Survivor Bias

In statistics, there is a concept called "survivor bias," which refers to researchers focusing only on the common traits of "survivors" while ignoring the information from "failures."

A classic example is during World War II when mathematician Abraham Wald was tasked with studying how to reinforce the armor of British bombers. The returning aircraft had most of their bullet holes in the wings and tail, but Wald believed that armor should be reinforced around the cockpit and fuel tanks because bombers hit in those areas never made it back.

The same logic applies to books that tell stories of entrepreneurs' secrets to success. Blindly copying the advice in those books doesn't guarantee success; what's more valuable is analyzing the mistakes made by companies that went bankrupt.

The same is true in our circle—people always focus on the rare, most sensational success stories. For example, who made millions on SHIB or NFT projects, but few analyze what went wrong with those bankrupt exchanges and funds: fraud, high leverage trading, risk management failures.

Learn lessons from others' mistakes; sometimes, the cost of your own mistakes can be too heavy!