Annie Duke, Author of Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts, and former professional poker player, shares her approach to making decisions in an uncertain environment, overcoming cognitive biases that lead to poor decision-making, and making small bets to learn.
In poker, you have to make high-stakes decisions with limited information. As a result, there’s only a loose relationship between outcomes and decision quality.
Annie mastered decision-making in this environment. She won a World Series of Poker gold bracelet, the World Series of Poker Tournament of Champions, and the NBC National Heads-Up Championship, and earned more than $4 million in tournament winnings.
It turns out, making decisions in poker has a lot in common with making decision in product management.
In product management, it’s hard to predict what products and features will be successful. If you’re creating a new experience, you don’t have historical usage data to rely on, and customer needs and market dynamics are always changing.
To make smarter decisions, Annie recommends thinking in terms of the probabilities of potential outcomes, getting input from others to counteract our natural cognitive biases, and making smaller bets to gather information and improve your ability to make bets in the future.
You’ll learn a lot from this episode about decision-making, forecasting, and resource allocation.
Here are the highlights:
- How Annie’s success making decisions at the poker table translated into making decisions in the boardroom (8:30)
- How Annie makes business decisions without having all the facts (13:15)
- Annie’s approach to gathering information to make a decision about a new product or feature (24:40)