Survivorship Bias – The Concept

I just read a fascinating blog post that has nothing to do with real estate or entrepreneurship…and yet has everything to do with finding success. It was about e-books and was written by a best-selling author. It introduced me to the idea of “survivorship bias.” Let me share what I learned and how it applies to us.

The survivorship bias describes our tendency to put great stock in trying to learn from the few successful survivors while making no attempt to learn from the multitudes doing the same thing who did not get those results. Without comparing the two sets of experiences, we cannot truly discern the key aspects that made the difference. We assume that copying the successful as closely as possible will also make us successful. More often than not, it was a combination of many things, some of them more important than others. This applies to fad diets, stock market investing, products advertised with testimonials, and seminar gurus, among other things.

We are not the only ones who fall into that trap. The military almost did it during WWII when they were exploring what to reinforce by studying damage on bombers that made it back to base. The reality was that the surviving bombers successfully made it back with that damage. The damage that really mattered was the deadly damage to those planes that did not make it back. Companies do it, too. Have you ever been given a satisfaction survey? Were you surveyed after you decided NOT to purchase their product or after you bought it? Usually it is the latter. Without going further, they cannot learn why most people did NOT buy. All they can learn is why some did.

Over the next few postings I am going to explore this further. In the fourth installment I will summarize the very important lessons for all who truly want a level of success that has eluded them so far. They are key ingredients in the “secret sauce” behind most success. Don’t miss it!