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TODAY’S STORY
26 Aug
,
2022

Survivorship Bias is okay but let it not be an excuse.

Here are two commonly experienced scenarios:

1. You try a new marketing approach. It's clearly not working and feels like a waste of time and money. But you persevere; you keep tweaking it and one day the right recipe finally clicks. You kept at it and tried till you succeeded.

"Winners never quit" is what you tell yourself and others.

2. You try a new marketing approach. It's clearly not working and feels like a waste of time and money. But you keep trying and eventually end up wasting even more time and money. Your business is out of cash and will need to shut down.

"It's better to recognize a failure and pivot at the right time" is what you advise others after committing the same mistake yourself.

Whenever someone who experienced scenario no. 1 writes about their experiences, you're the first one to comment, "But that's just survivorship bias."

"But that's just survivorship bias."

Let's ruminate on this a little bit.

The past may be a good sample set to assess probabilities of success. But that didn't stop anyone who was serious from trying. So, why all this fuss about survivorship bias?

Also, when something isn't working, how do you even know which scenario you're in?

How are you to know whether you’ll end up as a cautionary tale of someone who couldn’t let go when he’s clearly wrong-headed, or as a hero who bravely fought through doubt to prove everyone wrong?

Short answer:

You cannot know.

Long answer:

Stopping is sure failure, while continuing at least promises a possibility of success. So continuing feels like the smarter option.

But wait.

That's true but is that really wise? Not really. If you run out of chips, you can't sit at the table and play anymore. So you'd rather cap your losses and be left with enough chips to start over again.

But then, if you don't keep at it and quit, you might have to live with the regret of not trying hard enough.

So, you cannot know. Not for marketing, not for product design, not for hiring, not for almost any decision that's truly consequential.

The best investors in the world cannot know either, but they try. They diversify their bets and stay in the game long enough to eventually win. And that's what really matters:

Staying in the game.

Most decisions can't be rationalized perfectly before the fact. And rationalizing post-facto is what you typically see successful people do. If that's your case against survivorship bias, I'm with you.

Heck, many times, it’s not even clear that we’ve “learned" anything, whether the outcome was good or bad. Perhaps all we’ve done is made some choices and observed some results, and that’s the end of it.

But this is a positive more than a negative. Realizing it helps you make decisions with less second-guessing and less guilt about failing.

In fact, what separates the successful from the unsuccessful is that the former chased failure. What do I mean by chasing failure? For sure, no one likes failing. But people do like pushing their limits till they break. When systems break, they heal back stronger.

To know your limit, you have to break it in a controlled way.

It's called Hormesis. And it sits at the heart of mastery and expertise.

Trudging through some bad decisions is inevitable. Not everything that doesn't kill you will make you stronger. But staying in the game is the rule without a trade-off or exception. Doesn't matter whether you're scenario 1 or 2 — whether you choose to persevere or decide to call it quits and start over.

If you can continue without losing all your chips, keep trying.

But if you risk losing all your chips, it's better to take a step back while you still have them, pause, and re-evaluate.

Ultimately, you're the best judge of what's right for you based on the cards you've been dealt.

But don't let survivorship bias be an excuse for not having tried. As long as you aren't making any irreversible decisions that may lead to you having to quit the game, failing forward is the only way.

Because when you don't know what might happen, you're in some sense, always moving towards eventual failure.

And that's okay.

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