There has been a lot of articles written about the advantages and disadvantages of amassing a portfolio of failed startups and how it helps you succeed, eventually. And there are those, like Jason Fried, who irrevocably abhor spending time thinking about anything but successful outcomes.
According to a recent Harvard Business Review article, Why Leaders Don’t Learn From Success, Jason should rethink his stance. The article talks about why just focusing on success won’t make you a better entrepreneur. They cite three main causes:
- Fundamental attribution errors
- Overconfidence bias
- Failure-to-ask-why syndrome
The first item, fundamental attribution of errors, refers to crediting the successful outcome to only our talents and our current model or strategy and ignoring any environmental factors and random events that may have had a role in the success.
The overconfidence bias relates to giving too much credit to ourselves and our capacity and thinking we don’t need to change anything.
And finally, focusing on success can also lead to not asking the right questions about why we succeeded, and not investigating why there was such good performance.
How success hinders learning
In a recent study we conducted in a controlled laboratory setting, students from U.S. universities were asked to work on two decision-making problems. Learning from experience on the first problem could help them perform well on the second. After submitting their solutions to the first problem, the participants were told whether or not they had succeeded. They were then given time to reflect before starting the second problem. Compared with the people who failed at the first problem, those who succeeded spent significantly less time reflecting on the strategies they’d used. This had a cost: Those who succeeded on the first task were more likely to fail on the second. They had neglected to ask why.
It’s a compelling argument for focusing on failures when trying to learn how to become a better entrepreneur. Sure, just because you failed doesn’t mean you will do better next time, but it seems that betting on those who were successful is also not foolproof.