People are making bad decisions. Two main factors contribute to our inability to make good initial decisions. First, we don’t have the time to think. And second, we don’t have a firm understanding of how the world works. You'll make better decisions if you understand how the world works and apply a framework. These better decisions will also free up your time, reduce your stress, allow you to spend more time with your family, and achieve success. Video of this talk at https://www.youtube.com/watch?v=6dOSjQUJcqE

1. LET’S TALK ABOUT
DECISION MAKING
INDUS KHAITAN
ENTREPRENEUR-AT-LARGE
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2. QUICK BIO
• Two startups
• One seed fund
• Lots of working and defunct software codehttp://khaitan.org
@1ndus on twitter
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3. GOOD (& BAD) DECISIONS I’VE MADE AT
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4. ”
“ A conclusion or resolution
reached after consideration.
- Dictionary.com’s definition of Decision
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5. WHY LEARN TO MAKE
SMART DECISIONS?
• All the information is out there for everybody
to learn
• Skills of humans have gone up
• Everything equal, decisions differentiate
success from failure
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6. RULE OF TWO
• The person with the fewest blind-spots wins
• Don’t aspire to be a problem solver. Avoid the
problems by making better decisions
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7. ANALYSIS VS. PROCESS
Widespread Belief that analysis reduces biases
Imagine a big decision made by your boss,
organization – How would you rate the quality?
Analysis is a good start to remove bias
Process ensures objectivity in analysis
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8. HOW DO WE MAKE BAD
DECISIONS?
• We fool ourselves
• We are not ready
• We don’t gather information
• We get engulfed by four villains of decision
making
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9. What are the popular examples of bad decisions?
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10. THE FOUR VILLAINS OF BAD
DECISIONS
Narrow Framing
Confirmation Bias
Emotional rollercoaster
Overconfidence
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11. Wrap
✔Widen Your Options
✔Reality Test Your Assumptions
✔Attain Distance Before Deciding
✔Prepare to Be Wrong
The Villains
➤To overcome narrow framing
➤To overcome confirmation bias
➤To overcome emotions
➤To overcome overconfidence
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TAMING THE VILLAINS USING “WRAP”

12. HOW TO MAKE SMART
DECISIONS
• Figure out how the world works
• Use frameworks and toolbox such as Mental
Models
• Ditch biases
• Debug using a decision journal
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13. ”
“ What the pupil must learn, if he learns anything at all, is that
the world will do most of the work for you, provided you
cooperate with it by identifying how it really works and
aligning with those realities. If we do not let the world teach
us, it teaches us a lesson.”
Joseph Tussman, UC Berkeley Department of Philosophy
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14. LEARN HOW THE
WORLD WORKS
• Rules the Universe plays by (Physics and
Math)
• Rules life on Earth plays by (Biology)
• Rules humans have played by (History)
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15. LAWS OF PHYSICS AND
MATH
• Velocity does not equal Speed
• Reciprocity
• Multiplication by Zero
• Relativity
• Leverage
• Randomness
• Compounding
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16. LESSONS FROM
BIOLOGICAL HISTORY
• Life is Competition
• Life is Selection
• Life must Breed
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17. LESSONS FROM HUMAN
HISTORY
Human behavior has changed, but not human nature
Ideas are the strongest things and shape future generations
Fragile relationships break, but strong win-win is super glued
Lack of adaptiveness to change is a losing strategy
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18. DITCH BIASES
• Availability bias – “Recall the recent, frequent
and important.”
• First conclusion bias – “First idea gets in and
then the mind shuts.”
• Hindsight bias – “I told you so. Knew-it-all-
along.”
• Confirmation bias – “Reassurance, rather than
new fact gathering.”
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19. MENTAL MODELS
• Framework for understanding how the world
works
• Toolbox for making decisions
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20. TOP FIVE MENTAL
MODELS
• Inversion – “Just tell me how I’m going to die
so that I never get there.”
• Occam’s Razor – “Simplest explanation with
the least moving parts.”
• Hanlon’s Razor – “Never attribute to malice
that which can be explained by neglect.”
• Second-order thinking – “Effects have
effects.”
• Map is not territory – “Reality is different
than abstraction.”
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21. DECISION JOURNAL
• Quality control log for decision making mind
• Write down
• Situation
• Problem
• Variables
• Alternatives
• Outcomes
• Expectations
• Mood/Feelings
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22. SUMMARY
• Everybody has all the skills, with smart
decisions we can lead a good life
• Decision making is not like writing a book, it is
an art and a science
• Rein your biases and use mental models
• Keep a Decision log
• There are exceptions, use multiple techniques
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23. REFERENCES
• Generous helpings from FarnamStreet,
BrainPickings, 25iq, Psychology Today
• Decision Making by Alan McLucas
• Decisive by Chip Heath and Dan Heath
• The case for Behavioral Strategy by Dan
Lovallo and Olivier Sibony
• Poor Charlie’s Almanack by Peter Kaufman
• Thinking Fast and Slow by Daniel Kahneman
• Seeking Wisdom by Peter Bevelin
Thank you for inspiring!
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24. GOOD LUCK!
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