When making forecasts or setting goals, people usually rely on the inside view—their own intentions, resources, and optimism. It feels natural to believe our situation is different. The problem? That mindset blinds us to the outside view, which looks at what usually happens in similar situations.
The outside view is powerful because it grounds our expectations in reality. For example, while an entrepreneur might believe their new business will turn profitable in 18 months, the outside view would ask: how long did it take most businesses like this to become profitable? Research shows the answer is usually far longer. Ignoring this data is what’s known as the outside view bias.
Why the Outside View Bias Matters
- Leads to overconfidence: People consistently underestimate how long tasks will take (the planning fallacy).
- Skews risk assessment: Investors, managers, and founders often downplay potential pitfalls.
- Harms decision-making: Projects go over budget, launches get delayed, and personal goals slip away because the outside view wasn’t considered.
How to Avoid the Outside View Bias
- Use base rates: Look up statistics from comparable cases. If most people take a year to lose 20 pounds, don’t expect to do it in 2 months.
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Adjust expectations:
Blend your inside view (unique factors) with the outside view (historical outcomes). - Track your own data: Build your personal base rates over time so your predictions get sharper.
Real world example
Psychologists asked honors students to estimate when they’d finish their thesis.
- Inside view: Average prediction = 34 days early.
- Outside view: Historical averages showed they usually finished later.
- Result: Actual average completion = 55 days later than predicted. Zero students finished earlier than their “best case scenario.”
Again, the base rate (outside view) crushed the inside forecasts.
Final Takeaway
The outside view bias tricks us into thinking we’re the exception when we’re not. If you want better forecasts—whether for your goals, your projects, or your business—don’t just ask, What do I think will happen? Ask instead: What usually happens to people like me in this situation?