Do things get skewed if you survive?
I was reading Scott Adams book; How to Fail at Almost Everything and Still Win Big.
[if you click that link and buy the book, I earn a shiny dime!]
He’s the creator and writer and artist for Dilbert. That cartoon about the hellish corporate world that I know all of you are trying to avoid.
I’m halfway through the book and I believe it’s awesome so far so I put it in my Amazon Store for you.
In the book, there is a section on psychology which lists out all the biases that we humans sometimes suffer from.
One of them is Survivorship bias.
It stuck out to me because last week on September 2nd, Roy H. William’s Monday Morning Memo (a podcast I listen to) was all about Survivorship bias.
What is this phenomenon?
Roy tells us:
It’s derived from WWII when an analysis was done of all the fighter planes returning from the Battle of Britain.
The analysis looked at where the most bullet holes were found to try and improve the planes.
A report detailed the need to add armor and extra steel to the indicated zones.
Then somebody put their Idea™ jeans on and realized-
‘These are the planes that survived to fly back to England, we need to add protection in the other spots because the planes that got hit there didn’t make it back.’
So how can this affect us in buying a business?
When you hear about amazing successes in business and about how people did amazingly awesome deals you are likely hearing a true story.
But you’re hearing from a survivor.
The survivor doesn’t necessarily understand all the variables that go into success. Timing and luck are always part of these things.
The survivor looks at his journey and assumes that his attitude and work ethic are what led him to succeed.
So, he tells you, ‘You just have to be willing to work harder than the other guy and make more calls. If you are committed and visualize the outcomes you want then the only way you can fail is if you’re deficient somehow deep down inside.’
[No particular wantrapreneur guru quoted there, I made that up]
You’re not hearing from all the other people who tried to make similar things happen and who failed.
And here’s the point.
Many of these wantrapreneur gurus advertise to the ‘get rich quick’ crowd and convince them that business acquisition is a path to quick riches.
Then they sell them an expensive program.
When the student doesn’t achieve the same level of success as the teacher, it’s obviously because they didn’t try hard enough.
If you ask around long enough, you can find someone you’re connected to who went out to the Hilton Hotel near the Airport back in 1996 for a two-day seminar in how to get rich flipping bank repo houses.
It’s the same type of stuff.
In my experience working with business owners, entrepreneurs and investors, I’ve seen a lot of bad ideas.
I’ve witnessed people failing and I’ve seen people lose lots of money and time.
That’s why I teach what I do. I’m trying to get people to learn from the mistakes of others.
Sometimes, people do my Business Buyer Advantage online course and then write me to thank me.
They say that they learned so much in the course that they’ve come to realize that buying a business is not for them.
To me, that’s a survivor too.
Business ownership can deliver time freedom, flexibility, lifestyle choices and, yes, even greater wealth too.
You need to be cautious.
Remember- Warren Buffet will tell you that to be wealthy, you have to avoid losses.
This is why I don’t advertise to the ‘get rich quick’ crowd. I promote myself to people who’ve already realized that they want to buy a business.
I teach them how.