Aram Attar

Truth. thevcfactory.com/entrepreneu…

“When the facts change, I change my mind. What do you do?” — John Maynard Keynes

This is one of the most widely used economics textbooks, and yet one of its central tenets is repeatedly ignored by top decision-makers. N. Gregory Mankiw, Professor of Economics at @Harvard, prescribes sunk costs should be ignored when decision-makers ponder economic decisions. Yet many top execs, entrepreneurs, and VCs fall prey to sunk cost bias, escalating commitment to a failing course of action instead of taking the loss. We seem to be naturally drawn to salvage whatever time, money, or commitment we’ve put in, even if doing so leads to a poor decision. “Sunk cost bias is one of the biggest decision traps in organizations, across sectors.” — @JenniferLerner, @Kennedy_School

“oat milk latte” is so random yet so true 😂😂😂

@HowardMarksBook (Oaktree): Choose work that uses your strengths, avoids your weaknesses, and makes you happy. Source: My First Million

The difference between the risks we perceive and reality is often due to one or several of these mental shortcuts we use to understand the world: - What's easy to imagine or remember (availability heuristic) - What can be seen or easily predicted (certainty heuristic) - How much we feel we're in control (controllability heuristic) For example, traveling by car can seem safer than by plane: we're behind the wheel (control) and we all have in our minds images of terrible plane crashes (availability). Yet, far more people die in road crashes in the US than in commercial aviation (in the US, the death rate per passenger-mile is about 1,200 times as high for passenger vehicles as for scheduled airlines). Taking base rates into account and, more generally, pausing to examine our first impressions can help us make better decisions.

People are more afraid of shark attacks than fireworks, even though the latter kill 11x more. That’s partly because shark attacks are more often portrayed in the media and are easy to imagine, creating vividness. What’s available is not necessarily more likely. Taking into account base rates can help reduce such biases.

Steve Jobs: The world you inherited can be changed. You can take an active part in shaping it. Source: BarrancoStudio

Steve Jobs (NeXT): NeXT must deliver something uniquely valuable to higher education. Without that, it has no reason to survive. Source: Steve Jobs Archive

“The essence of ultimate decision remains impenetrable to the observer—often, indeed, to the decider himself.” — John F. Kennedy, 1963 A striking acknowledgment from a sitting president who was on the analytical side. Even the person making a decision may not fully understand how they arrived at it.

Few people have what it takes. But startups do need employees.

What sets superforecasters apart (those among us who are consistently better at predicting what will happen) is not just that they’re smarter or more open-minded. It’s their willingness to recognize that judgment can be trained and to commit, for example, to including probabilities and base rates in their thinking. They’re also open to being measured. I wonder how that translates to Power-Law Masters in VC, the rare investors who have generated billion-dollar outcomes more than once.

Don Valentine (@sequoia): Learning to tell a compelling story is essential to raising money. Source: Stanford Graduate School of Business

Elon Musk (Tesla / SpaceX): Creating OpenAI to counter Google helped accelerate the very technology he was worried about. Source: The Economist

@HowardMarksBook (Oaktree): Let your children make decisions, including wrong ones. They need the experience to learn how to choose for themselves. Source: My First Million

Kenneth Griffin (@Citadel): Study your winning investments too. Understanding what you got right can help you repeat it. Source: Norges Bank Investment Management

“A wealth of information creates a poverty of attention.” — Herb Simon, 1971 Simon was writing about how organizations could cope with an abundance of information when human attention remained scarce. His observation feels even more relevant in the age of generative AI: he was one of the founding figures of artificial intelligence.

Martin Eberhard (@Tesla): Building a startup means keeping your team steady through the highs and lows, even when your own confidence is shaken. Source: Kim Java

Daniel Kahneman: Sounding confident can make someone look like an expert. What matters is whether they actually get things right. Source: Intelligence Squared