🤔 Did you know…
If you spend much time scrolling through Twitter or LinkedIn…
You may begin to think that everyone is running a 7-figure business or growing their audience lightning fast.
(They’re not)
What’s actually happening is far less exciting…
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Pre. S. Today’s issue is a little different. Rather than exploring a concept from behavioural science and sharing how to apply it in your marketing, we’ll look at how you can apply it personally to reach your goals and learn more from failures. I hope you enjoy it.
Imagine this…
You’re on your lunch break scrolling TikTok.
You come across an influencer who tells you the secret to business success is just starting.
They tell you that the most important thing they ever did was quit their job and go all in on their passion project. They didn’t have a dollar to their name… but they worked hard and made it happen.
And that leap of faith turned into a $30 million dollar acquisition 5 years later.
The time is ticking down on your lunch break. You’re frustrated.
“I don’t want to have to go back to work when somebody tells me,” you think. “If this person can pull it off then I can too.”
You decide to take one final scroll before you start work again.
The next video hits you with a stat that startles you.
“Did you know that 90% of businesses fail?!”
Hmm. That number seems unrealistically high, right? Based on what you see on social media, lots of entrepreneurs are thriving.
Which video do you choose to believe?
In today’s edition of Why We Buy, we’re taking a look at the Survivorship Bias — why we overestimate the likelihood of success when we only focus on the success stories.
Let’s get into it.
The Psychology of Survivorship Bias🧠
Our minds aren’t great at categorizing a fluke outcome as… a fluke.
We’re more likely to think that outcome happens often versus realizing that it may be an outlier.
The most famous research study on Survivorship Bias comes from the World War II statistician Abraham Wald.
His research group was in charge of figuring out how to make the WWII planes less likely to be shot down.
The initial approach analyzed the damage to the planes that returned from battle with the plan to reinforce the areas that were hit the most.
But Abraham realized this was actually the complete opposite approach they should use. The team had accidentally taken a fork in the road toward Survivorship Bias.
By changing their focus to reinforce the most vulnerable parts of the planes that were causing them to go down in battle, they were able to create better planes.
Inside Your Mind🧐
You’re getting pummeled with success stories all day.
One scroll through Twitter will have you thinking that everybody and their grandma has built a 7+ figure business, grown a 100K social media following, or lost 30 lbs in 30 days.
And of course the people who have achieved those results will gladly share their secrets with you… for a fee.
Oftentimes what you’re seeing are often the outliers. Not the reality.
If you’re not careful, Survivorship Bias can wreak havoc on your self-esteem.
But it’s not all bad. As with many things, understanding our bias to focus on success stories can be useful when channelled in the right direction.
How To Apply This 🤑
Alright, so how can you apply this right now to sell more achieve more of your goals?
Think critically about the success stories you see (and dig into the backstories)
Our bias for focusing on success stories can skew our perception of reality. Before you start a new project or venture, do your homework first. For instance, newsletter media companies are very sexy right now. There are plenty of success stories to inspire you…
Shaan Puri built Milkroad to +100k readers and sold it for (a rumoured) $10M in less than a year. Zain Kahn is the founder of Superhuman, the fastest growing AI newsletter in the world. He built Superhuman into a 7-figure business lightning fast.
If you look at these success stories in isolation then you may assume that starting a newsletter is the fastest path to riches. But when you dig into Shaan and Zain’s backstories you see that both started with huge advantages.
Shaan was independently wealthy from past business ventures, which meant he could self-fund Milkroad’s fast growth. And Zain was an experienced marketing exec who spent 3-years pouring almost all his time and energy into audience building. He grew his LinkedIn and Twitter following to over 700,000 people before launching Superhuman.
Both are incredible entrepreneurs who have earned every ounce of their success, but without digging into their backstories you may wrongly conclude that “newsletters are easy businesses”. (Believe me, they’re not.)
Do a post-mortem when a project fails
Failure is inevitable (despite what Survivorship Bias may lead you to believe). When a project goes off the rails, don’t just sulk for a bit and then move on—learn from it.
A “post-mortem” is a structured process for examining a project and extracting lessons you can apply in the future. After my tech startup failed, I conducted a post-mortem by asking myself a series of questions like:
- What were the main impediments or roadblocks we encountered?
- Did we make any assumptions that proved to be untrue?
- Were there any skill gaps within the team?
- Did we accurately forecast the resources we’d need to be successful?
- Were there any missed opportunities or alternative approaches that could have been explored?
Surprisingly, it was actually a very cathartic experience. We couldn’t change what happened but having more clarity on the issues that led to our failure has helped me tremendously in my current business.
If you’re curious, I shared a bit more of my own failure backstory in a recent LinkedIn post…
Be realistic AND relentlessly optimistic
People have much more to gain from sharing their success stories than chronicling their failures, so those are the stories we see most often. Once you learn about Survivorship Bias, you’ll notice it everywhere. That said, resist the urge to become a cynic. Success is possible.
You can build a 7-figure business or lose 30 lbs (though you probably shouldn’t try to do it in 30 days). People achieve goals like these every day. Are those people outliers? Sure, but the people who win are the ones who believe success is possible. The opposite is also true. Behavioral scientists call this the Galatea Effect.
Be a realistic optimist. As Thomas Friedman famously said,
The Short of It 💥
Survivorship Bias is real. Once you understand it and see how it works, you can make better decisions. I hope you’ll also be a bit kinder to yourself.
That’s all for today.
What did you think of today’s special issue?
Love it? Hate it? Hit reply and let me know.
Until next time, happy selling growing.
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🐦 Your Brainy Tweetable Success is the outlier. Failures are the most common outcome. Studying what’s most likely to happen will get you further than only focusing on what might happen. Spend more time figuring out what traps are heading your way than potential accolades. Cc: @KateBour |
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