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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 — Brought to you by: • Vanta—Automate compliance. Simplify security: https://vanta.com/lenny • UserTesting—Human understanding. Human experiences: https://www.usertesting.com/lenny • LinkedIn Ads—Reach professionals and drive results for your business: https://www.linkedin.com/podlenny Find the transcript at: https://www.lennysnewsletter.com/p/making-better-decisions-annie-duke 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/ Where to find Lenny: • Newsletter: https://www.lennysnewsletter.com • X: https://twitter.com/lennysan • LinkedIn: https://www.linkedin.com/in/lennyrachitsky/ 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: 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 • 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 Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com. Lenny may be an investor in the companies discussed.

Annie DukeguestLenny Rachitskyhost
May 1, 20241h 21mWatch on YouTube ↗

At a glance

WHAT IT’S REALLY ABOUT

Annie Duke Reveals Practical Systems For Sharper Decisions And Quitting

  1. Annie Duke, former pro poker player and author, shares concrete ways individuals and organizations can dramatically improve decision quality by making implicit judgments explicit, structuring how groups think, and shortening feedback loops. She describes lessons from Daniel Kahneman, emphasizing intellectual humility, adversarial collaboration, and the power of asking “why am I wrong?”
  2. In organizations, she argues meetings should only be for discussion—not for discovering opinions or deciding—and shows how independent, asynchronous input and clear decision ownership produce better outcomes. She also explains why there is effectively no such thing as a 10‑year feedback loop: you can always define and track nearer-term leading indicators.
  3. Drawing on her work with First Round Capital, she illustrates how structured rubrics, explicit forecasts, and post-hoc analysis expose when intuition is accurate versus misleading. Finally, she reframes pre‑mortems as tools for defining “kill criteria” and shows why, behaviorally, if you’re seriously thinking about quitting something, you’re likely already late.

IDEAS WORTH REMEMBERING

5 ideas

Make implicit judgments explicit to expose when intuition is wrong.

We all apply hidden mental models (e.g., what makes a good hire or investment); by surfacing criteria, scoring them, and recording forecasts, you can later see which beliefs actually predicted success and which were just confident stories.

Redesign meetings so they are only for discussion, not discovery or decisions.

Have people submit their views, rankings, estimates, and rationales independently and asynchronously before the meeting, then use the live session solely to compare models and focus on disagreements; make the actual decision outside the room (ideally by a clearly designated decision-maker or independent vote).

Get opinions independently to avoid loud, confident voices dominating.

Use ‘nominal groups’: collect inputs via forms or private messages where no one sees others’ answers first; this reveals the true spread of beliefs (including junior or contrarian views) and prevents early anchoring and conformity.

Stop chasing ‘alignment’; aim for people feeling heard and overruled “nevertheless.”

Total agreement is unrealistic and coerces people into conformity; instead, ensure each person’s view is clearly reflected back (“I hear you; nevertheless, here’s the decision”), so they feel psychologically invested even when they disagree.

There are no inherently long feedback loops—only unchosen leading indicators.

For long-horizon bets (like startup investing), you can shorten learning cycles by forecasting and tracking intermediate signals (e.g., series A funding, product-market fit, churn, talent retention) and tying them back to the original decision assumptions.

WORDS WORTH SAVING

5 quotes

It’s so incredibly necessary in improving decision quality to take what’s implicit and make it explicit.

Annie Duke

The only thing that’s ever supposed to happen in a meeting is the discussion part.

Annie Duke

There is no such thing as a long feedback loop. You choose how long the feedback loop is.

Annie Duke

Our intuition is sometimes right and sometimes wrong. If you don’t make it explicit, you don’t get to find out when it’s wrong.

Annie Duke

Most people won’t quit until it actually isn’t a decision.

Annie Duke (via Richard Thaler)

Daniel Kahneman’s humility, open-mindedness, and adversarial collaborationHow much decision-making can realistically be improved—and under what conditionsRedesigning meetings: separating discover, discuss, and decide; nominal groupsStructuring investment and product decisions (First Round Capital case study)Shortening ‘long’ feedback loops via leading indicators and forecastsUsing pre-mortems to define kill criteria and fight sunk-cost biasQuitting psychology: why we almost always quit too late

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