💡 Weekly Thought Exercise: How to Think in Bets to Stay in Founder Mode

This week's thought exercise comes from co-founder of Y Combinator Paul Graham and professional poker player Annie Duke.

Paul Graham:

• Co-founder of Silicon Valley startup accelerator Y Combinator

• YC companies: Airbnb, Instacart, Dropbox, Coinbase, Stripe, Reddit, Gusto

• Went viral last week for his essay on Founder Mode

Paul talks about how Silicon Valley (a.k.a VC investors) pushes founders into Manager Mode.

Investors tell founders to outsource their business decisions to experts (like their hired executive team).

And this makes sense on paper.

But the problem comes when you think about how the human brain works.

Employees are never willing to take as much risk as founders.

If you’ve ever been an employee you’ll agree. There’s not much benefit in taking a huge risk that could:

1) Get you in trouble

2) Make you lose your job

3) Ruin your reputation

Which means that as the founder you are the only person willing to “inject risk into the business.”

How do you do that well?

By Thinking in Bets.

Annie Duke:

• Author of Thinking in Bets

• Retired professional poker player

• Beat 234 players to win the World Series of Poker in 2004

Annie’s poker experience taught her that life is not a game of chess. It’s not a strategy game.

🌟 It’s a probability game.

When managers make decisions they play a strategy game (playing safe = the best strategy to keep their job and reputation).

Founders need to look at the decisions being made and play a probability game.

What’s the probability of this decision leading to failure?

• If the probability is 80% success and 20% failure it’s a valid risk to assess taking.

• If the probability is 10% success and 90% failure then it’s obviously not worth putting effort toward.

This week’s thought exercise will look at a decision, strategy, or idea that your team or you are thinking about adding to your business and analyze its probability of success or failure.

• You don’t need to add any context to the prompt

• AI will prompt you to share your decision, strategy, or idea

• Your conversation will walk you through thinking in bets and give you a probability of success and failure

Here's the prompt to copy and paste into Claude.ai:

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