#2 A Hungarian Badass, Erewhon Smoothies, and Business Screwups

My friend Dan was telling me about a nightmare scenario facing aviation engineers in the 1940s.

 

British bombers kept getting shot down, and Britain couldn’t hold on much longer if they weren’t able to keep their birds in the sky (I'm two sentences in and I can't help the bird reference? We're doomed).

 

The engineers immediately began examining the bombers that survived their missions. They found shrapnel and bullet holes grouped in sections all over the planes, so they did the logical thing, they added armor plating to the bombers where they were getting shot up. The bomber loss rate didn’t change.

 

Then Abraham Wald entered the chat.

 

Abraham wasn’t an engineer. He was a Hungarian Jewish statistician who escaped Nazi Europe in 1938 and came to Columbia University. He knew numbers, not airplanes. Wald suggested that the aviation engineers were going about it all wrong (which I'm sure went over like a 300-pound pole vaulter). The planes coming back were the planes that survived. Their damage was non-lethal. Instead, the planes that didn’t return were likely hit in other more critical spots. This damage didn't show up on the returning planes because the planes that would show the damage were lost. This concept has been making my head hurt since I read it for the first time.

 

So, paradoxically, Abraham told the engineers to think harder about the planes that were shot down, and armor the parts of the surviving planes that weren't damaged. Loss rates immediately improved, and Abraham Wald defined the concept of survivorship bias...and complete Hungarian badassery.

 

When I brought Day Owl back, I found myself trying to replicate the things we did well the first time. I ignored the stuff I messed up. Then I realized that for every good decision I’ve made, I’ve easily made five bad ones. That’s 5x the lessons, and according to Abraham Wald, that’s where we should also be focusing, on the lessons learned from the things that went poorly. So, if you're still with me, here is the lesson to take back to your own teams, kids, and book clubs...failure, as it turns out, isn't the opposite of success; rather, it's part of it.

 

We see this everywhere.  For every Edison, there are thousands of inventors who, through poor luck and circumstance, didn't invent the light bulb.  For every Apple, there are a 10,000 start ups that crashed and burned (sometimes spectacularly). For every Academy Award winner, there are a million photogenic juice boys at Erewhon selling $20 smoothies. These stories have a lot to teach us. Dr. Wald might say they could save us all.

 

In a cruel twist of the universe, Abraham Wald died in a plane crash in 1950. Eighty years later he is still considered one of the most important statistical minds of the 20th century. He saved countless lives.

 

Ian

 

PS- Each week I’ll look at the mistakes I’ve made and the lessons I’ve learned at Day Owl. I’ll tie it all to real world ideas and stories. I’ll also do an Instagram reel accompanying the newsletter @hellodayowls. We’re calling it all "For the Birds", and this is installment # 2. Please comment, ask whatever you want, and if you have an interesting story of a reject, misfit, or failed idea, text me...724.312.1012.