The one part I loved about the book is when it provides tips on how to identify these "empty" claims. Things like "we spent 3 years putting this analysis together!", which does nothing to support their claims, but just creates the impression that "wow! this must be true!".
https://www.amazon.com/Halo-Effect-Business-Delusions-Manage...
Or are you saying that without a million dollars you can't afford to "give back" an occasional one-hour lecture on skepticism ? That seems ironic.
Edits: rant
Judging by her campaign and how she ran HP, I don't see a sign she's critically open in the way you need to learn from history.
Personally, I'd say knowledge of history is a very, very thin bullshit detector. It simply allows you to see more patterns; not how to evaluate them when they compose.
1. Send e-mails to a bunch of people claiming to have a great stock pick. Tell half of them to buy and half to sell short.
2. Wait a week. If the stock went up, do the same thing but send your new pick only to the half that got your buy recommendation, and if it went down, send it to the other half. Anyone who saw your incorrect prediction never hears from you again.
3. Repeat a couple more times.
4. Now ask the people on your list to pay you to continue getting your stock picks -- after all, at least as far as they've seen, you've been 100% right on every pick you made.
The recipe is:
1. Cold call people on a lead sheet for people indicate interest on placing bets on sports games.
2. Sell interested folks with a "two week package" for $250; seems pricey, but the name of the game is to filter out the minnows catch gullible whales. You want folks who are "vested" on this and prove they have the cash to be scammed. Double-side your bets or smarter yet, side your bets by the probability implied by the Vegas oddsmakers (50% Team One Wins, 50% Team Two Wins or 70% Team One Wins, 30% Team two if spread is that way).
3. After a couple of weeks pass, call up the people who have won 4 or 5 games in a row, inevitable happenstance by sheer probability. Upsell them on a "weekend Vegas package" where they can gamble on higher stakes preferably $50K-$75K; because you're seem now as a infallible genius by the marks, you charge them a 35%-50% commission on their wins.
4. Doesn't matter if your client wins or lose. Take home the 50% commission on their churn and move onto the next one. Rinse and repeat.
The show is highly entertaining and enlightening not because of the extreme doucheness of the head scammer and his salesmen, but the marks who delude themselves as they lose game after game and gets scammed - all followed by the camera-men of CNBC and the spin-motivational commentary of the scammers.
Great link by the way.
Then interview that last person and ask her what her technique was, how could she possibly flip heads 6 times in a row? What hard work and practice did she do ahead of time to make her such a good coin flipper? What daily habits produced this proficiency? This is essentially what we do when we try to be successful simply by asking successful people what they did.
Just thought I'd point that out given how there are some parallels to how many people play support roles within society while only a few make it to the pinnacle. Yet we still say that those at the pinnacle 'beat' all their peers.
So the truth lies somewhere between "it's entirely chance" and "it's entirely hard work/intelligence/participation".
Ha! I have not, but that's a great exercise. I'd be interested in hearing the "winner's" responses to the questions.
I can't think of any specific citations, since it's such a general observation.
One case study is a woman who wins lots of newspaper contests - the point being that she wins lots because she puts in for lots.
Another point is perspective. You fall and break your arm. You can either perceive it as bad luck, you broke your arm, or as good luck since it could have been your neck.
For example, if "risk-takers" both sometimes do very well and also often fail then you expect to capture the failed risk-takers in your initial sample, so you're not just biased by the successful risk-takers (said survivorship bias).
I'm not familiar with the book, but the snippet you reference describes something much closer to proper scientific method than most of the examples of this phenomena.
If you survey all CEO's of the Fortune 500 you might find that they are all workaholics. Do you conclude that being a workaholic will make you a CEO? Of course not. Did you look at how many workaholics there are that don't become CEO? That is survivorship bias.
You also need to look at cause and effect. Is it that you must be a workaholic to become CEO? Or is it that as you climb the ladder you end up working hard and harder because that is a requirement of each position. Maybe being a workaholic is an effect of climbing high.
It's perfectly possible some traits of all 11 successful companies are also shared by most of the unsuccessful ones, too.
But they still fail to find out about what made them rich in the first place.
For example, there is a German real estate millionair, who does online courses to tell people how he got so rich.
He talks hours of hours about how he learned the right trade and how he invested his money in flats he bought and improved etc.
In his first lessen he talks a bit about his past and says "The only thing you got to do is to buy a flat and get someone to rent it! I did it like this, I simply put in 50k€ of insurance money I got from an accident."
The whole thing is done with this. I mean he literally told the audience "You simply need 50k to get rich!"
It's not a "get rich quick" scheme by any means, though, and managing properties is still work. I know more than one retiree who has built up 8-figure wealth this way. Of course, it took them a lifetime.
For someone with a talent for online marketing, it's almost the easiest money there is.
You get this in the UK all the time, property shows where people "do up" a dilapidated property over 6 months, then relist it. And guess what? It's gone up! It's gone up by labour cost + materials + background land price inflation. But they see it as a wise "investment".
If you put your own capital and work into something, and its value increases... that's what an investment is.
Also in most casts they are not putting capital in, they are borrowing from a bank who create the debt. They are little more than outsourced debt collectors.
Of course you can't just expect to follow Pixar's bets (or Apple's, or Google's, or ...) and expect to win big. But understanding the way they played is important, if you're playing the game too.
(As you touch on too, tempering the natural tendency to give credit for success rather than chalking it up to chance is also important. But I can't believe that Jobs' success is survivorship bias alone.)
This is similar to $BIGCOMPANY passed on $BIGIDEA see how they sucked and passed up a great opportunity!
Without knowing the thousands of other ideas that they passed on that never made it anywhere.
A small example is perhaps HP not taking Wozniak seriously. (Also assumes the presentation and pitch was done right and all of that...)
My take on it is that people really really want to believe there isn't a measure of luck there.
The book was not totally useless but the above moment caused me to lose interest very rapidly.
Survivorship Bias has a place but it is not the be-all-end-all.
In Built to last, they have compared what great companies had done different from their companion companies which went defunct. Of course, it neglects few aspects like luck, but it does explain a lot of things which are notably absent from folklore of "create a great app, disrupt a market and go count the number of 0's in your bank account", except that it rarely happens like this!
Go read Good To Great and prepare to barf. Business schools adore this book. Look at the description on Jim Collins's web site [1]: "Start with 1,435 good companies. Examine their performance over 40 years. Find the 11 companies that became great. Now here's how you can do it too." That's literally Survivorship Bias.
1: http://www.jimcollins.com/article_topics/articles/good-to-gr...