Not only history is written by victors but also every business guide. Why we shouldn't get deceived by success stories.
Becoming a football star or maybe rather popstar or even a top model - this is dream of many teenagers. It actually seems to be quite realistic. After all the guys from our favorite football team were all at one time the ordinary neighbor's child which played at the village's sports ground. Nobody of them had inherited his football skills from their parents. Everything they achieved on their own.
"Sure, you have to train hard. But if our football hero made it then why can't I make it?" That's how surely many of us thought as a child as well. Today we are grown up. Today we are smarter. Today we know that our football hero is one of a million kids that have played on the sport grounds of the nation who finally made it.
But we adults have our own heroes and gurus as well. Whether they are speakers like Anthony Robbins, founder legends like Elon Musk or successful self-made billionaires like Richard Branson. Please don't get me wrong. All those persons have plenty of grey matter and we can surely learn a lot from them.
But does their success justify everything? To state it clearly: I am personally absolutely convinced that one can achieve everything if he has the right belief. I am a big advocate of hard and also smart work. Certain strategies and behaviors are undoubtedly part of every success. And certainly, there are countless other small details which may bring forward success in business and in private life.
Yes, maybe they are even necessary. Nevertheless, I would like to point out that we should not just listen to the old winners. Because success does not always prove them right!
We often fall for the so-called "survivorship bias". This bias says that we only see the few successful people which in these terms "survived" and we don't see the huge mass of people who failed. But those might have done everything the same as the winners. They might even have had the same business strategy as our guru.
Probably those "losers" were even the mentors of our idols and have taught them their behaviors and attitudes which they now propagate as speakers or YouTube stars with great conviction. We just don't see the people who failed and therefore we don't have a control group for the success of a method.
Maybe it is the belief X which ensures success. Possibly it might also be the non-existent belief Y which prevents from failing after all. Maybe it is not my working throughout the night that leads my enterprise to success but rather the daily dose of sport I do. Or maybe the actual formula for success is very trivial: Some people are lucky and have the right contacts and others have bad luck and harmful calamities.
Sure, most of those success coaches would deny this since they are really convinced of their strategies and advices. And yes, maybe they are right. But on the other hand, they might also just be wrong. Who knows? We might never know how an alternative reality would have looked like.
Just one unusual approach: Why don't we save the money for our upcoming high-priced speaker event and give it to a homeless person. Then we just sit next to him and let him tell us his life story for two hours. That might be very valuable from time to time, too!
Of course, many speakers, coaches and authors promote themselves with their achievements: the success of their clients. And that is okay and who can blame them for that? I just assume for now that they are all honest people. However here also the effect of the survivorship bias applies.
Because only the small or big number of clients who are actually successful with the methods and strategies of their idol are also willing to buy more material from him. All others turn away from him over time and forget him. So, who stays in average for possible feedback?
It's always those people for which the product seemed to have had an effect and which are therefore in a good mood. And so, the credentials turn out according to this as well.
Let's assume that an investment advisor has 10,000 email addresses. One group of 5,000 e-mail addresses he writes that the Dow Jones will go up this week. The other group of 5,000 he writes that the Dow Jones will fall this week. Let's also assume that the Dow Jones really goes up this week. The 5,000 people who received his prognosis for the fall of the Dow Jones will now disappointedly turn away from him. The other 5,000 want to read more recommendations from this advisor.
In the next week, he writes his prognosis again to the remaining 5,000. This time again to the one half that the Dow Jones falls and to the other that it will go up. The whole game he repeats several times for a few weeks. In the end, he might just only have 10 people left who follow his emails. But those 10 people will now eat everything right out of the palm of his hand!
To those 10 victims who are now absolutely convinced of his competence since he seemed to be always right for them throughout the last weeks the advisor will now sell a "very hot tip" for a bunch of money. And all 10 will buy those. The advisor will collect the money. Whether his e-mail subscribers will be successful doesn't count for him anymore.
Now one could say that such a fraudulent business model is not sustainable. But if one takes in account that those more and more convinced 50% will certainly bring one or two friends as new customers for this investment advisor the system can be retained lucratively for a while.
During World War II English engineers have studied the bullet holes of airplanes which came back home from battle. While doing so they realized that the planes got hit at certain spots very frequently. Their seemingly smart solution was to strengthen the armor at these spots. But the success never happened. There was not a higher percentage of airplanes coming back home.
The mathematician Abraham Wald finally found out that you would more success if you would strengthen the armor at those spots that don't have any bullet holes. Because all returning flights were rather to count as evidence that the observable bullet holes were unproblematic. Hits at the other spots on the other hand were obviously fatal. That's why the machines with such hits didn't come back in the first place!
One can therefore learn from survivorship bias that to have success in all areas you first have to find the "deadly" weaknesses and avoid them. After that it becomes altogether even relevant whether one applies the correct success strategy. Thus, we should free ourselves from thinking that might just blindly follow any guru.
Read this book to get more infos about the survivorship bias and other biases, too.
Do you have ideas how one can find those invisible "losers"? From which mistakes of others could you already learn to become a "winner" yourself? Please write your ideas and suggestions below in the comments!
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