Lebron JamesI’m coining a new term today in response to what I keep seeing all over the place recently: The Lebron James Fallacy.

What is the Lebron James Fallacy?

It’s when a 16 year old kid tells you that he doesn’t need to study because he’s going to the NBA where he’ll make millions. It’s when a startup values itself at 10 million dollars because Google acquired the company next door for 100 million. It’s when the founder of Hotmail uses “ice cream glove math” (see about 3 minutes in) to overvalue his startup even before entering the market.

(For those who don’t know: Lebron James was the first round NBA draft pick right out of high school in 2003 and is one of the most highly compensated players alive.)

Why am I writing about this? Because I see people falling prey to unrealistic expectations more and more, especially when it comes to online business. This applies across the board, from small time bloggers to well-funded startups.

USA Today ran a story about a handyman who’s pulling in six figures per year with his blog. Thousands of people read that and thought “damn, that looks easy. I’m gonna start a blog and make thousands with Adsense because surely I’m smarter than this guy.” But here’s the problem: that handyman is just like Lebron James. He’s the exception. Whether it was due to market timing (which accounts for many of these stories), an aged domain, luck with a big media story, etc – he’s in the 1% of people who is actually able to pull this off.

Darren Rowse‘s b5 media gives out tshirts that say “Adsense buys my daily coffee” – which is pretty accurate. The overwhelming majority of bloggers don’t earn much at all via Adsense, but “the Adsense dream” gets perpetuated in the media through success stories just like this one (for more on this, read the teaching sells report). Success stories like these sell papers, but they also give people unrealistic expectations. What doesn’t get covered are the thousands of quiet failures that go bust every single day.

The same goes in the affiliate / online marketing world. People see Shoemoney’s check, Sup3rnova’s monthly earnings, John Chow’s stats and fall for the Lebron James Fallacy. What they fail to realize is that these people are superstars. They are the 1% – and as much as reporters like to parrot the quick money line, even they had to put in a TON of work to get there.

The fact of the matter is, it takes a lot of work (and a little bit of luck) to be successful. Overnight success stories are the exception, not the rule.

If your business model calls for a Google buyout, equates eyeballs with actual cash, or presumes that you will duplicate the growth of YouTube or Flickr just by having a similar product – you might want to reevaluate your assumptions. Don’t fall for the Lebron James fallacy.

There are superstar basketball players who break the mold and achieve greatness against all odds. There are bloggers and web 2.0 startups that become highly successful in an ultra-competitive space. But there are thousands of unsung failures that make up the other 99%. Aim for the former, but never be blind to the latter.

Know your odds.

(photo credit: brunkfordbraun)