Black swan events are now a staple of our daily vocabulary. Popularized by Nassim Taleb’s book “The Black Swan” (2007), the term is a metaphor for a totally unexpected event that catches the observer on the wrong foot. After the fact, experts try to rationalize the event, and it seems clear, that it just had to happen. The black swan problem dates from the 1930’s, when Austrian philosopher Karl Popper became known for his work on empirical falsification. In a nutshell, he described the event where just one observation contrary to a thesis proves the thesis wrong.

So does this apply to technology? Of course, in a major way. Who has not heard VCs say they are only interested in black swans? Who has not read a business plan that stated that a particular venture had “black swan potential?” Chances are they are not talking about black swans in the original sense of the term. Most people may be comparing apples to oranges.

Taleb regards almost all major scientific discoveries, historical events, and artistic accomplishments as black swans, undirected and unpredicted. He lists the Internet, the personal computer, World War I, and the September 11 attacks as examples for black swan events. If we put the emphasis on the word “unpredicted,” the definition runs contrary to the popular use of the term. Nobody who is working on an invention can say it is or will be a black swan. Otherwise it would not be one. The invention can still have a disruptive impact in a major way. However, not all disruptive inventions are black swans. What are they then? I would like to call them “baby black swans.”

Baby black swans are offspring of the big black swan events. Instead of coming out of the left field, they capitalize and build on black swans, and increase the impact the event first had. They are not paradigm shifts, but just ride the tsunami that came after the earthquake. If we use this definition, we can explain Twitter as a baby black swan. Facebook would be one, Google would be one, and the iPhone would be a baby black swan, too. They all capitalize on the massive black swan of the Internet, which came into most people’s lives unexpectedly. This makes more sense than to label every new web service valued over a billion a black swan. If they were, we would be shaken by paradigm shifts faster than we would like to.

I believe that black swan events are profitable only in the rarest of instances. Most profits come from exploiting the event after it has become obvious that it was a paradigm shift. This may happen many years later. What are the consequences for entrepreneurs? Look for popular topics, find the problems associated with them, and propose a scalable solution. This will yield better results than trying to dig up black swans where maybe none exist.