When discussing entrepreneurial and creative success stories, the concept of survivorship bias often emerges. Some use this argument to discourage individuals from taking risks and pursuing their own path. However, I believe this reasoning is not entirely accurate.
Survivorship bias refers to our tendency to focus on successful examples while ignoring failures, resulting in a distorted view of reality. This is true when looking at company success rates; the majority of startups fail, yet we're disproportionately exposed to the few successes.
Using this information to advise someone considering entrepreneurship is, unfortunately, misleading. Entrepreneurship isn't a one-time endeavor. Serious entrepreneurs typically make multiple attempts, learning from each failure. While the probability of success for a single venture is low (confirming survivorship bias), the likelihood of an entrepreneur succeeding across multiple attempts is likely much higher. This is the statistic aspiring entrepreneurs should consider, not the success rate of individual companies.
I don't want to suggest that building a successful company or project is easy; it's not. However, I believe the success probability for those who seriously pursue this path is >50% (based on intuition, not a formal study).
What constitutes a serious attempt? I think several criteria must be met to classify as a serious entrepreneurial effort:
- Long-term commitment: Are you willing and able to dedicate >4 years to making it work?
- Ability to learn: Are you intelligent and reflective enough to learn from your experiences without falling prey to self-serving biases?
- Ability to improve: Can you enhance your skills based on the lessons you learn?
- Resilience: Can you persevere through extended periods of hardship?
- Passion: Do you genuinely care about what you're doing?
If these criteria are met, I believe success in this line of work becomes more likely than not.
I'm not suggesting everyone should start a company. Certain traits are necessary for a reasonable chance at success. However, we shouldn't discourage people from entrepreneurship by citing survivorship bias based on single-venture success rates. Instead, we need a more grounded understanding of what it takes to become successful in this field.