There are those moments in every business where events just come from out of the blue and seem to be random and possibly catastrophic.
When unpredictable events occur, businesses tend to contract and become more conservative. This approach is a commonsense reaction but may not be the best response.
Unpredictable events that can overwhelm the system, societies, economies, and businesses are defined as a “Black Swan Event.”
It was named after discovering the first Black Swans in Australia, which was considered impossible as a potential species at the time of their discovery.
So the realization that black swans existed was a surprise, and that is how the events nicknamed “Black Swan Events” have come to be defined.
Black Swan Events come from seemingly out-of-nowhere, but in hindsight, there are warning signs that could have been read if people only knew what to look for and where.
Examples of Black Swan Events in history include;
The 9/11 Attack
Before the airplanes attacking the World Trade Center, the Pentagon, and possibly the White House (flight 93), the idea that commercial airliners could be hijacked and used as a weapon was the stuff of fantasy.
There were plenty of warning signs that terrorists had been planning something to do regarding airplanes. For example, there were reports about flight students learning to fly and maneuver commercial-sized airplanes but had zero interest in learning how to take-off and, more importantly, land those planes.
In hindsight, in reflection, that critical hint stood out.
The Housing Bubble of 2008
The financial product that was packaging subprime loans into a triple-A prime product to be bought and sold was considered a stroke of genius.
The problem was that once these subprime loans started to default, the interconnectedness of these financial products with all aspects of investments began to unravel.
The economic impact reverberated throughout the United States and the world, and if not for quick response by governments, the economic impact could have been catastrophic.
The COVID Pandemic
In early 2020, rumors of a respiratory illness in China began to be reported. By March of 2020, the world was shut down, with most countries forcing stay-at-home orders on their populace.
The severity of the health crisis and the economic impact on a global scale could have been severe if not for swift actions by governments worldwide.
The speed and severity of the Pandemic appeared as if out-of-nowhere, but in hindsight, warning lights of the potential for a global pandemic were being reported by experts for years.
Black Swans As An Opportunity
What these events have shown is that instability occurs at random.
The story has an upside, just as the world was unprepared for these developments’ sudden impact. So instead of looking at Black Swan Events as an issue, look to Black Swan Events as an opportunity.
For example, businesses that saw the Pandemic as an opportunity to expand through expanding their virtual reach saw tremendous growth instead of those that chose to contact their physical operations.
Zoom as a meeting app lagged in usage and popularity prior to the Pandemic. Since then, Zoom’s valuation, for example, went from approximately $200 million in early 2020 to an astounding $1200 million due to offering a remote tool for people, educators, and businesses alike.
Other industries such as real estate saw challenges from restrictions from in-person activities, eviction and rent regulations changed, and lower inventory.
But others, like Samuel Kooris Brooklyn real estate agent, saw a crushing opportunity as housing became a new hotbed for investments.
Inventory in certain areas decreased, driving the demand higher and higher.
Instead of in-person meetings and showings, virtual tools to do inspections and walk-throughs allowed real estate agents to operate at near-normal levels.
As a result, Sam Kooris real estate showed tremendous growth and operated at a level that many other agents lacked during the pandemic.
The key to surviving unpredictable events such as a Black Swan is to find pivots that you can grow to match the needs of the challenges present.
Great examples of growing and pivoting in the face of these challenges are:
A small upstart virtual meeting tool such as Zoom quickly grabbed the throttle, offering smaller users free access and larger groups a discounted price as soon as the Pandemic hit.
Real estate agents all across the globe suffered tremendous losses until they realized the potential in lower sales volume (due to lack of inventory). Still, the demand drove prices higher, meaning less volume of sales but higher closing prices, thereby raising commissions.