What's on Your Mind: What is a Good Decision?

Ram Ahluwalia & Justin Guilder

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Episode Description

Ram and Justin share their decision making frameworks?

Episode Transcript

[00:00:00] Hey, Justin. How are you? Hey, Ram. Happy Friday. I'm doing well. Good. You too. The snow has melted here. So the burden of shoveling is gone. That's good. You got quite a bit of snow. We got quite a bit of rain here in DC. So foggy backyards. We did it. So what do we want to talk about today? A lot happening. We got the Bitcoin ETF that was launched.

It was exciting. We did a whole show last week on that, so we're not going to spend much time on it this week. Take a look at it. It was with Galaxy Digital's Alex Thorn, VanEck's Pranav, it was with Quinn, who's head of capital markets at Maple. It was really fantastic. And what's happening now is playing, which is exciting.

So that was one. So that was a great conversation. This week I had a conversation with Jeff Yang, who is the founder of Redpoint Ventures. And [00:01:00] after 30 plus years in venture, founded a couple of businesses, one with LL Cool J, one with Matt Damon and Ben Affleck. A. Socky company with his family and a company called Curon Health, which is a longevity and wellness company that does high end client service to assess an individual's background and then help them grow.

Yeah. That's the venture firm that he was. They've done one or two interesting investments. It looks like. Yeah. They've got a few. Successful perhaps. Yeah. Yeah. Nubank, Stripe, Snowflake, Twilio. He goes back to day one when they were investing in things like Evo. So talk about a long term success story.

Incredible. He's on the board of the U. S. Olympic Committee Foundation [00:02:00] and Warner Brothers, you name it, he's done it. And now he's focused on longevity. Among other things. So what did you all get into in that topic? Was it like how he approaches longevity and tactics or? A lot about the business of here on life and how they assess and measure individuals and then how they help them grow across what dimension.

So I think he talked about four dimensions of health, metabolic, cognitive, physical, and mental, how they holistically evaluate it. Individuals and then how they coach them up and then how data drives their approach. Also talked about, what they see in different decades of life and how intervention at certain times is What that can mean for your healthspan, because we all want a long life, but we also want to be healthy through that long [00:03:00] life, right?

So the concept is not just live a long time, but be healthy for a long time. And so that's really their focus is healthspan. So great conversation podcast launched this week. Check it out. Great conversation. So let's look up a Lumida legacy on Apple, Spotify, et cetera. And this is a period in life. So they cater to wealthy individuals that want concierge services to extend life, or it's just really, how does one relate to this service exactly?

Yeah, that's right. This is for the executive out there who says, I want the data and science behind elite athletes. For my longevity, they've got a team of experts, whether it's physical trainers, nutritionists, quite a team and built a lot of interesting technology and. Really have the capability to help identify what [00:04:00] you need to do to achieve your long term goals.

Super interesting. There's a lot of focus on longevity and I know it's one of our secular investment trends, our personal interests, a lot of clients ask us about it. Fred Escher, I'm the founder of Coinbase and paradigm analysis shifting to longevity. What good is money if you can't live long?

No, that's exactly right. I think Sam Alvin has a little venture in that space. Help people live another decade. You what I was going to say as a kind of conversation is you were really on top of the Bitcoin ETF, as well as the implications for the last six or more months. About some of the upcoming regulatory decisions that would need to be made and the market conditions that existed as a result of that.

And so to me, There was, you made a good [00:05:00] decision many months ago, and I want us to talk a little bit about how do you make a good decision? I have frameworks for decision making. I know you have frameworks in common, but I think having a conversation about that would be really interesting.

Let's do that. That's a fun, that's a really fun topic. This is a great. Building block, evergreen conversation. I've written out my decision making framework. Actually, I have it in a Google doc. Actually, I just looking at it right now too, although I could do it off the top of my head. But yeah, so, decision making, I think the first step is what are the stakes?

Are the stakes high or the stakes low? Cause your approach changes. The second is a first step. Let's hang on that first step. And I think that's a really big one. Cause I talk about it as. I'm like, reversible versus irreversible decisions. I was going to go there next. That was the second one, right? Yeah.

I guess they could be high stakes or low stakes and reversible or irreversible. So maybe [00:06:00] it's a two by two matrix there. But if you get to make the decision again, frequently, and it's reversible. Don't overthink it. So there's that step one, right? Correct. Exactly. It's what's the level of scrutiny you have to place on making the best decision because everything costs time and are you focused on the right decision?

So yeah, no, I agree. If it's irreversible and it's low costs, low stakes, like what you're having at the brunch tomorrow doesn't matter. Let's make a decision. But if it's high stakes. And the high stakes ones are so important that they each may have their own sub decision making framework, like hiring is one, who you get married to is another one.

Yes. And each of these I have a decision making framework for, I've only been [00:07:00] married once. Who you start a business with. Oh yeah, selecting a co founder absolutely is a big one. Those decisions I spent more time on than like what car do you buy to be honest. I mean they're that big a deal.

Yeah, that's a reversible decision even though there might be some financial consequences. You don't like the car, you sell it. Unless you bought a brand new car, It doesn't really even lose value, like if you're buying a two year old car, it's a completely reversible decision. It might cost them time and headache to resell it, but truthfully, it's a quite reversible decision.

And here's where reversibility and stakes come together is in investing, right? So if you're investing in a private equity venture capital investment, private equity fund, or a small business, if it's not liquid, then the stakes are high. So you gotta get that right. By the way, even if it is liquid, [00:08:00] the stakes are high.

And this is the point that Warren Buffett makes where he's look, just act as if you only have 10 investments you can make. You punch a hole in a card, and when you punch 10 holes, you're done. And his point is, act like an owner. And what he's saying is, raise the stakes. I know more people that spend more time researching the best no blower.

Then making a stock. You'll spend three hours researching the snowblower. I've seen this happen before or the leaf blowers. The other, I believe it to the Warren Buffett. I learned this from Nigel Morris, the founder of QED and one of the co founders of Capital One. He would ask his partners and. If this was your last dollar to invest, would you invest it in this company?

And I like that mental model as well. I like investing. I like that as well. So right. [00:09:00] Are the stakes high? Is it reversible? Or is it liquid? And then if the stakes are high enough, there may be its own framework, and we should talk about some of those too, because they're fun to get into now once you're within the decision set.

So you said, all right. We're looking at a decision. My first item I focus on is what is the primary consideration? I don't like pros and cons lists. I think they're the worst actually for making a decision. I know a lot of people like, oh, you make a pro and con list. If you're not sure what the primary consideration is, then go make the pro and con list.

But then focus truly on what matters and make it narrow. In fact, try to force yourself to make it one factor, one primary consideration. So can you give me an example of what you mean by a primary consideration? Yes. So [00:10:00] here's an example. Should I go to this conference or not? Really simple decision.

Happens a lot. People on your team will say, I want to go to this conference. You got to make a decision. So my primary. The decision rule I do is very simple. Are my customers going to be there or not? If yes, then I'll go. If not, then I won't. I can have a pro con list saying are contractors I can do business with will be there?

Will I learn from the conference through a panel? Is it convenient for me to go to? Did I go last year? Am I invited to speak on a panel? I can come up with 15 things on a list. And probably 12 of them will say go. I know someone there, I might just make up, I have a friend there, I can learn something new.

Probably 12 of them will say go. And that is the danger of self deception, which is the killer of a good deception, a good decision. Self deception. You are your own worst enemy when it comes to making a good decision. And [00:11:00] if you can, Focus on the primary consideration matters so much. And, Warren Buffett talks about this and Charlie Mung when it comes to investing in business and teams.

And you talked about this with selecting co founders too, it's like honor and integrity, right? So if you're forced to make a primary consideration, you really separate what truly matters or who you're going to Build a family with you start to superficial items and you really, and then of course you bring in other considerations, right?

But you try to get past important considerations first. You try to falsify those first. So is there a kind of relationship between the say stakes involved in the number of considerations, right? So we're only right now in this quadrant of irreversible high stakes decisions. And [00:12:00] then, do you start to add secondary and tertiary considerations the higher the stakes go?

Is that how you think about it? Uh, I think that is relevant in the sense that we have criteria we look for, right? We have criteria. We're trying to find a house with, Six beds and three baths and a garage, but there is a maximizing function, ideally, and that's the primary consideration, the criteria help to filter, but ideally we're maximizing the same way, like when you're hiring world class talent.

What are we solving? What are we trying to maximize here? There's of course, criteria. There's minimum criteria required. They speak English, like hopefully there's higher criteria than that, but give you an example, right? But there's some what's the spike this talent has that we're going to maximize for if you're looking for a product manager, there are many kinds of product managers and one JD won't narrowly, won't [00:13:00] necessarily take care of You have the product manager that is go to market focused, you have a product manager that is good at going from zero to one and discovery and the iteration and finding product market fit.

There's another product manager who's a technical product manager, has those more narrow and look, of course you could say no, those are actually three different roles, but most our reps will say, I have a JD for a product manager and they're different kinds of products. Some product managers have managed teams.

Or have not, and have to influence engineers. So what's the spike you want? Do you want the spike in influence of other engineers? The product manager is purely an influence role, very hard role because of that. Or is it in product visioning? So what's the spike and where's everything else you need to have?

Proficiency as a standard, as opposed to mastery or excellence. So I always try, what's the primary consideration? Where does it, where do I need excellence? [00:14:00] Because these things trade off also, right? Someone that's excellent in one thing may not be excellent in another. The person might be autistic. But excellent.