Mauboussin: Entrepreneurs need irrational optimism, but investors must rely on base rates
Michael Mauboussin · BONUS – Michael Mauboussin on the Decision Education Podcast · Feb 4, 2021 · at 38:51
Michael Mauboussin discusses the psychological tension between base-rate statistical thinking and entrepreneurial motivation on the Decision Education Podcast.
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“If you're an entrepreneur and you actually know the base rates of failures for entrepreneurs, you might never try in the first place, right? So there's this really interesting tension, I think, between we want that optimism at the global level. We want people to try out stuff at the global level, but if you're making an investment, you know, investing in this, you have to be more measured that, you know, the aggregates aren't going to work out.”
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