How Nassim Nicholas Taleb Saved My Business
My company survived the Covid19 crisis thanks to two valuable advice from Incerto books.
It is not an overstatement to say that I could go bankrupt — like many of my competitors — in this crisis.
Just over 1 year ago, I decided to expand my business — a touristic hostel in Warsaw, Poland — and needed additional resources.
Loans are relatively cheap in Poland. Even young and high-risk companies like mine find rates near 7% per year. I considered for some time taking a loan to finance the expansion.
After some reevaluation, instead of taking any loan, I preferred to bring new partners which would own a considerable portion of the business, although I would still be the main shareholder.
More than once colleagues and family asked me if instead of bringing in new shareholders, would not be better to simply take a loan since the rates were attractive. They even listed the benefits of favouring banks instead of additional business partners:
- The peace of mind of not risking other people money.
- No need to explain to anyone about my decisions, or company results.
- Reduced legal expenses.
Despite that, I had in mind two concepts from the brilliant Incerto books series, written by Nassim Nicholas Taleb: Antifragility and Skin in the Game. They are both the main concepts and the titles of two books from this Lebanese-American writer.
As the author explained in Antifragile: Things That Gain from Disorder:
Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure, risk, and uncertainty. Yet, in spite of 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. This property is behind everything that has changed with time: evolution, culture, ideas, revolutions, political systems, technological innovation, cultural and economic success, corporate survival, good recipes (say, chicken soup or steak…