Thursday, June 26, 2008

Black Swan Theory

The black swan theory is :

It takes millions of swans and thousands of instances of sightings, spread over hundreds of years, to prove the fact that all swans are white. But to shatter this strong fact it just takes just one single instance, just one single sighting of just one black swan. The Black Swan diasaproves the entire learning and belief that all swans are white. Similarly For a particular thing/project to be a success it takes thousands of things to be done correctly, precisely and timely. But for the project to be a failure it just takes one single mistake. Infosys made it though history of Indian IT companies , like Infosys there were thousand other companies , which started at the same time and , did almost the same as infosys did , but did they survive ? They didn't , just like the thousands of companies which file for "certificate of incorporation " but fail to get the certificate of registration.

Imagine driving a car. To get home , you have to be perfect about millions of variables, for example steering , cornering, speed , brakes , common sense , etc etc etc. but moment you miss out on a single variable , you crash .

The Black swan is a lot about the positive too. not everyone who buys a lottery ticket get the jackpot, or even this can't be assured if a person keeps buying a lottery all through his life , can get the jackpot by guaranty. Well things just randomize , and some people do get lucky randomly.






Abhishek Sagar