This discussion explores the art of decision-making, emphasizing how practice can sharpen our skills. Delve into cognitive biases and the importance of documenting decisions for better outcomes. Discover how trivial daily choices consume time and how the 'happiness test' can guide better resolutions. Learn about 'decision hygiene' and the value of diverse perspectives in startup environments. Lastly, uncover techniques to de-risk decisions, boosting confidence amidst uncertainty.
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insights INSIGHT
Paradox of Experience
Experience is crucial for better decision-making, but individual experiences can be misleading.
We learn poorly from single data points due to resulting and hindsight bias.
volunteer_activism ADVICE
Overcoming Hindsight Bias
Reconstruct your knowledge at the time of a decision by analyzing what you knew before and after the outcome.
Use a 2x2 matrix of decision quality vs. outcome quality to identify patterns of luck or skill.
volunteer_activism ADVICE
Ditch Pro-Con Lists
Ditch pro-con lists; they lack dimensions of magnitude and probability, amplifying cognitive biases.
Instead, use decision trees, considering possibilities, payoffs, and probabilities for each option.
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Making Smarter Decisions When You Don't Have All the Facts
Annie Duke
In this book, Annie Duke teaches readers how to make better decisions by treating them as 'bets' on uncertain outcomes. She emphasizes the importance of distinguishing between the quality of a decision and its outcome, acknowledging the role of luck, and avoiding biases such as 'resulting' and hindsight bias. Duke draws on her experiences as a professional poker player and combines these with insights from cognitive psychology and other fields to provide tools for making more objective and thoughtful decisions. The book encourages readers to get comfortable with uncertainty, seek truth through diverse opinions, and learn from outcomes to improve future decision-making[1][3][5].
How to Decide
Annie Duke
Can you get better at decision-making with practice? Many founders, investors, and builders must make many critical decisions, big and small, every day, and improving the quality of your decision-making process can become a big competitive advantage.
In this episode from October 2020, expert decision strategist, author and professional poker player, Annie Duke, joins a16z managing partner Jeff Jordan, to discuss some of the frameworks, strategies, and tactics for better decision-making by both individuals and organizations that she outlines in her second book, How to Decide. This was Annie’s second appearance on the podcast – she first joined a16z co-founder Marc Andreessen and host Sonal Chokshi to discuss her first book, Thinking in Bets, where they went deep into how to frame taking risks and placing bets, especially in the context of innovation.
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