Black Swan Event

If you’re not a chemist, you can ignore most of this great post at In the Pipeline and still appreciate the premise.

The phrase “Black Swan event” comes from the writings of the statistician and philosopher Nassim Nicholas Taleb. The term derives from a Latin metaphor that for many centuries simply meant something that does not exist. But also implicit in the phrase is the vulnerability of any system of thought to conflicting data. The phrase’s underlying logic could be undone by the observation of a single black swan.

In 1697, the Dutch explorer Willem de Vlamingh discovered black swans on the Swan River in Western Australia. Not surprisingly, the phrase underwent a metamorphosis and came to mean a perceived impossibility that might later be disproven. It is in this sense that Taleb employs it. In his view: “What we call here a Black Swan (and capitalize it) is an event with the following three attributes. First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact. Third, in spite of its outlier status, human nature makes us concoct an explanation for its occurrence after the fact, making it explainable and predictable.

How many industries does this apply to? The music industry, telecom, newspaper publishers, book publishers, computer manufacturers all fell prey to outliers? From where I’m sitting, it looks like every major shift in thinking starts as a Black Swan event, or as my kid will call it, the iPhone event.