vector research partners ( aka V4RP )
The Tactical Guide to Making Better Decisions When Starting and Scaling Companies
The V4RP team has been lucky to work with retired poker player and decision-making expert Annie Duke in a special capacity these past few years. Here, we open-source some of the advice she gives to help founders face down uncertainty and make better decisions.
The Tactical Guide to Making Better Decisions When Starting and Scaling Companies
Outline
“You’re slogging your way through an uncertain system. Outcomes and decisions are loosely linked, and there’s so much hidden information.” Annie Duke was talking about poker, but this quote is just as apt for the game of startups.
No matter if you’re on the founder’s or investor’s side of the table, startups look a lot like poker. They both involve big gambles, the kinds where it’s unclear whether you’ll end up with a winning hand or a “bad beat story” because the cards didn’t go your way. There’s also a series of small decisions that need to be made at lightning speed — and a need to keep close tabs on your competitors, while not getting knocked off your own game. And if you’re forced to fold, you’re left to wonder if it was doomed from the outset, or if poor execution and unforeseen forces played a role.
Uncertainty swirls whenever luck plays a big hand in the outcome. And when there is so much information players don't (and can't possibly hope to) know, people often resort to relying on “track records,” “gut feelings,” and “instincts.” Without a solid decision process, founders and poker players alike risk amplifying the cognitive biases that frustrate all of our decisions. One such bias is what Duke calls “resulting” — the human impulse to equate the quality of a decision with the quality of its outcome. “I have yet to come across someone who doesn’t identify their best and worst results rather than their best and worst decisions,” she wrote in Thinking in Bets.
In poker, that might mean changing strategy because you’ve been on a good streak, discounting the luck of the deal. In startups, it might mean ascribing brilliance to founders and investors of a tiny startup that scales impressively.
Resulting was one of many concepts that resonated with V4RP partner and co-founder Josh Kopelman when he first read the book. Intrigued by how we could apply Duke’s frameworks to our work backing and advising founders, Kopelman got in touch. After a few weeks of a trial consulting engagement, a partnership solidified. And so for the last few years, the V4RP team has had the great fortune of working with Duke, who’s become our Special Partner for Decision-Making Science.
Duke’s resume isn’t standard fare in the startup world. She’s forged a fascinating career with several distinct chapters: first as a PhD student in cognitive science at the University of Pennsylvania, next as a professional poker player who made millions in tournament games, and now as a decision strategy consultant. She’s also a bestselling author and co-founder of The Alliance for Decision Education, a non-profit that bolsters decision-making skills in students.
While it’s not typical for a research and investment firm to team up with an expert like Duke, for us at V4RP, the benefits have been multifold. On top of helping us reduce bias and bring more rigor to our investing process, Duke has also been a wonderful addition to the V4RP community. Just as we have partners with deep expertise in product strategy and go-to-market motions, it’s been a huge boon to have Duke help founders hone their decision-making chops.
For the past couple of years, Duke has been sharing her advice with founders and angel investors in closed sessions for the V4RP community, but given our focus on open-sourcing, we thought readers would be curious to see a few pages from her decision-making playbook, tailored for startups.
In this exclusive interview, Duke offers a behind-the-scenes peek at her consulting work, sharing the very advice and frameworks she walks founders through. We start with fundamental lessons that sharpen a founder’s personal skills, as well as company-wide decision hygiene that steels a startup for scale. Duke gets tactical, offering pointers for hiring and firing, “bet the company” decisions, and the painful choice to wind things down.
FOUNDATIONAL SKILLS: MENTAL MODELS FOR REDUCING BIAS
From early-day choices of navigating design partners to later-stage judgments like introducing a product line or going public, the tempo never lets up and the decisions don’t get easier.
Duke stresses founders must sharpen their own decision-making skillset while maintaining hygiene and systems to allow high-quality decisions even at scale.
“When you're dealing with the startup world, there’s a lot of uncertainty, and that’s when people tend to go, ‘Well, I just go with my gut.’ But cognitive science shows our decisions are noisy and biased, so that’s not the right call.”
Key Problem Areas:
- Noise: “Different people have different judgments in identical situations. Even on different days, your judgment can vary. Daniel Kahneman’s Noise: A Flaw in Human Judgment is a great read on this topic.”
- Bias: “We’re riddled with predictable decision errors: overconfidence, confirmation, availability, hindsight, illusion of control. Experience is necessary but can trap us in outdated mental models.”
Relying on your gut is where bias lives. Simple habits like asking, “If I were wrong, why would that be?” help, but Duke advocates for a systemic overhaul.
Duke’s Foundational Principles:
1. Make the implicit explicit.
Capture all factors influencing a decision: facts, beliefs, assumptions, options. For example, when deciding whether to aggressively scale your sales team, outline leads, probabilities, burn rate, fundraising expectations, and market conditions. Leaving these implicit makes it impossible to learn from mistakes.
2. Think outside the specific decision.
Instead of facing a decision cold, map the general decision space. Predefine criteria to reduce bias and capricious judgments. This is particularly effective in hiring, acquisitions, and fundraising choices.
3. Bring others in, but don’t infect the group.
Collect opinions independently to avoid influence. Techniques: anonymous input, reverse seniority order, private email responses.
SETTING UP FOR SCALE: COMPANY-WIDE DECISION HYGIENE
4. Don’t fear process, even if moving fast.
Startups either lack process or overdo it like BigCo. Fast execution is fine for MVPs, but step back to triage strategic decisions.
5. Review the good with the bad.
Analyze both successes and failures to uncover overlooked factors. Don’t just do blameless post-mortems on bad outcomes.
6. Make the decision smaller to go faster.
Assess impact and reversibility. Smaller decisions reduce risk and allow faster learning. Example: test product directions with minimal team effort.
UNPACKING BIG-TICKET DECISIONS
Customer discovery: Collect independent opinions, rate problem acuteness and feature impact, focus on areas with high dispersion.
Hiring: Slow down for high-impact hires. Predefine 3–6 predictive traits, evaluate candidates with structured rubrics, and probe decision-making skills. Example questions:
- How do you understand uncertainty?
- Give an example where you managed disagreement in a decision.
Firing: Flip the framing (opportunity cost) and pre-commit to benchmarks. This reduces the human tendency to avoid realizing losses.
“Bet the company” decisions: Treat pivots, acquisitions, and strategic shifts as new decisions. Approach with independent perspectives and expected-value thinking.
Winding down: Know when to quit. Apply future-casting: set benchmarks over weeks or months to see if continuing is justified. Don’t let external perceptions, investor expectations, or employee attachment keep you trapped in a failing path.
