There is an abundance of stories on “how I am making $Xk/mo working 2 hours a week”, or the ever-popular “99 ideas to making passive income today”.
While great for entertainment, most of these stories never touch on the struggles. But every entrepreneur, especially online, has a graveyard of failures.
Table Of Contents
- Table Of Contents
- What’s the problem?
- Not raining on anyone’s parade
- Incomprehensible numbers
- Hindsight is 20/20
- Survival Bias
- Ok, now what?
What’s the problem?
Despite doctor’s orders, many people compare ourselves to others. Comparison isn’t all bad though. It is an important mechanism for us humans to make sense of the world around us. There are healthy ways to compare and unhealthy ways to compare.
Stories of outsized success can feed into our self-talk. I know it does for me every now and then if I don’t pay close attention to the stories I tell myself. And I have spoken to plenty of other entrepreneurs that told me something similar.
Most success stories are devoid of the despair present when these entrepreneurs struggled. I think there are valuable lessons hidden in each graveyard of failures. Stories of personal growth, developing passion, and the discovery of meaning in the struggle.
Every entrepreneur I know has one of these. Every person has one. Not always filled catastrophic failures, but at least a bunch of attempts at life that did not work out as hoped or expected.
Heck, I have one so full, I am about to buy a second bag:
Not raining on anyone’s parade
Just to be clear: I am not here to teach “the proper way” to get to a 6 figure business. I have been full-time independent for about 2 years as I am writing this, and nowhere near 6 figures yet. What do I know.
Nor am I talking smack to any entrepreneur out there! On the contrary, I love hearing succes stories as fuel for my imagination and inspiration. But it is good to be aware of these four (potential) issues when consuming these stories:
Mentioned amounts of money per month or per year, are often unclear. Is it revenue or profit? It is projected or realized? A person boasting “I am on track for 200k this year, here is how I did it”, means very little.
“On track” can mean anything.
Therefore the “here is how I did it”, is useless too. “Here is how I think I might get there” is more realistic.
For example: To calculate ARR (Annual Recurring Revenue) by multiplying your best month so far times 12, is likely to result in a nasty surprise at the end of the year if you forgot to take churn into account.
Also, revenue is not the same profit or a salary.
So a “2k/mo passive income” does not mean spending an extra 2k every month.
Hindsight is 20/20
Speaks for itself, right? Telling a story based on history, is an interpreted and biased representation of the past. It is therefore impossible to look at struggles, failures, and obstacles objectively as those now serve as plot devices.
The story has a purpose: to tell us it all worked out in the end. Like all Hollywood movies, this story too is one of Kurt Vonnegut’s 6 basic plots.
The stories of success have to contain setbacks for the hero to overcome. But it is very hard to convey the intense emotions that are present when the outcome of your decisions is all but certain. The cesspool of self-doubt is a very real place for many entrepreneurs. As are insomnia, and rapidly dwindling savings accounts.
Looking back on those trying times from a point of current success, inevitably results in:
Also known as survivorship bias, it is the error of focusing on whatever worked while neglecting the things that did not work. Drawing conclusions based only on what was successful leads to overly optimistic beliefs and the sense of having found “the key to success”.
For example: “Steve Jobs, Marc Zuckerberg, and Bill Gates all dropped out of college and became filthy rich, so that’s what I will do too”. It is true that these people dropped out of college, worked hard on their own idea, and became successful.
It is also true that many (many) more dropped out of college, worked hard, and did not become successful (whatever that means).
The origin of survival bias lies in WW2. Airplanes would come back to base, riddled with bullet holes in the wings and fuselage. So, engineers decided to improve the planes by adding armor plating to the wings and fuselage. That is where the bullet holes were, after all.
Until statistician Abraham Wald, pointed out that the engineers were only looking at planes that made it back to base. Though hit, those hits were not fatal.
Planes and pilots that did not return, were fatally hit. In the end, additional protection was added to those areas unaffected in the planes that returned: the engines and cockpit.
With differentiation, I mean the desire to attribute success to some special trait or habit in order to stand out from the rest. If a person is known for something very specific, that is what they will preach. And rightfully so, survival bias and hindsight turn that experience into “the truth”.
Such a storyline is attractive to some, and not to others. But it is essentially marketing. Seth Godin‘s “All marketers
are liars tell stories” explains this very well. Different people have different world views and thus are attracted by different stories.
Whenever the reality of a (business) idea does not match the fantasy I had about it beforehand (isn’t that what failure really is?), I am much more susceptible to embracing the more extreme stories of successful people.
But it never works. Conclusions of others rarely work well in unmodified form.
Ok, now what?
Thanks Arno, now I feel depressed. Should we just dismiss all these stories as fake news?
Of course not!
Just don’t take them all to be the truth, the whole truth, and nothing but the truth. What works for me (survival bias alert! 😉) is this:
Whenever I come across a story that resonates with me, I will take some time to dive into this person and the business. Do some critical thinking, and use common sense. I am not looking for “the truth”, but for the nuance behind the story.
I try to find indicators that back up the story. Are there other (reputable) sources talking about this person or business? If so, see if you can take one thing from that story and apply it to your situation as an experiment.
If it works, it works. If it doesn’t, also fine, you’ve learned something. Then iterate. Put in effort, figure out what works, adjust when necessary.
It is a cliché, but true: This is all about the journey, not the destination. Adapt to change and get to know yourself, so that you can improve yourself and keep going.
Find your goal, your spot on the horizon to work towards, this is your journey and you do it your way.
May you fill up your graveyard of failures along the way!
Because the more people that can keep working on what they find important, the better this world will be.