This will make you a better decision maker | Annie Duke (Thinking In Bets, former pro poker player)

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: www.lennysnewsletter.com/p/ma...
Where to find Annie Duke:
• X: / annieduke
• LinkedIn: / annie-duke
• Website: www.annieduke.com/
• Substack: www.annieduke.com/substack/
Where to find Lenny:
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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
Referenced:
• Daniel Kahneman, Who Plumbed the Psychology of Economics, Dies at 90: www.nytimes.com/2024/03/27/bu...
• Adversarial collaboration: en.wikipedia.org/wiki/Adversa...
• Does more money correlate with greater happiness?: penntoday.upenn.edu/news/does...
• Income and emotional well-being: A conflict resolved: pubmed.ncbi.nlm.nih.gov/36857...
• Strategic decisions: When can you trust your gut?: www.mckinsey.com/capabilities...
• Cass Sunstein on X: / casssunstein
• Dr. Becky on Instagram: / drbeckyatgoodinside
• A framework for finding product-market fit | Todd Jackson (First Round Capital): www.lennysnewsletter.com/p/a-...
• First Round Capital: firstround.com/
• Brett Berson on X: / brettberson
• Renegade Partners: www.renegadepartners.com/
• Renata Quintini on X: / rquintini
• Roseanne Wincek on X: / imthemusic
• Josh Kopelman on X: / joshk
• Bill Trenchard on X: / btrenchard
• Linnea Gandhi on X: / linneagandhi
• Maurice Schweitzer on X: / me_schweitzer
• Create a Solid Plan on How to Fail Big This Year: www.forbes.com/sites/forbesfi...
• Quit: The Power of Knowing When to Walk Away: www.amazon.com/Quit-Power-Kno...
• Richard Thaler on X: / r_thaler
• Stewart Butterfield on X: / stewart
• Glitch: en.wikipedia.org/wiki/Glitch_...)
• How the Founder of Slack & Flickr Turned Colossal Failures into Billion-Dollar Companies: / how-the-founder-of-sla...
• The Most Fascinating Profile You’ll Ever Read About a Guy and His Boring Startup: www.wired.com/2014/08/the-mos...
• The Alliance for Decision Education: alliancefordecisioneducation....
• Make Better Decisions course on Maven: maven.com/annie-duke/make-bet...
Production and marketing by penname.co/. For inquiries about sponsoring the podcast, email [e-mail].
Lenny may be an investor in the companies discussed.

[@hcubill]

Wow what a gem of a guest. Never heard of her and now will buy all her books!

[@francisotuogbai]

This is the best parenting advise I've heard as a new dad

[@Kashmiribakiri]

Such a good session

[@amanpreetkaur7406]

Amazing conversation and filled with so many examples . I am in for an imp decision in my life right now and think the science explained of being explicit abt decision making is so useful.

[@zerosubspace]

The harsh words about alignment brightened my day.

[@leadgenjay]

The insights on pre-mortems and "kill criteria" are spot on for avoiding sunk cost fallacy in business. A key tactic is to set clear, quantifiable goals at the start and if those aren't met by specific checkpoints, it's a signal to reconsider or halt the project, saving time and resources. This strategy is crucial for entrepreneurs who need to pivot quickly and efficiently.

[@olemew]

You can make pre-decisions in your every day too. For example, if you're at a local event and there's a popcorn stand, decide what's your max price and stick to it.

[@dontdoit6986]

Annie is a legend.

[@user-dv4lv2vh9x]

Thanks for asking the decision improvement question. It's reassuring to know we can improve our decisions. 😊

[@LennysPodcast]

YES

[@mhauzeur]

Amazing interview! Great tips, examples and so more! I will follow her for sure.

[@amokeodotobios]

I enjoyed this conversation. I acknowledge what she said about alignment (i.e. alignment being overrated etc). Tried it for one meeting and I feel like we went back to the storming stage of team dynamics. Even I feel like some people just wanted to disagree for the sake of disagreeing So, I think I will use more of 1 on 1s to get a sense of people's POV and maybe meet with smaller groups of people whose opinions are similar before a big meeting.

[@MyDerrick]

Interesting discussion. Learnt a ton and questioned some of my own thinking. I think alignment is not the same as agreement. Also, there is a slight flaw, in my opinion, in nominal groups. They are heard but still have to accept the decision of someone else. They will not see much of the value in being just heard.

[@olemew]

What's the alternative? Cater to bad ideas? Stop the project forever until somebody magically changes opinion or leaves the company? The best you can do is genuinely listen to them and make minutes so they'll feel vindicated if they were right (or humbled, if it turns out the opposed idea worked too).