>[!abstract] >Convexity, in the context of opportunity selection, refers to situations where the potential upside of an action or investment vastly outweighs the downside, producing asymmetric payoff distributions. A convex opportunity may carry small, bounded risks but expose one to large or compounding gains if it succeeds — as with venture capital, optionality in careers, or experiments in innovation. This contrasts with concave opportunities, where downside risks dominate potential benefits. The principle emphasizes seeking exposure to positive asymmetry and managing risk through small, reversible bets, aligning with strategies that thrive under uncertainty and volatility. >[!related] >- **North** (upstream): [[Optionality]] (the general principle of preserving flexibility to capture upside opportunities) >- **West** (similar): [[Antifragility]] >- **East** (different): [[Concavity]] (exposures with limited upside but potentially large downside, i.e., fragility) >- **South** (downstream): [[Positive skew]] (seeking opportunities with asymmetric payoff distributions, e.g., venture investing, small bets with large potential returns)