How to Become Antifragile and Survive Volatility
Mistakes happen. How do you survive them?
As 2020 continues to throw curveballs left and right, the only thing we know for sure is that we have no idea what is coming next. That’s a tough pill to swallow, especially if you are a business owner trying to plan for the next quarter, or even the next week. Consumer behavior continues to shift, and every industry in the world seems to be in a constant state of flux.
With so much volatility, what is an entrepreneur to do? Taylor Holiday has some ideas. Holiday is the Managing Partner of Common Thread Collective (CTC), an agency that helps eCommerce companies grow from zero to $30 million, and recently, the companies he works with have been forced to change the way they operate. As Holiday explains, business owners no longer have the luxury of falling back on old strategies and they can’t make concrete plans for sales, seasons, or events. Instead, Holiday says success will depend on a company’s ability to prepare for every scenario thrown its way.
“When you think about trying to forecast into an environment that is this volatile, there’s huge error bars on any prediction that you’re going to make as a business owner,” Holiday says. “If you think about some of the things that we’re looking at, as we think about Q4, is retail going to be open? Are people going to be able to shop in stores? We have no idea. Is the USPS going to be able to handle the influx of demand on the infrastructure? We have no idea. What is the social position of our country going to be after this election? We have no idea. As you think about that, what you have to accept is the idea that whatever you think is going to happen is likely going to be wrong. What that means is that, unlike years before, when we were in a more stable environment, you need to have plans that account for different possibilities.”
In years past, an eCommerce store or any retail outlet would have been planning for the Q4 holiday season months in advance. Those shops would know exactly what their promotions would be and they would be able to model out the type of traffic in-store and online they could expect. No such models can be created this year.
“As you think about something like your Black Friday promotion, which in years past, maybe a very simple exercise of just going well, we’re going to try and bundle some products and do a discount, you need to consider the possibility, well, what happens, what would our discount be if USPS doubled their rates?” Holiday asks. “Would we still be able to offer and afford free shipping? I would start to have multiple plans….Rather than trying to guess which one is going to be accurate, I would begin to have a multitude of plans for this moment in ways that we’ve never really had to consider that level of volatility before. That’s one of the big things we’re talking with our clients about, is this idea of how do you deal with the idea that you are most likely going to be wrong about whatever you think is going to happen in the future?”
With your plans in place, you can move forward knowing that you have started to build an antifragile company.
Being antifragile is fundamental, Holiday says, because it allows you to absorb the blows when things ultimately go wrong.
“When I think about how I want to build a business, I want to build a business that thrives when I’m wrong,” Holiday says. “I actually want to accept the fact that I am not going to be able to determine the future, and I want to set up the business to be able to survive in almost any environment. That’s the idea of antifragile, is not just that I’m resistant to negative, but actually the negatives can be in an environment in which I succeed.”
Because there are so many variables that contribute to the success or failure of your business, there is no way to accurately predict what will be most important. You can choose to pivot one way when the world moves in the opposite direction. Managing those missteps and coming out on the other side still intact is the only way that any company can thrive.
Becoming antifragile is not easy, though, and it means that you have to be able to see where you are going wrong. Then, once you know where mistakes are coming from, you have to be humble and flexible enough to fix the problems. You also have to set yourself up to battle through challenges.
For example, when your company is too heavily invested in one channel or another, or when the channel you’ve invested in starts to falter, your entire business can crumble. Instead, diversify yourself so that any volatility in one channel doesn’t lead to a massive problem.
Additionally, you have to find a way to stand out among the crowd. Holiday says that in today’s world, getting the attention of a consumer has to be your first order of business.
“You’ve got to break the feed,” he says. “You’ve got to be novel, and you’ve got to figure out a way to differentiate yourself. People are scrolling a mile a day on their phone. If you plan to stop them and break them, then you’ve got to figure out a way to be compelling right off the bat, and a great metric for tracking this.”
When you do track what you see, it’s important to remember that what works now might not work later. Because, again, the future is completely unpredictable, especially now.
“The value of an ad deteriorates in repetition of its use,” Holiday says. “Every time that an ad goes out into the world and every time it’s replicated, it becomes less valuable. That same thing happens with ad formats. We’ve seen it with influencer ads and UGC and the Mashable style, and these formats that have become really popular, eventually their impact is reduced as people encounter them. I think that the key thing, and this is the biggest challenge inside of an organization like ours, is how do you produce a system that constantly generates novel ideas?”
It’s not easy, but CTC has found success for itself and its clients through analytical methods, formulas, and a reverence for the past.
To learn more about all of that and more, check out Holiday’s interview on Up Next in Commerce.