Black Swan or Ugly Duckling?

Last Thursday, I gave a speech at Ignite Chicago on the relevance of "black swan" events on entrepreneurship. I had originally been asked to talk on fundraising.  However, after a compelling talk by Steve Jurvetson on our monthly network partners call, I made an audible at the line.  So, thanks to Steve for inspiration and content here.

A lot has been written on "black swan" events since Nassim Taleb’s book, The Black Swan: The Impact of the Highly Improbable. In my mind, there  is some overlap with this and chaos theory & non-linear systems. I have attached my presentation if anyone is interested Download 2007_12ignite_blackswan.ppt

Quick points:
— a Black Swan is 1) a rare event, 2) with high impact, 3) that is hard to predict (pattern attributed post event)
    * examples include 9/11, stock market crashes, discoveries like Penicillin, start-ups (eBay, etc)
— most of mankind’s development has been driven by black swans (unstructured randomness)
— black swans key in driving big entrepreneurial successes (payoff inverse to predictability)

When this is coupled with the Law of Accelerating Returns (Ray Kurzweil’s book, The Singularity Is Near: When Humans Transcend Biology), you realize that the opportunity for entrepreneurs continues to grow exponentially. As technology improves non-linearly, this means we will experience as much change in the next 20 years as we have over the past 100. Buckle up…

2 thoughts on “Black Swan or Ugly Duckling?

  1. Matt, great post and presentation. I’ve been focusing on this for a little while now and have posted some initial observations here ( and am working on practical approaches for investors to get better at working with and creating ‘black swans’. Ideas exchange welcome… michael at igniter dot com. Cheers.

  2. Taleb’s “Black Swan” should be required reading for all would be entrepreneurs. His previous work “Fooled By Randomness” is very good as well.

    Right now, I’m not so sure that the U.S. is such a great incubator for entrepreneurial activity – despite easier access to capital. I believe many great ideas are getting caught up in corporations. (Innovation is not corp.’s specialty – whereas derivative work is.) The reason for the hold-up: a) uncertain and rising costs of healthcare and, b) debt-laden students. Who can afford to innovate young or old when you have student loans and/or a family’s livelihood to consider?

    Lastly, this idea of accelerated innovation has been promoted before (e.g. Herman Kahn’s “In The Year 2000”, 1967). Steven Schwarz disputes the notion in “MegaMistakes: Forecasting and the Myth of Rapid Technological Change.” I’m siding with Schnaars on this one. Even in 2007, it’s a myth.

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