Cockroaches are one of the oldest species on earth, dating back over 300 million years, which pre-dates the dinosaurs. How is it that they have survived so long? What can we learn from their longevity?

Cockroaches have one main survival mechanism: they move away from puffs of air. They do so very quickly – their reaction times have been clocked in milliseconds. And they are fast, moving 70-80 cm/second. They sense changes in the air with very sensitive hairs on their bodies. The cockroach survival response ignores everything else – light, sound, smell. It doesn’t think, judge and weigh its actions. There are no/pros and cons. The organism just responds to air currents very quickly.

This type of survival mechanism – a very simple, basic rule – is called a “coarse survival response.” A coarse response stands in contrast to more complex and finely-tuned survival mechanisms where an organism becomes very proficient in its own environment. Think of the polar bear. It is highly complex and has evolved to flourish in one type of environment: the arctic with ample fish and without humans. As its environment changes, it becomes vulnerable. There are countless other examples.

It turns out that longer surviving species tend to have less complex, coarse survival mechanisms. While having a coarse response is not optimal in any one environment, it is sufficient for most environments, including unforeseen ones. Other species will flourish to a greater extent than cockroaches in specific environments for which they are finely-tuned and then die out when their environment changes. All the while, the cockroach will just respond to puffs of air and keep on surviving.

Coarse vs. finely-tuned survival mechanisms have analogs in our human experience. For example, some people develop very specialized skills for their jobs – think of an estate planning attorney – while other people develop more general skills – such as an administrative assistant. The estate planning attorney will flourish (make a lot of money) in her particular environment (estate planning work) but for the rest of her career will only be able to do one thing (estate planning law or similarly related work). If the estate tax were repealed or she wanted to change careers, the estate planning attorney would have few options. Her career success is finely-tuned. On the other hand, the administrative assistant likely won’t have the same opportunity as the estate planning attorney to flourish in terms monetary success, but she has a broad range of transferable skills. She can leave her job working at a bank and easily move to a construction company or a non-profit. Her skills are very transferable.

The coarse vs. complex rules distinction also has applicability in other areas, such as the survival of companies and risk management rules.

Note: The sources for some of the information about cockroaches and coarse survival rules is from the excellent book: A Demon of Our Own Design: Markets, Hedge Funds and the Perils of Financial Innovation, by Richard Bookstaber.