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Jeff Bezos explains the perfect way to make risky business decisions

Correcting Bad Decisions Fast

Stay flexible and be prepared for a speedy course correction of things that break down with a bad decision.

Get comfortable with uncertainty, and master the art of quickly recognizing, and correcting bad decisions.

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Jeff Bezos explains the perfect way to make risky business decisions

Jeff Bezos explains the perfect way to make risky business decisions

https://www.businessinsider.in/tech/jeff-bezos-explains-the-perfect-way-to-make-risky-business-decisions/articleshow/58156477.cms

businessinsider.in

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Key Ideas

Jeff Bezos

Jeff Bezos

"Most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you're probably being slow."

Not Just Speed

It isn't just about making fast decisions.

The challenge is to make informed, high-quality decisions, with inadequate or incomplete data, and do it fast.

Correcting Bad Decisions Fast

Stay flexible and be prepared for a speedy course correction of things that break down with a bad decision.

Get comfortable with uncertainty, and master the art of quickly recognizing, and correcting bad decisions.

Being Wrong 

It is better than nothing. Being slow leads you nowhere but being wrong while moving fast can lead you somewhere eventually.

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Data and how it frames your thinking
Data and how it frames your thinking

What’s more important than how much data you have is how it frames the way you think.

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Thomas Bayes'd thought experiment

He wondered how he could predict the probability of a future event if he only knew how many times it had occurred, or not, in the past. Bayes figured out that even when it comes to uncertain outcomes, we can update our knowledge by incorporating new, relevant information as it becomes available.

His theorem describes the probability of an event, based on prior knowledge of conditions that might be related to the event.

Importance of using probabilistic thinking

Data can be imperfect, incomplete, or uncertain. Most of the time, there is more than one explanation for why things happened the way they did; by examining those alternative explanations using probability, you can gain a better understanding of causality and what is really going on.

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Our emotions are short-term biased

Our emotions are obsessed with the present moment because it’s difficult to look past our immediate fears and anxieties. And this prevents good decision-making.

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“Risky” behavior you should consider
  • Propose “moonshot” ideas, knowing that 90% of them will get shot down, but that if one of them gets accepted, it will be a huge boost to your career.
  • Be excessively bold in your dating life, stating exactly who and what you want.
  • Buy difficult books expecting that most of them won’t be useful to you, but also that, occasionally, one will completely change your life.
  • Say yes to every invitation knowing that most of the events/people will be boring, but that occasionally you’ll meet someone really interesting.
Optimizing life for fewer regrets

Most of us are afraid of messing thing up. But we rarely ask, “Would I regret that failure?” If the answer is “no,” then that is absolutely a risk you should pursue.

Sometimes, the right decision becomes crystal clear when put into these terms.

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5. Read For Immediate Rewards

Studies show that there’s correlation between human behavior change and immediate rewards. Receiving immediate rewards releases dopamine in our brains, which compels us to seek more of the a...

4. Use Triggers to Your Advantage

We often start habits and drop them a few days later. To combat this, you can use triggers to remind you to practice the habit. Examples of triggers:

  • Reading at the same time everyday will prime your brain to automatically trigger itself to begin reading.
  • Leaving your books in places you will easily see is another trigger. If you read books digitally you could pin your tab so it’s always in your visual perspective.
3. Stop Before You’re Finished

Studies indicate that the Zeigarnik Effect is real. It says you are more likely to recall uncompleted tasks than completed ones.

Knowing this pattern of our brains, we can trick it by forcing cliffhangers when we’re reading books. It’s hard to stop reading in the most interesting part but it will make you want to start reading again.

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