Tuesday, June 16, 2009

Success bias.

It's funny that people think most small business blogs are too negative about the economy. If anything, it's the opposite.

1.) People who are doing well, tend to talk about it.

2.) People who are doing well, who have a bad month, are unlikely to talk about it.

3.) People who are doing poorly, tend not to talk about it. Or to hide it.

4.) People who are doing really, really poorly -- have quit.

I've been reading my Comic Retailers Bulletin Board over the last few months, wondering why everyone else was doing so well with comics when my own sales were down. Today's news is that comic sales were down 19% in May, and that only one comic broke the 90k sales barrier, and for the second time in comic history, no comics broke the 100k figure.

But you'd never know it from the Comic Retailers Bulletin Board, which consists of the savviest, most technologically adept members of our community. There is a definite success bias, which you have to watch out for. Not to mention, these guys sell dozens and sometimes hundreds of units when I often sell a few or one or none.

There are ways even amongst the 'objective' measuring standards to fudge. For instance, Marvel and DC might do a promotion that gives you a huge discount for ordering more copies. So what shows up on the charts are high ordering numbers, but the companies probably made little or no profits.

So whenever you think the economic news is bad, and that everyone is just being oh, so negative, think about this.

It is undoubtedly worse.

1 comment:

Anonymous said...

"There is a definite success bias, which you have to watch out for."

I think this is a form of 'selection bias' that is naturally occurring in statistical analysis.

The observations in your sample are not representative of the population -- they only represent those few retailers who are currently doing well.

The bias probably isn't as bad when the economy is strong because even relatively inefficient retailers can do well when there's growth. Therefore, a higher percentage of retailers report in, making the sample more representative.