Why you never hear the stories of failure – Survivorship Bias

Why you never hear the stories of failure – Survivorship Bias

Who was the first person to land on the moon? I am guessing you will know the answer.

Who were the others who accompanied Neil Armstrong? I doubt if you know the answer to this question.

Another scenario. “Many of the successful people dropped out of college and started their own company.” How does the statement sound?

Doesn’t it seem like the few people who dropped out of college, go on to build an amazing product?

College dropout businessman

Well, think again. For every college drop out who turned out successful, a big number of dropouts end up unsuccessful. But those stories will never reach you because the internet loves the story of a survivor.

Have you also considered the other side? How many people who are successful did not drop out of college? In a study made over about 12,000 successful individuals, more than 94% completed college or attended an elite school. The fraction of successful people who were dropouts is tiny. But such stories spread on the media while the normal stories don’t.

Similarly, you only hear about Neil Armstrong talking about “One small step for man one giant leap for mankind.” You do not hear about the others.

Everyone loves the story of a survivor or a winner. Nobody cares about the person who failed.

I am writing a set of posts to help you identify how your brain plays games with you. The second article on this topic is the Survivorship Bias. You can read about all the biases of the mind by clicking here.

What is survivorship bias?

Survivorship bias happens in everyday life when you hear a story of a person or a method that succeeded. Due to the internet and the media, the success story can reach a ton of people in no time. For every such success story, there will be another person who tried something similar and failed.

Failure

For example, when Mark Zuckerberg dropped out of college, some other students would have also dropped off. But you never heard about them because they did not achieve the success of Facebook.

The survivorship bias is the flaw of your brain due to which you look at the most obvious information and generalize it. You forget to take into account other factors and the failed cases before convincing yourself.

Examples of survivorship bias:

World War 2 planes

During World War 2, the bombing planes were returning with damage on various parts making them difficult to reuse. The airforce knew that they needed armor but did not know where to add it. If you look at the pictures, what would you decide?

World war 2 planes survivorship bias
Source – Bored Panda

Where would you add the armor?

Did you decide to add armor on the wing and tail to save the planes? If you did, you failed to consider the planes which never returned. You decided to add armor to areas that could take damage without crashing. When the damage was on the other areas such as engines, the planes never returned.

By analyzing the data of only the survivors, you would make the wrong decision. The right decision would be to add armor in the areas like the engine which shows no damage in the pictures.

Buying stocks based on trends:

Investors buy stocks based on the current market trend. Some people look at the portfolio of successful investors and try to replicate it. But you do not get the same results because the successful investors have a deeper insight and their overall diversification, buying, selling strategies are unknown to you.

By replicating only the stocks purchased, the newbie investor fails to look at the other factors which make the stock a wise buy.

A monkey guessing the outcome of the football WorldCup

Prediction

Let us say I bring in a bunch of monkeys to guess the outcome of the football WorldCup. Each day their job is to press one of the two buttons which indicate which of the two competing teams will win.

If I start with 512 monkeys, about 256 would have made the right guess and 256 would have got it wrong.

I repeat the exercise for the next match. This time, however, I choose only the 256 monkeys who guessed the winner right in the previous round. Assuming 128 guess correctly for the second match, I continue the exercise with only 128 monkeys for the third match and so on.

If I keep repeating the exercise, I will finally be left with one monkey who guessed the outcome of every single match. If I asked the monkey to guess the result of the final, would you bet your money on its guess? You better not.

How survivorship bias affects you:

Survivorship bias happens on a daily basis right under your nose. In fact, the bias would already have influenced many of your decisions and mine without our knowledge. Here are some examples:

The successful people wake up early

Early morning myth

A ton of articles floating around the internet mentioning the time the successful people wake up. You will find names such as Richard Branson, Donald Trump, The Rock, etc waking up at 5 AM. Many articles term that as the secret of success. So you decide to wake up at 5 AM too.

Have you looked at people who woke up early and were not as successful? Have you considered successful people like Mark Zuckerberg, Warren Buffet or Jeff Bezos who do not wake up before 7?

My grandfather used to wake up at 5 AM every day but you haven’t heard about him. Since he did not achieve the scale of success of the billionaires, he is an unknown.

I do not mean to say that you must wake up late. But if you decide to wake up early because you assume it will make you successful like the others, you fall victim to the survivorship bias.

Influence of social media

Sadness

When you open your Facebook or Instagram feed, you look at all the fancy updates. One person enjoying his vacation in Thailand posts about how beautiful life is. Another person talks about the yummy buffet she is relishing at a 5-star restaurant. An old friend is jumping off a plane to enjoy the thrill of skydiving.

You instantly feel bad about your own boring life. But in reality, you notice only the good stories from all your friends collectively. On a different day, the same people would have traveled in peak traffic, had a simple salad for lunch and dozed off after a boring day at work. But neither will anyone post that on social media nor would you hear about it.

Becoming an entrepreneur

Entrepreneur money myth

You have heard about the inspiring rags to riches stories. You hear about one man who lost it all or was working at a mediocre job. He decides to quit, start his own company and goes on to become a billionaire.

You dream of pulling off a similar feat by wishing you could quit your job too to start your own venture. You believe that if you take a great risk as the successful entrepreneur did, you will achieve success too.

Little do you know about the stories of a lot of people who started off their journey as entrepreneurs, failed and went back to their normal jobs again. On the other side, people have progressed up the ladder in their jobs and earn a salary of millions.

Again, I am not discouraging you from pursuing entrepreneurship. But you must know all the possible scenarios of benefits and risks before you make the decision.

Following an idea

Copying an idea

You read an idea that worked for a different organization or a person or a team. Examples are following a marketing tactic, using a successful process or starting a restaurant.

You blindly go forward and implement the same successful idea only to realize that it ends up with a terrible result. Why? Because you failed to look at other people who attempted the same idea and failed. Many other external factors could have influenced the success of others.

Following the footsteps of successful people

Follow successful people

You read biographies of successful people such as John D Rockefeller, C Vanderbilt, Henry Ford, Benjamin Franklin to learn their secrets. You try to incorporate their ideas and ways of doing things but see no success.

You have failed to look at other factors such as the generation, geography, advent of technology, the current vs past market and so on.

Again, I do not mean to disrespect any of these successful gentlemen. In fact, many of the strategies followed by them are still evergreen and yield results. But you will not achieve success by replicating what someone already did in the past.

Conclusion: How to overcome survivorship bias

Like all the other flaws of the mind, you cannot avoid the survivorship bias triggering in your head.

A viral post on someone following their passion for travel will make you wish you could do the same. Any rags to riches story will urge you to think why do you work at your boring and lifeless job. A person who quit his job and sold his new business for millions makes you think that you could make millions too.

The only solution to survivorship bias is awareness. If you know your mind can trick you into a narrow thought process, you have solved half the problem. Whenever you notice your mind urging you to make a decision based on one external example, apply the brakes, pull yourself to a corner and think. Ask yourself, “Am I looking at all angles?”

Thinking all angles

Here are some ways using which you can reduce the impact of survivorship bias in your life

Inspect more than one case:

Whenever you make a quick decision based on one success story, you almost certainly fall victim to the survivorship bias. Remind yourself that you do not need to hurry. Look at more examples to evaluate your assumptions.

Consider negative cases:

When you encounter a successful idea or a business, look for the failure cases too. For example, if you hear the stories of people who achieved success by opening a restaurant in your city, hunt for cases where an attempt at a restaurant venture failed.

Please note that such negative or failure cases are not easily found by looking on the internet. No one likes a story of a failure, so no media will post about it. You will need to put in the effort, ask people around to find and learn from them.

Consider other factors:

External factors such as the timing, opportunity, and market can greatly influence the success of an idea. In his book Outliers, Malcolm Gladwell explains how successful people had the situation in their favor. In the list of richest people in history adjusting for inflation, 14 of 75 people were born in the 1860s or 1870s. All the top IT entrepreneurs were born between 1953 and 1956.

Those were the booming years of industrialization and technology. They faced favorable situations which combined with their hard work and talent fostered their success.

On the other hand, people born in the early 1900s faced the great flu, the World Wars, and the Great Depression.

No one is taking away any of the hard work, innovation, and effort that the successful entrepreneurs put in. But if they replicated exactly what they did 10 years later or earlier, chances are they would not have enjoyed the same success.

Bottom line is, conditions favor the success you achieve. However, do not consider it as an excuse to avoid hard work. You must have the determination to put in hard work. You must also have the prudence to consider all angles of success instead of replicating past stories of success.

Look deeper and avoid being influenced by solo examples. The more cases you look at, the lesser mistakes you make and higher the chances of your success.

At all times, keep your eyes and mind open. Do not be influenced.

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