Have you heard of Survivorship Bias? Some ways it's holding you back - A Short Primer
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Have you heard of Survivorship Bias? Some ways it's holding you back - A Short Primer
Wisdom Letter #83 | Mistakes we make in learning from Success
Hello and welcome to The Wisdom Project — your weekly dose of human-curated wisdom in a world full of algorithmic noise.
Don’t you love old buildings?
Old architecture is fascinating, we love it wherever we see it. We look at them and say to ourselves — “They don’t make buildings like that anymore”
And the funny thing is, people have been saying this forever - even when those old buildings were new!
So why does that happen?
Turns out, there is an interesting effect of Survivorship Bias at play here.
Let’s find out.
Today we talk about what is survivorship bias, how it impacts us, and what we can do about it👇
What Is Survivorship Bias?
Survivorship Bias is our tendency to focus on the winners and forget about the losers.
We get inspired by the narratives of extremely successful people.
We imagine ourselves walking their path. And we start to exactly copy the approach that worked for them.
In the process, we don’t realize that what worked for them may not work for us.
The extremely successful may have achieved success because of their superior skills, or maybe because of random chance.
Or some combination of the two factors.
Learning From Success vs Failure
Looking from the outside, it’s impossible to know the reasons for someone’s success. It’s hard to learn something effective from it.
Sure, successful people have a lot to say, and a lot of wisdom to impart, but their experiences can be guiding principles at best, not a formula for success.
For every successful person in any field, there are at least a hundred failures.
We can learn more from failure than from success.
Success hides our flaws and weaknesses. Failure exposes them and forces us to deal with them.
When we look at other people’s failures we can learn what not to do to become successful.
This approach works especially well when we are thinking about a new venture, entering a new field, or starting a new project.
When we just look at the survivors in the field we are bound to feel that their path was easy.
That, if we just follow their exact approach then we can get fast success.
But we know that’s not true in real life.
We underestimate the complexity of a problem when we only look at the survivors.
And then we are surprised when we fail. We succumb to Survivorship Bias.
Simple Example of Survivorship Bias
Celebrities
One simple example is looking at successful movie stars and sportsmen and trying to emulate their journey.
We try to follow their path to the tee, wondering that the “right” path and “hard work” will give us the same success.
We fail to acknowledge that success anywhere requires the role of luck.
For every hit movie star or sportsman, there are more than hundreds or thousands of failures in their field.
They all “worked hard”, but they still failed.
And you don’t know their reasons.
Maybe they were not at the right place at the right time, maybe they got injured at a crucial moment, maybe they just had a bad day during a trial or an audition.
Or maybe they made some fundamental errors at critical points of their careers.
You can learn a lot more from that than from anecdotes of a successful career.
Financial Instruments
Did you make money on Bitcoin? Or that one particular IPO listing. Or some random stock tip from a “stock market expert”.
For every financial instrument that makes it really big in a really short time, there are hundreds, nay, thousands of other similar instruments that went bust.
The people who made the most money on Bitcoin bought it way back in 2011 or 2012.
There have been more than a thousand cryptocurrencies invented since. How many do you know about? And how many are actually making money for people?
The success of Bitcoin gives the illusion that all cryptocurrencies are “100x in 10 days” type of investments.
While in reality, Bitcoin is a survivor and the world of crypto is highly complex and unpredictable.
The Romance of Old Architecture
Architecture in particular, and city planning, in general, is in a constant state of flux.
With new technology, new tastes, and new requirements, the nature of our buildings is constantly changing. Old buildings are continuously being taken down, and getting replaced with new ones.
So it’s not that there weren’t ugly buildings back in the day, it’s just that they all got replaced with new ones.
And only the good ones were not taken down. They became survivors.
Practical Applications
Survivorship bias plays out in our regular life in a couple of ways:
Every time you are recommended a fad diet or a trendy new workout routine by someone. An activity that is supposed to “guarantee instant results”.
Be very careful with this. It may have worked for a few people(survivors) only. And you may be getting a filtered version of reality.
Every time you are suggested a financial investment to earn quick and easy money. Be skeptical of it.
There is no such thing as easy money in the world.
Even if you can see examples of other people making easy money, you may be just seeing a few survivors and not the whole spectrum.
In general, whenever you are promised “certain and instant success” and given a few examples, it’s likely you are only looking at the “survivors” and missing out on large pieces of failure data.
How to Eliminate Survivorship Bias?
Few tips to tackle survivorship bias:
Be skeptical of your chances of replicating other people’s success exactly.
It’s good to dream and be ambitious, but it’s prudent to be skeptical and realistic.
Gather more data. Especially from failures. Go out of your way to look for details about other people’s mistakes whenever you are pursuing a new endeavor.
Be careful when you give advice to someone else
You may be a “survivor”.
You may not realize it, but if you’re successful at something, there’s a good chance that you have benefited from some luck in your life.
Luck that someone else might not have. Always be mindful of that and stop yourself from giving a false sense of certainty to someone.
Thank you for reading🙏
Recommendations
💭This is Survivorship bias summarized in a single comic strip by the brilliant xkcd 👇
🧾This is a cool story of how the idea of survivorship bias was first conceptualized. 👉By looking at surviving World War 2 planes
📺Watch this TedX Talk to understand how Survivorship bias skews our perception. 👉 Missing What’s Missing
📖This article from FarnamStreet is a great read 👉 The Tale of Forgotten Failures
📑This Wisdom Letter about a related concept called The Narrative Fallacy — Know You Narratives | Wisdom Letter #65
What are you reading?
This is a new section we have started, of reader recommendations.
This what a bunch of you recommended last week👇
Thinking Fast and Slow — Daniel Kahnemann & Amos Tversky
Antifragile — Nassim Nocholas Taleb
We love it that we get the same recommendation from multiple people.
These are fantastic recommendations. Thanks a ton🙏
I’m wondering, are people not reading blogs anymore🤔 For the last 3 weeks we have only been getting book recommendation😆. We actually love that, so keep them coming.
Any book, blog or podcast that you consumed and you think is awesome, just hit reply and let us know.
So What are you reading?
Important Note
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ICYMI 👉 The Gray Rhino Effect | Wisdom Letter #82
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This was Wisdom Letter #83. In case you want to revisit any of the previous 82 letters, check out our entire archive.
Love,
Aditi & Ayush