2020 may not seem like a banner year for entrepreneurs. In April, the U.S. employment-to-population ratio plunged to its lowest point since the federal government began keeping stats on this metric in 1948 (U.S. Bureau of Labor Statistics). As we write, COVID-19 cases are cresting across the country.
To be sure, there's a lot of risk and uncertainty in the world right now. But that's why now is exactly the right time to consider opening a business instead of looking for a job. Becoming captain of your own fate isn't only liberating; it's also a means to lay claim to your risks and use them to power your self-improvement. Put another way, it's a path to becoming antifragile.
What is antifragility? As author Nassim Nicholas Taleb explains, it's a pervasive yet often little-noticed characteristic that allows institutions, ideas, and people to thrive in an uncertain world. Instead of being damaged by chaos and unpredictability, the antifragile actually benefits from them (Taleb, 15).
To be clear, we're not talking about resilience here. Resilience is when something remains unchanged by an unexpected shock; antifragile things are changed by the unexpected, but instead of degrading, they improve (Taleb, 15).
Antifragility is all around us, Taleb explains. Protests grow stronger when they meet opposition. Books gain popularity when they're banned. Bones and muscles grow stronger in response to a health amount of physical stress.
And, as one study found, one in three people who undergo a traumatic change, like a job loss or the death of a loved one, not only survive but thrive in the aftermath (Tasler, 2016). This so-called "Adaptive Third" seems to demonstrate that human psychology is capable of antifragility, too.
"To argue against entrepreneurship based solely on the fact that there's risk involved misses an essential point: Employees have risk, too; they just don't know it. And that's where the danger lies."
So, what does this have to do with starting a business during uncertain times? Just this: Hanging out your own shingle allows you to cultivate a measure of antifragility that you can't develop as an employee. Here's why.
Starting your own business is risky, sure. But you know what the risks are. When business is slow, you know it, and you can respond accordingly. This might include offering new services, using a different marketing strategy, or looking for another customer base. Seeing revenues decline month-over-month is no picnic, but this and other stressors provide valuable information that make your business stronger (Taleb, 92).
Granted, not all stress is good stress. Past a certain point, stress and hardship do real damage. But to argue against entrepreneurship based solely on the fact that there's risk involved misses an essential point: Employees have risk, too; they just don't know it. And that's where the danger lies.
If an employer is having cash flow problems, the employee isn't likely to hear about it until they either receive a pink slip or, if their position survives downsizing, they find themselves among the unlucky few who now have to do the work of four people. Their risks are hidden; they are isolated from the stressors that can help them gain insight into their situation and act accordingly. Put another way, their position is fragile. (Taleb, 92).
"Continued education helps fortify you against the unknown. It makes you more adaptable, agile, and, yes, antifragile."
Another way self-employment is antifragile is that it spreads out the risk over a larger field, reducing the chance that a single unfortunate event will scuttle the whole enterprise. If a project with one client gets unexpectedly called off, there are other clients who can help support the business (Taleb, 93). An employee, on the other hand, has only one "client:" the employer. When the employer decides services are no longer required, the employee has nothing to fall back on (unless they've developed a side-hustle, which is basically entrepreneurship lite).
Similarly, the risk (and headache) of finding new work is spread out across a wider range of time for the self-employed. Business owners are always marketing their services, even when times are good. Compare that to employees for whom the job search is a rare but stressful experience. When an unexpected job loss precipitates the job search, the experience is even more unpleasant.
Antifragility doesn't come free. You have to adopt a healthy tolerance for risk and uncertainty. Perhaps more importantly, you have to be willing to enroll permanently in the School of Life. Stop learning and you're sunk.
Here's the good news: The more relevant skills and applicable knowledge you learn, the more valuable you become. Everything you learn now can be leveraged to help you land a future opportunity. No knowledge is ever wasted if you're willing to put it to use.
Continued education helps fortify you against the unknown. It makes you more adaptable, agile, and, yes, antifragile.