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Calculated Risk

Confirmation Bias


Making mistakes is acceptable (ak-sep-t-bl), even advisable (ad-vai-s-bl) , if you want to succeed in business. Leaving room for experimentation is essential, but you have to be careful, because not all mistakes are the same. 


Overconfidence, especially when creating new businesses, can lead to disaster. In psychology this is called confirmation bias: An individual only sees the data that confirms their theory (thear-ri) and discards the data that contradicts it.


But in the end reality prevails (preh-veils): the most frequent cause (cours) of failure (feil-ya) of a startup is to run out of money before achieving a stable income.


Running out of money is like running out of oxygen. Recovering from financial failure can take years. 


To avoid confirmation bias, actively seek out data that contradicts your theory. Look for critical voices, someone who will put you through the worst. From there you will take a calculated (calc-yi-lei-ted) risk, and if you fail, you can get up and try again. 

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