Thinking in Bets: The Skill School Never Taught You
Why most decisions fail because we focus on being “right” instead of making smarter bets and how to break the cycle.
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In my early career, I judged most of my decisions by their results. When things went well, I thought it was all me, and when things went poorly, I felt I messed up. I started to lose confidence, avoid risk, and repeat a bunch of mistakes. This made me lose momentum, as I second-guessed a lot of deals and hesitated out of fear of being wrong, which made me miss potential opportunities.
This is exactly what Annie Duke talks about in Thinking in Bets, a book I recently read and reflected deeply on in terms of how I could apply the principles. Honestly, her entire framework maps perfectly onto partnerships, negotiations, and long-cycle commercial plays because most people in deals behave like they’re trying to win arguments, not increase expected value.
Let me explain.
The Illusion of “I Know This Will Work”
In corporate environments, everyone loves certainty.
The clean narrative. The big confident prediction.
The tight deck that somehow confirms what we want through an intricate, polished presentation citing facts and models that make it work in theory.
But that’s not how real deals work. A partnership is a probabilistic game. You never have full information.
You never control all the variables. You never actually know how the other side will behave once contracts are signed and the initial enthusiasm fades.
Yet people still go in trying to convince themselves (and their boss) that “this is the one.” This becomes emotional comfort, not actual strategy.
Thinking in Bets teaches that certainty is an illusion. Good decisions are not the ones that feel certain they’re the ones where the expected value is positive, even if the outcomes fluctuate.
What’s expected value? Here’s a super simple example:
Imagine someone offers you this deal:
50% chance to win $10
50% chance to win $0
EV = (0.5 × 10) + (0.5 × 0) = $5
This doesn’t mean you’ll get $5.
It means:
“If you played this game 100 times, you’d average $5 per play.”
The expected value is $5, even though you never actually win $5 in any single round.
The great part about thinking this way is that you stop fixating on the final result as a fixed number. This was a huge breakthrough for me personally. Previously, when I forecasted or evaluated a deal, I felt like if I didn’t hit the number or the deal didn’t perform, that meant failure. But actually, as long as the thinking process was right and the expected value was higher than the alternatives, it made sense to do the deal.
If the deal ultimately doesn’t perform, that’s part of the probability game.
The key is to focus on the process, not the result.
Then rinse and repeat.
Most People Judge Decisions by Outcomes
Partner launched late? Blame the partner.
Revenue lower than forecast? Blame the model.
This is “resulting,” the exact trap Annie Duke warns about when evaluating the quality of a decision purely by its outcome.
And yes, you’re probably thinking: Shavaye, this sounds like a very elegant way of not blaming yourself when sh*t hits the fan :-)*
There will always be situations where someone genuinely dropped the ball, and I’m completely aligned with holding people accountable.
But then there’s the inverse:
“This deal was great! You’re a genius.”
“Results were through the roof!”
“The partner crushed it!”
“The team worked around the clock!”
Yet we rarely stop to ask:
How much of that was skill vs luck?
We tend to think we succeed because of skill and fail because of luck. But both outcomes are always a blend of the two.
You might make the right decision with the right data… and still land a mediocre result.
Or make the wrong decision with the wrong data… and somehow look brilliant.
What matters is the process and understanding that each deal is a bet.
Focus on making the right decisions.
Rinse and repeat.
Why Are We So Attached to the Result?
From the time we’re kids, we’re trained to think in right or wrong, A or F, correct or incorrect. School conditions us to believe every question has a single answer and every action has a clear outcome. You either “got it right” or “got it wrong.”
But in real life, there’s always missing information. When we make a choice, it’s based on what we know right now. The answer may change as more information reveals itself.
Now that I think about it, we should definitely bring statistics into the school curriculum much earlier and start teaching kids this… instead of us, as adults, trying to un-school ourselves. (Anyway, that’s a deeper topic for another post.)
Back to Annie Duke…
Her whole point is that binary thinking makes us terrible decision-makers. We grow up believing that a good outcome means a good decision, and a bad outcome means the opposite.
That’s the trap she calls resulting.
3 Simple Techniques To Help You Make Better Bets
So what can we do daily to shift our thinking? Here are three simple techniques I find useful:
1. Replace “Was I right?” with “Was that a good bet?”
After every decision, win or lose, ask:
Given what I knew at the time, was this the highest-EV option?
Did I rely on data, or did I rely on hope?
This shifts attention from results to decision quality which is the core of Annie Duke’s work.
Why it works:
It breaks the childhood conditioning of “right/wrong” and trains the brain to evaluate decisions the way a professional investor or poker player does.
2. Do a Pre-Mortem Before Big Decisions
Instead of asking, “Why will this work?” ask:
“Imagine this deal failed spectacularly six months from now. What likely caused it?”
List the reasons. Then mitigate them before signing anything.
Why it works:
It puts your brain into probabilistic mode, not optimistic mode.
3. Separate Outcome Review and Decision Review
After any deal, run two separate reviews:
Decision Review (before the outcome biases you):
What did we know?
What options did we compare?
Why did we choose this one?
What were the known risks?
Outcome Review (after results emerge):
How much was skill?
How much was luck?
What would we change next time?
Why it works:
It prevents “resulting” - blaming yourself for bad luck or taking credit for good luck.
Final Thoughts
Thinking in Bets gave me permission to stop beating myself up for every deal that didn’t land the way I wanted. It forced me to separate my identity from the outcome. Once I did that, I started making cleaner decisions, taking smarter risks, and moving faster because I wasn’t stuck replaying every miss like it was some moral failure.
Deals are messy. People are unpredictable. Markets shift. Partners change their minds.
But if you build a process that consistently puts you in high-EV situations, you win over time. Not every deal, but over time.
That’s the real game.
Not being right.
Not calling every shot perfectly.
Just making better bets, repeatedly, with less emotion and more clarity.
If there’s one thing you take away from this:
Judge yourself by your process, not a single outcome.
That mindset doesn’t just make you a better dealmaker, it makes you harder to shake, harder to distract, and a lot more effective in the long run.
Because once you stop needing every bet to work…
you finally start placing the ones that actually matter.