The Jordan Harbinger Show - 757: Annie Duke | The Power of Knowing When to Quit

Episode Date: November 29, 2022

Annie Duke (@annieduke) is a World Series poker champion, a shrewd decision-maker, and the author of Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts and Quit: The Power of Knowing When to Walk Away. What We Discuss with Annie Duke: Why "Never give up!" is objectively terrible advice (as even Muhammad Ali might grudgingly admit). Life's too short to keep fighting a battle that's only losing ground when you could better devote the time you're spending to more worthwhile pursuits. Why the worst time to make a decision is when you're already in the middle of it. How the sunk cost fallacy keeps us spinning our wheels in fruitless attempts at progress long after we should have turned back. How we can actually tell the difference between a worthy pursuit and a lost cause — and what we can do to resist our own stubborn impulse to persist beyond reasonable defeat. And much more... Full show notes and resources can be found here: jordanharbinger.com/757 Sign up for Six-Minute Networking -- our free networking and relationship development mini course -- at jordanharbinger.com/course! Miss our last conversation with Annie Duke — World Series poker champion and author of Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts? Catch up by listening to episode 40: Annie Duke | How to Make Decisions Like a Poker Champ here! Like this show? Please leave us a review here -- even one sentence helps! Consider including your Twitter handle so we can thank you personally!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

This episode is sponsored in part by Conspiruality Podcast. You know how I'm always talking about critical thinking and spotting manipulation? Well, there's a podcast that's all about dismantling new age cults, wellness grifters, and conspiracy med yogis, basically the wild overlap of spirituality and misinformation. It's called the Conspiruality Podcast. The hosts, a journalist, cult researcher, and a philosophical skeptic, dive deep into how this stuff spreads, from Project 2025 and the Heritage Foundation's dystopian vision of the future to how former leftists get pulled into far-right conspiracies.

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Find Conspirality on Apple Podcasts, Spotify, and wherever you get your podcasts. Coming up next on the Jordan Harbinger Show. I think that one of the problems that we have with sort of accepting quitting is an okay thing to do is we think quitting is going to stop our progress. This will slow us down. And the fact is that quitting done well

actually speeds us up because we stop doing things that are going to damage our health. We stop being in jobs that are dead-end jobs. We stop being in relationships that aren't fulfilling and making us happy and allowing us to actually gain the things that we most value. and we quit those, and that frees us up to go do other things that will actually get us to where we want to go faster.

Welcome to the show. I'm Jordan Harbinger. On the Jordan Harbinger show, we decode the stories, secrets and skills are the world's most fascinating people. We have in-depth conversations with scientists and entrepreneurs, spies and psychologists, even the occasional professional poker player, mafia, enforcer, former cult member or former jihadi, and each episode turns our guest's wisdom into practice. advice that you can use to build a deeper understanding of how the world works and become a better thinker. Now, if you're new to the show or you want to tell your friends about the show, I suggest our

episode starter packs. These are collections of our favorite episodes organized by topic, and it'll help new listeners get a taste of everything that we do here on the show. Topics like disinformation and cyber warfare, persuasion, influence, crime and cults, and more. Just visit jordanharbinger.com slash start or search for us in your Spotify app to get started. Now, today on the show, persistence is not always the best route. I had Annie Duke back on the show. That was episode 40. We talked about thinking and bets,

talked about decision making. This interview, relax, is not done with the current crazy RSV, stuffy head cold that I have now. Just the intro in the close, promise. Annie Duke is a professional poker player. Now,

we all know that lost cutting separates the real pros from the rest at the poker table. But outside of a hand of poker, most of us think that quitting is bad or it's the same thing as losing, and we tend to be pretty bad at it, and we tend to frown upon quitting just about anything else.

Annie is a friend of mine, a super smart thinker when it comes to decision-making at or away from the poker table. I've come to her with big decisions and talked them through as well, which is always super helpful. Today, we'll discuss when to quit and when to persevere. We'll learn why the worst time to make a decision is actually when you're in the decision itself, and why we usually wait until long past time to quit to actually stop doing something as well as why goals can actually trip us up and inhibit the efficiency and effectiveness of quitting.

This is a topic that candidly I found really counterintuitive and very, very useful, and I think you will as well. So enjoy this episode here with Annie Duke. Really interesting topic you've chosen for this book, Annie, because quitting, it's a tough topic, in part because it's just frowned upon in our culture, especially I live in Silicon Valley. It's like this tech bro place. Whenever you hear advice from these guys on the radio, to never give up, which is objectively terrible advice? Yeah, I mean, look, what if you're like playing a football match and you get a concussion?

Should you never give up when you stay on the field? It's so easy for me to rattle off examples where never give up is ridiculous, right? Like, look at Muhammad Ali. The story with Muhammad Ali is, you know, Cassius Clay, won the heavyweight championship against Sunny Liston. But then when he became Muhammad Ali, it was a conscientious dexter to the war. he refused to go to war. So he got stripped of his title. After he was finally allowed to fight again, it took him four years to get a title fight. So now we're talking, here's a guy who's now in his early 30s,

and he has to fight a man named George Foreman, who not only was undefeated, but it was basically like you walk in the ring, George Foreman punches you, you get knocked out, that's the end of the match. So, you know, huge underdog goes to the rumble in the jungle, he used to do this, like float like a butterfly sting like a beat. Like he was really fast and then he would like score a punch. But now Muhammad Ali has to change his strategy because he's playing George Foreman and he starts doing rope adope, which is laying against the ropes, allowing George Foreman to tire himself out while he punches him. Obviously a lot more physical damage to your body comes from that than Ali's old style when he was younger. But, and this is the beauty

of grit, right, is that he wins. And he did see something that other people can see that the naysayers couldn't see through all of the sort of negativity and everybody saying he couldn't do it or he shouldn't do it he did that's the power of grit the problem is though that grit you know just the never give up attitude itself isn't a virtue grit is a virtue when the thing you're doing is worthwhile and we can see this with ali as such an obvious example of why quitting is also a virtue so he keeps fighting eventually he starts to get some pretty bad medical reports there's kidney damage showing, starting to have some bad neurological signs. And Teddy Brenner, who's the fight promoter at Madison Square Garden, who was a very good friend

of Ali, says, you really need to quit. You know, and he said it, I don't want him to come to me and not know who I am one day. You know, like, that's not what I'm in here for. Ali doesn't listen to him, refuses to quit. So Teddy Brenner actually quit him. And so I'm not going to host a fight of yours here anymore. Then Ferdy Pacheco pretty quickly after that, who's his fight doctor, says, look, there's really bad damage to your kidneys occurring.

like you should not fight anymore. This is unsustainable. It's going to be permanent damage. You need to stop. Ali ignores him and keeps fighting. Ferdy Pacheco quits. So his two people quit on him when they're saying to him, like, and these are people who really, really care about him saying that he shouldn't fight anymore.

So then it's hard for him to get licensed. He gets a fight with Larry Holmes in Las Vegas. I don't know if you're, this very famously Larry Holmes cried after the fight because he gave such a beating to Alps. Ali, it was just really sad. Ali lost to, like, Leon Spinks and, like, Leon Spinks, like, seventh fight ever. It was just horrible. And then eventually he can't even get licensed in the U.S. He ends up fighting in the Philippines. And, like, some, I don't know, like, you know, two bit, like they used a cowbell. Oh, man. For the Browns. Like, yeah, they were sharing gloves.

It was really bad. So, so this is a good example of never give up. Like, what are you talking about? like two people who really cared about him, Teddy Brenner and Ferdie Pacheco, we're saying, you need to give up, we care about you. This is really bad for you in the long run, and he refused. And I think we can see there that grit isn't good anymore under those circumstances. Yeah, this, aside from making me feel kind of queasy, because I'm envisioning being punched and repeatedly in the head and kidneys, you know, we only hear about him being the greatest.

We don't really hear about him not knowing when to quit. And people go, well, that's how you leave a great legacy. But it's like, man, that guy spent, I want to say decades of his life, kind of not knowing where he was and not being able to walk. It was like 40 years. That's awful. And he had kids and they probably couldn't do much with him towards for a long time. I guess my rambling point here is that sometimes the grit that gets you to the top can actually be your downfall. It gets you to stick with things that are worthwhile like building a skill or a craft, but it also gets you to stick with things that are horrible for you or not worthwhile at the very least.

Right. And the other thing is that, and I think this is the case with Ali, like just to put a finer point on it gets you to stick to things that are worthwhile, but then you keep sticking to them after they're not any longer. And that's the thing is that life is really short. We have a limited time on this planet. We need to be spending our time on the things that are getting us to where we want to go and not causing us to lose ground. And the minute that things shift, the minute we discover, like I'm on this road and there's a tractor trailer that just, you know, turned over and is blocking the road. You need to exit the road as quickly as possible. Because otherwise, you're just stuck. And I think that one of the problems that we have with sort of accepting quitting

is an okay thing to do is we think quitting is going to stop our progress. This is slow us down. And the fact is that quitting done well actually speeds us up because we stop doing things that are going to damage our health. We stop being in jobs that are dead end jobs. We stop being in relationships that aren't fulfilling and making us happy and allowing us to actually gain the things that we most value and we quit those and that frees us up to go do other things that will actually get us to where we want to go faster. And that's the thing. It's like quitting speeds us up. It doesn't slow us down when we do it well. Some people stick for things way too long because the, I mean, look, the old maxim is quiters never win, winners never quit, right? So we think something's wrong with us

if we stop doing something, almost regardless of what it is. Not that there's something wrong with the bad advice we're following or that our television shows or whatever have taught us, we're just blindly staying the course. And you note this in the book. It's reflected in our language, right? There's lots of more synonyms in English for grittiness than quittiness, which is a word that doesn't even exist. Yeah. And one of the first conversations I had with Phil Tetlock, who wrote Super Forecasting, which is a wonderful book. People should get it. You know, when I started really getting kind of obsessed with this topic, I just started calling people that I know to say, well, what do you think? And Phil Tetlock is quite,

the sort of like epitome of an academic. And so what he said to me is, oh, you need to make a Peabody table. And I'm like, I'm sorry, what is a Peabody table? What is that? And you notice that just so people know there is no Peabody table in the book, but I do something Peabody like. So a Peabody table is basically when you take a word and you put the synonyms that are positive for the word in one cell and the synonyms that are negative for the word and another cell, and then you can do that for pairs, right? So what he was saying is you should make a two by two where you have grit and quit, and then you have positive and negative synonyms, and you could make a little table like that. I said, well, that's not really the way I write, but I'll do that in more free form. So I did. I followed Phil's advice. And you can do

this too, go look in the the thesaurus. And what you'll find is that grit has all these things like steadfast metal, right, M-A-T-T-L-E. What's interesting is like if you look at persevere or grittiness or whatever, heroism is one of the synonyms for it. Heroism. Yes. That's charged. The people who grit are the heroes of the story. And we know that that's true.

Because just as you said, when we think about Muhammad Ali, we think about a hero of the story. We don't think about the other stuff. But there's a few negative words for grit, like obstinate, you know, inflexible, stubborn, rigid. But mostly it's like, you know, perseverance, like heroism. So then when you go and look at quit or quitter, you see things like, you know, loser, failure, capricious, weak-willed. And here's one coward. Oh, man. So now that's all you need to know, right, is that the ones who stick it out are heroes. The Soros tells us that. And the ones that quit are coward. And there's a funny little anecdote, which is, so a synonym for quitter is poltroon. And this is a very old word. It was. used in like the 1800. I'm sure you haven't heard it. It sounds like one. No, I've never heard it before. Like Jordan, are you a Pultrune? It's like, I don't know. What is that? It's quite the Pultrune.

Yeah, it sounds like something you'd read in a comic book from 1930. Yeah, that's basically right. So Pultrune is calling someone a quitter. And when it was in use, it was a horrible insult. Such a bad insult that it was grounds for a duel. Somebody called in print, somebody called Andrew Jackson a Pultrune. And Andrew Jackson challenged him to a duel. which occurred like, I think, in the middle of Manhattan at the time. Of course. Right. It's like on Fifth Avenue or something.

The woods of Manhattan above the canal. Yeah. Exactly. Andrew Jackson killed him in the duel and afterwards was elected president. But it was because everybody was like, well, I mean, he called you a quitter. Right. Like, he called you a poltroon. He deserved it.

That's how poorly we think about people who quit. That's kind of like all you need to know about like what's going on with grit and quit in our culture. I found it interesting. In the book, you said, said that the worst time to make a decision is when you are in it, which is somehow really obvious, but also really, really useful advice that never had occurred to me before. You know, the thing is that the way that I feel about my writing is that I'm telling people things that are obvious. It's just that they haven't heard it yet. I don't think that I write

about things that are complicated, right? I mean, I think I say things that are pretty obvious. It's just that until somebody says it out loud, it's not necessarily obvious to you. And the reason why I write that way is because people tell me these things. And when I hear it, it's obvious. But I realize it wasn't obvious before I heard it. These are actually my favorite concepts because I think that things that are obvious, but only after you hear them are the most useful. Because you're more likely to internalize them and start to use that and your decision making growth forward. So this idea of being in it, like, what does that mean? In it means when you're actually in the middle of like facing down whatever the decision is. So like the example that I love to use that I think people really understand about in it is like you may have some general desire to eat healthy. But when there's an open box of chocolates in front of you, you're in it. And that's really hard, particularly for me if they're like delicious salted caramels. Then that's really tough for me to actually resist. And that's true of anything, right? Like we can say we want to save for retirement, but when we're actually like in the middle of thinking about buying the fancy car or the fancy clothes, it's really hard to keep those longer term goals in mind. Like you're not going to be at your best when you're in it. And what's true of those things is also true for quitting. We have the intuition. And I think that this is kind of the broad problem that I'm talking about, you know, in this book is that we have this intuition that after we start something, when we get signal,

that things aren't going well, that we will quit. Right? Like if your fight doctor tells you you're getting permanent kidney damage, obviously we'll walk away. We look at Ali and we say, how could he not walk away? That's silly. Teddy Brenner said so and Ferdi Pacheco said so. And our intuition is that we will pay attention

that somehow Muhammad Ali is unusual here. But what decades and decades and decades of research shows, and this is research from like Barry Staw, who's amazing, done all this work on escalation of commitment, Richard Thaler and Danny Conneman, who are both Nobel laureates, Colin Cameron, some of the real giants in the field. What those decades of research shows us is that that intuition is just plain wrong. And the reason that it's wrong is because when you see the signals, you are in it, that's the problem. So when I'm climbing the mountain in the shadow of the summit and the snowstorm rolls in, I'm in it.

And I am going to make a bad decision about it. So this is the thing that we all need to realize is that we don't pay attention to those. signals very well. We aren't very rational about them. And what happens is that we're pretty good instead of being rationalizing. We're really good at rationalizing away the information. Sure. So we want to make a, I assume make a plan to quit ahead of time based on specific milestones. And your example in the book is the Mount Everest turnaround points where it's like when you're there on the mountain, you go, I spend $150,000 getting here. It's taken me eight years of training and doing the other mountains or whatever it is. I am not turning back because

it might snow or we're like an hour behind schedule or we're stuck behind some other group. I'm not doing that. I'm too far along. Meanwhile, everything you wrote in your little plan says if you're not here by this time, you're going to die if you try to get down from the top after that. And you're like, well, but maybe I'll be. And the mountain is literally covered in the dead bodies of people who do this. Yeah.

So there's a few things that we kind of think, right, once we sort of understand this problem, that we aren't good at paying attention to those signals in the moment. Like, I mean, here's an example. How many projects have you been involved in where, you know, the budget has tripled and it's now, you know, a year late? And looking from the outside, you're like, why are you still pursuing this? Like every, the world is yelling at you that this isn't going well, but people won't give up on those things.

And that's the same thing as, you know, climbing Mount Everest, right? I think we have an intuition, first of all, that we will pay attention to those signals. That intuition is wrong. The second thing that I think we have an intuition about is that if we know about the problem, that we won't do it. And that intuition is also wrong. Knowing about it does not help you one bit, not at all. And the third intuition that I think we have is, and I think this is something that I hear a lot of people say, particularly in business and finance, is they say, well, what I say to myself is, if I had the option to start this fresh today, would I do it? So you can kind of think about, like, you know how you'll often say to yourself if I knew then, what I knew know now, I would make a different choice.

Yeah, sure. So the idea is, okay, but what if you said, well, I do know those things. If I had the choice to start it today, in other words, if I had no history with this at all, would I start it today, would I start it today. So like a simple example would be if you buy a stock, say at 50 and it's trading at 40 to say to yourself, if I'm going to hold it, what I'm really saying is I would be willing to buy it today at this price. Is that true? That's something that people do all the time. If I knew today what I knew now, like, would I start this project today? They think that they can kind of get around the problem by thinking about it that way.

The science also shows that that does not work at all. It doesn't make it better. And the reason is that there's no way to undo the history that you have with the decision. Right. So we can't just make believe that we're making this decision in a vacuum. Yeah, because nobody parachuted you to Camp 4 on Mount Everest, right? You spent the $150,000. You spent the years of training.

you got from base camp one to camp two to camp three to camp four, we're not parachuting you into that spot. If you've been working on a project, no matter how over budget or how much you've blown the timeline, you can't pretend like you're making a decision to start it fresh today because you've already been doing it. We need to sort of dump that as an idea that we can solve for it. And that gets us to exactly what you said is that like, well, how do you solve for it? And one of the best ways to do that is to do it before you're in the decision. In other words, to say, what are the signals going to be that I'm going to see in the future that would tell me that I ought to quit and then commit to do that when you see those signals? And I know it

sounds a little bit like a distinction without a difference. It's like, but wait a minute, you just told me that when I'm in it and those signals happen, I don't see them. But what the science shows, again, very clearly is that no, but if you do say, let me try to anticipate whatever those are in advance and make a pre-commitment when I'm not in the decision, that that actually, will get you to behave much more as if you're fresh to the decision. And that's really all we're trying to do, right? Is if you have history with it, we want you to behave the same as if you were fresh to it. That's what we're trying to accomplish. And thinking about these things in advance are going to get you very close to that. Is this sunk cost fallacy or is it more? Because it seems like

what you're saying is there's this illusion where, like I said before, we can't ignore all of our previous pre-commitment and investment. And even though you know that you shouldn't calculate it, it's just very, very hard slash impossible for us to remove it from any calculation we make in our brain, whether to quit or continue. And I see this in myself when I'm reading. I know this is like the dumbest example in the world, but I'll be reading. This is a really good example, by the way. You know what I'm going with this? Okay. I do. I'm reading a book and I go, God, this is boring, man. I am not interested in this. I should cancel this interview or I should. stop reading this book or whatever, I'll go, but I'm halfway done with the book. I spent the whole

afternoon reading it outside. I've got a little sunburn as a result. I'm just going to read a couple more chapters and then I'm going to decide. And then I read a couple more chapters and I go, but now I'm 65% through this book and I can't just, I'm just going to finish it. And then I finish it. And I go, that was a freaking waste of time. Why do I spend my day doing this? So you're describing kind of what I call the Katamari problem. So there's this really strange a video game that came out in the aughts called Khashmari Domesi. And my daughter used to play it. I never thought that I would use it as an analogy because my daughter just used to play it a lot.

But I'm happy that it was useful for something besides her entertainment. So the premise of it is that a king has gotten drunk and wiped out all the planets and stars in the universe. And so the prince, his son, has to make new ones. And so he's given a Katamari, which is just Japanese for a clump. and it's a tiny, tiny little clump, and you have to roll it around on the ground. If it hits something that's larger than it, it will become smaller. But if it goes over something that's smaller than it, it becomes larger.

So at first you're picking up like little pieces of dust and hair and thumbtacks. And then eventually it's like rolling over bottles and pieces of paper and then the cat and the dog and then the couch and then cows. and then it's rolling over the whole house, and then it's, as one reviewer put it, it's ripping bloody rainbows out of the ground. And then when it gets big enough, it becomes a star. That's the premise of the game. It's actually quite addictive.

It's a lot of hair and thumbtacks to make a star, but we'll let that part slide, right? Right, exactly. So what does that have to do with what you just said? Well, you just described a Katamari problem. You start off with a little clump, right? And you're picking up this debris, and what's happening to the Katamari, it's growing bigger.

And then that keeps rolling. which allows you to pick up bigger and bigger, bigger things, accumulating more debris as you go along until you have this humongous clump. And that's what you're describing. You start off and you read a little bit, and that little bit makes you more likely to want to read more, why, for a variety of reasons. So sunk cost, as you said, is a small piece of it. It turns out that there's a very large number of cognitive biases and then also some motivational problems as well, which comes from the motivational side of psychology that make you not want to quit. But what you described is a little bit of the sunk cost problem. So the sunk cost problem is once we put time and effort, attention,

money into something, we don't want to quit because either we want to get our money back or we don't want to have wasted our time. So that's what you're describing, right? Like I've already read this much. If I quit, I'll have wasted my time. So that little bit that you read is like the Katamari. It's small. It's a little clump. But that clump sort of now has. momentum, which makes you read more. And now when you say, oh, this is still boring, you're like, but now I'm halfway through. Right. The snowball's bigger. Right. And then you keep going. And it's like, but now I'm three quarters of the way through. And then, and then it gets really bad. Because then you've got like a chapter and a half left. You hate the book. You have all the

information you need to know that there's no reason to keep winning it. But there's a finish line. And that's the end of the book. So how can you possibly stop? And then all the of a sudden you've read a book, which I imagine you would like to get that time back. And this brings up the real Katamari problem is that because we think of waste as a backward-looking problem, I don't want to have wasted the time that I put into reading this. It causes us to waste more time. It's funny because I do describe it in my own head. And when I've talked about this before, is a snowball effect because the more I push through to continue, of course, I'm just investing more. The heavier the sunk cost feels. And it's funny because I know what's happening in real time. I'm going,

I'm just investing in this thing that I don't want to invest in and making this worse, and I still can't stop myself probably at least 50% of the time. Yeah, so this is where Kill Criteria can become really helpful. So Kill Criteria, basically what you mentioned, which is decide in advance. So let's take a really simple example of Kill Criteria from Everest. On Everest, when you leave for the summit, on the day that you leave for the summit from Camp 4, they have a turnaround time in place. They actually have a turnaround time for all the climbs. But for Summit Day, it's helpful to know this. and that turnaround time is 1 p.m. And what that means is that no matter where you are in the mountain,

it doesn't matter whether you've made the summit or not, at 1 p.m., you have to turn around. Why do they set those turnaround times? Well, because they know that in the shadow of the summit, people are going to be pretty poor decision makers about this. And 1 p.m. is the turnaround time, because if you descend after 1 p.m., you're too likely to send some pretty dangerous parts of the mountain in darkness,

low on oxygen, with frostbite. tired and exhausted. The probability of death just goes up a lot higher if you haven't turned around by 1 p.m. So there's this wonderful story of three climbers, Dr. Stuart Hutchinson, John Tasky, and Luke Kassiske. They're a part of a climbing expedition in the 90s. There's eight climbers. These three became friends, three climbing serpas and an expedition leader. So they leave on camp four and they have the turnaround time, which is 1 p.m. And it's really slow. Everett got super popular and so it would be crowded. about this. There's just lines to get past things now where you're waiting. Right. And obviously,

this is slowing people's progress to the summit. So their expedition leader came up from behind them and Hutchinson just said to the expedition leader, hey, how long is it going to be to the summit from here? Because he knew that things were kind of going slow. And the expedition leader said three hours. So the expedition leader now runs ahead after telling them it's going to be three hours, tries to speed up the mountain. And Hutchinson holds tasking Kasicki back and just says, hey, I think we have an issue because our expedition leader just told us to me three hours. And I'm looking at my clock, and it's already 1130 in the morning. And I can do math. And that means that we're going to make the summit at 2.30. Like even if we sped up, we'd make it 2 p.m. That's already an hour past the turnaround

time anyway. We can't make up that much time. So he said, I think we should turn around now. Got a little bit of resistance from one of them who was doing the seven summits and it was going to be their seventh summit. But they agreed and they turned around and they went back to camp. Now, Jordan. Right. Yeah. Like, I'm sure they wrote a. book about that, oh, wait, nobody cared because they just quit. Right, exactly. And that's the problem. That's the problem. And it's an even bigger problem because they did write a book about it. And it was called Into Thin Air by John Crackauer. Oh, yeah. I read that a long time ago when I was in high school. So I bet you don't remember these three people. No, I was going to say,

I don't remember the book going like that, but whatever you, you're fresher than I am. No, well, they're in the book. But I also who had read the book and seen the movie. And I didn't remember them either. You know who I remember Rob Hall. The people. who died, yeah, unfortunately. All jokes aside. Because they persevered. They're the heroes of the story. That's what I'm saying about grit.

They're the heroes of the story. So Rob Hall was their expedition leader. This is the shocking thing. He's the one who told them that 1 p.m. was the turnaround time. And he kept going and perished atop the mountain. He got there at 2 p.m. That's an hour past the turn.

He perishes on the mountain while waiting for another person in the expedition, Doug Hansen, who gets there at 4 p.m. and they both perish on the mountain. They're the protagonists. These three guys, John Crackauer, did write about. In fact, he said they were the best decision makers on the mountain that day. He says that in the book. Well, we don't remember them because they aren't the heroes.

We don't care. And that's the problem, right? That's the problem. Why is it that we remember Rob Hall, who ignored his own turnaround time, but we don't remember these three guys? So that's like such an important point, but there is a lesson in the story, which is, had that turnaround time not existed, those three people would have been in danger.

Sure. So three people more than otherwise would have turned around and got back safely. And that's why those turn around, things like turnaround times are so important for our decision-making. You're listening to the Jordan Harbinger show with our guest, Annie Duke. We'll be right back. If you're wondering how I managed to book all these folks for the show, it's always been about my network, and I know networking is a gross, dirty word. It's schmoozy.

It feels gross. of that is present in the course. I want to teach you how to do this stuff for free, but also in a non-gross way. That's Jordan Harbinger.com slash course. This course is about improving your relationship building skills, inspiring other people to develop a relationship with you. And the course does all that, again, in a super easy, non-cringy, down-to-earth kind of way, no awkward strategies, no cheesy tactics, just practical exercises that'll make you a better connector, a better colleague, a better friend, a better peer, just six minutes a day, not even that. That's all it takes. And by the way, many of the guys,

guests on our show already subscribe and contribute to the course. So come join us. You'll be in smart company. Again, you can find the course at Jordan Harbinger.com slash course. Now, back to Annie Duke. Molly Bloom, a long time ago, episode 120, we're on like 700 something now, talked about horrible poker losses from some big, rich Hollywood types. You probably know these stories too, but there's a guy who lost something like $20 million and he missed his wife's 70th birthday party or maybe is their 50th anniversary party. It was just some monumental event that you just don't miss for anything and he's playing some three-day-long Red Bull and cocaine poker game or something like that. It's just really sad, even though it's self-inflicted. And it just shows you how powerful trying to make a

decision is in the moment. I mean, yes, this might be gambling addiction or something else. But when you're on a mountain like Everest, the pole is largely, it's kind of the same. It's similar. Yeah, I think this brings up something really important. So, you know, as I was thinking about quitting, one of the reasons why I'm so obsessed with it is because I think that the main skill that separates amateurs from elite players at the poker table is loss cutting, you know, just like quitting. So when you look at the first two-card starting combinations that you get, you know, you get dealt two cards and hold them at a nine-handed table, you'll see that professionals are folding somewhere between 75 and 80 percent of the two-card combinations that they get,

just like right off the bat. And amateurs are folding less than 50 percent. in the time. So pros are just folding way more because they recognize that the hand isn't worth it to continue. And then once you're in the pot, like once you've actually invested money in the pot and you've seen more cards, pros are much better at folding in those situations. And you'll hear amateurs say things that sound very sunk cost like. They'll say, I have too much money invested in the pot already. I can't fold. It's like, but here's again, the thing is it doesn't matter how much money you have in the pot. What matters is the next dollar you back going to earn you any money. and they just don't think that way.

So I think that's another big piece of the puzzle for them is, and they'll say, like, you know, I want to protect the money I had. I can't fold now. I've got too much invested, which is really what all of our problems are, right? I can't break up now because I've got a year in this relationship. But what if the next year is going to be miserable too? Why are you staying? I can't quit my job now.

I did so much onboarding. I've learned the culture and it's taken me a long time to figure out the politics. okay, but what if the next year of your life in that job is going to be miserable? And we look backwards instead of forwards and that's what the poker players are doing. And then there's another piece which I think plays into this on top of sunk cost, which is this desire for certainty. They want to know how the hand is going to turn out. And for them in particular, the idea, these what ifs are so hard for us. The idea that you would fold a hand and it might turn out that you would have won it is so painful that they want to play it up.

until there's no chance that they could win, which is generally until the end. You know, there's a saying among bad players, which is any two cards can win. And the answer is, sure, if I climb up Everest in a snowstorm after 1 p.m. trying to make at the summit, I might survive. But that doesn't make it a good decision because I'm probably not going to survive enough of the time to make that a good choice. Same thing in poker. I can play a seven and a two, which is the worst hand in poker. And there's some chance that, you know, sometimes that's going to win the day, but it's not going to win the day enough at the time. But we want that certainty so much. And can't we feel that? Like, you know, what if I could have turned it around? Like you see people with projects or

products or relationships or whatever. It's so hard for them to leave it because like, what if I could have turned it around? What if I had stayed? Maybe I would have made it work. Maybe if I continued up the mountain, I would have made the summit. Maybe if I held on to the stock, I would have made my money back. And these things are really hard. It's really a siren song and it reflects this asymmetry, which is like, if you want to know how the thing you're going to do is going to turn out, you have to stick to it. That's the only way for you to know for sure to the point where we really aren't willing to quit until it really isn't a choice anymore because like it's a dead certainty. It's a dead certainty or we're like super screwed. Quitting requires you to be,

you have to make peace with what might have been at your job or in the hand of poker or or whatever decision you're making. And that's always the problem, right? Like, if I just held the stock a little longer, well, wait a minute, I just won't sell it. And then I'll know what's going to. Oh, I should have sold it. Right.

And that's with everybody in cryptocurrency in the past few years as well. I was like, no, why didn't I? Because in the moment, you were like, but it's going up. I actually saw the weirdest exchange on Twitter. Somebody had bought Bitcoin somewhere around $50,000. And they had announced that they had sold it at like, 26. They said that they had sold it at 26. And I saw a reply saying, like, what are you doing? Like, now you can't ever get your money back. And they were saying, like, what if it goes back to 50?

This is the issue we have, right? If you wouldn't buy it at 26, then you shouldn't hold it at 26. It doesn't matter that you bought it at 50, but this was such a good expression of this problem, you know, but those what ifs are so strong. Look, here's the thing. Like, just culturally, we feel this way. How do people feel about Barry Sanders? Oh, gosh. I mean, I don't know. They were like, how could he do that? Why did he quit? He could have kept going.

Yeah, yeah. People are mystified by this. They're mystified by it. And he just said, I want to quit at the top. So did Seinfeld. He said, I don't want to become the butt of a joke. I want to be the one making the jokes. And people get really pissed when that happens.

People actually prefer a situation like you just talked about, like Aaron Rogers or Tom Brady or Peyton Manning, John Elway. Because once they quit, you. know that they have to. So it's really hard. Like if they quit at what might be the top, people are like, how could you possibly quit? Maybe there was more. They want to see the decline. That's well put. Right. We only know when we should have quit with hindsight. And you know that because people are like, God, can you look at this irrelevant idiot still doing this podcast, right? And I'm hoping people don't say that about me in 10 or 15 years. But maybe in 10 or 15 years, it'll be like, Jordan, hang it up, man.

This is just sad now, you know? And I'm going, but it's fine. I still get fan mail, right? I still get DMs from people. Nobody uses that anymore. Jordan, what's wrong with you? And it's ironic because it's like we should only quit when it's so obvious that something has become terrible.

And again, it sounds like a blueprint for my career as a podcast host. I'm on the upswing for now. But look at a guy like, I think your example in the book was maybe Dave Chappelle, where he left and everyone's like, what an idiot. He left and, oh, man, what was he thinking? He must be on drugs. Yeah, they said it. They thought he had checked himself into a mental institution.

Sure. Or that he was on drugs. Look, everything is about what your own values are, right? So if you love podcasting so much that even if nobody listens to you, that's fine. And, you know, Peyton Manning or Tom Brady may love the game of football so much that it doesn't matter to them that they're not performing well on the field. Assuming no permanent damage or, you know, Steve. Steve Young probably took one too many concussions, right? But assuming that stuff aside, this is a matter of

your values. So you may feel like, I don't care if anyone's listening. Like, I like having conversations with the people I have and hopefully people will listen to these conversations, but if they don't, I'm cool. Then I'm going to say, hey, I'm all for that, right? But just as we accept that, we have to accept the other side of the equation, which is Dave Chappelle was doing stand-up, which is what his first love was. and people started screaming characters from his show at him. And for him, that was just awful. He really hated that, that his show had sort of become who he was. They wanted him to do the material and the characters from the show, as opposed to the

material that he really wanted to do. And for him, that was just not a situation that fit with what he valued. And so he quit. And people were so confused because he obviously walked away from a huge contract when the show was the number one comedy show around. and nobody would accept it. But we have to accept these things, right? Like, it's a trick to quit on top.

And as I said, like Barry Sanders did it. Jerry Seinfeld did it. Dave Chappelle did it with his show. Phoebe Waller Bridge with Fleabag. Left everybody hanging on the show that everybody loved. It would be like if Jason Sudecass didn't make another season of Ted Lasso, right? We'd all be like, what? Why?

It's so good. It hasn't jumped the shark yet. Even when we're looking at other people, we want that certainty. Now think about how that translates to ourselves. You know, partly because if I call you a quitter, I'm calling you a loser. So if I quit something, I think you're going to call me a loser. Yeah, yeah, we don't want to have to do a duel. No, exactly.

No duels in Manhattan. That's right. So I want to walk away at a point when Jordan will not question the decision. And if you think about, like, for example, in a startup, what does that mean? It means you have no more capital and you can't raise anymore. You're broke. Yeah, you've laid everyone off. You're broke and, yeah, you're selling your monitors.

And everybody goes, what could you do? You tried your best. There was nothing you could do. We get it. That's why you had to quit. And you don't, you don't feel the same criticism or the same self recrimination that comes along with with quitting well before that. It stands the reason that quitting on time then just feels like quitting too early because you haven't reached the socially acceptable, completely obvious, no going back point of where you should have already quit. Yeah. So what you bring up, it's really important. It's not just that we quit late because we're worried. about what other people will think, at which point we could be quitting late, not because it feels like it's the right time, right? But because we know it's too long, but we want to make sure everybody else knows along with us. But there's good science that shows that that's not true, that it's actually, if we quit, when we quit, we're already at the decision too late. Like, when we think maybe we should quit, it's actually not very close at all. We're actually getting

to the quitting decision too late. So when we quit on time, it really does feel to us also, like we're quitting too early. And this actually comes from Stephen Leavitt, you know, Freakonomics and whatnot. Oh, yeah. Go see his TED Talks, read Freakonomics. He's wonderful. He put up a website where people could go. And like, Jordan, let's say that you had a really tough decision about should I stay with what I'm doing or should I quit and go do something else. So let's say it was like a relationship, should I quit? Should I stay in my relationship? Should I quit? Should I stay in my job? Should I quit? And so you have one of these big decisions and he invited you to come to this website. You would put in your decision. He would ask you, to rate on a scale of 1 to 10 how happy you were at that moment in time. And then he would invite you to flip a virtual coin. Had you stay, tails you quit. So first of all, like, you'd be like, well, who'd ever do that? Like it's a really big life's decision. 20,000 people. Out of how many, though,

we're like, I'm not doing this. This is the stupidest thing I've ever seen. I don't know, but 20,000 people is a lot. It is a lot. It's a lot. But I imagine like a million people got the invitation and went, no, thank you. Yes, but 20,000 people did go and do it. Here's the interesting thing about this. So I just want to make sure that you see this logic. If you're willing to flip a coin to make the decision, it must mean that you're 50-50 on the choice. Okay, fair. So that means you think it's a very close call.

And if we think about what's the goal of quitting or not quitting, let's assume it's to increase your happiness, right? So basically what you're saying if you're going to flip a coin is, I don't know, I'm really torn. Maybe staying is going to make me happier. Maybe quitting is going to make me happier. I don't know. Fair?

Yeah. So, you know, these people flip the coin, they either quit or they didn't. And remember, he had measured their happiness before the coin flip. And now he checks back in with them two and six months later. Because he wants to understand, like, is it true that it was a 50-50 choice, meaning quitters are just as likely to be happy as the non-quitters. And what he found was no, like quitting was the winner. Really? Yeah. So when you check back in with them, the quitters were happier. So what does that tell you? It tells you that when we're experiencing this as a close call, it's not close at all. Quitting has already won. I suppose this makes sense, right? Because we're weighing all the sunk costs and all the investment and everything, and that makes it look like it's equal. But once you get rid of that baggage, it's like clunk, the scale just drops down on the side of quitting. Like if you were airlifted or teleported into that situation without the baggage, you'd go, man, this person really should quit. You should definitely quit. Well, yeah. And actually, I think that we do sometimes get airlifted into those situations when friends come to us. So, like, how many times you had a friend who's like in a crappy relationship? Yeah. You like have a beer with them.

They're telling you how miserable they are. Maybe they should break up. I don't know what I should do. But I don't want to be alone and it's going to be so hard to get back in the apps. And you're like, forget about that crap. She's terrible. Right. Like you're so unhappy.

And then you see them three months later and you're rinsing, repeating the exact same conversation. And then three months later are the same because it's like you reading a book. But I put so much time. I put so much effort. I put so much this into that. And then that makes them stay. And then it's like now they've spent another six months. And now they've spent another six months.

It becomes really hard to disentangle yourself from that. Just like it's hard to put the book down. But if you airlift into it, meaning you're just the friend who's observing. So you're not carrying, you don't have the katomari, right? You don't have any debris that you're dragging along with you. You're just looking going, man, like you got to get out of this. This isn't good for anybody. But it's hard for us to see it when we're in it.

How do we do that mental time travel? to figure out whether we should do this or not. Is that even the right, am I aiming in the right direction here? No, you are, you are. So I think this is a pretty good example of how we can handle this. So there's a guy named Ron Conway. Some of your listeners might be familiar with him. He is a founder of SB Angel, one of the absolute most successful, if not the most successful Angel investors ever, a really smart guy. You know, obviously he is helping people to grit things out because he's getting companies at their earliest stages when they may just be an idea. And he's helping people go through the hard times in order to achieve an Uber type of exit, right? But when you talk to him,

what's interesting is that the thing he really prides himself on is helping people to get to the quitting decision. And he does it by really helping them to get to sort of kill criteria and to be able to do some mental time travel, to be able to see what the future might look like. So the way he describes is he'll sit down and go Jordan. Let's be honest, this startup is not going to be going well. You know, whatever. Like you're not achieving product market fit. You're not generating enough net new revenue, whatever, you know, just things aren't going well. I think we ought to think about shutting things down. Now, he's having this conversation with them long before it. They have to because they have capital in the bank still. What his goal is that if he sees it, he wants them to shut it down

before they're at zero. That's what his goal is. So what inevitably happens is you, you'll say, no, I know I can turn it around, which is fine. That's what people say in that situation. Like, no, I know I can turn it around. And here's the trick that he does. He doesn't disagree. He says, that's great. I know you can turn it around. I believe in you. You know, let's just look at kind of what your runway is and let's agree that you really only have like six weeks, two months to figure out if you can turn this around. It's easy for me to get you to agree to that because that's not in it. So when I say, well, let's talk about two months from now, you'll be like, okay, yeah, let's do that. You'll say, So what does turn it around look like?

And he'll set benchmarks, right? Which just might be like revenue generation, right? Like maybe this is what the top of your funnel is going to look like in two months. It's going to be populated in this way. You're going to have closed this much new business. You're going to have done the work to see if customers want your product. Whatever it is, it is. He does that with you.

So, like, Jordan, what do you think good looks like? What do you think the signals would be in a couple of months that this still isn't going your way and that you ought to shut it down? He's getting us to set up kill criteria for ourselves in the moment without saying, without being too obvious about it, I guess. Well, because he's not saying we should kill it now because of these criteria, he's saying let's talk about it in six weeks. And he's doing this because even though he already knows you're supposed to quit, he just knows you're not going to do it. You're not going to do it. So he's trying to help you to get there yourself. So now we've worked together and we set these kill criteria. And now, now Ron says to the founder, okay, let's meet up in six weeks or let's meet up in two months, whatever. that deadline is, you always want to have a deadline for it. Let's meet up and let's talk about it and see if things have improved. And then he does. And they're just much more likely to shut it down

and return the capital to the investors at that point. And I think that one of the things that's so important about what he really says to the founders is, look, you're clearly a very smart, very gritty, very driven individual who could be doing amazing things. Your life is too short to spend your time on this thing that isn't working because you could free up that time to go work on something that is. And I think that's such an important thing. And then sometimes, you know, with these rationalizations, what he'll hear from the founder is, but I owe it to my employees. Yeah. I owe it to my employees. And he says, no, their lives are short too. And they're working for you for little cash comp in exchange for equity that we have now together determined is not worth it. Right. And their life is too short to

keep them here, you need to let them go and do something that's going to change the world also. The hitch here is that while quitting feels like, oh my gosh, I'm starting over, this is, look, we're going back, we're just greatly slowed down in our lives or our business. Actually, it could speed you up because it frees you up from the thing you're quitting, which is not working out, to go full on into the new thing that might. That's exactly right. And I think that one of the reasons why we don't think that is because of survivorship bias. And the aphorisms that go along with that, right? Like if at first you don't succeed, try, try again. Like, why do we have that? Well, because we can name a lot of success stories who stuck to it, you know, come what may. And what we think is,

oh, then if we stick to it, we'll succeed. But what's true in retrospect is not true prospectively. And so we hear these stories of the people who got to the brink of death and managed to survive. And we think, well, then that's the way to do it. Get to the brink of death. And then will manage to survive. And it's not true. And, you know, if you look at the average age, a founder of a unicorn, it's 42 years old. Oh my gosh. I didn't know that. That's, I mean, that's my age. You know, it's not the Zuckerberg. These people have failed a lot. They've tried stuff. It didn't work. They've tried other stuff. It didn't work. You know, and then they come across an idea and it does work. And, you know, why is that? Well, because they're sticking to the stuff that's working later.

they're quitting the other stuff as quickly as they can once they figure out it's not working so they can move on to a better idea. Let's go back and talk a little bit about kill criteria. How do we set this up? Are there some examples you can give? I know there's some of the book that are pretty interesting because I think people are going, oh my gosh, I need kill criteria for my career decision that's coming up or my college admissions or my retirement pros and cons. You know, how do we set this up for ourselves? There's an example from a company that I work with called M-Portical. They do a customer data platform where we were working. working with their sales force to try to get them to be more efficient. So, Jordan, have you met some salespeople in your life? Of course, yeah, plenty. Are they gritty? Sometimes to a fault where you're like, stop calling me. This is not happening. You're wasting your time. And having been in sales, now I do people a favor and I go, here's what would get me there. Here's what won't. And they're like, you can just hear the experienced ones go, wow, thanks, because you just saved them

hours of time. That's exactly right. Yeah. But what's interesting is like what I was finding with sellers was that, you know, even in situations where there were really adverse signals, like this was a SaaS company, they already had a competitor installed. They'd be like, but I know I can win them over, right? Like, that's the thing is that they really, they really want to keep going until the deal is truly dead. Like, you've already fallen into crevasse kind of dead. Like, you're on top of the mountain. It's 4 p.m. Okay, I'll give it up. And obviously, this is really bad because you have a limited a number of reps that can be selling for you and you want them to be spending their time on the most valuable leads and ditching all of the rest. This is our goal for anything. Sure. Right? Like,

through at the poker table, I want to spend the most of my time playing when I'm playing well and quit all the other times. I want to play the hands that have the highest expected value and quit all the rest, so and so forth, right? So we just did this. This is, I think, a good example of how to get to kill criteria. You got a lead through an RFP or RFI. It's now six months. from now and the lead is lost. Looking back, you realize there were early signals that you were not going to win the deal. What were they? So notice, they're not in a deal. We're not talking about a deal that they just lost. We're asking them in the abstract. You got a lead. It's a, you know, six months later, you didn't win it. Looking back, you realized, oh, yeah, I could tell from the first meeting that this

was not going to close. What were those signals? So we had everybody do it independently, which is important, not as a brainstorm in the room. It's a better way to get this kind of information. It was like 40 sellers and they sent us a whole bunch of stuff. Some examples. The first thing and the only thing that the potential customer wanted to ask me about was price. So that's bad because you're probably a stalking horse. The RFPR RFI was very clearly written with a competitor in mind. So that means they're probably already down the process and like you're a box checking exercise. Another one was we couldn't get a decision maker in the room. We cared so little about this that we didn't even call the person who could pull the trigger. Yeah, exactly. So, but I mean,

this was some among a very long list, right, but I'm just using these three as examples. And so for those three, we then turn those into kill criteria. So if in the first meeting, they only want to talk about price you would kill. If it was written with a competitor in mind, you would ask them directly, how far down the road are you with this competitor? Sometimes the answer is we have them installed, right, at which point you would kill. With the, I can't get an executive in the room, you offer executive alignment at the next meeting. I'll bring a decision maker from my side. You bring a decision maker from your side. At the next meeting, we find the deals go more smoothy this way. And if they say no to that, you kill. So what does this allow you to do?

Well, first of all, it allows you to abandon course much more quickly in the same way that having a turnaround time helps you to abandon course much more quickly. But also, I think this is so important for people who are gritty and ambitious and driven is that it gives you another way to succeed. Because once you've made these criteria clear, then when you're doing deal review and you say, well, they went straight to price and they didn't want to talk about anything else. So I killed it. You get kudos. As opposed to when you leave it on the fly and you say, I killed the deal, you get quizzed.

You don't get kudos. You get interrogated. It turns it from something which is a moment of interrogated. which the best way to defend yourself against is, you know, I did all this research and I had 17 meetings with them and, you know, what could I do? Which is the defense against that, which is to stick longer. And here you just go, well, we agreed if they only talked about price. I was supposed to ditch it. And then everybody's like, yeah, you. And there's no interrogation. Bravo boundaries. Yeah. Yeah. It's good for you. Go generate some new leads.

This is the Jordan Harbinger show with our guest, Annie Duke. We'll be right back. If you do like this episode of the show, I invite you to do what other smart and considerate listeners do, which is take a moment and support our amazing sponsors. They do take a risk with some of these episodes. This one's a little non-controversial, finally, but some of these, you know, our sponsors stick through it with us. To learn more, to get links to all the codes, the discount codes, or if you're just doing some shopping and you want to see if we have a deal for you on our site that supports the show, go to Jordan Harbinger.com slash deals. You can always search for any sponsor using the search box on the website as well. That's at Jordan Harbinger.com, or just go to the deals page at

slash deals. Thank you so much for supporting those who support us. It really does keep things going. Makes it possible to continue creating these episodes week after week. Now for the rest of my conversation with Annie Duke. In the book, you give examples from the Iran hostage rescue, the bin Laden raid. I think that stuff really makes sense and illustrates it in very simple ways. I think there was something if we lose three out of the five helicopters in the desert due to the sand in the Iran rescue, we're turning back. And that happened? And they were like, okay, we're done. It wasn't like, but I think we can maybe still make it and then get a bunch of soldiers captured by Iran. The bin Laden had a similar thing. It's like we can afford to lose one of the helicopters

and what they did so they proceed. That stuff being decided in advance seemed, of course, literally life-saving, but also how could you possibly make that decision in the moment? Oh my gosh. Yeah, I mean, and that's something that Admiral McRaven told me was he wants to make his few decisions on the fly as he has to. Now, some things are going to come up on the fly, right? But the idea of like how many functioning helicopters do we have, has Pakistan figured out that we're in their airspace? There's stuff like that where, you know, you've seen this enough, you've done it enough that you know, if this goes badly, what are the things that are going to have happened?

Let's write those things down. And even with something like the Pakistani airspace, it depended on how close they already were at the point that they got detected. Right. So even that was built into the plan. You know, he said they probably had like 100 different command decisions already. planned out before you started, and there's maybe going to be three or four that come up on the fly. And that's going to cause you to be just a much better decision maker, because what are you supposed

to do in the middle of it when you've lost one helicopter? But we've come so far and we've done all this training and we've spent all this money and I've sold this to the president, you know, that this was something that we were going to do. And what if bin Laden isn't there the next time? And you can imagine all of the different ways that you're going to rationalize yourself into continuing on in a situation where that can really create disaster. I mean, honestly, like the Challenger is a very good example. The space shuttle. Yeah, of not paying attention to the signals because they knew that those gaskets failed

in cold weather. But it was like we've put so much time and it's on TV and the media is watching us and how can we stop now because they left that decision to the day of. Instead of just saying in advance, if it's below a certain temperature, we're going to abort the mission. And they're much better now about checklisting those kinds of things. But you can see where that, you know, allowing those decisions to occur in the moment can end up in real disaster. We were watching that in my school as kids.

Can you imagine? I mean, I remember it was clear as day. That was really traumatizing. The teacher was from my hometown. Oh, man. Kristen McCalliffe. She was from my hometown. Just a horrible thing to have happened.

And of course, to see on live TV. The Bin Laden, Admiral McRavenworth, was on the show episode 315. we don't talk about kill criteria per se, but we kind of do. What about the age-old wisdom, hey, quit while you're ahead. Is there anything to that? I'm sure you had to go through that in the book when writing. So it's so funny, you know, almost all the aphorisms about quitting are like, never give up. Yeah, terrible. You know, winners never quit. But there's one, as you just pointed out, there's one aphorism, quit while you're ahead. And that is also terrible advice. And the reason why all of these aphorisms are terrible advice is because the actual advice is quit when the thing you're no long,

when you're doing is no longer worthwhile and stick to everything else. So that's kind of harder. It's not as easy a rule of sum. But the issue with both of these, you know, try, try again, like never give up is that that's playing into this bias that has to do with some cost endowment, how our identities get wrapped up into things we're doing, our preference for the status quo, so on, so forth, that make us want to stick to things too long. So never give up is amplifying a bias about sticking to things too long, except quit while you're ahead is also amplifying a bias that we have, which is the one time that we often quit too early is when we're ahead. So when you look at like the behavior of retail traders or like trading in the stock market, it's very common when you

put in when you buy a stock or you make a trade that you put in both a take gain order and a stop loss order. So what does that mean? It means like let's say I buy a stock at 50. I may put in, if it gets to 40, I'm going to automatically sell it. Like the computer will do it for you and just sell the stock at 40. So that would be a stop loss. But on the flip side, I might say, if the stock gets to 60, I'm going to automatically sell it. So that would be a take gate. And what you find is that, you know, just as the never give up amplifies the bias about quitting too late, when the stock gets to 40, people cancel their stop loss order and they keep holding. Why? Because the moment, when you're in the losses, when you have a loss on paper, the moment you quit is the moment you can't get that money

back. Right. It's that Bitcoin tweet all over again. It's the Bitcoin tweet. How could you sell it at 26? You're never going to get your money back. You're never going to get your money back. Now, on the flip side, people put in these take gain orders. So they buy it at 50. They have a take gain at 60. And they get to like 56 and they cancel their take gain order. So they quit while they're ahead. But before they rationally said they should. So we're going to assume you're the most rational before you've bought the stock, and you've decided if it goes to 40 I'm going to sell, if it goes to 60 I'm going to sell. And now you can see a rationality on both sides.

When it goes to 40, you hold. But when it goes to 60, well, you wouldn't know because you've sold before it ever happens. So you're canceling the take gain order, but now to sell too early. And the reason is the mirror image, which is if I have made $6 on that $50 buy, the only way that I can lose that money back is if I keep holding it. So just as much as we don't want to take a loss on paper and turn it into a shore loss, a realized loss, we also don't want to take a gain on paper and end up losing that back. We want to turn that into a shore gain or a realized gain.

And the only way we can do that is to sell. I know a lot of people are sitting there thinking, okay, fine. I don't have anything I want to quit, but I really want to convince my kid or my spouse or my friend to quit something. How do we convince someone else to quit something? You mentioned before this investor who does a good job of asking questions and helping kill criteria for the future. But how do we avoid that escalation of commitment, the doubling down, all these logical fallacies and mistakes that people make? How do we help someone else avoid those?

So I think there's two really good strategies. I mean, first of all, the fact that you're helping them is helpful, right? Because we can see things from the outside that people from the inside can't see. And so just the fact that you're trying to help and coach them is going to be very helpful for getting them to quit. And there's lots of evidence that shows that if you get somebody else to help you with the decision, you'll do better. But I think that this actually works. I mean, if we're talking about kids, kids also have the problem of quitting too early, mainly because they just don't have the time horizon to be able to know the difference between a bad day on the soccer field and, you know, it's going to get better versus I had a bad day and I didn't score any goals and now I want to quit. So, you know, and that's the point of Angela Duckworth's book. It's why people should get her book because we do want to be able to tell the difference between those two things. and a parent can really help or you as a friend can help somebody do that on both sides of the

equation. So when somebody is saying that they want to quit, it may be that it's worthwhile. It may be that it's not. It may be that they're willing to pull the trigger. Maybe not. Whatever you see, you can do exactly what Ron Conway does and says, that's fine. How long can you take the situation for as it sits? So maybe for your kid, it's like, look, you've got 10 more games left. Let's stick it out and let's look at what's happening after the end of those 10 games. And then you figure out what does success look like and what does failure look like? What does it look like that it's something that you would want to continue? And what does it look like if it's something that you don't want to continue?

And write those things down and whatever that deadline is, then you can help them with both sides of the equation, both not quitting too early because you're allowing them some time to try to see how it plays out. And also with not quitting too late because you're helping them to see that they should walk way. One of the examples I give is I coach, you know, CEOs, executives, and I will tell you, one of the biggest problems people have is infiring people. They don't want to do it. When it's obvious that having nobody in the role would be better than having that person in the role, they still won't do it. They're hoping they can coach them through it. They're hoping they can get them to turn it around. This is just the way we are. And so what I say is, I want you to sit down with them and do

the wrong Conway thing. Set down, you know, over the next six weeks, this is what I expect to see. you know, just give them some KPIs and agree to what those are with them and then say, we'll talk again in six weeks. And if you haven't, you know, and if we don't see this turnaround, then I think it's time for us to talk about what the next step is, which would be moving on. Because otherwise, what I see with them is they go and they have a discussion that, you know, they tell the employee what they think is going wrong. The employee says, I hear you. They make all sorts of promises. They say they're going to turn it around. And then it's six weeks later. And back in the same spot and they have the same conversation and this goes on forever. And this actually

not only makes it so that they can get to that decision faster, but it gets the employee to realize that it's the right decision also. Right. It's like kill criteria for both of you. Okay, I'm going to fire you in six weeks and the other person goes, okay, I'm going to have to move on in six weeks unless these things change. Right. And then you can talk about what are the inputs that we create the change and you now have some focus to what you're doing in the role. And I would say that along with that, It was a little bit of the framing I just gave you is another way that you can help people see it is to say, what would you be doing with the time? Or imagine you're alone. Would it be better or worse than the situation that you're in? So when I work with CEOs, what I say is, imagine that there's no one in the

role. Are you better or worse off than you are today, including the fact that when you have someone in the role, they're generally acting as a blocker because people will pick up that slack, but they can't, as long as the person who's not performing is in the role, it also usually is causing cultural breakage, right? So if you take that person out of the role, I understand that you have to do a search and that's kind of scary and all that stuff, but don't you think people will pick up the slack and you'll reduce the cultural damage that's occurring? So I sort of get them refocused over on that. Same thing with relationships, you know, but I'm afraid of going out into the dating pool. What if I end up alone? What if I end up in a relationship that isn't as good?

And I try to refocus that in two ways. One is if they're worried about being alone, I say, Well, what would be worse? Okay, let's imagine being alone. Is it worse than the situation you're in now? Generally, when someone's at the point where they really are thinking about walking away, they usually realize they would be happier alone. So you can sort of get them to sort of think about that in a way that makes it more concrete. And then in terms of the what if I date somebody new and it doesn't work out, I just ask them this simple question. Okay, what's the probability in six months you're going to be happy in the relationship you're in? You know, and they'll usually say, low. Like I've put a lot of effort into it. I've tried. We've done couples counseling, so and so forth. So I'm

pretty sure I'm going to be unhappy in six months. Okay. So let's say you start dating someone new. What's the chances you're happy with them? Well, I don't know. Is it greater than zero? Yes. So that sort of thinking about what are the opportunities you're giving up? You know, if you're spending money on something that isn't working out, well, what if that money was all of a sudden freed up? What would you go spend it on? What if your time was all of a sudden freed up? What would you go spend it on? That can also be very helpful to sort of reframe it for people in terms of getting them to see the opportunity costs, the stuff that they're missing out on because of what they're doing. I want to wrap with some of the cult stuff because who doesn't love a good cult discussion, especially on the show,

cults and prophecies are often wrong. And you write about this in the book. You've got these cults that are either the doomsday stuff from years gone by. Cults are very similar to what we do with our jobs and careers as well, or political candidates. When we get new information about something, we will just go, eh, sunk cost, status quo bias. It's really hard to recognize our mistakes in our faults because of cognitive dissonance. So let's talk a little bit about what happens in these cults, because I think for a lot of folks, when a cult leader says 2012 is the end of the Mayan calendar, we're all going to die. And then it's January 1, 2013. People don't just go, oh, man, we were so wrong about that. They go, oh, wait, the Mayan calendar and the Gregorian calendar,

they don't overlap completely. And so actually, now it's May 2016, so we've got an extension. So here's the fact. The hardest thing to quit is who you are. And when the things you believe become part of your identity, when what you do becomes part of who you are, it is very hard to walk away from it. So that's true whether it's a cult. So a lot of people are familiar with when prophecy fails.

Leon Festinger followed the seekers from the 1950s, alien. from the planet Clarion were supposed to come and wipe out humanity with a flood. But the true believers of the seekers would be rescued at midnight on December 20th of 1954. Midnight came and went. No aliens. Weirdly, the cult didn't disband. They actually doubled down. They escalated their commitment to the cause, which is what happens. They didn't walk away. So, okay, that's weird because you had a day of doom and it came and went. Your cult was disproved. And yet you still believe. And it's the rastew. like, oh, they're coming later or, oh, we believe so hard that that's why they didn't come. Now, lest you think that's just has to do with cult members, I'm sure people are thinking about some

stuff happening in politics right now where they can see those same kind of things occurring. This occurs for people who you would consider to be quite rational. And it has to do with when you have beliefs that make you stand out from the crowd, which a cult will, when you've taken actions based on those extreme beliefs like cut off your family, maybe you've given up a whole bunch of money to the cause, that kind of thing. when you're confronted with the world telling you, hey, abandoned course, that means abandoning your identity. That's really hard. And in the battle between identity and the facts, identity is going to win. So John Bashir's and Katie Milkman did a really interesting study where they just looked at stock analysts

in their earnings projections. And a lot of those earnings projections would be in the consensus, like mainstream, and some of them would be out of consensus quite extreme. And they said, okay, well, let's look at what happens when the actual earnings come in and they conflict with the forecast. And what they found was that when the forecast was in the mainstream, the analysts were like, oh, whatever, I was wrong and they'd update it. But when it was not, when it was out of consensus, when it made them stand out from the crowd, they would double down on their projection, forecasting again something that was out of consensus. And it's kind of in this way, like Jordan, if you believe Pluto is a planet, that wasn't unusual. Everybody believed Pluto was a planet. Who cares?

It doesn't define you, right? So if they tell you then that Pluto is in a planet, you're like, eh, whatever. But what if you're a flat earther? That's part of who you are because it makes you stand out from the crowd. So now when you, you know, someone shows you a laser experiment that demonstrates the curvature of their earth, you're like, ah, that's wrong. Your equipment is broken. And we have all these ways of rationalizing this stuff away, you know, like false flag. That's a way to just reject evidence that doesn't really fit with what your belief system is, right?

say some things of, it was the deep state. Sure. You know, that kind of thing. You know, that has to do with like these beliefs that are like identity, but then also what you can do can be part of your identity. So I think Sears, you know, the retail company is such a good example of this. Obviously, their identity is a retailer. They were the number one retailer for decades and decades and decades in the 1950s. They represented one percent of USGNP. Holy cow. Wow. I know. But then like Kmart and Walmart and then eventually Target came along from, you know, the discount retailers and then also the Neiman Marcus's and the Sacks. They got squeezed out of the market by the 90s. They were not the number one retailer. You know, in the 2000s, they go bankrupt. So we know that story of Sears. But

what's really interesting is that Sears wasn't just a retail company. It was also a financial services company. Back in the 30s, they founded a company called Allstate Insurance. Oh, wow. Right. Interesting. Allstate insurance, why? Because people were driving cars to their stores. And so you could literally buy a drill, some socks. And car insurance. Wow. So anyway, Al-State Insurance ends up becoming the largest personal liability insurer. They also owned a company called DeWitter, which was a very big financial services company. They got acquired by Morgan Stanley, represented 40% of Morgan Stanley's worth at a time. It was a very big stock brokerage. They found a Discover card, holy cow, and they had Coldwall banker. So then the question is, how do they go broke? And it has to do with identity.

when the retail stores started faltering and those were no longer making money, they had a choice. All right, what are we going to do here? The obvious choice is quit the retail business, keep all the financial services businesses that are thriving, except that their identity was a retailer. What they did was who they were. And so they decided to get back, quote unquote, get back to their retailing routes. They sold off all of the financial services companies in order to try to save the retail business and we know what happened.

they went broke. So even when you have incentives to get it right, it's very hard to do it, particularly when your identity gets involved. Because in the end, whether it's Sears or the stockbrokers or anybody else, we're all in some sort of cult, right? Like, we just don't know it. And the more extreme your position, the more cognitive gymnastics you need to put in place to rationalize it. And that's whether it's a cult, a politician, or cult of a politician, or anything of the sort. Annie, thank you so much again for a fascinating conversation. I, I think I'm in podcasting for the long haul, of course, but you've definitely given all of us something to think about, and I appreciate that.

Well, I hope so, and I just want to appreciate you were one of the first people who did a podcast with me with my first book when nobody even thought, oh, you know, who's this poker player lady writing about cognitive science? And we talked about thinking in bets way back then, and I'm so appreciative of you giving that book a platform, which then allowed people to kind of get to know me and my writing. And, you know, here I am now talking about my third general audience book. And I just want to express some gratitude to you for allowing me to come and chat with you about these things. Well, I appreciate that.

And I can't take any credit because your writing is wonderful. And I'm so glad that we're friends. And thank you for the off-air help that you gave me earlier. I'll leave, I'll let everybody wonder about what that could possibly be. Yes, they'll wonder about what that is. But I think it was a good conversation. Me too. Thank you so much.

Awesome. Thank you. Bye-bye. If you're looking for another episode of the Jordan Harbinger show to sink your teeth into, here's a trailer for another episode that I think you might enjoy. The quality of your life is determined by the sum of two things, the quality of your decisions and luck. When something bad happens to us, we act as a skill wasn't involved at all.

We just sort of pawned off to the luck elements. But when good things happen, we sort of ignore the luck element, and we say that it was because of our great skill. a self-driving Uber just hit and killed a pedestrian. But what I thought was really interesting was that the reaction was to suspend the testing and just to take the cars off the road, not just the Uber cars, but other self-driving vehicles. And what I didn't see were any comparisons to how self-driving vehicles did per thousand miles traveled versus the technology that we already have on the road, which is cars that are driven.

by human. We know that 6,000 pedestrians die per year by regular driven car. Let's say that you're on the side of the road and you've got a flat tire. And of course, what everybody's thinking in that moment is I have the worst life ever. Like, why do these things always happen to me? I'm so unlucky. I'm so miserable. What's really interesting to me about it is like you could have gotten a promotion, like the biggest promotion of your life three days before. And you're not standing on the side of the road going, my life's great because I just got the biggest promotion I could ever imagine. So imagine that you had this flat tire a year ago. And now I'm asking you today, a year later, how much do you think that that flat tire

would have affected your overall happiness over the year? For more with Annie Duke, including some common mistakes we make when evaluating decisions, check out episode 40 here on the Jordan Harbinger show. Annie was on the show before, for those of you that think you're going crazy, and I've heard a little bit about this, that was episode 40. Quitting an expected value from an endeavor doesn't always have to be about money. This is an important note. Quitting can be about sanity.

It can be about mental health, can be about getting more free time. There's a lot of things that I have stopped doing that would have made me more money because I want to spend more time with my family. Or I hate the task so much that I just don't want to do it anymore. Like training and live events, a lot of these, not live shows, but training events and workshops. I just don't want to do that stuff anymore. lucrative as it might be. Another interesting cognitive bias that we didn't get into in our conversation

was the endowment effect, why we value things that we own more than identical items that we do not own. Really, really interesting. This extends to more than objects. It can extend to businesses. It really does even extend to IKEA furniture. I built it, even though it's broken and lower quality than the thing I already have, but it's worth more because I invested in it. Relationships. We see this happening all the time in relationships. Ideas that. people have that they become attached to because it's their own. It's something you should watch out for. It's something that I'm certainly on the lookout for and trips me up quite a bit, frankly, if I'm being perfectly honest here. The status quo has some inertia, it seems. And in fact,

there is also the status quo bias. People will stick with the status quo even if it has a lower expected value. I am also just so guilty of this, making really big changes. It'll often give me a little bit of anxiety, and I'm liable to stick with something even though it's not optimal. the devil you know kind of thing. It really is very apropos, in focus, happening in my life right now, in fact. So I am very, very aware of status quo bias and endowment effect. It really is the old max and better the devil you know. Known quantities are always easier to stomach because they're more familiar. This shows up all over the place, including in the NBA. Why didn't they shoot a bunch of three-pointers in the 80s and 90s? Well, they needed time for somebody to sort of break through that.

People did things the way they've always done them. It happens even when people are thinking about problems when there's a lot of people attacking a problem, it really does take a lot to break the status quo. Now, in decision making, when it comes to decision making in organizations, one of the practicals that Annie had mentioned off air is have the people who decide whether to start something be different than the people who decide whether to stop something. This helps mitigate the endowment effect, the sunk cost fallacy and other biases. For example, if somebody decides to make a bank loan and then those people default on loans are in danger of defaulting, you can't have the same person the decision to give the loan, be the same person who decides whether or not to revoke that

or stop whatever credit line it is. It has to be somebody else because you really can't just do a Jedi mind trick and pretend that you are different people. That doesn't work. Science has shown this. It's probably going to be easier in an organization than something we can do personally because I can assign something to somebody else if I'm a CEO of a company. I can't pretend to be somebody else if I'm making a decision personally. You can also have mentors and other people close to you, maybe a spouse get the final say in these kinds of things, but this is tougher for personal decisions. Take it from me. Also, being forced to quit something forces us to explore other opportunities that we might not have seen. I know this sounds like just look on the bright side, but really there is a lot to

this. You should start exploring other opportunities before you're forced to do so. Ideally, this will make for a softer landing. But if we are forced to quit something, often it forces our vision to open up a little bit and we tend to see other possibilities. I know, again, this has been true for me when I've had to start something over or leave something or quit something, I often find that the new thing that I was never looking for to begin with turns out to be a better option, not just a rationalization that it's a better option, but actually something that is better for me over the long term. I know we talked a little bit about goals during the show, and goals get us to focus on the finish line and keep us motivated to keep going, but they are also bad

for these exact same reasons. Sometimes we would simply be better off quitting, and goals can often inhibit that. Now, it's great to have goals. I'm not going to quit. I have a goal in mind, but this one's going to be very tough for those of us raised to never quit no matter what, because goals both serve the purpose of keeping us motivated and focused in the face of a challenge, but unfortunately, they also keep us motivated and focused in the face of a challenge that might have told us otherwise that we should quit. So it's hard to know what to do with goals. Sometimes they're appropriate, and sometimes they need to be re-evaluated. And hey, look, we all know that we don't want to change our beliefs, midstream especially, because doing so admits that we were

wrong and that we failed. Quitting psychologically somehow makes us go from failing to having failed, and this to many of us means we never should have started in the first place, which I understand, and I feel the same way, this is an intolerable belief to hold. I can certainly relate to this, because, of course, we're worried deep down that others are going to judge us as harshly as we judge ourselves. We want others to see us as consistent because the opposite, inconsistency, fickle, whatever, it's not flattering. We will be seen as irrational, prone to mistakes. At least that's what we think is going to happen when really often the opposite is true. Somebody who can admit a mistake, realize they shouldn't be taking a certain course of action,

stop taking that course of action and change their course. That person can, should, and often is seen as more capable. But in the moment, it certainly does not. feel that way. Great big thank you to Annie Duke. Links to all things Annie will be on our website in the show notes at Jordan Harbinger.com. Transcripts in the show notes, videos on YouTube, advertisers, deals and discount codes, all at Jordan Harbinger.com slash deals. I've said it once. I'll say it again. Please consider supporting those who support this show. I'm at Jordan Harbinger on Twitter and Instagram. You can also connect with me on LinkedIn. And I'm teaching you how to connect with great people using the same systems, software and tiny habits that I use every single day.

Harbinger.com slash course. I'm teaching you how to dig the well before you get thirsty, folks. Build those relationships before you need them. And you'll be joining many of the guests on the show who subscribe and contribute to that course. In other words, you'll be in smart company. This show is created in association with Podcast 1. My team is Jen Harbinger, Jace Sanderson, Robert Fogart, Millie O'Campo, Ian Baird, Josh Ballard, and Gabriel Mizrahi. Remember, we rise by lifting others. The fee for this show is you share it with friends when you find something useful or interesting. If you know somebody who needs to stop doing something, needs to quit, needs to change course, definitely share this episode with them. The greatest compliment you can give us

is to share the show with those you care about. In the meantime, do your best to apply what you hear on the show so you can live what you listen and we'll see you next time. This episode is sponsored in part by What Was That Like podcast. If you're looking for a new show to add to your rotation, something that'll make you stop mid-dishwashing and go, wait, what that actually happened? You got to subscribe to What Was That Like? It's real people telling you. the most surreal moments of their lives and they're not just giving you the highlights. They're walking you through it from the inside as a person who actually lived it, which means you're basically getting a front row seat to the chaos.

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