Notes on Thinking in Bets (Annie Duke)

My friend Chap recommended me Thinking in Bets by Annie Duke. Here are my notes from it:

  • Resulting is the tendency to equate the quality of a decision with the quality of the outcome. It’s so easy to do this: you fail, and you conclude that the things you did led to that failure. A better framing is: you used your best judgment to place a bet, and that bet didn’t pan out in your favor this time.

  • Life isn’t chess, it’s poker. In chess, there’s an optimal move at any given time. There’s an optimal tree of moves for every state of the board. Poker involves randomness, and with that, chance. This hit me hard, because as a computer scientist (and formerly active chess player), that frame of thinking has always been my default. But as a founder and capitalist, the poker frame of thinking is gradually replacing my chess mindset.

  • “Right” and “wrong” are inefficient words to use. Vectors have a speed and a direction, so should our confidence levels. I’m trying to wipe these words from my vocabulary and attach a percentage rating to how I think about something eg “I feel 70% confident about x”.

  • Every decision is a bet. We are always putting some resource at stake in exchange for upside. Everything is a tradeoff. I’ve started to use the word “bet” more often in everyday discourse. I’ll often ask founders in a pitch: what bets are you making that will make this company successful?

  • The phrase “wanna bet?” is actually really powerful. It brings a level of seriousness and clarity to decision making. People think much more lucidly when their skin is in the game. I will try to use this phrase more often, but am worried it will come off as childish.

Written on February 6, 2024