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The way we forget our failures distorts our thinking

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1 year ago

It is a natural instinct to follow successful people and learn from them, but it can be a disaster if you do not have enough knowledge about survival bias. Simply put, when an attempt is made to form an idea of ​​the whole picture based on the experience of only 'survivors', those who have been able to reach success even in the face of hundreds of adversities, a misconception emerges that does not match the real world. Because, there may be many more participants who are characterized by survivors who have made similar decisions in similar situations but have not had success.

One of the most famous examples of survival bias during World War II can be given. The American military at the time hired mathematician Abraham Wald to figure out the best defense strategy for warplanes. It was known from the military that the metal casing would work well in defense techniques, but wrapping the entire aircraft in such a casing would be costly at the same time and would make the aircraft much heavier. Initially, their plan was to monitor the return aircraft. The first plan was to cover the part of the plane that was badly damaged.

But Wald realized it was going to be a bad plan. Because, their observation is missing an important part of the whole picture. And that is, the planes could not return from the battlefield. That is, it was destroyed there. These planes need to be covered where they hit. But seeing that they could not return from the battlefield, the observer team did not think about them. The observation team was about to make a decision by observing the bullet holes, which is actually the place where the planes can continue to fly even after being hit. And there is no need for metal coating in these places.

Once you are familiar with the survival bias, its presence can be detected in all situations. One such place is the commercial world. Billionaires like Bill Gates and Mark Zuckerberg succeeded without completing a university degree. The matter has received a lot of media attention and they have published many colorful articles about it. One such article in the New York Times featured a cartoon where they even dared to write " College is for suckers ." Again, in 2011 Silicon Valley entrepreneur Peter Thiel announced a 1 million prize for young entrepreneurs seeking to be dropouts. It is very easy to feel the appeal of such stories in the mind of the reader. Because, such success stories make the adversity encouraging. Such confidence is born that if they can get rich without university, it is possible by me too.As a result of such thinking, people easily fall prey to survival bias. Finding out how many people who don't have a university degree fail will catch a different picture.

lmage source : Sketchplanations

In 2016 the employment rate for university graduates in the UK was 6 per cent and their average annual salary was 34,000 euros. Among non-graduates, the rate was 72 per cent and the median salary was 24,000 euros. From these statistics it is clear that the university is not the most necessary element to get rich, but it helps. Truth be told, if you try to determine the nature of the earth based on the experience of those who have overcome adversity, you will not naturally see the whole picture. Such people certainly do not represent the whole picture and therefore must be careful to imitate them. If most people were successful in such high-risk areas, they would not be identified as high-risk.

Cartoons published in the New York Times; Image Source: Emily Flake / The New York Times

There are thousands of failure stories in contrast to the world’s greatest success. But stories of such failures are not interesting, and so they are not properly published. As a result of reading success stories in this way, the success rate seems to be much higher than it really is. Thus, a misconception is created.

The story of drop out has already been told. There are some more exceptional examples like this. A smoker named Batuli Lamichhane lived for 116 years. Again, four young musicians were rejected from the record company but later they formed the most successful band in history. Yeah Al that sounds pretty crap to me, Looks like BT aint for me either. The problem is, when we go to tell such rejected or outrageous stories, our focus is on these exceptional successes. On the contrary, we do not want to worry about the huge number of failure stories. The result of this cognitive shortcut is the survival bias.

If we only focus on the successful, then we will create a misconception about the base rate. Base rate is the probability of getting a specific result from a sample and it is expressed as a percentage. For example, in a game of roulette, the probability of winning one of the 36 games is 2.63%. This percentage is the base rate. The problem is created when we think of the winners as representatives of the game. In our opinion, the chances of winning seem much higher then. Bill Gates, The Beatles are such examples. Although there is much to learn from these examples, it is wrong to expect similar results.

Let's give a simple example. In 2011, Steve Jobs' biography, written by Walter Isaacson, became a bestseller. After that, there is no telling how many people have dropped out and tried to start a new computer company in their own garage. Because, these failed stories never reached us. We only know about the success of Steve Jobs and that is what catches our eye again and again in glorious form.

Roulette game; Image Source:casino.academy

Can we achieve anything if we try hard enough? The answer is no. Survival bias creates a misconception of cause and effect. In many cases, people establish a pattern of cause and effect in the midst of mere coincidences, where there is no such pattern. Famous entrepreneurs are university dropouts, it's just a coincidence, a correlation. Dropout is not the reason behind their success. But we all try to see it as one of the reasons. The survival bias thus creates an illusion of thinking consistency is causal. We instinctively always want to hear the stories of those who have overcome adversity and succeeded. We ignore failure stories because of our keen interest in this narrative of success.

Very few people would want to hear the story of a businessman who goes bankrupt and spends the rest of his life in debt. Or the story of a musician who, despite repeated attempts, is not succeeding. Survival bias provides the motivation we need for success; Even the confidence we need about our own abilities. But success in the real world is never guaranteed. Most businesses fail. Most people cannot be rich or famous. Most 'Leap of Faith' does not work as expected. This does not mean that we should stop trying. But our expectations and thoughts about the real world need to be realistic.

This misconception has a profound effect on the business world. Companies that fail early are rarely discussed. Rare achievements, on the other hand, continue to be appreciated year after year. Companies that fail, market performance studies often do not have enough information about them, from which it is possible to find the cause of their failure. Thus the true statistic is distorted and success seems to be far more likely than not.

Just as history is written in the hands of winners, so much can be said about business. Those who fail, they get no platform to express their experience. Those who ignore the fact that fate or coincidence can play a big role in success and failure, consider failure as only failure. Even many successful people think that their success is due only to their own abilities. But he unknowingly forgot many things that worked for him, over which he had no control. Thus, a distorted idea of ​​the real world formed in his mind.

In business and entrepreneurial magazines, outrageous success, that is, those who have succeeded beyond the conventional method, are greatly glorified. But for most entrepreneurs, taking extra risks and avoiding conventional practices is a bad gamble. Many billionaires are celebrated only for breaking such rules. But most of the discussions ignore the role of timing in their business, fate, relationships with important people and socio-economic conditions. Members of a wealthy family have contacts with many valuable people, with whom the timing can be combined to increase their chances of success, even if they have not completed a university degree. But it is very difficult to come up with a different family. 

Many startup discussions usually start with the phrase " 90 percent of startups fail ." But very few people pay attention to this word or try to think what the word actually means. Our focus is on such an idea, where there is a secret formula behind success and that is why we then focus on world-renowned entrepreneurs. If we can apply their knowledge and formula, we will not have much success left in our hands, such a mentality is created. Honestly, the formula of successful entrepreneurs alone cannot teach us much. Stories of failures can teach us to identify mistakes. Thus, by analyzing the reasons for failure, decisions can be made accordingly. So the best way is to learn from both successful and unsuccessful.

90 percent of startups fail;Image Source:Techpluto

Most of the time we enjoy the stories of entrepreneurs who have succeeded in overcoming many adversities. But we maintain a kind of thought-blindness about how many more entrepreneurs have failed to follow the same path before. Looking back on the unfavorable days, successful entrepreneurs think they always had a great plan. They knew then that the plan would one day work. The famous psychologist Daniel Kahneman says about this,

A stupid decision that works out well becomes a brilliant decision in hindsight.

Even after hearing his story, an outside observer might want to find out the pattern of success from there. But as Kahneman says, the only similarity between these patterns is fate. Because entrepreneurs who fail to walk the same path, for whom fate has not worked, will always find the same plan wrong.

The story of the mathematician Wald during World War II is a good example of overcoming the survival bias. The lesson to be learned from this example is that decisions based solely on the information we have can be misleading. You have to keep in mind all the events that started in the same way, those that failed. When reading a success story in a magazine, you have to think equally about the failed people of the same pattern. Of course, it would be wrong to use the survival bias as an excuse against taking new initiatives. Rather it is a tool that helps to understand the true state of the world by cutting out statistical errors. As a result, in any case you will have the whole picture in your mind which will help you to make the right decision.

This article is about a specific cognitive bias called 'Survivorship bias' which distorts our view on rate of success in the real world.
References:
1. How 'survivorship bias' can cause you to make mistakes
2. How the Survivor Bias Distorts Reality
3. Why do we misjudge groups by only looking at specific group members?

Featured Image: climber.eu


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very insightful and logical @tram 🙂

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Thank you for understanding the underlying depth of the article and for your valuable comment...❤

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