I was just as frustrated as the next person in March 2020 when there was not a single roll of toilet paper to be found on any store shelf in America. Likewise, it was frustrating in January 2021 when Robinhood blocked customers from buying more GameStop stock after the high-volume trading and immense price volatility of GameStop prevented Robinhood from meeting its clearinghouse capital requirements.
I would argue these scenarios, while wildly different, grew from the same seed: the transition to ultra-lean business planning. Grocery stores never have more than a few days worth of inventory at any given time, and Robinhood clearly doesn't have the in-house capital to cover all possible trading scenarios. These lean business models have caused quite a ruckus in America over the last year. But should this change? Should we design businesses to operate extremely efficiently 99% of the time and accept we may butcher the last 1%, or should we design businesses to operate more inefficiently but have 100% uptime?
To me, planning your entire business model around thwarting black swan events is like insisting you only vacation at indoor waterpark resorts to avoid the possibility of bad weather. Sure, your risks are drastically mitigated, but at what cost? It might rain for an hour or two in Fiji, but the sunshine the rest of the trip will more than make up for it.
Business success often necessitates that some risks be taken. Building an ultra-lean business model might cause some hiccups, but taking ten steps forward only to walk back three steps every now and then still gets you farther than taking four slower steps forward.
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