The Art of Quitting Wisely

Annie Duke is a former professional poker player, a decision-making expert, and a special partner at First Round Capital. She is the author of Thinking in Bets (a national bestseller) and Quit: The Power of Knowing When to Walk Away and the co-founder of the Alliance for Decision Education, a nonprofit whose mission is to improve lives by empowering students through decision skills education. In our conversation, we cover:

• What Annie learned from the late Daniel Kahneman

• The power of pre-mortems and “kill criteria”

• The relationship between money and happiness

• The power of “mental time travel”

• The nominal group technique for better decision quality

• How First Round Capital improved their decision-making process

• Many tactical decision-making frameworks

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Find the transcript at: https://www.lennysnewsletter.com/p/making-better-decisions-annie-duke

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Where to find Annie Duke:

• X: https://twitter.com/AnnieDuke

• LinkedIn: https://www.linkedin.com/in/annie-duke/

• Website: https://www.annieduke.com/

• Substack: https://www.annieduke.com/substack/

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Where to find Lenny:

• Newsletter: https://www.lennysnewsletter.com

• X: https://twitter.com/lennysan

• LinkedIn: https://www.linkedin.com/in/lennyrachitsky/

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In this episode, we cover:

(00:00) Annie’s background

(03:53) Lessons from Daniel Kahneman: humility, curiosity, and open-mindedness

(09:15) The importance of unconditional love in parenting

(15:15) Mental time travel and “nevertheless”

(20:06) The extent of improvement possible in decision-making 

(24:54) Independent brainstorming for better decisions

(35:36) Making sure people feel heard

(42:41) The “3Ds” framework to make better decisions

(44:49) Decision quality

(55:46) Improving decision-making at First Round Capital

(01:05:05) Using pre-mortems and kill criteria

(01:10:15) Making explicit what’s implicit

(01:10:55) The challenges of quitting and knowing when to walk away

(01:19:23) Where to find Annie

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Referenced:

• Daniel Kahneman, Who Plumbed the Psychology of Economics, Dies at 90: https://www.nytimes.com/2024/03/27/business/daniel-kahneman-dead.html

• Adversarial collaboration: https://en.wikipedia.org/wiki/Adversarial_collaboration

• Does more money correlate with greater happiness?: https://penntoday.upenn.edu/news/does-more-money-correlate-greater-happiness-Penn-Princeton-research#

• Income and emotional well-being: A conflict resolved: https://pubmed.ncbi.nlm.nih.gov/36857342/

• Strategic decisions: When can you trust your gut?: https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/strategic-decisions-when-can-you-trust-your-gut

• Cass Sunstein on X: https://twitter.com/CassSunstein

• Dr. Becky on Instagram: https://www.instagram.com/drbeckyatgoodinside

• A framework for finding product-market fit | Todd Jackson (First Round Capital): https://www.lennysnewsletter.com/p/a-framework-for-finding-product-market

• First Round Capital: https://firstround.com/

• Brett Berson on X: https://twitter.com/brettberson

• Renegade Partners: https://www.renegadepartners.com/

• Renata Quintini on X: https://twitter.com/rquintini

• Roseanne Wincek on X: https://twitter.com/imthemusic

• Josh Kopelman on X: https://twitter.com/joshk

• Bill Trenchard on X: https://twitter.com/btrenchard

• Linnea Gandhi on X: https://twitter.com/linneagandhi

• Maurice Schweitzer on X: https://twitter.com/me_schweitzer

• Problems with premortems: https://sjdm.org/presentations/2021-Poster-Gandhi-Linnea-debiasing-premortem-selfserving~.pdf

• Create a Solid Plan on How to Fail Big This Year: https://www.forbes.com/sites/forbesfinancecouncil/2020/02/07/create-a-solid-plan-on-how-to-fail-big-this-year/

• Quit: The Power of Knowing When to Walk Away: https://www.amazon.com/Quit-Power-Knowing-When-Walk/dp/0593422996/

• Richard Thaler on X: https://twitter.com/R_Thaler

• Stewart Butterfield on X: https://twitter.com/stewart

• Glitch: https://en.wikipedia.org/wiki/Glitch_(video_game)

• How the Founder of Slack & Flickr Turned Colossal Failures into Billion-Dollar Companies: https://medium.com/swlh/how-the-founder-of-slack-flickr-turned-failures-into-million-and-billion-dollar-companies-7bcaf0d35d66

• The Most Fascinating Profile You’ll Ever Read About a Guy and His Boring Startup: https://www.wired.com/2014/08/the-most-fascinating-profile-youll-ever-read-about-a-guy-and-his-boring-startup/

• The Alliance for Decision Education: https://alliancefordecisioneducation.org/

• Make Better Decisions course on Maven: https://maven.com/annie-duke/make-better-decisions

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Lenny may be an investor in the companies discussed.

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