Getting Started With Antifragile Marketing

by Chiel April 06, 2018

Most people and companies act like turkeys the day before Thanksgiving. Day after day they are being fed with the most delicious stuff. Sure, they have seen through the fences, and have seen the ‘hunter and gatherer’ lifestyle of the wolves, eating a plethora of foods. But their gains are uneven: sometimes they feast for days, and sometimes they conserve their energy and eat very little. To the turkeys looking out this looks insane: sure, these wolves are free to choose and go where they want, but why would you want to when you are being fed daily? They are living the life!

And then, just when their highest point of happiness and lowest perceived risk point is attained, Thanksgiving Day arrives. And oh boy, does the friendly farmer have a surprise for them!

As platitudinal as this attempt at an allegory may be (doesn’t inserting animals to illustrate a point make everything less confrontational?), it helps to paint a picture of the situation many organizations find themselves in. Just substitute a trough with a sales funnel with only one type of customer or channel at the top, and you have the monotonous diet that many marketing organizations are binging on. And then Thanksgiving Day arrives for them…

Bite the one hand that feeds you

A reliance on one type of income wasn’t always a recipe for future famine. It worked fine back in the days before the Great Filter Bubble (GFB 0). When there were only a few media outlets and sources of information which everyone had to read to keep up-to-date, you knew as a marketer where you needed to be to find your future customers. Just buy ads on TV or the major newspapers, and you knew your audience would read your message. Sure, it wasn’t cheap, but what else were you going to do?

But now, with everyone entrenched in their bubbles, and in a world where everyone is a publisher, this approach doesn’t make sense anymore. The adage goes, that ultimately advertising on any new medium or channel is a race to the bottom due to the Law of Shitty Clickthroughs.

The world as a whole, and the world of marketing, seemed to behave more ‘normally’ didn’t it? It seemed to be more predictable. But it never was, and it sure isn’t anymore. In fact, the world of business increasingly is a world of lopsided returns, where the majority of the spoils go to a very small share of the winners. It is our job as marketers to see the world as it is, not as we want it to be. And the fact is, the world of business and marketing plays by power laws and Pareto distributions, not by normal (or “Bell Curve”) distributions, as it does for the distribution of height in people for example.

Bell Curve versus Fat Tails (in Extremistan)Plenty of people (including us marketers) read one article, and believe that’s the extent of what there is to be known on any given subject. Confidently, we go out to clients and advice them with great assurance and confidence that the one thing they need to do is to ‘growth hack their sales funnel’, or whatever the latest fad is.

The problem is, that today this approach doesn’t work anymore. The world our marketing organizations and our customers inhabit, is volatile, uncertain, complex and ambiguous (VUCA). As Nassim Taleb has it, we are living in Extremistan.

For marketing to work in this world, we have to learn to appreciate (if not love) risk, lumpy returns and randomness.

But how do you go about applying this in real life?

I’m glad you asked. 

Marketing in Extremistan

Plenty of people (including us marketers) read one article, and believe that’s the extent of what there is to be known on any given subject. Confidently, we go out to clients and advice them with great assurance and confidence that the one thing they need to do is to ‘growth hack their sales funnel’, or whatever the latest fad is.

Humans are not meant to specialize. The success of us as a species, derives from our ability to be generalists and adapt to a great variety of situations and environments. We are meant to live like cavemen and fireman, resting for great parts of the time, and taking massive action for short periods.

The world is messy, and chaotic. And so is everyone’s decision making. Understand this: you are not rational, and neither are your customers.

How people typically make decisions is by listing out the attributes they care about and then weighing the pros and cons. And then and up overweighing the attributes that are relevant to them personally given their environment and inherent and (sometimes hidden) motivations.

So, what’s marketer to do?

1. Employ the barbell strategy

Taleb describes the “barbell strategy” as “a dual attitude of playing it safe in some areas and taking a lot of small risks in others, hence achieving antifragility.” Playing it safe reduces the potential downside of volatility and taking small risks exposes you to the potentially massive gains from the same chaos.

Marketing barbell strategies - Black Swans Marketing
In a world where we cannot predict the future, focusing on ‘push’ mechanisms and trying to avoid randomness are recipes for the eventual destruction of your business. Playing it safe, similarly, makes no sense. What’s safe now, is gone tomorrow.

The way to hedge your bets, is not by having 80% of your products or assets in something that is relatively ‘safe’, but take plenty of large risks for the other 20%. Similar to someone with an accountant job in the daytime, and a risky side hustle at night.

So how you actually determine what this ‘risky 20%’ should consist of? And how do you start?

2. Don’t go broke

“Great Einstein, you have my full attention!” I can hear you think.

Hear me out though.

Many marketers are focused on the upsides, and doing everything they can ‘right’.

What’s often more important though, is to do no harm to things that are already working. Or to resist the urge to do more or overcomplicate things.

Most people want to be busy-bodies. ‘Productivity’ is the great yardstick to which all success is measured these days. But often, things just need to be left alone.

Via Negativa, or decreasing downsides, is often overlooked, but it’s one of the great levers that aids your ability to buy options. People often look at the economic return of transactions, but don’t understand that transactions alter their incentives, their behavior and the perceived utility of what they invested in.

So, you want to avoid at all costs doing the things that are redundant, or pursuing with marketing projects which aren’t delivering enough to warrant the (time) investment. 

3. Create your Launch Platform

In a world of lopsided returns, some projects and products that you launch will crash – badly.  Most will have marginal success, but not much (not enough for you to retire off of). And a few, just a few, will blow up.

Therefore, the more projects you start (and launch), the better, as you will increase the odds of creating something that hits big.

In a world of lopsided returns, the same goes for addressing markets and choosing channels. Some will not pay off (at all), but some will be your ticket to the marketing hall of fame. You don’t have to be Elon Musk to launch often. Although there is something to be said for doing it with a certain flair.

4. Validate your ideas like Elon

It is much better to do things you cannot explain than explain things you cannot do 

Assuming you’re not building a rocket like Elon, you don’t have to spend years developing your idea, prototyping it, testing it, and finally, building and launching it. You can get your ideas off the ground much faster.

Most people think that carefully planning your next big idea minimizes risks. They feel they need to answer the “unknown knowns”, so they can assess the risks and develop tactics to mitigate those risks.

But as we have shown before, you need to embrace risks, not try to box them in. We work with a process that lets you launch something people are willing to pay for, before you build it. By focusing extremely closely on the problems faced by your target audience, and finding the gaps that currently exist in the offerings of your potential competitors, we help you develop your ideas like Elon does (OK, we can’t all be like Elon, but we can follow similar processes).

Adopting First Principles thinking, your team can break down the problems your audience is facing into its core components, and start developing your innovative solution based on these components.

We have developed the “Hunch – Launch – Crunch” framework to guide you through this process.

In the ‘Hunch’ phase, we start with a certain ‘gut feeling’ of where opportunities lie. We tend to trust these more than overdeveloped theories. We turn these ‘gut feelings’ into heuristics and testable hypotheses, so we can evaluate whether there is indeed a market for your idea.

In the ‘Launch’ phase, we don’t focus on building the product, but instead we focus on building your minimum viable audience. The efforts are directed at building your sales funnel and crafting your sales pitch. We want to minimize the costs of putting your idea out there, and at the same time maximize the odds of reaching your first real customers. These will be your evangelists in the future phases when it comes to rolling out your idea.

Finally, the ‘Cruch’ phase is where the ultimate tinkering and rigorous weeding comes in. Applying 80/20 tools, we break down where (approximately) 20% of the customers or profits came from. Based on this, we either 1) distill it down to the most profitable sector or customer group that generates the bulk of your profit, 2) decide to cut the program entirely, or 3) take massive action to extend the scope of this program.

It’s based on a lot of tinkering, coupled with exploring the edges and taking lots of small risks, to create new businesses, marketing channels or tap into new audiences. 

Now go build your rocket ship!

In a VUCA world, the only certainty you’ll have as a marketer, is to embrace uncertainty. By applying the universal principles of Antifragility to your marketing organization, I have shown the 2 What’s and 2 How’s of Antifragile Marketing:

W1) Use Barbell Strategies – take lots of small risks

W2) Don’t Go Broke – it’s more important to avoid mistakes or waste of time and resources

H1) Develop a Launching platform – get your organization in order to be ready to continuously test your ideas

H2) Use the Hunch – Launch – Cruch framework to take massive action on your risky marketing projects to increase the odds of positive lumpy returns

Your industry might still resemble the turkey farm we painted in the intro to this post. People may think things are going great now, and will continue to be great in the future. There may be a lot of resistance to change.

Great! More opportunities for you to stand out, be different, and propel yourself out of complacency.

It might just be your rocket ship out of a dying industry, or into a new planet of undiscovered customers. 

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