The best way to learn is by studying the successful people who came before you… right?
When you first start thinking about becoming an entrepreneur, it’s natural to look up to and model yourself after the radically successful entrepreneurs who have come before you. You may even idolize them, to a degree. But while these successful and popular entrepreneurs certainly offer valuable lessons that all of us can learn from, our views are dangerously distorted by survivorship bias. In fact, this bias may be leading millions of young entrepreneurs down the wrong path entirely.
Survivorship Bias in a Nutshell
So what is survivorship bias? The gist is this: when you focus too heavily on the “survivors” of a given population, you ignore important qualities about the rest of the population. It’s usually demonstrated with an example of planes in World War II. The British military had access to a bullet-resistant material that could cover some, but not all parts of each plane. The original approach to determine where to place the armor looked at the bullet holes in the planes that came back. Since these bullet holes show the most frequent places planes were getting hit, it stood to reason that this was the best place to put armor.
However, this is a fallacy of survivorship bias. Instead, the ideal solution was to place armor wherever the surviving planes weren’t getting hit — you can’t study planes that were shot down, so you have no bullet holes that show you the most vulnerable parts of the planes.
The Cult of Successful Entrepreneurs
So how does this relate to entrepreneurship? Well, we tend to gravitate toward the most successful entrepreneurs in the world when we study examples — think of people like Bill Gates, Richard Branson, Steve Jobs, Mark Zuckerberg, Elon Musk, and Mark Cuban. We tend to note that these entrepreneurs have standout qualities that surely must have led to their success.
· Rogue thinkers. Entrepreneurs like these are ones who did something different. They didn’t take the “average” path to success, and they didn’t follow a formula. They kept going when they were told they were crazy, and they ended up on top of the world. This makes people believe that going against the grain is always a good thing — but it often isn’t.
· Risk takers. You’ll also notice a common tendency to take risks. Risk-taking behavior can lead to more rewards, but don’t forget that there’s another side to risk-taking — and one that doesn’t make nearly as many headlines. You never hear about the millions of people who lose playing the lottery — just the few people who win.
· Extremists. These people aren’t middle-of-the-road types; they’d rather have polarization of people who love them and people who hate them than have everybody feel neutral about them. Stirring these strong feelings can make you more successful than your average counterparts, since you’ll attract more attention — as long as you end up with more positive relationships than negative ones.
Who Are We Missing?
However, we don’t get to study examples of entrepreneurs who demonstrated these qualities, but ended up failing — and there are probably a lot of them. The above qualities aren’t guarantees of success; they offer a flip side that can actually be devastating:
· People who ignored advice. Rogue thinking is great — in small doses. Standard business practices are standard for a reason, and ignoring the advice of people who came before you can actually lead you to ruin. You might get lucky and stumble on a revolutionary new way to view the world, but it’s more likely that you’ll simply be ignoring some sage wisdom in the process.
· The unlucky. It’s fun to look at all the risk-takers whose gambles ended up paying off, but this view ignores the millions of entrepreneurs who took big risks and failed. You don’t hear many news stories about the business owners who ended up in financial ruin.
· Offenders. When it comes to polarizing an audience, offense is just as likely as attraction. New entrepreneurs who grow to be too bold may alienate investors and early clients, ruining their chances of attracting initial momentum.
A Balanced Approach
None of this is to say that you should ignore the most popular and successful entrepreneurs in the world — clearly, they’re doing something right. Instead, I’m demonstrating the fact that survivorship bias makes us ignore the potentially devastating downsides and consequences of these behaviors and outlooks. The key, then, is taking a more balanced approach; instead of trying to emulate your favorite entrepreneurs directly, draw some key takeaways and come up with your own way to incorporate them into your business.
Instead of taking advice as law, take it as one of several considerations. Only with a balanced approach will you be able to find your own path to success.
For more content like this, be sure to check out my podcast, The Entrepreneur Cast!