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The funny thing about the cabbie story is that it only takes one statistical outlier success story for the meme to spread to a thousand others who fritter away
by lukifer 13y ago
The funny thing about the cabbie story is that it only takes one statistical outlier success story for the meme to spread to a thousand others who fritter away their savings in this manner.
I've also started to wonder recently about the relationship between the gambling instinct and entrepreneurship. While there is obviously a distinction (entrepreneurs are often pursuing genuine passions and/or creating real value), when you look at the real-world risks and returns, it certainly seems to have a similarly irrational component, both for founders and investors. (Not that I'm judging; the line between genius and madness is a thin one.)
- gnaritas 13y agoThat's because most people reason by anecdote rather than actual statistics, sad but in my experience true.
- NhanH 13y agoThere is the fact that to a certain extent, entrepreneurs know their odds going in. Gamblers more likely than not doesn't.
- bdcravens 13y agoMany gamblers know the numbers fairly well. The problem is they let their heart convince them that the Gambler's Fallacy doesn't exist for them.
- judk 13y agoThat's exactly backwards. Most games of chance post odds explicitly. Entrepeneurship works because 1 it actually creates value, not negative expected value, 2 much of the gambling is with other people's money (investors and creditors) who don't get their teeth in if the entrepreneur fails, raising EV further.
- NhanH 13y agoSorry I wasn't being too clear. Knowing the odds as in "I know I have little chance to have an exit, but I still want to do it anyway". While gamblers might see the odds posted but still think "I'm gonna be the one guy who wins".