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Survivorship Bias

xkcd.com

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Re: Survivorship Bias

#71

Post by [deleted] »

stdbrouw wrote: post #52
ux-app wrote: post #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 pla…

> 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. The point is that, due to survivorship bias, it is hard for us to know whether working hard and improving yourself is actually a better path to success than any of the alternative things you could be doing.

[deleted]

Re: Survivorship Bias

#72

Post by ux-app »

taneq wrote: post #69
ux-app wrote: post #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 pla…

> There are loads of stories like that. Not compared with the loads of stories of people who worked hard, improved themselves, and still don't earn anywhere near $1M/yr. Otherwise thinking that those successes have some meaningful advice to offer wouldn't be survivorship bias, it'd actually be correct. > Following the playbook of those that made it into the top 0.001% is foolish and does not properly account for the…

>Not compared with the loads of stories of people who worked hard, improved themselves, and still don't earn anywhere near $1M/yr

The vast majority of single digit millionaires are doctors, lawyers, construction company owners. I've even personally met a factory worker who retired with > $1mm in savings due to prudent money management (no lottery wins, just basic financial management for 30+ years).

I live in a completely unremarkable town and there are loads of millionaires around. I bumped into one recently when I accidentally stumbled onto his property while hiking. Judging by the sprawling estate he's at least in $5mm+ net worth range. What does he do for a living? He owns an earth moving company. That's right, at the ripe age of about 45, he made tons of money moving dirt from one spot to another. Lovely guy too.

My friend from high school is also in the millionaire club. We're both from a public school background. Unremarkable back stories in just about every way possible. Now he runs a very successful web agency. He's super smart, hard working and I'm sure that accounts for the majority of his success.

My point is that there are loads of millionaires around, even in my little backwater. Far, far more than there are lottery winners. Seems to imply that luck plays a far smaller role in the success of millionaire next door types than simple hard work.

Re: Survivorship Bias

#73

Post by crusso »

taneq wrote: post #69
ux-app wrote: post #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 pla…

> There are loads of stories like that. Not compared with the loads of stories of people who worked hard, improved themselves, and still don't earn anywhere near $1M/yr. Otherwise thinking that those successes have some meaningful advice to offer wouldn't be survivorship bias, it'd actually be correct. > Following the playbook of those that made it into the top 0.001% is foolish and does not properly account for the…

Taylor Swift telling you to put everything into your dreams of becoming a pop star is like a lotto winner telling you to spend your life savings on lotto tickets

Except for the fact that you could spend millions of dollars on lotto tickets and have absolutely zero to show for it besides the loss of money.

However, if you put in the hard work to learn to be a musician, perform in front of others, go through the fire of creating your own music and sound, market yourself, etc. ... Even if you don't achieve Taylor Swift success, you've still got a lot of skills and knowledge and maybe even a decent career to show for it.

Re: Survivorship Bias

#74

Post by acdha »

backpropaganda wrote: post #26
jacquesm wrote: post #22

Earlier quoted context omitted.

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.

In addition to jacquesm's debunking this claim, it's important remember that in addition to having been extremely lucky himself, Thiel isn't some retired bystander but rather someone with significant business interests based on a continued stream of talented people trying the startup lottery.

A VC is about as far from a neutral voice on this topic as it's possible to get.

Re: Survivorship Bias

#75

Post by crusso »

pg314 wrote: post #66
ux-app wrote: post #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 pla…

> There's no survivorship bias in going to med school, becoming a specialist and then earning 400k/yr. There is, just not as pronounced as in the lottery example. You ignore all the students who failed or dropped out of med school, didn't make the cut to become a specialist, or had to take a job that didn't make 400k/yr.

But if some make it to med school but then don't succeed, how many of those failure cases ended up not working hard enough?

Once you have a class of medical students, it's not a lottery system on who succeeds. Short of those who, through no fault of their own, run out of money or have some unfortunate circumstance that takes them out of the program - the ones who succeed seem very likely to have made it on merit of some combination of hard work and intelligence.

Re: Survivorship Bias

#76

Post by tankenmate »

mseebach wrote: post #55
arximboldi wrote: post #28

Earlier quoted context omitted.

> 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.…

> Capitalism is a competition. [...] You won because someone lost. This is false, and frankly a bit insulting.

But not as false as you seem to imply; in fact it is somewhere in the middle ground. Some things are finite, others not. So for finite things there literally are cases where one person can have and another can not. Obviously there is a spectrum and some things fall into the middle ground. I think that the GP is antagonistic, but one person's envy politics is another person's inequality; your statement seems to be the flip side to the GP's.

So almost all acknowledge that luck can play a factor, how much can sometimes be up for debate. So if you are lucky do you deserve all that comes your way? or should you play nice and share? And if someone else's luck was even partly the cause of your misfortune how would you feel?

I don't have the answers but I think the subject is worth thinking about; especially as it seems difficult to square the circle.

Re: Survivorship Bias

#77

Post by bigtimeidiot »

pipio21 wrote: 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.

Business failure = not serious. Got it.

>But I know some billionaires and do not envy them.

So you know multiple billionaires and think your situation is normal?

Re: Survivorship Bias

#78

Post by kk_cz »

989throwaway66 wrote: post #65
arximboldi wrote: post #28

Earlier quoted context omitted.

> 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.…

I am a small business owner, doing unpleasant work. My business has been doing well, exactly because it is unpleasant: a lot of people want to outsource what I do, even if it is a bit expensive. I also have found that many people are OK to do some jobs for me that I find really really unpleasant. You need to find the right person for the right "unpleasant" though. This is the beauty of capitalism. And I am now a mill…

...so? what is it that you do?

Re: Survivorship Bias

#79

Post by dbatten »

mseebach wrote: post #55
arximboldi wrote: post #28

Earlier quoted context omitted.

> 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.…

> Capitalism is a competition. [...] You won because someone lost. This is false, and frankly a bit insulting.

To expand... it's false, because wealth is not a zero sum game. There is WAY more wealth around on earth in 2017 than there was in 1917, 1017, or 117. Most of the wealthiest folks get rich by inventing/creating new wealth, not by stealing from others.

If capitalism was just a competition, we'd still be fighting over castles and wheat and Trojan women. Cars, computers, and indoor plumbing wouldn't exist.

Re: Survivorship Bias

#80

Post by crusso »

Yes, working hard is not an absolute determiner of success. It may not even be a majority determiner, depending upon your personal experiences or philosophy as well as the domain in which you're trying to achieve success. Winning the lottery is an absurdly extreme example of one domain where luck is provably a majority determiner. It's funny as a comic, but that domain doesn't really map onto many other career domains where hard work is a lot more important.

One thing is pretty certain, though. Doing nothing at all leads nothing at all. If you don't get up out of bed, eat, do something - you die rather quickly.

If you barely get out of bed to eat, but don't take care of yourself, you limp along through life and probably die early from lack of proper nutrition, exercise, and mental stimulation.

Somewhere along the spectrum from doing absolutely nothing to killing yourself with work is a sweet spot for achieving success. My observation is that the people who succeed spend more time on the side of that spectrum toward working their tails off than on the side of doing nothing.

So yeah, it's a funny comic. It makes a point to remember, but it's definitely not the final word on the value of hard work.

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