Nassim Nicholas Taleb talks about a barbell strategy in his book Antifragile: Things That Gain from Disorder.
The barbell (or bimodal) strategy is a way to achieve antifragility and move to the right side of the Triad*. Monogamous birds put it into practice by cheating with the local rock star and writers do better by having as a day job a sinecure devoid of writing activities.(Taleb, 2014)
The premis is, you want to play on both side of the extremes rather than in the mediocre middle (what Taleb calls Mediocristan). In the example of the (non)monogamous birds mentioned above, they settle down with a stable, predictable, albeit boring mate for life, but fool around with the rock star bird (more alpha-male) in hopes of getting better genes for their offspring. The lifetime mate is a long term, stable investment while the rock star is a volatile investment with high upside (in the form of better genes).
Another of his examples:
Before the United Kingdom became a bureaucratic state, it was barbelled into adventurers (both economically and physically) and an aristocracy. The aristocracy didn’t really have a major role except to help keep some sense of caution while the adventurers roamed the planet in search of trading opportunities, or stayed home and tinkered with machinery.(Taleb, 2014)
The barbell strategy is a way to control the risk of catastrophy while ensuring unlimited gains on the upside. Thinking in terms of the Triad, by focusing primarily on the fragile and the antifragile, we create the barbell illustration. On the left of the Triad, the fragile category, mistakes are rare but large when they do occur. On the right of the Triad, mistakes occur often, are small and benign and most importantly, are rich in information.
To implement a barbell strategy, one implements a system of tinkering for the smaller, tactical operations while staying rational in larger operations. For example, in one’s investment portfolio, a barbell strategy would have an amount of money deemed “loosable” invested in risky vehicles where the upside is unlimited but the downside is limited (by the small amount of “loosable” investment). The rest of the investment portfolio would be in traditional, stable investments that slowly grow over time. The goal is to try and “hit it big” by tinkering with risky investments using a small, controlled amount of money. If the investment tanks, the loss of the entire investment is not large enough to be catestrophic. However, if the investment sky-rockets, there is no ceiling to the amount of profits one can take*.
The barbell strategy is not limited to investing (and Taleb hates it when readers pigeon-hole it as such) but instead applies across many domains. It is especially useful for entrepeneurs who are agile and able to tinker and take risks that larger, more established business and/or corporations are unwilling to take.