVERYDAY LIFE
In practice
September 11, 2001 Terrorist Attack
Taleb argues that if the threat had been taken seriously on September 10, protective measures could have prevented the attack. This is a counterfactual illustration of how expectations can affect preparation, rather than proof that awareness would guarantee prevention.
Secret Recipe in the Restaurant Business
Taleb argues that an unexpected restaurant concept may face fewer competitors than an obvious one. He uses this to connect surprise with potential payoff; the example does not establish that novelty alone makes a restaurant successful.
Indian Ocean Tsunami (2004)
Taleb uses the tsunami to illustrate how lack of warning can magnify harm. He argues that anticipation could have led to warning systems and different settlement patterns.
A MOMENT TO REFLECT
Put it to work.
What Black Swan events could fundamentally change your industry or personal life, yet are currently considered highly improbable?
How does your current knowledge and planning blind you to the potential impact of things you don't know?
Think of a past unexpected event that significantly altered your plans. What could you have done to anticipate or mitigate it?
References
- The Black Swan — Nassim Nicholas Taleb (2007)
CONTINUE THE CONVERSATION
Source texts
- The Black Swan The Impact of the Highly Improbable With a new section On Robustness and Fragility (Nassim Nicholas Taleb)