Invert Your Thinking

Seems we fool ourselves constantly. We leave out or discard important information because it doesn’t fit our narrative - or simply because we’re too lazy to discover what we don’t know.

Invert Your Thinking
Capital Thinking | Invert Your Thinking

Capital Thinking • Issue #111 • View online

“Simply put, survivorship bias is your tendency to focus on survivors instead of whatever you would call a non-survivor depending on the situation. Sometimes that means you tend to focus on the living instead of the dead, or on winners instead of losers, or on successes instead of failures.

It is easy to do.

After any process that leaves behind survivors, the non-survivors are often destroyed or muted or removed from your view. If failures becomes invisible, then naturally you will pay more attention to successes.

Not only do you fail to recognize that what is missing might have held important information, you fail to recognize that there is missing information at all.”

- David McRaney

“The cemetery of failed restaurants is very silent.” - Nassim Taleb

And the hits they just keep coming, this one from none other than Arthur Conan Doyle’s famed detective, Sherlock Holmes.

Gregory (Scotland Yard detective): “Is there any other point to which you would wish to draw my attention?”
Holmes: “To the curious incident of the dog in the night-time.”
Gregory: “The dog did nothing in the night-time.”
Holmes: “That was the curious incident.”
Photo by Gary Wann on Unsplash

All these folks make the point that survivorship bias (sometimes called selection bias) is a very real thing.

Seems we fool ourselves constantly. We leave out or discard important information because it doesn’t fit our narrative - or simply because we’re too lazy to discover what we don’t know.

One of the most famous stories about survivorship bias took place during World War II.

Allied bombers were being shot down in shocking numbers and a special group of mathematicians was tasked with determining how much more armor could be placed on the aircraft to tilt the odds in the favor of the plane making it back to base.

Abraham Wald, working for the Statistical Research Group, realized they were being asked to solve the wrong problem. The military was only considering half the data - from those planes that returned safely. They paid no attention to those that didn’t make it back at all.

As Wald correctly pointed out, those huge holes in the returning aircraft didn’t need extra protection because the planes returned safely in spite of the damage. The planes that didn’t return were obviously hit elsewhere, in more critical areas.

Wald’s calculations are still used today and his work formed the basis for the field of study we now know as Survivorship Bias.

But wait, I can hear you thinking what’s that got to do with me?

We Don't Recognize or Consider Failures - At All

Photo by Randy Fath on Unsplash
“Survivorship bias also flash-freezes your brain into a state of ignorance from which you believe success is more common than it truly is and therefore you leap to the conclusion that it also must be easier to obtain.
You develop a completely inaccurate assessment of reality thanks to a prejudice that grants the tiny number of survivors the privilege of representing the much larger group to which they originally belonged.”
- David McRaney

By leaving out some of the most important data, our calculations are flawed. Not asking the right questions leads us to the wrong conclusions. And that’s not good for anyone.

You can learn more about Survivorship Bias here:

The Dog That Didn’t Bark | Invisible Laws
In the classic short story, Silver Blaze, Sir Arthur Conan Doyle chronicles the mystery of the kidnapping of a prize race horse. Doyle’s iconic detective, Sherlock Holmes, is summoned to investigate the crime. Holmes famously solves the case by focusing on a critical piece of evidence, a guard dog t…
Survivorship Bias
The Misconception: You should focus on the successful if you wish to become successful. The Truth: When failure becomes invisible, the difference between failure and success may also become invisib…
Survivorship bias - lessons from World War Two aircraft - Clear Thinking
Survivorship bias is a classic thinking fallacy where you learn lessons only from successful outcomes because the failures are often invisible.
Abraham Wald and the Missing Bullet Holes
An excerpt from How Not To Be Wrong by Jordan Ellenberg
Survivor Bias in WW2 Airplanes, NBA players, & Mutual Funds
My project on Survivor Bias is an attempt to answer the question: “What can we learn from dead startups?” Looking at dead startups is form of thinking called inversion that Tren Griffin and Charl…
Abraham Wald - Wikipedia
Photo by Ryan Richards on Unsplash