What is Survivorship Bias and How to Overcome it?

A False Perception

Each year, when the results of national competitive exams are out, newspapers are filled with full page advertisements with pictures of students who scored 95% above.

Coaching institutes try to build their reputation based on few students who top. This leads parents and aspiring students to think that they will also succeed in scoring higher marks if they join this magical institution.

However, the sad reality is that the success being advertised is only a tiny fraction of the total number of students who went through the coaching in that institute.

Case in point, the medical education national entrance exam in India: Approximately 2.5 million students in the country appear for national competitive exams for medical education, which are meant to fill just about 100K available seats.This means just about 2.4 million students will still not succeed in what their inspiring for despite two full years of hard effort, resulting in an overall success rate of 4%.

In many domains and specialized disciplines, the success rates can be much lower than that.

Glorifying success of a few is prevalent across industries. Financial agents will only showcase portfolio of their customers who have generated great returns. Entrepreneurship events celebrate founders who built, scaled, and got their companies funded. People choose career paths based on a few success stories around them.

Survivorship Bias

In all these cases, setback and failures are deliberately hidden to create false perception.

When triumph is made more visible than failure, we systematically overestimate our chances of success. Because we cannot see failure, we failed to acknowledge the big picture and the context in which a person succeeded or failed. Psychologists call this survivorship bias.

Why is it a problem?

When we blindly follow the visible success, we tend to neglect the factors that can risk our success. We also tend to neglect the context in which the other person success happened, which could be anything from their timing to their environmental conditions to their circumstances. No success happens in isolation, but when we are driven by survivorship bias, we failed to see the other factors behind their success. I have seen people who take a disproportionate amount of risk trying to emulate somebody else’s success only to regret those decisions later on.

What can we do about it? 

• First thing we can do is to realize that while the success of our role models can inspire our journey, it cannot define our journey. Knowing that you have to create your own success based on your specific context, circumstances, and environmental conditions is the first step to avoid survivorship bias.
• Secondly, for every success story that inspires us, we should look for similar choices that failed. We have to actively seek out cases, stories, and data on failures to build a holistic perspective on what we are trying to achieve.
• Third, we always need to ask the question, “What’s missing?” and “What am I not considering?” when making decisions based on a limited set of input. Doing this with others can open up diverse perspectives.
• Fourth, we need to look at the big picture through data and trends. When we are fixated on a decision, it is very hard to see the broad trends on the topic. Actively seeking data and trends, rather than simply depending on outlier cases can open up the big picture for you.
• Finally, we need to normalize talking about our setbacks. When we share our vulnerability with those around us, it reduces the stigma associated with failure and helps other people learn from our mistakes.

In conclusion:

Just a few days ago, I was having a conversation with a friend in EdTech space. He mentioned a growing trend amongst young people who drop out of their college to start their companies after being inspired by Bill Gates or Gautam Adani or Mark Zuckerberg. They correlate success with dropping out without considering how many people who dropped out actually succeeded – perhaps, a tiny fraction as data suggests. On the other hand, people who pursued higher education have also founded large and successful business.

Correlation is not equal to causation.

Knowing that “Survivorship Bias” exists and understanding its impact on our judgment/decisions is critical. Only then you can think critically and make best decisions for yourself.

Sketchnote Summary: Survivorship Bias

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