Part 16/17:
In systems governed by normal distributions, consistent effort and risk management yield predictable results. But in a power-law world, persistence, adaptability, and taking calculated risks can lead to outsized rewards—even if many bets fail. The key is to understand what kind of "game" you're playing.
If your environment is a power-law domain—such as innovation, finance, or natural disasters—then the optimal strategy is to make many small bets, knowing that one of them could produce a breakthrough. Conversely, trying to avoid risks entirely can be futile because rare, high-impact events are inevitable.