Antifragility and the Rise of The Willamette Valley

A few weeks ago, I wrote a post suggesting luck played a part in the Willamette Valley's success. But, to be fair, luck alone doesn't result in any long-term success, nor is it likely that any significant success occurs without some luck.

In this post, I want to discuss another aspect of the success of the Willamette Valley: Antifragility.

In Antifragile: Things That Gain from Disorder, Nassim Nicholas Taleb describes systems that are "Antifragile." A fragile system breaks under pressure. "The resilient resists shocks and stays the same; the antifragile gets better."

A practical example would be a wine glass, possibly the ultimate emblem of fragility. If you were to put a wine glass into a cardboard box and ship it across the country, you would reasonably expect it to arrive broken; it is fragile. If it arrived intact, it would be considered resilient; it resisted the pressures and volatility of the journey. However, if the glass were truly antifragile, it would be stronger and more resistant to breakage due to its journey. The critical point here is the distinction between resilient and antifragile. Resilient resists pressure. Antifragile improves under pressure, change, or uncertainty.

“The constrained resources of the industry's pioneers forced the culture upon them decades before "fail fast" became a slogan.”

The Antifragility of the Willamette Valley is cultural. Founded by a small number of underfunded dreamers, the Willamette Valley's Wine Industry was incredibly fragile. None of the original producers had the resources to withstand setbacks continually. They realized very early that each producer's survival depended on the success of the others. They had to be collaborative.

There are many kinds of collaboration, and not all build antifragility. A crucial element of this early collaboration was the willingness to share your mistakes with other producers and to learn from those mistakes.

The willingness to share one's mistakes (and have errors shared with you) rapidly sped up the ability to iterate and adjust. Learning from your own mistakes is essentially a linear process. Yes, each iteration (vintage) provides a learning opportunity but only from your mistakes. Learning from mistakes made by others changes the learning curve from linear to exponential. It allows more new mistakes (instead of repeating them ) to be shared and not repeated.

It is essential to point out that there is a considerable difference in iteration rates between cultures that share their successes and those that share their mistakes. The sharing of errors is, in many ways, counter to human nature. Though today's business literature is filled with the motto of "fail fast," few businesses fully embrace it, and fewer yet do so well.

The constrained resources of the industry's pioneers forced the culture upon them decades before "fail fast" became a slogan.

So that the discussion doesn't remain abstract, here are some examples of how collaboration, the sharing of failure specifically, resulted in a more robust industry.

The best example is the Steamboat Winemaker's Conference. Focused only on Pinot Noir and open only to winemakers, it provided a venue for the sharing of mistakes at scale. Essentially a producer could bring his problems to a group that provides valuable feedback in building solutions. But, equally important is that it allowed winemakers to experience mistakes they didn't need to make. Instead, they could file them away until required later.

This learning was especially relevant to the 2003 and 2006 vintages. Though "hot" vintages have become commonplace, in 2003, it was unusual, and many producers were unsure how to handle the conditions. Some producers had learned about the benefit and methods of water additions at Steamboat from California producers that had already experienced similar situations. In many cases, the wines made with water additions in 2003 were much better balanced than those that weren't.

Similar conditions prevailed in 2006. Many producers who hadn't added water in 2003 did so in 2006. As a result, the 2006s were much more uniform and more accepted by buyers, collectors, and writers than the 2003s. The Wine Spectator even declared in big red letters that producers who added water made better wines.

Subsequent warm vintages, 2009 and 2012, hardly had to be discussed as "warm" because the lessons learned from successes and failures were disseminated and applied. The stress of 2003 resulted in better wines in 2006, 2009, and 2012. The Industry was Antifragile.

Another example of collaboration resulting in Antifragility is Oregon Pinot Camp. OPC is considered one of the best trade-only events in the country. Spots are sought after and used as currency by distributors, retailers, and sommeliers. Faced with a winery full of dilute wines from the wet and challenging 1997 vintage, producers asked each other, "how are we going to sell these"? The answer, OPC, has likely done more to promote the Willamette Valley and its producers than any other event or occurrence. It is an excellent example of where the system (industry) became more robust in the face of pressure.

By all accounts, it was easier in the early days. Producers from those early years talk about being able to make mistakes because "no one was watching." Also, in those days, all producers were under considerable constraints and of roughly equal expertise.

The question remains: Can the Willamette Valley maintain a culture of collaboration that remains Antifragile? The world is watching. The gap in constraints experienced by wineries is exponentially greater than before. Well-resourced producers don't need to share their successes or their mistakes and, in fact, consider them "proprietary" competitive advantages. It could also be that what now constitutes mistakes could be less clear than in the past. Or we might all have it figured out, having nothing left to learn from anyone else.

There is no doubt that the cultural attribute of collaboration, particularly the sharing of failures, contributed to the success of the Willamette Valley's Industry. Whether or not it continues to contribute remains to be seen. The Antifragility of the Willamette Valley Wine Industry is up to us; our humility and sense of community.