What Do We Do When the World Comes Crumbling Down?
Collapsing Cumulus by Kaptain Krispy Kreme
This is my blog, so I can change the rules. Right?
I know you were expecting to read an article about being insanely interested in everything and the things I have learned about it so far. You were not expecting this article.
And in the same way, most of us were not expecting the world economy to collapse the way it’s doing as we speak. It’s not that it was impossible to predict — the signs were there (although it’s always much easier to spot them after the fact than before). But we are terrible at estimating risk, and the crisis took us by surprise.
Nassim Nicholas Taleb is a Mediterranean man with the looks of someone ten years past his age and a sharp mind that doesn’t conform to the latest hype. A trader turned philosopher, whose favorite pastime is
“[...] teasing people who take themselves and the quality of their knowledge too seriously and those who don’t have the courage to sometimes say: I don’t know….”
In his top seller book, The Black Swan
A Round Of Russian Roulette
If I asked you to play a game of Russian Roulette, you would most likely say no. At least I hope so, because if you said yes, and then died in the game, I would feel responsible for it for the rest of my life. That’s why I won’t ask you to (plus I don’t want to play it either).
But how about a virtual round?
This is all happening inside your web browser, so it’s safe. You won’t die for real. Just press the button.
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Now, imagine it was a real gun you were holding in your hands. By now, you would be dead. That kind of makes the earlier victories (if you got any) worthless. Maybe you lasted for five rounds, maybe a bit longer. Each round you lasted made you money and gave you respect among your peers. But now that you're dead, those things don't matter much, do they?
It was all pure luck, and when the lucky strike was over, you were out -- for good.
We get this. But what we don't realize is that as a society, we are participating in a game of Russian Roulette every day.
We look at the odds (which, according to Taleb, are usually not calculated correctly because the math used does not work outside the classroom) and see that the risk of a market crash is minimal. So we take huge risks (thinking that they are small) -- and never give a thought to what would happen if the worst case scenario came true.
It's like playing Russian Roulette and focusing on the 5/6 probability of winning money, forgetting how dramatic the consequences of the remaining 1/6 are.
Not understanding the risks has brought us to a situation where the world is crumbling down, fast. We are not dead yet -- luckily. Our economy as we know it might soon be, but we can raise again -- not today, and not tomorrow (I don't think we still have seen the end of this tunnel). But we will. This time we just need to make sure we try something different.
We need to stop trying to explain why this crisis took place, and instead think about why its consequences were this big. The next crisis will start from something different anyway, so the learnings on how to notice a crisis like this in advance are not that useful. But we can start building a society that will survive the next dramatic changes.
What do we do when the world comes crumbling down?
We build a better one.
Bring Value First
37 Signals
My favorite example for a company that puts values first and shows a different way to do business, is 37 Signals. This Chicago based software company runs a successful business with a crew of a handful of passionate developers, working only four days per week, without outside funding. Always asking how they can make their products simpler.
The answer is less. Do less than your competitors to beat them. Solve the simple problems and leave the hairy, difficult, nasty problems to everyone else. Instead of oneupping, try one-downing. Instead of outdoing, try underdoing.
Read their book, Getting Real, today.
In my previous article, I wrote about how blogging should be about bringing value and not just adding more noise to the already crowded bit stream we know as the Internet. But there is more to it: Our whole economy needs to think about this.
We need to ask ourselves some big questions:
Are you running with fake money? Are you building a bubble? Or are you creating something lasting that doesn't evaporate the minute banks start falling?
Are you bringing value? Or is the business you work in only a scam built to make money? Is there something more important that you could do instead?
Have you grown enough? Or could it be that you are already too big? Maybe it's time to stop fighting for more market share a bigger organization, and start working on your values instead. It might even help you grow!
Let's be honest: most of our business world is not about bringing value. The companies make products, some of which are useful and some not. But what they really care about is making more money.
And our society is the same. Our governments are obsessed with economic growth and want us to keep spending more and more money to keep the businesses growing. Is it any wonder that nature is falling apart and the majority of the world is living in poverty when the rich can't stop trying to get even richer?
This is why the loss in our huge game of Russian Roulette hurts so much. We have built our economy such that we have too much to lose.
When a business is built on loans and risk money, the fall is inevitable.
When a business is built in a way that its cost structure demands for an ever growing customer base, the fall will not be soft.
That's why we need to change the very foundations of our thinking. And now, with the world as we know crumbling down around us, it's a perfect time to do it.
We have to fight the idea of ever-continuing business growth. And we have to start acting like responsible adults: Let our governments rave over growth and saving national businesses. We can start from our own level, and make our businesses (the ones we own or the ones we work in) smaller, more responsible and extremely value driven.
It just makes sense:
It's safer. Like Seth Godin says, the new great companies are too small to fail.
It's more fun. Everyone wants to feel useful, and we do our best work when we are making a difference. That's engaging -- and fun.
It creates fans. I'm convinced that people can smell marketing from far away. And they (we) want more than to just be a target market. We want heroes, like Eco Libris, who we can follow.
My dream is that we can build a new world where we don't need our governments to come to rescue when the bad companies go down. One where, even if some companies keep playing by the old rules, we can be safe knowing that our own businesses are ones that are making things better.
There is always need for a business that makes the world a better place. And we, the insanely interested, are the ones best positioned to lead the change. That's why I can't help but think of this crisis as an opportunity to see what we can dream up, and how we can change our future!
Let's get to work!
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“What do we do when the world comes crumbling down?
We build a better one.”
Quote of the day ;)
Great read Jarkko.
PS – I loaded the gun up but 6 bullets later I’m still alive!
Great thoughtful article. Enjoyed it and agree wholeheartedly. Thanks for your thoughts.
pf´s last blog post: Networking
@Joshua: I think you should try investing! With your luck, you’d be a millionaire by now. :)
Glad you liked the post!
@pf: Thanks! And great to hear that you agree.
Absolutely fantastic post, Jarkko!! I completely agree that there is tremendous opportunity right now if you have the right outlook and mindset. I am going to follow your advice and GET TO WORK. :) [ps. stumbled]
@mark_hayward: Thanks, man! You’re doing a great job with Train for Humanity and your business. Just keep it up, and the rest of us will follow your lead!
Great article, Jarkko. I think you’re totally right. When both business and government is set up to foster irresponsibility, the most revolutionary thing you can do is be responsible, reliable, and creative.
(Incidentally, I think that creativity is more likely to be found in responsible companies than in companies following the latest craze.)
Joshua Clanton´s last blog post: Unprofessionalism #1: Blog Dis-Integration
@Joshua: That’s an interesting idea: “creativity is more likely to be found in responsible companies.” I think that can well be true, because the responsible companies have a bigger cause for their innovation.
On the other hand, I think it’s possible for a responsible company to follow the latest craze as well. And I hope being responsible will soon become the “latest craze” ;)
“The next crisis will start from something different anyway, so the learnings on how to notice a crisis like this in advance are not that useful. But we can start building a society that will survive the next dramatic changes.”
Do you really think that by building a society we could survive dramatic changes?
There are random events that occurred in the past and will occur in the future no matter how smart humans get no matter how advanced humans get there is still that 1/6 chance of a disaster taking place.
Just my opinion on the blog.
Nicely written jarkko !!!