The Sales Hacker Podcast
The Sales Hacker Podcast

Episode · 3 years ago

31. Annie Duke, Author of "Thinking in Bets" and Celebrity Poker Player

ABOUT THIS EPISODE

This week on the Sales Hacker podcast, we are delighted to speak with world-famous author and teacher, Annie Duke. Annie is a former World Series of Poker winner and has written an incredible book detailing how thinking in bets can improve outcomes. In this episode, we take those concepts and apply them to sales.

One two one thee: Three Bo everybody: It is the Sales Hackerpodcast. It's your host, Sam Jacobs. I am the founder of the New York revenue,collective. I suppose I'm chairman of the global revenue, collective. I cangive myself any title I want when it comes to the revenue. Collective, I'malso the CRO at a place called Behavvox, which is a big date of machine learningplatform, and today we've got an incredible interview, because we've gotAnnie Duke the world famous poker player. She won the world series ofpoker a few times. She was on the celebrity apprentice, so she hasexperienced with our wonderful president and she's, also exceptionallyin sightful and she's written a book called thinking in bets, and Iencourage everybody to read it. We talk about that book in this episode sobefore we get into the episode. Let's thank our sponsors. We've got to thefirst is air call the phone system designd for the modern sales team. Theyseamlessly integrate into your crm. They illuminate data entry for yourreps and they provide you if you is the manager with greater visibility intoyour team's performance through advanced reporting. When it's time toscale, you can add newlines and minutes, and you can use incall coaching toreduce framtime for your new reps, so that website is aircalled that iowforsh sales tacker. That's once again, air called that IO FORWARD SH salestacker to see why Uber Donnan, Brad Street pipe drive and thousands ofothers trust aircall for the most critical sales conversations. Oursecond sponsor is outreached dot, io the leading sales engagement platform,outreach, tripples, the productivity of sales teams and empowers them to drivepredictable and measurable revenue growth by prioritizing the rightactivities in scale. ING Customer engagement with Intelligent Automation,outrach makes customer facing teams more effective and improves his abilityinto what really drives results hop over to outreach that io forward slashsales hacker to see how thousands of customers, including cloud Eric,glasdor, Pandora and Zillo, rely on outreach to deliver higher revenue forsales rap so without further Du. Let's listen to the interview with Annie,Duke High Folks. It's Sam Jacobs and welcomeback to the Sales Hacker podcast were incredibly excited for our guest today,any Duke who is an award winning author, Professional Speaker, decision,strategist and also former professional poker player, and he has just releaseda book or I guess earlier this year the book is called thinking in bets, makingsmarter decisions when you don't have all the facts. I first found out aboutthe book through Mark Andreason and his twitter feed, and then I downloaded itread it and was just really really intrigued by the ideas present in it,and so that's how we got Annie onto the show right now. Let me just tell youbriefly about her background for two decades and he was one of the toppokerplayers in the world in two thousand and four, she won the world series ofpoker her first bracelet. She also won a big tournament that year in theTournament of champions in two thousand and ten, she won the prestigious NBCNational Heads, Sup Poker Championship she's, also by the way, a student ofcognitive psychology. So she was also aworded a National Science FoundationFellowship to study cognitive psychology at UPENN. She now spends hertime. Writing Coaching speaking on a wide variety of topics he's regularlysought. After as a public speaker, she is a philanthropist she's written otherbooks about poker mostly- and this is sort of I think but she'll correct meif I'm wrong one of the first books that she has that's really not aboutpoker at all, but just about decision making she's a master storyteller. Itworks incredibly excited to have her here on the show, so welcome any to theshow, thanks for having me Sam, we're excited about it. So the context forthis conversation is, I bought your book. I read it. I thought it wasreally really interesting and I think it's incredibly relevant to the salesprofession, but first, let's just hear a little bit about your backgroundagain. We know you, I think, is now a professional speaker and decisionstrategist, as you say, and a coach, but I think a lot of the world knowsyou as a poker player. Where did you come from? You know where d you grow up.You talk about this ind some of the book, but walk us through how we gothere a little bit where e t I was bored, an a OAMPTURE WI. I mean I'll start with my adultlife. I started off doing my Undergrad work at Colombia. I went into majoractually an English lit and but ended up double majoring in English andpsychology, partly because of the mentorship of a wonderful professor.There named Barbara Landow and I was actually her research assistant forfour years and she was working in the Sych Department there and sheencouraged me. It took on to graduate school, which I did. I got into theUniversity of Pennsylvania Program and the Guy, as you said, in NationalScience Foundation, fellowship to study cognitive science, and I was workingwith Lilan Henry Glitman, who actually the book that I wrote is dedicated tothey're, really my intellectual parents and most ways, and so I was studyingthere and I was there for five years and did all the things yore supposed todo. o You know, get your Pagd, I studying in specific. First, languageacquisition, but what carto psychology is really dealing with, is how do youinterpret the world around you right,...

...so they're dealing with questions thatkind of cross with a lot of different fields and disciplines. You knowbiology, physicics, physiology, a little bit of philosophy, businesspsychology and it's some computer science and that's really put togetherinto this kind of cross disciplinary view of the way that we interpret theworld. So a lot of what I was thinking about in particular was learning andhow you learn and in my particular interest with, and how you learn afirst language, so I'm going along and right at the end. So this is, afterfive years I'm going off to interview to become a professor for my job talkin academics and I had been struggling that year with some stomach issues thatgot really really bad right around the time that I was supposed to be goingout for my job in teviews and actually on my way to Nyu. For my first job talk,I got so sick that I landed into the hospital and I was there for actuallytwo weeks, and so I had to delay going out onto the job market and anacademics that market is seasonal, so I couldn't just delay it a few months.While I got better, I had to delay it a whole year. So during that year, when Iwas recuperating, I wasn't teaching, which was one of my sources of income.I certainly didn't have a fellowship, so I just found myself in need of moneyhonestly, and my brother Howard letter had already started playingprofessional poker at that time through somewhat circuitous rout. If you wecould talk about that, if you want, but nohe had already found his way to poker,which was very unusual at that time, because poke was not on television, itwasn't something that as a kid you could just sort of like see. Oh, thisis something that I want to do. It wasn't really a known profession, buthe had found his way there, and so I was aware of it and he suggested to me.Oh, since you need money, this would be a good thing to do in the meantime andI'll teach you how to play like you, watchd me play some and I'll teach youhow to play. So it was during that recuperation time that I startedplaying, and I thought okay I'll do this and then next year, I'll go backout on the academic job market, but I ended up really taking to the game. Ireally really loved it. I love the problem that it was presenting to meand you know in retrospect. I now realized that I didn't actually changewhat my area of interest was, because when I was playing poker, what I wasreally trying to figure out was you know? How are you learning this game?Where are you getting tripped up? How do you deal with this very noisyfeedback that you're getting from the way that things are turning out? Howare you mapping out the future when it's probablistic, you know all ofthese kinds of questions that were actually very similar to the kinds ofquestions that I was askng. The Graduate Student So essentially themeantime turned into like twenty years, eighteen years ortwenty years, and then I retired in two thousand and twelve- and this was allin Montana- that's I mean I think, an interesting wrinkle right if I'm notmissin a so it started in Mytana. So I was, I was obviously in Philadelphiawhen I was at at Upenn and when I was recuperating my then husband actually had a house in Montana. Hisfamily lived in Untenan, so we just decided we would go out there well Iwas,trying to get better instead of staying in Philly an my apartment there, andyou know me continuing to do research that it would be better if I was reallytrying to take some time off. So that's how I ended up win Montana, and I wasthere for about three years. That was really where I would say myapprenticeship occurred, and by the time I was done there I had declaredmyself professional. I had already cashed in three different world seriesof poker tournaments by that time and I'd actually made a final table andcome in second one, and so at that point I moved down. I made the decisionto move down to Las Vegas and pursue it full time so that that WS, one thousandnine hundred and ninety four, that I decided to pursue it full time andbecome a professional. Then the real kind of Aha moment, for me, I think,was in two thousand and two so now. This is eight years in to myprofessional life is a pooker player. A friend of mine named Eric Sidel who'smentioned quite heavily in the book Becaus. You know who really I considerone of my main mentors in the game. He had started his life off, partly as anoptions. Trader and he'd been trading on th the floor in New York and also, Ithink in La and he had madehe had developed. Obviously,some relationships to bad and one of those relationships that Guid Nad roderlow had asked him if he would come and speak to retreat of options trader soRoger Low had a hedge fund at that time and had a group of option shiters andhe wanted err to come and talk to them about how poker might inform yourdecisions about trading and risk. So Eric is notoriously shy about publicspeaking. He really does not like getting up in front of large audiencesand talking so he demurred, but he said. Well, maybeyou should have Anni, do it because...

Anni actually used to he shooosed toteach college, so assume she's pretty good in front of an audience, since shehas a lot of practice at it. So I got asked to do it and it was. It wasreally actually the first time that I tought in a very explicit way aboutwhat the relationship between my academic life was and what I've beendoing it at poker and really started to explicitly figure out. How can Iexpress this relationship between these two things and what poker might teachyou about? The challenges of learning and how we're thinking about the future,how we control our emotions when we're in the moment of a decision, what kindof biases are really tripping us up and preventing us from really experiencingthe learning curve that should be available to and poker, because theamount of feedback that you're getting. So it really brought to light this.This really big problem that I sort of realized t t I'd trying to tackle thatI've been thinking about a lot as I was learning to play the game, which isthat in graduate school, you know what I have been taught was that learningoccurs when you have lots and lots of feedback tied closely in time todecisions and actions. It's very common thing. You hear it in every single likeone class and I thought well. This is interesting because here I've come intothis game. You know when I was playing in Montana and I was playing againstpeople. whoave been playing the game for decades and you know certainly Idid. I did have a very good teacher and my brother at that time, but certainlydid not have the experience. I did not have the number of hands Eider, my bout,that these guys had and honestly they should have been a lot better than Iwas. You know just given the sheer amount of experience that they had had,but yet they weren't- and you know I didn't think it was somethingparticularly special about me. I thought it was something special aboutthe problem that poker was presenttng in terms of how you actually learn fromwhat's happening around you and what I realized was that this idea of you knowlearing occurs when you have lots and lots of outcomes tie closely in time todecisions and actions is missing, a sentence which is except when thefeedback is really really noisy, and what that means is, when the actualoutcomes that you're getting are only very very loosely related to thedecisions and actions which is exactly what's happening in poker, so over thelong run in poker. If I'm playing really well against you I'll end upwinning over the long run. Likewise, if I'm playing worse than you over thelong run, you know that difference is going to reveal itself, but it takes awhile so on any given hand or even on any. Given you know eight hour sessionthat I might play. I could end up winning, even though I've played quitewell in comparison to you or I could end up losing. I could end up winning,even though I quit played quite quite poorly rather in comparison to you andI could end up losing, even though I het I've actually played quite well incomparison to you. So this presents a really big problem, because whetheryou've played the hand well or not, is kind of hidden from you, because Ican't see the other players cards, so I don't really know what they're holdingand even if I could see the other players cards, I still have to guessabout how you might react to them. So I have this sort oftwo stage process which is guessing at what your whole cards are,which oure face down to me and then also trying to figure out how you mightreact to those cards or certain bets and at the end of the hand, that stuffis mostly never revealed. So I'm just taking the outcome. I want or lost thehand and I'm trying to work back to uncover this thing. That's actuallypretty opaque, and so it's very noisy, because it's not a perfect signal andthe way that you can sort of feel like okay, it's not a perfect signal is tothink about it in comparison to a game like chess, so in chess, if I lose toyou like, if I play a game of chess against you and I lose like what do weknow about my decision making in comparison to your yeah? Well, we obviously know it's avery discreet outcome, so we can say it was either worse or better and- and Ithink the other point is that there's always a I mean the math would say thatthere's always a correct decision in chess. Crap and there's probably not inVoker, I would guess well, there's a theoretically correct decision in pokerif you could turn poker into a game like chess, so you know we could thinkabout that comparison right, so ind. The reason why inchest there's atheoretically correct answer that we can go back and work out and the reason why we know that if we,if I have a bad outcome, that I can work backward and say that I've madeworse decisions than you is because you're losing a lot of this noise rigta lot of the uncertainty, a lot of the sort of probabalistic nature of thingswhen you're playing chess and you're losing it for two reasons. One is thatthere isn't a super strong luck element, meaning somebody isn't randomly comingacross and like taking. You know a pan off your board or something at likerandom intervals. Where you don't know when that's going to happen, which is alittle bit, what happens at poker when there's a bad turn of the card, butalso there isn't a hidden information...

...element. So there's no information, asymmetry. I can see your position just as well as you can see my position yeah,and what that means is that we can actually work it out. So, as a player Ican say like I can see what all of your possible moves are, and I also knowthat the pieces are only going to move on purpose right, because someone doessomething on purpose to make them move that way. So it just presents like asuperdifferent problem that takes the noise out of the problem in a way whereyou can actually work backwards and try to figure out. You know why you want ar lost and whatthat means is that learning proceeds at a much more orderly pace in a game likechest. No chess is very complex, so it's hard, you have to it's a lot tomaster and most people. Obviously you know, aren't going to master it, butthe learning proceeds more orderly and generally you know, someone who hadbeen playing chess really seriously for twenty years would always crash someonewho came in essentially on thei first day and that's not necessarily the casein poker. So poker really presents a unique problem and the thing that Ithink I found really fascinating was it's the unique problem that I wasstudying when I was in graduate school, because poker looks a lot more like thedecisions that we make in life taing it back both to first to the audience,which is sales and sales by definition, is probablistic God, you know, and ourwin rates from this, maybe to inside baseball on some of the jargon. But youknow we create opportunities, that's sort of like the notion of a containsales conversation. Those opportunities should win on the low end, depending on how youdefine it, maybe like eight to ten percent of the time and then on thevery high and from thsand a twenty five. Thirty percent of the time so eitherway we're losing most of the time yeah. And similarly I mean similarly in Poker,I'm sure you you lose more hands, or at least you fold more hands than you win,and you have to know how to size the bet and do all of those things. But oneof the key concepts in the book that you articulate is this concept ofresulting so walk us through. You know like what that means, because I thinkit's and we were talking about it- you know offline before, but it's probablylike the most prevalent thing. That happens. You know it certainly insports, but really in life, which is so tell us at what the definition is. Yeahsure so resulting is essentially working backwards from the quality theyoutcome to the quality of the decision. So it's basically saying if I can seewhat the quality of the outcome is, then that tells me what I need to knowabout the quality of the decision now, resulting in something that'sparticularly a problem when you're trying to evaluate what somebody elseis done, who you aren't in direct competition with. So this is why we seeit so much in sport. So the example that I opend the book with obviously ispet Carol, the seahawks two thousand and fifteen super bowl, forty nine lastplay of the game, and so they're den Tanewing, a patriots it second downthey're down by four. So they need to score a touchdown here and they're onthe Patriots, one yard line, and they have one time out left. So this is likeone of the most amazing examples of resulting that I've ever seen in mywhole life, which is why I open the book with it. So basically, whathappens is that Pete Caroll is expected. There's an expected play here and theexpected play is that P Karolis going to hand it off to thei running backmarsh on Lynch? Well, O me, l! Is it personally get handed off he's gonnahave wreste Wilson hand it Olt, at's, right yeah, a and Marshann Lynch is oneof the best short yardege running backs in the history of the game, which is ne.Actually he had a great game and you know run through a bunch of Patriotsearlier so right exactly so, everybody thinks okay he's going to hand it offto Marshal Lynch. That's the obvious play Marchan Lynch is going to try toget the one yard you know. Obviously, if Marchaun Lynch fails there, theyhave this time out in their back pocket. So t they'll call the time out andthey'll take another shot at it and that's the way that they think that thegame is proceeded going to proceed, but pickurl actually does something supersurprising here. He has Ressa Wilson, actually plat past the ball. Ressel Wilson does that he passes theball and it's pretty famously intercepted by Malcol Butler andobviously that ends the game, and I really highly recommend that people goand kind of find the footage on Youtube, because I want you to listento Chris Callingsworth call this and you can hear Chris collings work.Just just you know. This is the worst plac ever seen. Basically, like I don'tknow what he was thinking. This is so ridiculous. Why did he make this call and then the next day, even afterpeople had had time to think about it? So you know in Chris Callings worthdefense he's making this judgment. Obviously on the fly right then, butthe people who were writing it about it. The next day have had a lot of time tothink about whether this play was any good or not, but they didn't really sayanything different than Chris Callingsworth did and there seemd to bekind of the. Only disagreement among the major newspapers was. Was it theworst play in Super Bowl history, or was it the worst playe NFL historyperiod? Now? What I think is really interesting about this is that what wedo know is that it was definitely one...

...of the worst outcomes in Super Bowlhistory. That's for sure, and for sure it was one of the worst outcomes in NFLhistory, although I would argue like that, Jose tisman getting his leg,broken thing, which that was probably worse outcome, at least for Joke Eisman,but and for Washington, Redskins fans, of which I am one yes exactly, but butyou know it certainly it's going to be competitive here for one of the worstoutcomes in superbowl history, but that does not mean that it was such aterrible decision, as everybody said, and there were a couple of voices thatwere arguing a different stance. One of them was Benjamin Morris than fivethirty eight another one was, I think, Brian Butler, on s late. You can go,read them if you want, but basically the point that they were making waswhoa hold on a second guys. Don't you want to kind of know what theinterception rate is here, because if it's super low, maybe we should startto think about what was pet carroll getting in exchange for the play. So ifwe start there a super conservative estimate of how often that ballis goingto be intercepted, there is around two percent. The range of estimates isgoing to be between one and two percent, so we already know that there's was areally really low probability event. So, let's just start there and then thesecond really kee piece of information is that if you hand it off to MarshallLynch remember they only have twenty six second flaft. The only way to stopthe clock if Marshan Lynch fails is to call the time out and by the time thatthat has occurred. A lot of time will have rorled off the clock, because,obviously, a run play takes longer than a pass play and by that time, they'reonly going to have a ch one more chance at the end zone, but if they pass theball, there's really kind of three outcomes that occur wer setting asidetumbles, which we should, because you can fumble also if you're running theball, but in the three outcomes are an interception. Whic is what happened,which we know is only between one and two percent of the time: An incompletepass, which stops the clock very quickly, Aha and allows you to run theball twice again or a touchdown, which obviously wins the game. So that's thatkey piece is that when the ball is incomplete, the clock stops so quicklythat Seattle can still hand it off to marsh on Lynch twice. So, basically,what they were arguing was for this little like one to two percentchance that this disaster happens. What you're getting in exchange is threetries at the end zone instead of chew. You still get those two running plays.If you happen to fail on the past side, almost all the time that you fail, youstill get the two run play. So you know you can agree or disagree with that,like I'm willing to have a conversation with you about. You know where thestakes too high- or you know, was that too high of an interception rate toWillie withstand, but I think that we coul get to really understanding what'sgoing on here, that they were really overlying on the fact that the outcomewas so bad by just asking a simple thought: Experiment and the T sympthotexperiment is: What do you think would have happened if the ball was caughtfor a touchdown? What do you think Chris Collingsworth would have beensaying in game, and what do you think that the headlines would have read thenext day, O brilliant call? Of course? Yes, and actually I mean just to sortof prove the point- you can go- listen to Chris Callingsworth call the Phillyspecial from this year. Super Bowl, which was an incredibly unexpected play.The Eagles were on the Patriots, one yard line again and it was forth downand the eagles were up by two at the end of the second, by three. Rather atthe end of the second quarter and everybody expected, they were going togo Horfield Goa and go into the locker room up by six, and instead not onlydid Doug Peterson not put out the kicking team, but instead he went forit, and Nick foles went around and hot the ball in the enzone. Somehow, so thequarterback ended up in the ANZONE as a receiver. Now that play happened towork out equally unexpected, and you know Chris collings worth was callinghim a genus in game and the next day, of course, that was all the talk of thenewspapers about how smart Doug Peterson was. So we actually have anexample of what happens when you have two kind of equally weird plays and inone case it works out in in one case it doesn't, and I think that we can alsodo the reverse tot experiment on the Philly special and say well what, ifthat ball had been intercepted? Theyhad not gotten the three points you knowand the Eagles had gone on to lose the game. No doubt people would have beengoing and pointing at that particular play. So what we can learn from this isthat we really make this really big mistake, which is we think you know ifwe have a good outcome, if we close the sale, we obviously had a brilliantprocess and we should try to repeat that n. We should be. You know pattingourselves on the back for how great a job we did and if somebody, if we seesomebody not close a sale if someone's working for us or whatever it might be,then we're much more likely to sort of point fingers and try to dig in andlook at where the mistakes were ind where the blame was. But what we knowis that things that turn out badly aren't necessarily just because ofmistakes, and things are their turn out. Wow aren't necessarily a mistake. FreeYeah, I mean, I think,...

...exactly to your point. The last thingon the football part is that I think the the statusticians have done themath and I think the result is that, like in almost every situation, veryrare, I would say the majority of situations. People should go for it onforth down and they nereting by the way on your own one yard line yeah exactly,but they never do right so yeah and actually so the reason why you shouldgo forird on your own one, your line just for people who are a little bitmore statistics. Geges is because, when you punt, the other team almost alwaysends up inside the fifty and so they're already kind of guaranteed three pointsanyway, yeah no you're already giving up three points, and so you're justsupposed to try to go for it on an the on Yar line and on your own one yardline on fourth down and just try to get the first down in order to move theball a little bit farther down the field. The fascinating thing is the thesports journalism world and the media, because they are so heavily focused onoutcomes. They'll construct entire narratives out of you, know the Gritand the virtue and the determination. Those are all adjectives, taare goingto be used on a probablistic outcome where you win and then, if you againmake the same decision and you lose, then it's something about your spiritand your know: you're not strong enough and there's weakness and the coachwasn't good. So that's exactly that's exactly right. That what's happening isthat on the downside, people are looking for things that were in controlof the team right in the control of the coach that you know they just didn't,have the spirit to win, or you know they weren't good enough to overcome,or you know whatever it might be, and also on the upside they're, also saieg.Oh, that was because of their grit, but we know there's a lot of randomnessright like if you think about basketball, for example, when you'retalking about like a one point, lots or one point win a lot of it just has todo it sort of randomly. You know who ends up with the ball las yeah, I meanI'm a hockey fan. So there's nobody that knows about probabilities morethan a Washington capitals, hockey fan and by the way. So speaking of thefourth down thing, the NL is another lead. That really has this problem,because there's been a lot of mat done on when you should pull the goalie andpeople should be pulling the goalie a lot earlier in the game than theyactually do, and why don't they do that? Well, because they know that the fansand the ownership are all resulters. I mean this is a problem right, like PeteCarroll got so excoriated when this didn't work out well and that happensto NHL coaches as well. If they pull tha goalie in a place where peopledon't kind of sort of accept that that's maybe something that you shoulddo, then if they go on to lose the game, what's going to happen, like people aregoing to point tot the coach and say I can't believe how bad they are. Ohclearly, you know clearly they're such a failure, and here is the problem. Sothis is where we can really kind of tie these together and see how this reallyaffects behavior. Is that now people see the treatment that pe carrol getspeople see how, if you pull the goalie, you get completely yelled at you know,people see what happens when you go for it onforth down and under unexpectedsituations, and you fail what kind of treatment the press gives you and thefans give you. So what does that drive people to do? It tries people to notmake those decisions? So, even though the math is very very clear on thesekinds of things, the NFL has been incredibly slow to adopt thesefourthdown plays, and the NHL has certainly been incredibly slow to adoptpulling the goalie relatively early in the game. So why is that? Well becausethey're afraid of basically getting yelled at so we can sort of go back tothis in terms of what's happening, for example in your world in terms of sales.So you have this world where your prospecting and some small percentageof those prospects are going to actually realize and the ideais thatthe ones that do realize are going to pay you enough in order to sort ofcompensate you for all the small fishing lines that you're putting outthere right. But if I know that the person that I'm reporting to is goingto result on me, which is what most leaders do right, most leadershipresults and if they didn't close the sale, they say. Why didn't you closethe sale like? What did you do wrong? And I know that that's going to happen,then. What is that going to drive me to do it's going to drive me to try toclose the sale under kind of under all circumstances, so what I'm not going todo is tend to push the boundaries. In other words, it's going to drive me totry to close as many sales as possible so that I can sort of fend off thisresulting problem. I can fend off this kind of like when I don't close, I'mgoing to have this deep dive. comeing on me right, so it's going to cause meto maximize the number, not maximize the amount and that's obviously reallybad if people on your team are behaving in that way and if people on your teamare behaving in that way when they're trying to maximize number as opposed toMaximi, actually how much they close the sale for generally, if people arebehaving that way, it's your fault...

...because you're acting like the fans ofthe seahawks yeah, I mean then there's a again whether it's sales or any otheraspect of life. People fudamentally misunderstand like the notion ofexpected value. I have a question for you in my world, so my world isenterprise sales and these are twelve month, sometimes eighteen month, salecycles and one of the things that you mentioned poker so useful for isbecause you're getting feedback all the time on decisions that you make thatare determining outcome. So you have enough data to analyze your process andto make improvements. How do you deal with the situation where these arebinary outcomes? You know we either CAC wiler, we don't and for very largeamounts of money. So the expected value is fantastic, but the forecasting ofthese deals is very difficult and also there's this resulting problem. WhereI'm not getting enough. I don't have that much data for me to in anyconstrained period of time, particularly it startups, because youknow we're trying to like double and triple in twelve month periods, and so how do you deal with this situation?Where you're not getting enough feedback? There's not enough signalcoming back to you in order to you, know, adjust and improve the processyeah. So that's a really interesting question. So let me just roll back sortof a little bit earlier in what you said, because I in some ways thatslower cycle is actually avantageous. So let me just explain why so one ofthe problems in poker is that you're getting so much feedback that the paththat you're on becomes very very clear to you. In other words, you know you'resort of getting pounded by feedback and people aren't natural data aggregator.So it's not like I'm getting a series of results and I'm saying well let mewait and step back and sort of take the average of these results and kind ofwait to make a decision about what each of these outcomes means and I'm goingto step back and I'm going to wait until the end of the session toactually go back and try to figure this out. Instead, what we tend to do is wefeel thaut comes in sequence, so we feel them one at a time and thedecisions that we've made about each outcome. Tan effect the kinds of waysthat we think about the next outcome, not only that you can see reallyclearly when you're sort of on a a downward trend versus in upward trendand the way that we actually view what's going on around us is very pattdependent. So the way that we feel about it, the way that we think aboutit, the way that we analyze it is very passipendent, so you're right there's alot of there's quite a bit of upside to poker in terms of the shortness of thecycle. You get feedback off your decisions within you know thirtyseconds, and so that's really great to be having such a short cycle and it'sreally great to be having so much feed, backcome and such a short period oftime, but there's also a dark side to that and that Dart side actually cancause people to get so sort of emotionally hot and be unable to evenstep back and aggregate those results in any kind of way that they canactually learn from. It is part of the reason why somebody could be playingfor twenty years and continue to make the same mistakes over and over again,partly because of the amount of data, so there's kind of good and bad to it.So when you have a slower sale cycle, obviously there are challenges thatcome with that, just in terms of but you're kind of fishing around in aspace where you're not closing the gap that quickly, and so it feels like you,don't have as much. Certainly, it's true that you don't have as much datato work with in order to make your guesses and it's a slower process, butyou do get a little bit out of that passipendency. It does allow you toapproach it and a little bit more of a rational way. So I just want to justpoint out that there are some good things to kind of slowing it down: Yeah Yeah, yeah orwe're, going to say: Oh no,I do't go ahead because I was just going to move on to the next point. Sogo ahead! No! The next point is probably the interesting one go for it.No, but obviously there are downsides to not having as much data as well,because you know now as you're trying to make your estimates of what theprobability is, that something's going to close you're sort of casting about alittle bit more and your confidence intervals are going to be much wideraround those estimates and then very often, the answer itself that comes inis very remote from a lot of the initial decisions that you made, whichactually increases the amount of luck in the process, because you know youmake a decision to pursue our particular lead and try to close aparticular deal, and it might be eighteen months before you actually getto the result, and a lot of stuff can happen in eighteen months that youliterally have no control over. Not only that within that eighteen monthperiod, there can be a lot of information that reveals itself thatyou didn't have access to at the time of your initial decision, and so thatcan make it hard to sort of stort out. What should I have known, or what couldI have known? You know versus what was reasonable for me to know what was onlygoing to reveal itself after the fact after I already started down the path,so that can become really difficult. Yeah, I mean, I think one of thechallenges is that the time interval that we're all being judged on,especially in sort of high grows startup land with these sale cycles, isout of sink with the length of the sale cycle, because 'm I'm judged on thetime interval that doesn't give me enough data to really build anefficient decision making process around these types of deals right, yeah,so t, basically what I would say about...

...that is that try to look to the good inthis, which is this that one of the ways that I recommend thatpeople deal with this outcome bias with resulting is to actually when you'redeconstructing the decision as much as possible. Try To deconstruct thedecision process prior to the outcome ever having occurred, and if you can'tdo that just because of time constraints, then you shoulddeconstruct the decision making process with people who you don't tell theoutcome to so. In that sense, it's actually kind of good news that yoursale cycle is so long, but you have to get by and from the people around you.In other words, you have to do a lot of really good work to work through whatstrategy you're going to use and make these reasoned estimates as to what theexpected value is of that particular opportunity, and once you've made thatreasoned estimate of what that expected value is, then everybody has to buyinto it and understand and the reason why it's really important to actuallymake these expected value. Estimates explicitly is because in making thoseexpected outcome estimate, you have to actually go through what the set ofpossible outcomes are right. So if this in this case where it sounds like it's binary, it's either yes or no right.It's either. Yes, for this amount or no for this amount yeah, I mean not tointerrupt you, but even just to underscore your point. It's actuallynot quite binary, because it's yes or no, but it's really often times itssnow, which means not right now. It's only binary against a specific timeconstrain. It's not generally binary right. So let's talk about it as aspecific time concern just to simplify it, because obviously we can do anexpected value calculation. That includes that has a conditionalprobability, which is no, but what's the probability that it will occur in alater date, yeah right. So let's take the simpler problem of its yes or no,and in any case it's always for the same amount right. So in order to comeup with anexpected value there, you have to really think about. What's theprobability of yes and what's the probability of no and you have to dothat in an explicit way and if you actually work through thatprocess with a good team where you're coming in with your own estimate,hopefully you're not telling them what your estimate is as yours, trying toget their opinion about what their estimate on that is, because all of youhave different experiences in different ideas and you're all the best expertsin estimating the thing that you're trying to estimate here right and thereisn't a right answer, because it is probablistic in nature and what you'retrying to come up with is your best guess and once you've bought into thatin advance. What tends to happen, because you can memorialize that andsay, okay for opportunity, a here's. How often we thought it would be? Yes,how often we thought it would be. No and here's the expected value on it foropportunity to be same thing for Opportunitto Sav for Opportunity D. now,there's all sorts of really good things that come out of that thing. Number oneis because you've actually worked through that and gotten by and on it,hopefully, because you workd through that as a group or you've actuallyworked through that with the person that is judging you, so they can seewhat you'r thinking processis and that they've made any tweeks that they thinkshould go into that right, so they've sort of been wrapped into part of theprocess, and so they have a little bit of ownership over it as well. Now, ifit's yes, hopefully you're not patting yourself on the back too much, becauseit was in the estimate already of yes and if it's no, hopefully you're notgetting judged too much for it. That's number one number two is because you'reactually actively trying to make these estimates. It starts to get you to beinformation hungry. So one of the problems that we have, if we go back tothat initial description, that I said of Poker, is that we've got two sourceson certainty. One is hidden information, there's just stuff that we don't know,and the other is luck. So, in order to make a really good estimate of howoften you think it's going to be es and how often you think it's going to be.No, you have to actually really try to uncover those two things. So, first ofall, you have to think really clearly about how much luck might be in theprocess like. Even if I do everything exactly right right, even if I don'tmake a single mistake, even if I have all the information I need in order tocome up with a perfect strategy and deploy perfect tactics and trying toexecute on this. How often is this just out of my control, and I have no say inthe matter, so it gets you to think about that really clearly in advance,but the more important thing that it does is that, in order to come up witha really good estimate, what you think those probabilities are in the future,you must become hungry information from information, because you're trying toget those to be more and more precise, becase you're, trying to model thoseoutcomes as accurately as possible in order to do that, you're trying touncover really good inputs into that model, so you're trying to figure outlike what information am I not thinking about what am I missing? Here's areally important one. Why might I be wrong, which is not something that wetend to ask ourselves? If we're not...

...thinking about these explicitly, ifwe're thinking explocitly, we tend to ask: Why are we write when we'reactually trying to create an accurate model of what's going to happen in thefuture? WE START TO ASK OURSELVES: Why are we wrong you're, going to start toseek out opinions and you're going to be especially appreciative ofdissenting opinions that actually help you to calibrate what your estimatesmight be? So it gets you to really focus on the uncertainty, because whatyou're trying to do is narrow down your own kind of cone of uncertainty, rightyou're, trying to make that on nerror, and it gets you to start to uncoverthis stuff yeah and then the last thing it does is kind of the other after thefact effect that it has. That's really really good is not only are you lesslikely to get resulted on both resulting on yourself or having someoneresult on you because you brought them into the process, but now, when you goback and you're trying to get feedback from the leads that you were workingwith, instead of just going and asking the people who said no, why did? Canyou just give me some feedback as to why I didn't get it, which is what ourtendency is? You're also going to go talk to people who said yes and say:Hey. Can you just tell me like what is it about what I did that caused you tosay? Yes, what actually do you think I made a mistake on what could I havedone better? What do you really think the probability of Yes was? Were youlike always a yes and no matter what I did I was going to get it yes. wasthere something in particular I did that caused you to say. Yes, eventhough I did that, were you on the fence or was it a wide margin and thoseare the kinds of questions that we tend not to ask when we actually get it? Yes,we tend to just sort of leave it and say yea me, I'm so excited like look atme, I'm so excellent, but the problem is that it is actually really importantfor your ability to estimate properly in the future to know. Was it a narrow,yes or was it a wide yet? Was it something you did or was it jestthat you were right place right time like and the reason why we don't liketo go in and sort of dake take a deep dive on this and explore. It is becauseone of the things that we really like to do is get those pattron the back ofmoments right to get those moments of feeling a lot of credit and if we go inand the person tells us like. Actually it was really close and I just flippeda coin. It feels like we're sort of losing credit for our own part inwhether that closed or not, because it feels like bad news, then that itwasn't wide and it wasn't like. I was so brilliant that it wasn't even close.But the thing is that, when you actually refocus on my whole goal isalways to be the most accurate estimator like that's what I reallycare about, then that then becomes your reward and the fact that you're evenwilling to go in and talk to somebody and get some bad news on something thatyou thought was good news becomes. What becomes sort of the self reinforcingaction, and the other thing is that when we actually try to think itexpected values this way. The other thing is that we actually get much muchbetter t s at creating a good workstack right like we understand what thehigher priorities are. So its an example like I was working with anonprofit that was, you know, obviously has a lot of grant prospectinghappening, and so it's a similar situation to you. It's very long psycleand it's either a yes or no right. So there's some Awarad amount on the grant.'S A hundred thousand dollar grandd they're, either going to get at yes ora no and it's a long cycle decision. So what was happening when I came intoconsult with them is that they were naturally stacking. The highest dollaramount like the highest award amount grants at the top, and that was a thingthat they were spending the most time on. It was certainly what they wereputting the most senior people on if they were hiring an outside grantwriter you know contractor to come in to work with them. They were puttingthem on these tie dollar account and when I had them Cromin and start doingthis expected value work. What ended up happening wash a much more efficientstacking, because if you have a hundred thousand dollar potential award thatyou're going to get twenty five percent of the time, that is actually theespective value on. That is twenty five thousanddollars. But if you have afiftythousand dollar grant that you're going to get seventy percent of thetime, that's worth thirty five sand dollar. So what happens is that youstart to see that the higher value grant is actually the fifty thousanddollar grant, not the hundred thousand dollar grant en so so it allows you tocreate a more efficient workstack and to actually understand like when it'sworth it to like bring another people who you should be put ing your staff onand then the other question that allows you to ask yourself which is reallyimportant. It's Oh, this hundred thousand dollar grant is only twentyfive percent. Is there something I can do? Is there information that I canuncover? Is there something I can do in terms of the way that I present theinformation or something I can find out about? For example, what the award bodywith the foundation is really looking for in terms of the way that I couldwrite this wrant, that's going to increase that percentage from twentyfive percent to Hihe yeah. Again, it's a nonobvious insight, we're almost atthe end of our time together. Sadly, because I feel like we could talk for along time if you have a couple like methods, foryou know, structures for helping people thinking bets, let's not give them allway, because we want people to read the...

...book, but what are some curistics thatpeople can use if they want to embrace this concept of probabllistic outcomesand working on their decision making process? What are a few mechanisms thatare useful? Well Yeah, thanks for asking me that so the first thing is toactually ask yourself: When you know, would I be willing to bed on this so alot of times. We think things are sure things and when you actually askyourself like well, would I bet on this like what? If someone came up to me andsaid, do you want to bet? How would I feel about this? You find out that it'snot so much a sure thing, so one af bet does it. It actually causes thisuncertainty to bubble up where you start to view it in a more realisticway. It's a good way to get to sort of what your probability estimates are ofoutcomes is to think about them explicitly as Bads as, if someone'schallenging into a fet, but the main actually thing that I would say, andthere wase some hints in it and what I said in terms of like go talk to otherpeople who have different perspectives and make sure that the person thatyou're reporting to is part of the process and you're getting theirperspective as well, is that you know the stuff that we do like, for example,the resulting bias, or in my book I talked about selfserving bias. I talkabout motivated reasoning. This is really part of the way that our brainsare wired and confirmation bias and hindsight bias, and all of these thingsijus very hard on her own for us as individuals to be able to overcome, andit's not the case that just because you happen to know about a bias and justbecause you happen to be a smart person that somehow that's going to make itsignificantly better. It really doesn't, because you know you just kind of Hadeto accept like this is the way I'm wired. This is wy everybody's wired,but the good news is that when we get away from ourselves- and we start to look atother people, we can actually see bias another people pretty clearly. I don'tknow if you've been watching any news lately but like when you're listeningto the pundit speak you're like they're, biased, no theyre bias. This is whythey're biased- and you know we can see thiss very clearly when people are sortof engaging in this kind of reasoning. When it's somebody else. So we canactually take that to really create an intentional way to solve these kinds ofthinking, so that we can get to a more accurate model of the world, which isto say, if I'm really good at spotting other people's bias, they're- probablyreally good at spotting by bias. So why don't? I go find a few people who arewilling to engage in this process with me who are really interested in whetherthey're accurate, whether they have an accurate model of the objective truth,whether they're moving toward that as a goal versus just affirming the thingsthat they are already believe versus just sort of wanting to pat themselveson the back, when they think that they can take credit and cast blame wherethey don't want. Yeah Right. If I can find some people who are like no we'recompletely in the accuracy business, and let's do that together and let'schange the way that people normally interact with each other. Where we'regoing into this with a contract. That not only are we going to be really openminded to those viewpoints that disagree with us, but we're going to begrateful for it, because that is going to help with calibate our beliefs, ind.That is what we are going to get our high from we're not going to get ourhigh from just like. I knew my opinion was right, I'm so smart, but ratherwe're going to get our high from saying. Oh my gosh, like thank you so much forgiving me that perspective, because that has actually changed my mind, yeahwell a willingess. To change your mind. I think, as a hallmark of I don't knowsomething good intelligence. If you're, if you can't change your mind with whenpresented with new information, then then it's clearly not an objectiveopinion that you have right- and here is the thing. I don't want to say thatthe goal is to change your mind, every single time that you hear an opinionthat disagrees with you. I mean obviously, sometimes the things thatyou write, you believe are mostly true, but when you really listen with an openmind to opinions that disagree with you, either your mind will change or youwill not only better understand your opinion, because you will have had todefend it or against somebody who really trulybelieves something different, and you will better understand why that personbelieves what they do and that's actually really really important,because, let's say, for example, that you're competing for a sale withsomebody else who has a different viewpoint of what trategically, whatyou're supposed to be doing in that situation right, and so you have sortof competing strategies and your executing strategy and theire executingstrategy B. If you don't completely understand strategy B, number one, youcan't sort of understand what about that might be good that you shouldincorporate into your own life, but also, even if you decide that it's nota particularly good strategy, really deeply understanding what they're doingand why they're doing it is going to help you to more effectively executeagainst it. You actually beat it better because you're actually taking the timeto actually understand it, not in a...

...straw man way in a really dismissiveway of that's just dumb, but to actually really take a deep dive onunderstanding why that person is doing what they're doing and that's actuallyincredibly helpful to you. I completely agree the last final thingI will say, because I just listened to this podcast and it was a differentpodcast about a different cognitive psychologist. Actually, who was talkingabout because I just think it's fascinating that I agree with you thatthat you sort of you want to get a tribe of people, and sometimes yourspouse is that person that helps you pursue and seek objective reality. Thenthat runs counter to some of the work that other cognitive psychologists havedone, which says that the objective reality that humans perceive is it'slike a user interface, it's a construct for the world, but the world doesn'tactually exist. The way that we perceive it. It's a construct. That'sbeen developed, that's evolutionary successful, so I don't know anyway. Soactually, I completely agree, and I think that that's the point is that if our goal is to because whatwe're doing in terms of our brains as we're always modeling the world, wehave a model of the world. We're not seeing the world as it is objectivelytrue, we're interfacing with the world through this model that we have of itto our experiences of it so actually fully recognizing. That is what causesyou to go and find a really good decision pod and say we want to try tocome up with the most accurate model of the objective truth. We want to try toget to what's objectively true as much as possible, instead of just goingaround and believing that things that are going on in our brain are right,yeah. So that requires an open mindedness, because what that means isthat if you just go around and you think well what I'm seeing is theobjective truth. Then, when someone sees the world differently than youjust automatically think they're wrong, because you don't recognize thatthere's an interface between you and the world right, so you just think.Well, I just see the world for as it is, and if you don't see it the same way Ido then I don't know what's wrong with you you're blind or dumb or something,but once you recognize exactly what you said, which is that we're justoperating off of a model of the world, then what you recognize is that willother people have different models and my model is not a hundred percentcorrect, I'm just trying to get it as close as possible. So so I shouldalways be trying to calibrate this, and I should always be listening to otherpeople who view the world differently than I do with an open mind, becausemaybe they have something more right than I do. Yes, I agree with you theonly time I probably disagree is if you've done all of the work and all ofthe thinking- and you have what you believe to be. You know you've done asmuch work as you can. You have a model that you feel as accurate. There arestill people that disagree, you've considered their opinion and they'restill wrong. I'm obviously speaking on politics, but you know that certainpoint you know ' like Thoe', so I can't be both sides on everything you knowthe world. The Sky is blue. I have to believe that yeah. So so you know whatso. I think that that goes to strong convictions, Lucy leheld. So when we'remaking our decisions, we want to make them in a strong fashion, saying I'vegone to work. This is the best information I have right now, and sotherefore, I can decide off of this, but always sort of be open minded tolistening to th other side. Now here is where I don't listen to the other side,when I don't think that the other side is engaging in in genuine way and inpolitics. I think that that happens a lot right. So I think that people arejust engaging not for the purposes of seeking truth, but for the purposes ofcausing controversy or being provocative or you know whatever itmight be, and then then I'm not going to really consider what you're sayingvery much, because I don't think that you're engaging in an authentic wayright. So as long as you authentically believe the thing that you're believingand you authentically think that this is true and that this is what's bestfor the world, I will always engage with you and even if I've come to theconclusion that I'm really sure that I'm a hundred percent right, I stillthink that I'm supposed to really try to understand your side, because, firstof all at helps me have compassion for you and not think that you're a badperson just because you believe something differently than me, which Ithink is actually really important. The other thing is that it really helps meto sort of decide in relation to you right like if we have completing values.I need to think about that. If I want to execute on the things that I believeare right, I need to really understand genuinely why you disagree with me soand then again, and the other thing is that sometimes in my change my mind alittle bit through that reengagement, so I'm always sort of trying to do that.That being said, I don't waffle when I go vote right because at the momentthat I vote I'm voting based on the opinions in the beliefs that I haveright now and who I think is going to exicute on those opinions and beliefsthe best an I do, that with absolute conviction and then after that I'llengage with someone who voted for somebody else to try to understand whythat makes a lot of sense. Anni. So the book is called thinking in bets. Whatis the rest of the title? I don't how Marter decision when you don't, whenyou don't know all the fact, that's Exactdo, you have er preferred as therelike a bookseller where you get a higher cobition or something like thator justhappens on yea. You know, I don't know like just go: Go to yourlocal bookstore! You Know Amazon, I'm a...

...big supporter of Inda book, so I loveit when people support Indean, independent bookseller, so you know, ifyou can do it that way, that would be amazing. There's actually a tigt calledInnyboo the best way to engage with me, thoe social medias on twitter. At Annie, Duke I'm actually incrediblyactive, I create all my own content for that and then another way to engagewith me is: I have a newsletter if you go to my website, Anda dukecom you'llsee ar chives of the newsletter, and the newsletter is actually basicallyjust executing on what we talked about today is so taking events currentevents that are either you know things in science or, for example, politics ortechnology or whatever it might be, and willy applying this kind of frameworkto thinking about. What's going on in the world, like I say you can readbefore you buy before you subscribe, but it's about two to threethousandwords a week that you'll get for me really kind of practical application ofthis kind of thinking. The other thing is that there's a contact for him onthere and if you write me, I will respond. I don't think that I haven'treponded to anybody, but I mean I try to. I try to respond to a hundredpercent of the people who write me because I love hearing from people whoread my newsletter, who who'v read the book because that's the best way for meto learn and to understand you know what people are thinking and I've alsogotten some really cool pointers to other really quool verses ofinformation from people who are readers of mine or different Te, just differentthoughts that they've had, and so that's a really fun thing. That'sfantastic, so lit'sten! Thank you so much for participating and for joiningus today. The book one last time is called thinking in bets making smarterdecisions when you don't have all the facts. andhy thanks for joining us.Thank you. So much for having me Fiker, Hey folks, this is Sam's Corner, wasreally honored and excited to have any duke on the show any, as we know, hasone multiple world series of poker, Bracelet shews on the celebriteapprentice, but most importantly, she's a trained cognitie psychologist andstudied at the University of Pennsylvania, sishe incredibly insightful, and her new book is called thinking in Bets and the whole point ofit is that we have to understand that decisions are bets on the future. Ithink that's a really interesting way of thinking about it and life isprobablistic and when you're, resulting, which is the phrase that the think theyuse in poker, which is focusing inordinately on outcomes, you're notgetting the whole picture when it comes to sales. It specifically comes down toforecasting accuracy as an important determinant of the efficacy and successof our work process and of our sales process and any mentions that underforecasting and over fodecasting are both equally bad. So we need todiagnose and dissect the process. Even if you know we say the dealis going tocome in for a hundred grand and it comes in for two hundred grand yeah-that's a great upside surprise, but we have to understand why we wereinaccurate and we also have to not inordinately focus on the outcome,because the outcome is a result of a series of probabilities. We have tosort of understand statistics and focus on the most probablistic outcome.Understanding that probability means that sometimes it's not going to go ourway. I think it's a really helpful framework and it helps keep us and keepour perspective in line as we go through the world of sales. I alsothink she talks about assembling a tribe of people that are going to helpyou pursue objective reality, which is a really a way of saying people thatare going to challenge you on your assumptions, but in the spirit ofpursuing truth, not in the spirit of you know, sort of personal denigrationand for a lot of us like me, my wife does that, but you know get in acompany or a culture where honest direct feedback, not about you. As anindividual, but about the process, helps you challenge your assumptions,change your mind and update your perspective. So that has been Sam'scorner. It is perhaps a more sereval episode, but one that I really enjoyed,and I really think the book is great now to check out the show, notes, seeupcoming guests and play more episodes from our incredible endup of salesleaders, visit sales, hackercom and head to the PODCAST TAB. You'll find usanywhere podcasts are found if you enjoye the episode please share withyour peers on linked in twitter or elsewhere, always unclear whith. Thatword and the cofee means. I guess facebook maybe write a handwritten noteand send it in a letter di you want to get in touch with me, find me ontwitter, samf, Jacobs, Boron Linkdon at Lintoncom, slashand Sashdam of Jacobs,once again, big shout out: Toour Sponsors Aircall, your advanced CalleCenter software, complete business phone and contact center, one hundredpercent natively integrated into any serum and outreach a customerengagement platform that helps effectively and efficiently engagedprospects to drive more pipeline and close more deals. Now I will see younext time.

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