The Stockdale Paradox: Why All Entrepreneurs Should Take It Into Consideration

By William Aug 17, 2023

The Stockdale Paradox is one of the weirdest and yet wisest sayings in the business world. It has received a lot of attention recently, but it’s by no means new.

This powerful quote was made popular in Jim Collins’s book, Good to Great, a now very popular self help book which I highly recommend you read.

In the book, Collins reveals a story about James Stockdale, an U.S. army veteran who was capture in the Vietnam war. When Collins interviewed Stockdale, he asked him how was it like being capture in the war, and he got a response that he surely didn’t expect.

“You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be.” – James Stockdale

This is the answer Collins received from Stockdale when asked how he managed to survive the terrors of war. After receiving this response, he asked who didn’t manage to escape the prison.

Admiral Stockdale then answered that the people who confused the reality with the faith didn’t manage to come out alive. Meaning that they were too optimistic.(1)

Stockdale’s brothers in arms were looking forward to getting out alive before Christmas, but unfortunately died before that ever happened.

The problem was that they didn’t realize that having faith is not enough. You need to have faith and also confront the current reality that you’re in.

In the end, Stockdale managed to escape the prison because he understood that having faith is not enough. He also understood the harsh reality he was facing and didn’t just “hope” he will get out alive.

Now that you know what the Stockdale Paradox is, why should you care? How does it relate to business?

Well, the most common reason people fail at starting their own business is not having faith in themselves. Therefore, they give up too soon and go back to having a 9 to 5 job.(2)

On the other hand, there are entrepreneurs that have too much faith and don’t realize that building a business is not easy, and they neglect certain important aspects that they need to take into consideration.

The successful entrepreneurs have a balance between trusting themselves and realizing that reaching their goal will not be easy. Having faith in your abilities is the most important quality of any successful entrepreneur.

BUT you can’t just blindly trust yourself without putting in the necessary work in order to reach your goal.

Imagine you start a blog, write a couple of articles and believe 100% that you will make a lot of money and people will love your website.

The harsh reality is that building up a website takes a lot of hard work and time. Usually, you need to consistently work for up to a year until you reap the rewards.

Unfortunately, if you just started your blog and wrote 10 articles, you can be as optimistic as you want, but the harsh reality is that nobody sees your articles. If you open your Google Analytics, you will wake up to reality.

In the beginning, you will not get any traffic. BUT that doesn’t mean you should not continue to work with 100% certainty that at some point you will be successful.

Good To Great is one of the most recommended self help book in the world and all entrepreneurs should have it in their library
Hopefully, you now know what the Stockdale Paradox is and how it relates to you as an entrepreneur. It’s very important to balance your faith in your abilities with the harsh reality that you’re currently facing.

If you don’t then you will have a hard time building a successful business. Trusting yourself is very important, but you also need to have the right training in order to push past adversity.

By William

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