Venture Capitalist at Theory

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1 minute read / Oct 16, 2022 /

Antifragility as a Competitive Advantage in 2022

“Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better.”

A friend recommended rereading Nassim Taleb’s Antifragile given the macroeconomic backdrop, which I did this weekend. How does a software company become stronger throughout this volatility?

One way is to ensure a healthy customer base. image

Cyclical companies boom when the economy thrives, but suffer during recessions. They are the hare of Aesop’s footrace. Non-cyclicals are the tortoises advancing inch-by-inch.

In the last 12 months, tortoises have outpaced hares. The blue lines show non-cyclical sector performance & the red lines are cyclical sectors.

I’ve watched some founders shift their sales focus to non-cyclical buyers for this reason. Churn, slower sales processes, & pipeline supply shocks are more likely today from cyclical customers than in the past.

Startups become stronger through downturns, those who improve with stress, evolve to dominate. Darwinism at its finest. Adaptations in go-to-market strategy like this are important strategic questions to ask & answer.

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