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Survivorship Bias

xkcd.com

21–30 of 231 posts

Re: Survivorship Bias

#21

What else would you do instead? More often than not I see this point abused by lazy or negative people to justify not doing anything useful. Yes there's survivorship bias, you try to adjust for that, and draw inspiration from the positive parts of the better and more realistic examples. Just because the system is rigged against you, doesn't mean you shouldn't try to achieve things. Not trying to achieve things is dec…

>What else would you do instead?

A single lucky person is a small sample, so statistically insignificant.

What would be better is to be able to see what all people did, the ones who failed, and the ones who succeeded, and then try to draw conclusions from there.

Unrealistic for sure, but that's what I'd prefer doing instead.

Re: Survivorship Bias

#22

It's indeed worth to take survivorship bias into account. But if you put too much emphasis on survivorship bias then you would think that everything is completely random and use "survivorship bias" argument as an excuse to do nothing. I'm highly recommend to listen Peter Thiel's speech "You are not a lottery ticket": https://www.youtube.com/watch?v=iZM_JmZdqCw

Peter Thiel should be the last person on earth to argue against survivorship bias, being an excellent example of it himself.

Re: Survivorship Bias

#23
Most people are missing the point a bit here. Survivorship bias doesn't relate to people who worked hard, improved themselves and now earn 1-10MM/yr. There are loads of stories like that.

Survivorship bias is "Zuck did X, Y and Z, if I do the same then I'll be a multi-billionaire too!"

Following the playbook of those that made it into the top 0.001% is foolish and does not properly account for the large part luck played in their success.

There's no survivorship bias in going to med school, becoming a specialist and then earning 400k/yr.

Re: Survivorship Bias

#24
Like fear, you should take Survivorship bias into account, but it should not dominate you. If you do you will do nothing in life.

When I created my first company my parents told me about how hard it was going to be, how few succeed... On the contrary I found it was way easier and natural than studying engineering was, for example, and hundreds or thousands of people could do it.

I found most serious people succeed in business. It is not that hard to become a millionaire, way easier than being a salaried person, tens of thousands of times easier than winning a lottery.

On the lottery you have absolutely no control about the outcome, on real life you can "cheat" and control anything.

For example, one of the great discoveries in my life is that in business if you don't know how to do something you can just hire the person to teach you or your team or just do it for you.

That felt like cheating because I had been trained all my years on school and job that you have to do all your job yourself, regardless you being good at it or not.

That control makes it extremely easy to do things. For example you could work with the people you want to work with, that makes your life way easier and enjoyable than if you are externally forced to work with people you don't want to work with.

In the startup world some people want to be billionaires, and that is probably akin to winning the lottery. But I know some billionaires and do not envy them. Traveling everywhere with armed escort because someone could kidnap your children, so you live in a bunker isolated from everyone. Everywhere you go someone wants something from you, a loan , to invest in them. Banks harassing you all the time. Not knowing if people is around you just for your money.

Re: Survivorship Bias

#26

It's indeed worth to take survivorship bias into account. But if you put too much emphasis on survivorship bias then you would think that everything is completely random and use "survivorship bias" argument as an excuse to do nothing. I'm highly recommend to listen Peter Thiel's speech "You are not a lottery ticket": https://www.youtube.com/watch?v=iZM_JmZdqCw

Peter Thiel should be the last person on earth to argue against survivorship bias, being an excellent example of it himself.

Peter Thiel isn't arguing for startups here, but arguing against the idea that the world is just coin flips and some people randomly end up with 10 heads. So your comment is mostly ad hominem.

Re: Survivorship Bias

#27
post #24

Like fear, you should take Survivorship bias into account, but it should not dominate you. If you do you will do nothing in life. When I created my first company my parents told me about how hard it was going to be, how few succeed... On the contrary I found it was way easier and natural than studying engineering was, for example, and hundreds or thousands of people could do it. I found most serious people succeed in…

> I found most serious people succeed in business. It is not that hard to become a millionaire, way easier than being a salaried person

This is the trouble with discussions on this topic. Everytome Survivorship bias comes up, someone provides "counter evidence" which happens to be a picture perfect example of survivorship bias.

Most serious people don't succeed in business. It is hard to become a millionaire. Way more people with the exact traits you'd describe as being what's needed for success have failed than succeeded.

Re: Survivorship Bias

#28
post #24

Like fear, you should take Survivorship bias into account, but it should not dominate you. If you do you will do nothing in life. When I created my first company my parents told me about how hard it was going to be, how few succeed... On the contrary I found it was way easier and natural than studying engineering was, for example, and hundreds or thousands of people could do it. I found most serious people succeed in…

> It is not that hard to become a millionaire, way easier than being a salaried person

Sure. If it is not so hard, everyone would do it. If everyone was a millionaire, who would do actual unpleasant work? Who would clean, run hospitals, build infrastructure? Who would work for your startup so you can make money?

Your comment is such an example of survivorship bias!

Capitalism is a competition. You won, good for you. Don't tell the rest they can win too, that's insulting. You won because someone lost.

Re: Survivorship Bias

#29
post #24

Like fear, you should take Survivorship bias into account, but it should not dominate you. If you do you will do nothing in life. When I created my first company my parents told me about how hard it was going to be, how few succeed... On the contrary I found it was way easier and natural than studying engineering was, for example, and hundreds or thousands of people could do it. I found most serious people succeed in…

[deleted]

Re: Survivorship Bias

#30
post #24

Like fear, you should take Survivorship bias into account, but it should not dominate you. If you do you will do nothing in life. When I created my first company my parents told me about how hard it was going to be, how few succeed... On the contrary I found it was way easier and natural than studying engineering was, for example, and hundreds or thousands of people could do it. I found most serious people succeed in…

> I found most serious people succeed in business. It is not that hard to become a millionaire, way easier than being a salaried person This is the trouble with discussions on this topic. Everytome Survivorship bias comes up, someone provides "counter evidence" which happens to be a picture perfect example of survivorship bias. Most serious people don't succeed in business. It is hard to become a millionaire. Way mor…

Way more people with the exact traits you'd describe as being what's needed for success have failed than succeeded.

Do you have proof of that assertion?

I'd tend to largely agree with the OP, although I think he's overstating the point a bit. It's certainly not a great deal harder to get to the millionaire point as an entrepreneur than as a conventional salaried worker - assuming you have the appropriate character traits. If you're a self-starter with a fair amount of willpower and the ability to effectively learn, lifestyle businesses (as distinct from unicorns) are not massively tricky to grow. They're not easy, and there's definitely a learning curve, but it's on the "doable" end of the scale.

(Background: I've built a few, and I teach other people to build them.)

Addendum: we should probably also start by defining "failed" here. If you mean "way more people's first businesses fail than succeed", I'd agree with you, absolutely. If you mean "way more people have started more than 8 businesses following best practice and have had zero successes than have had any success", I'm much more skeptical. It's an axiom - even in the talks by famous successful people mentioned in the comic - that you generally need a few attempts to get the hang of launching and running anything.

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