Visibility Winners
The bias of observing only successful outcomes (e.g., millionaires) and ignoring the many failures, leading to overestimated success rates and flawed conclusions.
THE IDEA
Visibility Winners
A sample selected for wealth includes the winners while leaving out people whose similar attempts failed. The authors made no attempt to correct their statistics with the fact that they saw only the winners. They make no mention of the “accumulators” who have accumulated the wrong things (members of my family are experts on that; those who accumulated managed to accumulate currencies about to be devalued and stocks of companies that later went bust). Nowhere do we see a mention of the fact that some people were lucky enough to have invested in the winners; these people no doubt would make their way into the book. For illustration, imagine lowering the observed average wealth by 50% to account for omitted losers. That would change the conclusion, but the percentage is not a calculated correction. Estimating the bias requires information about the people left out and their outcomes.
When to use it
When analyzing startup success factors, consider the many failed startups as well to avoid overestimating the effectiveness of certain strategies.
When evaluating investment performance, look at the full distribution of returns, not just top performers, to understand risk and randomness.
In career advice, be aware that successful people's stories are more visible than those who tried similar paths and failed, so avoid attributing success solely to specific actions.
When conducting survey research, ensure the sample includes both successes and failures to avoid selection bias.
FROM THEORY TO EVERYDAY LIFE
In practice
The Millionaire Study
A study selects only wealthy individuals to uncover the secrets of success, ignoring the millions who took similar risks and failed. This creates a biased view that certain behaviors or investments lead to wealth, when in fact many of those behaviors also lead to failure.
Lucky Monkeys on Typewriters
The analogy of a million monkeys typing eventually producing Shakespeare highlights that among a large number of random attempts, a few will appear successful by chance. Observing only these successes ignores the vast majority of failures.
A MOMENT TO REFLECT
Put it to work.
How might focusing on successful examples in your field lead to misleading conclusions?
What are the unseen failures in your area of study that you should consider to get a more accurate picture?
How would you correct for visibility bias when evaluating investment strategies or career advice?
CONTINUE THE CONVERSATION
Source texts
- Fooled by Randomness The Hidden Role of Chance in the Markets and in Life (Nassim Nicholas Taleb)