About Managing Risks, Barbell Strategy
Stress is necessary for growth. However, it is important to know how to manage Stress and risks when they arise. This note discusses methods for managing Stress and risks in order to predict and manage growth. If you can manage risks, you can predict and manage growth. For example, if you want to become a writer, it is interesting to consider the idea of "doing 90% of a job as a civil servant and 10% as a writer." It is important to be cautious about expecting linear growth in benefits in relation to the investment of assets (time and commitment). For instance, it is uncertain whether a piece of writing that took 100 hours to create will be more successful than one that took only 10 hours. = Benefits are not linear with respect to risk
The book "Antifragile" also provides an analogy about the desire to cheat in relationships, where 90% of people are serious and 10% are like rock stars. It emphasizes the huge risk of causing instant collapse and the importance of not engaging in such behavior. The book also discusses the importance of the order in which risks are taken. Problem of Order In the context of entrepreneurship, there was a topic that sparked controversy about simultaneously working for a large company and starting a startup, with some arguing that one should fully commit to one or the other. However, the answer to this topic suggests that it is better not to completely cut off the possibility of a fallback. From a risk perspective, committing fully (cutting off the fallback) does not guarantee linear results (the relationship between risk and benefits is nonlinear). The allocation of 90% to the large company and 10% to the startup is suggested, as the potential loss of collapse is significant while the potential gain is Sky-high (and the latter is not proportional). https://gyazo.com/64c594a8b7185810a6959d733992125a To clarify, the distinction between linear and nonlinear risks is important. While there may be linear proportionality up to a certain point, beyond that point, the relationship becomes nonlinear, and it is important to adjust accordingly. Taking risks of 10% or 20% is acceptable, but it is best to avoid immediate catastrophic failure. tkgshn July 27, 2020