In early November, I gave a keynote address at Subscription Show 2022. It was a great conference, and the topic fascinated me so much it inspired a series of blogs. This is the first in that series.
What do Black Swans have to do with Innovation? Before we tackle that, let’s get aligned on what a Black Swan is.
The term “Black Swan” was coined by Nassim Nicholas Taleb in his 5-volume series Incerto. The Black Swan was published in 2007 and was credited with predicting the banking and economic crisis of 2008. The book is about the nature and impact of unpredictable events, and in it Taleb offers three characteristics of a Black Swan:
First, Black Swans are outlier events, meaning they’re outside the realm of regular expectations. They’re not something we see every day. Whether it’s a financial downturn, the rise of a very new, very dominant technology like cloud computing, or a surprise attack like 9/11 – they’re singular events.
Second, Black Swans have extreme consequences. Black Swans are hard to forget. We often start conversations about Black Swans with, “Hey – where were you when ‘that’ happened?” The consequences are significant – from loss of financial security to loss of business to loss of life. These consequences are also quick and widespread.
And third, Black Swans are unpredictable. When we look back on Black Swans, we feel like we should’ve seen it coming, but the fact is, we don’t.
As a market strategist, I’m interested in Black Swans because Innovation and Black Swans are often the yin and yang of successful products and businesses. Some products seemingly come “out of nowhere” because they respond effectively to a Black Swan. In some cases, existing companies create the Black Swan event that disrupts others. The emergence of a Black Swan is often devastating, but doesn't necessarily have to be. Organizations that are innovating on purpose can implement practices now that lay the groundwork for not just surviving the Black Swan, but leading the market to what's next.
Innovation and Black Swans are often the yin and yang of successful products and businesses.
In this series, we’ll explore how you can battle a Black Swan and win. To do that we’ll answer several questions about Black Swans and Innovation, including:
How can you prepare for Black Swans, whatever form they arrive in?
How should you think about Black Swans to inspire Innovation?
Where are you vulnerable to Black Swans?
How can you learn from a Black Swan experience?
I’m looking forward to exploring this topic in the coming weeks, and hope you are too!
About the Author
Diane Pierson is the Founder and Principal Market Strategist of Innovate on Purpose, a consultancy enabling successful product innovation for tech companies through strategic focus and powerful go-to-market strategies. Diane is also a visiting instructor at Pragmatic Institute. Contact Diane at email@example.com.