Tropophilia in action takes advantage of the convexity bias, it gains from disorder, volatility, uncertainty, disturbances, randomness, chaos, and stressors.
In the words of Nassim Taleb (author of “The Black Swan” and “Antifragility”) there are seven rules for ‘Antifragility’ (which come pretty close to Tropophilia in action):
- Convexity is easier to attain than knowledge
Under some level of uncertainty, one benefits more from improving the payoff function than from knowledge about what exactly one is looking for.
2) A “1/N” strategy is almost always best with convex strategies (the dispersion property)
Reducing the costs per attempt, compensate by multiplying the number of trials and allocating 1/N of the potential investment across N investments, making N as large as possible. This minimizes the probability of missing rather than maximizing profits should one have a win. Research payoffs have “fat tails”, with results in the “tails” of the distribution dominating the properties; the bulk of the gains come from the rare event, i.e., “Black Swan” e.g., 1 in 1000 trials can lead to 50% of the total contributions — similar to the size of companies (50% of capitalization often comes from 1 in 1000 companies).
3) Serial optionality (the cliquet property)
A rigid business plan gets you locked into a preset invariant policy, like a highway without exits — hence devoid of optionality. One needs the ability to change opportunistically and “reset” the option for a new one, by becoming tropophilic i.e., by staying agile, flexible and anticipating frequent ways out, and counterintuitive, staying laser focused i.e., very short-termed, to capture the long term. Mathematically, 5 sequential 1-year options are vastly more valuable than a single 5-year option. This explains why strategic planning has never born fruit in reality: planning has a side effect to restrict optionality. It also explains why top-down centralized decisions tend to fail.
4) Non-narrative Research (the optionality property)
Technologists “harvesting Black Swans” tend to invest with agents rather than on plans and narratives that look good on paper, and agents who know how to use the option by opportunistically switching and ratcheting up — typically people try several technological ventures before choosing one. Note the failure in “strategic planning” to compete with convexity.
5) Theory is born from convex practice more often than the reverse (the non-teleological property)
Textbooks tend to show technology flowing from science, when it is more often the opposite, i.e., “lecturing birds on how to fly.” In developments such as the industrial revolution (and more generally outside linear domains such as physics), there is very little historical evidence for the contribution of fundamental research compared to that of tinkering by hobbyists. In random processes characterized by “skills” and “luck”, and some opacity, tropophilia outperform “skills”. Convexity is replaced with ex post narratives in the history of technology.
6) Premium for simplicity (the less-is-more property)
It took five thousand years between the invention of the wheel and putting wheels in suitcases. Usually, the simplest technologies are ignored. In practice there is no premium for complexification, only in academia. Looking for rationalizations, narratives and theories invites for complexity. In an opaque operation (i.e., most of the time) figuring out ex ante what knowledge is required to navigate is just impossible.
7) Better cataloguing of negative results (the via negativa property) Optionality works by negative information, using knowledge to eliminate what does not work. For this we need to pay for negative results.
To the Health of Your Tropophilic Organization!
JC Wandemberg Ph.D.
President & Founder
About the author: Dr. Wandemberg is an international consultant and stocks trader, keynote speaker, published author, professor, and analyst of economic, environmental, social, managerial, marketing, and political issues. For the past 25 + years Dr. Wandemberg has collaborated with corporations, communities, and organizations to integrate sustainability through self-transformation processes and Open Systems Design Principles, thus, catalyzing a Culture of Trust, Transparency, and Integrity.