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Discount your optimism
Remembering hidden parts of the denominator
There's a decision you're trying to make right now. You're thinking about the upside, the downside, and maybe getting inspired by the "keep g0ing! u 2 can do it, don't quit!" posts on social media.
(OK, maybe the grammar isn't that bad. But you know the posts I mean.)
I'm always inspired by John Wooden, so let's return to basics:
• **opportunity cost**: what else could we do with that time/money/effort?
• **survivorship bias**: how many other people/companies did the same thing, but it didn't work out so I didn't hear about it?
I'm an optimist by nature, so I have to constantly remind myself: the denominator in my ROI thinking needs extra padding for everything I'm not seeing, or can't.
(Shoutout to this new podcast ep with Annie Duke, one of my favorite authors on decision making.)