Entrepreneurship Survivorship Bias: Why Success Stories Are Only Part of The Picture
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I've been reading The Psychology of Money by Morgan Housel.
(It's taking me forever!!)
It's been over a year, because I keep checking out the audio book from Libby and then before I can finish it, my hold runs out. So I keep checking it out again, but there are so many holds on it, that it takes months to make its way back to me. So basically I've been able to get through a couple chapters every few months. 😆
But I'm almost done! It's really interesting, and I have lots of takeaways from it I'm mulling over. There's one particular concept I've been thinking about a lot, and I've sort of extrapolated it into what I'm calling 'Entrepreneurship Survivorship Bias'.
Entrepreneurship Survivorship Bias is the very human tendency to focus on success stories in business, while ignoring the people/businesses that didn't make it.
This phenomenon skews our perception of what it really takes to succeed, which can lead us to underestimate factors beyond our control (more below).
By focusing on the outliers who "made it," we miss the fuller picture of entrepreneurship - including the valuable lessons from those who faced challenges, setbacks, failed and tried again, or chose different paths. Recognizing this bias isn't meant to discourage you from trying, but to encourage you to approach your own entrepreneurial journey with more clarity AND compassion.
Survivorship Bias: Success Stories Often Ignore the Role of Privilege and Chance
In The Psychology of Money, Housel discusses how we often focus on the stories of successful people and try to emulate their paths, ignoring the fact that for every success story, there are lots more that followed similar strategies but failed for one reason or another.
This is a form of survivorship bias, where we only see the "survivors" of a particular strategy or behavior, and we don't recognize those who didn’t make it.
This isn't only true in the financial world, but in the online business world too.
For example, if you read about how an online course creator built a 7-figure business teaching digital marketing skills, you might be tempted (or encouraged, for the amazing price of only $1999) to emulate their strategy.
Their success narrative might go something like this:
"Through hard work and determination, I built my online course empire from scratch. I created top-notch content, mastered marketing funnels, and leveraged affiliates to scale rapidly. Now I'm extremely successful, and can tell you *exactly* what I did to get here. If you just follow my path, you can do it too!"
However.
This narrative can overlook several factors that I haven't seen discussed much in the business space:
Privilege: The creator might have had advantages like financial, race or gender privilege, all of which could have significantly eased their path to success.
Luck: Maybe they launched their course just as a major platform algorithm change favored educational content, giving them an unexpected visibility boost.
Neurodiversity: If the creator is neurotypical, they might not mention (or even realize) how standard marketing or productivity tactics worked well for them, while neurodivergent creators might struggle with the same approaches.
Social Capital: Their career wins might have come from a robust professional network built over years, or from access to higher education - a resource not everyone has access to.
Timing: They may have launched at just the right moment - either before the market became crowded, or during unique circumstances like the COVID lockdowns when online learning surged in popularity.
Cultural Fit: If the creator fits the dominant culture in their industry, they might not realize how this eased their path, compared to marginalized creators.
When you think about all of these factors, you get a clearer picture of what it really takes to succeed in the online course world. Yes, your strategy, consistency, mindset, & hard work matter, but privilege, luck, and your own unique brain & personality play big, and often under-recognized, roles too.
I share this not to discredit those who've become wildly successful, or to discourage those who are currently building their businesses. I just hope that as an online business owner, understanding this can help you set realistic & achievable goals, and to be more gentle & spacious with yourself. Don't get discouraged by comparing yourself to others - focus on building a business that fits YOUR life and plays to your own strengths.
The truth is, there's no one-size-fits-all formula for entrepreneurial success, and that's actually good news. When we let go of the pressure to replicate someone else's path perfectly, we open ourselves up to creating something uniquely our own. Maybe your version of success looks different – perhaps it's a business that lets you work at your own pace, honors your energy levels, and aligns with your values, rather than chasing arbitrary revenue goals or following someone else's blueprint.
Every successful entrepreneur you admire was once exactly where you are, facing their own unique blend of challenges and advantages. Your job isn't to become them – it's to become the best version of yourself, building a business that works for your life, your circumstances, and your goals. That might mean taking a slower path, making unconventional choices, or defining success differently than others do. And that's not just okay – it's exactly as it should be.
