The Lindy Effect
There is a lot of noise in the world. In a world where there is a lot of digital information, it is getting harder and harder to find the signal, also called important content, that can help you make better decisions.
Fortunately, there is a rather straightforward method for separating the information that is truly important from the rest of the noise. The phenomenon is known as the Lindy Effect.
Consider Shakespeare’s “Macbeth.” He penned it in 1606, and it has been in circulation for almost four hundred years. According to the Lindy Effect, we should anticipate that it will be somewhere in the neighbourhood of another 400 years.
On the other hand, we may anticipate that it will be around for another 500 years if it continues to exist in the mainstream for another 100 years. The longer it stays around, the more likely it is that it will still be around for a long time to come.
The Lindy Effect expects us to respect and adhere to old trends. In “Antifragile,” Nassim Taleb, did a great job of capturing this well:
“If a book has been in print for forty years, I can expect it to be in print for another forty years. But, and that is the main difference, if it survives another decade, then it will be expected to be in print another fifty years.
“This, simply, as a rule, tells you why things that have been around for a long time are not “ageing” like persons, but “ageing” in reverse. Every year that passes without extinction doubles the additional life expectancy. This is an indicator of some robustness. The robustness of an item is proportional to its life!”
Applying the Lindy Effect will encourage you to “wait and see.” Suppose you are investigating, for example, electric versus gasoline engines, because each year a “newcomer” survives, it implies a proportionate increase in their longevity. In other words, the stability of new projects improves and their fragility reduces with each passing year that they are allowed to continue.
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