Cognitive Bias — Survivorship Bias
I recently created an Etsy shop. Yes, I’m going to link my Etsy shop, and yes, I would love it if everyone reading this would go to my shop and buy stuff — after all, I want to make money just as much as anyone else. I don’t expect you to, though, and I mostly mentioned it because my research into selling on Etsy led me to think about the topic of this piece.
Survivorship Bias — What is it?
I’m going to tell you a story — it’s a story of a guy named Richard who was stuck on an island and needed to get to a conference. He noticed that a bunch of other people were also stranded on the island; their flight had been cancelled. He decided to charter an airplane and sell tickets to the other folks in the same situation as he was. He chartered the plane and went to everyone else to get them to sign on as well. They all said no, he didn’t recoup his money, and went back to his regular job as a mid-level executive.
That story is fictional — probably. It would be hard to know for sure because nobody would talk about it. Well, maybe that guy would every once in a while, but it wouldn’t get passed around, because it’s not very interesting.
Another one. A guy named Alex decided to sell gym launch packages. He built up a great set of products, worked his ass off on sales techniques, and started contacting gym owners to get them to sign on to his product. Turned out he was a bit offputting, and he went broke. He ended up homeless and wasn’t able to recover from it because his failure broke his will pretty badly, which triggered an underlying potential for a mental illness. He died of heart failure after several years of living homeless.
Again, that story is probably fiction. I mean, things like that happen every day, but I don’t know that that particular story happened.
I do know stories very similar to those ones, the first about Richard Branson, the second about Alex Hormozi. In the first story, a bunch of people did buy tickets on Richard’s charter flight, which allowed him to create Virgin Airlines. That Richard ended up a billionaire. Alex Hormozi ended up selling licensed gym marketing packages and became extremely wealthy by age 27.