Survivorship Bias: The Tale of Forgotten Failures

Alessio Frateily

Hatched by Alessio Frateily

Mar 19, 2024

4 min read


Survivorship Bias: The Tale of Forgotten Failures

Thinking Models: 5 Little-Known Concepts to Navigate the World

In a world where success stories dominate the headlines, it's easy to fall prey to survivorship bias. This common logical error distorts our understanding of the world by leading us to believe that success tells the whole story. We often overlook past failures and focus solely on the triumphs. But by doing so, we miss out on valuable lessons and insights that can help us navigate the challenges we face.

Similarly, thinking models, also known as mental models or mindsets, provide a structured approach to solving problems and making decisions. They are like tools that guide us towards answers, helping us break down complex problems and generate creative solutions. Just as survivorship bias disregards failures, thinking models help us focus on what's relevant and ignore information that is not.

Investors like Charlie Munger, Warren Buffett, and Naval Ravikant credit thinking models for their success. These models have become extremely popular in recent years because they offer a way to process information in a world of information overload. They provide simplified and experience-based mental representations of how things work, allowing us to make better decisions.

One well-known thinking model is the Eisenhower Matrix, which helps us prioritize tasks. By categorizing tasks into four quadrants based on urgency and importance, we can manage our workload more effectively. This model encourages us to focus on tasks that are both urgent and important, while delegating or eliminating tasks that are neither.

Another useful thinking model is the SARA Model, which stands for Scanning, Analysis, Response, and Assessment. This model helps us solve problems by breaking them down into manageable steps. We begin by scanning the situation to identify the problem, then analyze it to understand its root causes. Next, we develop a response or solution, and finally, we assess the effectiveness of our response.

Conflict resolution is another area where thinking models can be applied. Conflict Resolution Models provide a structured approach to resolving conflicts in a fair and constructive manner. By following these models, we can navigate difficult conversations and find mutually beneficial solutions.

But it's important to remember that thinking models are context-specific. While Buffett's Circle of Competence may be useful for finding your calling in life, it may not be applicable when diagnosing the problem with a crashing plane. The better your thinking model aligns with the specific issue at hand, the more effective your judgment will be.

In fact, the Black Box Model highlights the limitations of thinking models. This model suggests that we don't have all the answers and that there are often hidden factors at play. Just as a black box records data in an airplane, our understanding of the world is limited by the information available to us. Thinking models can help us make sense of this information, but they're not foolproof.

This idea is further emphasized by the Map vs Territory concept. Thinking models are like maps that help us navigate the territory of reality. However, no map is a perfect representation of the territory. All models are inherently flawed because they simplify complex systems. It's important to recognize that while thinking models can be helpful, they are not absolute truths.

In conclusion, survivorship bias and thinking models both provide valuable insights into how we perceive and navigate the world. By being aware of survivorship bias, we can avoid overlooking past failures and gain a more balanced perspective. Thinking models offer a structured approach to problem-solving and decision-making, helping us break down complexity and make better choices.

To apply these concepts in your own life, here are three actionable pieces of advice:

  • 1. Be mindful of survivorship bias: Whenever you encounter a success story, take a moment to consider the failures that may have been overlooked. By doing so, you can gain a more realistic understanding of the challenges and obstacles that come with success.
  • 2. Explore thinking models: Familiarize yourself with different thinking models and experiment with applying them to various situations. By expanding your toolkit of mental models, you can enhance your problem-solving abilities and make more informed decisions.
  • 3. Embrace the limitations of thinking models: While thinking models can be helpful, it's crucial to recognize their limitations. Remember that no model is a perfect representation of reality. Stay open to new information and be willing to adapt your thinking as needed.

By incorporating these tips into your mindset, you can develop a more nuanced understanding of the world and improve your ability to navigate its complexities. Remember, success stories and thinking models are just pieces of the puzzle. It's essential to consider the forgotten failures and recognize that no model can capture the full complexity of reality.

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