THE PERILS OF SURVIVORSHIP BIAS

Many aspiring entrepreneurs believe that dropping out of college to start a company is the key to success. Many successful CEO’s well-known stories give the impression that to triumph in business, all you need is a big idea in college and the will to quit school to pursue it. The problem is that college dropouts do not usually become billionaires. There are many more budding entrepreneurs who dropped out of college to start companies and failed than those who succeeded. To focus on the people who left school and made it big is to ignore the far larger set of dropouts who never got anywhere. This is what is known as “survivorship bias.” Survivorship bias is an error that arises because we look at the data we have but ignore the selection process that led us to have that data.  Read More >>

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