#BusinessEducation Survivor bias. Why ask for advice from tho | Trendfactory

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Survivor bias. Why ask for advice from those who have failed?

An example of the "cost" of a survivor bias and successfully overcoming this mistake is the work of the Hungarian mathematician Abraham Wald, who worked for the American army during World War II.

The command assigned Wald the task of analyzing bullet holes and shrapnel on American planes and propose a booking method so that pilots and planes would not die.

It was impossible to apply full booking - the plane turned out to be too heavy. It was necessary either to book those places where the bullets hit, or those places where there was no damage. Wald's opponents suggested booking damaged places.

Wald said that aircraft with such damage were able to return, while aircraft with damage elsewhere could not. Wald's point of view prevailed. The planes were booked where the returned vehicles had no damage. As a result, the number of surviving aircraft increased significantly. According to some reports, Wald thus saved the lives of about 30% of American pilots.

Survivor bias distorts our perceptions in business too. We read the biographies of famous businessmen and admire the way they dealt with the challenges that arose along the way. Only these problems were solved. What about those who couldn't solve theirs?

These are the cases that should be dealt with for your startup. No one examines the mistakes of those who have failed. They are simply not taken into account, thrown out of statistics, and therefore mistakes are repeated over and over again, killing new startups.

To avoid cognitive bias, study this particular question. Find people you know who have not been able to build their business. Go through the financial statements of failed companies. Find out what may interfere with your case, and think about ways out of the situation in advance.