Undercover Economist

Learn from the losers

Kickended is important. It reminds us that the world is biased in systematic ways

Can there be an easier way to raise some cash than through Kickstarter? The crowdfunding website enjoyed a breakthrough moment in 2012 when the Pebble, an early smartwatch, raised over $10m. But then a few months ago, a mere picnic cooler raised an extraordinary $13m. Admittedly, the Coolest cooler is the Swiss army knife of cool boxes. It has a built-in USB charger, cocktail blender and loudspeakers. The thundering herd of financial backers for this project made it the biggest Kickstarter campaign to date, as well as being a sure sign that end times are upon us.

And who could forget this summer’s Kickstarter appeal from a fellow by the name of Zack “Danger” Brown? Brown turned to Kickstarter for $10 to make some potato salad; and he raised $55,492 in what must be one of history’s most lucrative expressions of hipster irony.

I’m sure I’m not the only person to ponder launching an exciting project on Kickstarter before settling back to count the money. Dean Augustin may have had the same idea back in 2011; he sought $12,000 to produce a documentary about John F Kennedy. Jonathan Reiter’s “BizzFit” looked to raise $35,000 to create an algorithmic matching service for employers and employees. This October, two brothers in Syracuse, New York, launched a Kickstarter campaign in the hope of being paid $400 to film themselves terrifying their neighbours at Halloween. These disparate campaigns have one thing in common: they received not a single penny of support. Not one of these people was able to persuade friends, colleagues or even their parents to kick in so much as a cent.

My inspiration for these tales of Kickstarter failure is Silvio Lorusso, an artist and designer based in Venice. Lorusso’s website, Kickended, searches Kickstarter for all the projects that have received absolutely no funding. (There are plenty: about 10 per cent of Kickstarter projects go nowhere at all, and only 40 per cent raise enough money to hit their funding targets.)

Kickended performs an important service. It reminds us that what we see around us is not representative of the world; it is biased in systematic ways. Normally, when we talk of bias we think of a conscious ideological slant. But many biases are simple and unconscious. I have never read a media report or blog post about a typical, representative Kickstarter campaign – but I heard a lot about the Pebble watch, the Coolest cooler and potato salad. If I didn’t know better, I might form unrealistic expectations about what running a Kickstarter campaign might achieve.

This isn’t just about Kickstarter. Such bias is everywhere. Most of the books people read are bestsellers – but most books are not bestsellers. And most book projects do not become books at all. There’s a similar story to tell about music, films and business ventures in general.

Academic papers are more likely to be published if they find new, interesting and positive results. If an individual researcher retained only the striking data points, we would call it fraud. But when an academic community as a whole retains only the striking results, we call it “publication bias” and we have tremendous difficulty in preventing it. Its impact on our understanding of the truth may be no less serious.

Now let’s think about the fact that the average London bus has only 17 people riding on it. How could that possibly be? Whenever I get on a bus, it’s packed. But consider a bus that runs into London with 68 people at rush hour, then makes three journeys empty. Every single passenger has witnessed a crammed bus, but the average occupancy was 17. Nobody has ever been a passenger on a bus with no passengers but such buses exist. Most people ride the trains when they are full and go to the shops when they are busy. A restaurant may seem popular to its typical customers because it is buzzing when they are there; to the owners and staff, things may look very different.

. . .

In 1943, the American statistician Abraham Wald was asked to advise the US air force on how to reinforce their planes. Only a limited weight of armour plating was feasible, and the proposal on the table was to reinforce the wings, the centre of the fuselage, and the tail. Why? Because bombers were returning from missions riddled with bullet holes in those areas.

Wald explained that this would be a mistake. What the air force had discovered was that when planes were hit in the wings, tail or central fuselage, they made it home. Where, asked Wald, were the planes that had been hit in other areas? They never returned. Wald suggested reinforcing the planes wherever the surviving planes had been unscathed instead.

It’s natural to look at life’s winners – often they become winners in the first place because they’re interesting to look at. That’s why Kickended gives us an important lesson. If we don’t look at life’s losers too, we may end up putting our time, money, attention or even armour plating in entirely the wrong place.

Written for and first published at ft.com.