When you’re doing statistical analysis, N is your sample size. If you want results that are statistically significant, meaning that those results show an actual pattern as opposed to having likely just occurred by chance, you need a large enough sample size. Yes, I know this is a super dumbed-down simplification but stick with me…One of the things I see a lot in entrepreneurship circles is that business owners are willing to bet their entire companies on an N of 1, which is never statistically significant.
What do I mean by that?
In the entrepreneurship space, there are a lot of fireside chats and interviews with successful entrepreneurs, which I think is awesome, don’t get me wrong. The problem is that then the newer entrepreneurs take whatever the speaker says as absolute fact, sometimes to the point of ignoring facts and data in favor of the statement made by that speaker.
But even if the statement is accurate (which it may not be because everyone remembers things through their own lens of experience), it’s still just an N of 1, which means it tells us nothing about whether that technique is actually likely to lead to success.
Let’s put it this way, most of us can agree that if our child came home having not made the middle school basketball team our response would not be to tell him to double down, ignore everything else, not worry about academic success, and put all of his eggs in the figurative NBA basket just because Michael Jordan has said he wasn’t deterred by getting cut from his middle school basketball team.
When entrepreneurs take what any 1 success story says as objective fact, however, they’re doing just that and it’s a dangerous risk to take with your business and, by extension, your life.
Back to our kid/basketball analogy: yeah, we’d tell him to get back up and not give up, but we’d also make him be realistic about his future career options. In the entrepreneurship space, our jobs as coaches, consultants, and advisors is the same: to allow entrepreneurs to be inspired by the stories of success they hear but also to make sure that business owners stay grounded in facts and data and don’t get blinded by anecdotes.