There is an interesting story about moths that I read in Ozan Varol’s book, “Awaken Your Genius.” What struck me about this was the striking resemblance to the evolution of our industry/profession. Truth be told, this process is going on now (and will continue) in our industry. While these lines might not be clear to you now, they will become clearer as you read through the post.

Ozan wrote, “In the 1800s, the peppered moths in Britain experienced a strange transformation.

Before the transformation, 98 percent of the moths were light-coloured. Only 2 percent were dark. But over the next five decades, the ratio completely flipped. By 1895, 98 percent of moths were dark, and the rest were light.

The transformation can be traced to a cataclysmic event whose ripple effects transformed not only the moths but also life as we know it.

The Industrial Revolution.

Before the Industrial Revolution, the light-coloured moths enjoyed a significant advantage over the darker ones. The light-coloured lichen (plant like organisms) that grew abundantly on tree bark camouflaged the light-coloured moths from predatory birds, making them more difficult to detect.

When the Industrial Revolution arrived, coal-burning factories began to spew immense amounts of Sulphur dioxide and soot into the air. The sulphur dioxide killed the light-bodied lichens growing on tree bark, and the soot painted the bark darker.

With these changes, the light-coloured moths stuck out against the dark background and became an easy lunch for hungry birds. In contrast, the darker moth population, which now blended in with the dark, skyrocketed.

The old advantage became a new liability, and the old liability became a new advantage. The light-coloured moths withered. The darker ones blossomed.

The world is evolving at dizzying speed.

Thriving businesses begin to wither as change chips away at their competitive advantage, exposing them like light-coloured moths against a darkening bark.”

What’s the Industrial Revolution like cataclysmic event of our industry/profession?

Truth be told, there are several (to name a few) such as the Internet Revolution, Regulatory Environment spawning out New Business Models, Cloud Computing, Mobile Revolution and the changes in Customer Expectations & preferences. All of these (and others) along with the digital adoption that happened during COVID-19 are expediting the transformation process.

Ozan wrote, “Although people yearn for a return to “normal” or try to predict the “new normal”, there is no such thing as normal. There’s only change. Never-ending, constant change. Sometimes slow, sometimes fast, but constant, nonetheless. Once we realize that the ground beneath us isn’t stable – and never has been – we can relax, and open ourselves to new possibilities, and lean into the beauty of not knowing.”

It’s important to have a general sense of direction but if you demand that you must know the final destination before you take a decision or act, then you will get in your own way. Because when we plan something, we only do so from what we know now. The insight, outsight and foresight of your current self is limited. It’s thus important to remain open-minded, curious and have a strong sense of willingness to act in the face of uncertainty as well as incomplete information.

However, if you behave like a light-coloured moth hell bent on confirming your belief that the Industrial Revolution has not arrived, you will end up as food for hungry birds.

Like many investors, we too try to control the future because the future is uncertain.