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This will make you a better decision maker | Annie Duke (author of “Thinking in Bets” and “Quit”, former pro poker player)

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May 2, 2024

Guest

Annie Duke

In this engaging conversation, Annie Duke, a former pro poker player and author of "Thinking in Bets" and "Quit," shares her insights on decision-making. She discusses lessons learned from Daniel Kahneman, the power of pre-mortems, and effective strategies like the nominal group technique. Annie emphasizes the complexities of quitting wisely, using real-world examples to illustrate her points. She also highlights the importance of inclusivity and structured processes for crafting better decisions in both personal and professional contexts.

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INSIGHT

Kahneman's Humility and Open-mindedness

Daniel Kahneman remained humble despite his significant influence.
He valued diverse opinions and actively sought out those who disagreed with him.

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ADVICE

Parenting Advice

Ensure your children feel deeply loved; it outweighs specific parenting styles.
Accept imperfections; things will happen, and children are resilient.

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ADVICE

Mental Time Travel

Practice "mental time travel" to gain perspective on current problems.
Ask yourself how you will likely feel about the situation in the future.

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Reflections on Humility and Collaboration in Psychology

04:00 • 5min

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Navigating Parenting and Decision-Making

09:04 • 25min

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Harnessing LinkedIn for B2B Success and Inclusive Decision-Making

34:16 • 2min

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Fostering Inclusive Decision-Making

36:13 • 29min

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Enhancing Decision-Making with Pre-Mortems and Kill Criteria

01:05:06 • 5min

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The Art of Quitting Wisely

01:10:17 • 9min

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Closing Insights on Decision-Making and Resources for Learning

01:19:21 • 2min

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Quit

The Power of Knowing When to Walk Away

Annie Duke

Thinking in bets

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].

Thinking, Fast and Slow

Daniel Kahneman

In this book, Daniel Kahneman takes readers on a tour of the mind, explaining how the two systems of thought shape our judgments and decisions. System 1 is fast, automatic, and emotional, while System 2 is slower, effortful, and logical. Kahneman discusses the impact of cognitive biases, the difficulties of predicting future happiness, and the effects of overconfidence on corporate strategies. He offers practical insights into how to guard against mental glitches and how to benefit from slow thinking in both personal and business life. The book also explores the distinction between the 'experiencing self' and the 'remembering self' and their roles in our perception of happiness.

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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Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com.

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Lenny may be an investor in the companies discussed.

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