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“Thinking in bets starts with recognizing that there are exactly two things that determine how our lives turn out: the quality of our decisions and luck.”
Annie Duke
Each day I do a few things that scare me.
Like a sales ask, a hard conversation I’ve been avoiding or a run longer than I’ve tried before.
Before I start one of these courage challenges, I give it a score out of 100 for how hard I expect it to be.
A hundred is the hardest thing I can picture doing.
To pick the number, I have to play the challenge through in my head.
- Where I’ll be
- What I’ll do first
- Where it could go wrong
Amazon has a rule for new products.
Before a team builds anything, it writes the press release.
The press release announces the finished product to customers. Below it, the team answers the questions those customers would ask.
When Amazon started on the Kindle, the team had to picture a reader buying one. That reader wanted to download a book from anywhere and pay only for the book.
Colin Bryar and Bill Carr tell the story in Working Backwards.
Writing the press release raised a question: who pays for the wireless connection?
The team had to answer it before anyone built a device.
Annie Duke played poker for a living for nearly 20 years.
In Thinking in Bets she writes about a question poker players ask when you sound sure of something: Wanna bet?
Now being wrong would cost you money. To decide whether to take the bet, you have to run through how you could be wrong.
Often you get less sure before anyone puts money down.
Putting money on the claim makes you think it through.
Ray Dalio founded the investment firm Bridgewater and made his money trading markets.
In 1982 he told Congress a depression was coming. He was wrong. The market started a long climb instead.
He went broke.
He let his employees go and borrowed $4,000 from his dad to pay his bills.
After that he wrote down his reasons before each trade. When one closed, he could check what he wrote against what happened.
He tells the story in Principles.
Over the years those notes became the rules Bridgewater uses to trade.
Writing the reason made him think before he bought. The pile of notes showed him where his thinking went wrong.
You can do small things that force you to think better before you act.
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What small act could raise the quality of your decisions?
