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Quit The Power of Knowing

Section: What Berle was talking about was a common Borscht Belt meme of the butcher ‘gaffing’ the scale, usually by sneaking his thumb on it, to cheat customers. - Quit: The Power of Knowing When to Walk Away
- Prologue: The Gaffed Scale
  - Grit vs. Quit
    - Muhammad Ali is a symbol of grit for his perseverance in boxing
      - But his grittiness led him to fight too long, likely contributing to his later health decline
      - This shows grit is not always a virtue - the trick is knowing when to persevere vs quit
      - Aphorisms and the English language overwhelmingly favor grit and perseverance over quitting
    - Quitting is an important decision skill
      - It allows you to change course based on new information
      - But uncertainty makes quitting decisions difficult
        
        Persevering is the only way to know for sure how things will turn out
        
        This "siren song of certainty" lures us to keep going even when we should quit
    - Companies must be good at quitting to adapt to a changing business landscape
      - Many formerly successful companies stuck to losing strategies too long (Sears, Blockbuster, etc.)
    - In poker, quitting (folding) is the most important skill separating pros from amateurs
      - Pros fold far more often than amateurs
      - Amateurs play more hands to avoid the pain of folding a hand that could have won
  - Wrapped in Euphemism
    - Even when famous people like Lindsey Vonn quit, they avoid saying "I quit"
      - Instead they use euphemisms like "starting a new chapter"
      - If even Vonn avoids saying "I quit", it must be very hard for the rest of us
    - The word "quit" is given the "Voldemort treatment" - avoided as if taboo
  - Science Says
    - Scholarly research across fields shows our tendency to persist too long in the face of negative results
      - Termed "escalation of commitment" by researcher Barry Staw
      - Found in individuals, organizations and governments
      - Causes us to increase commitment to losing courses of action
    - The book aims to:
      - Explain cognitive forces that make it hard to quit
      - Provide strategies to improve quitting decisions
      - Rehabilitate the concept of quitting
Section: Chapter 1 covers why quitting is our best tool for making decisions under uncertainty, because it allows us to change course after new information is revealed. - Quitting a course of action is sometimes the best way to win in the long run, whether:
- You're cutting your losses at the poker table
- You're getting to climb another day
- Quit and grit are two sides of the exact same decision
- Decision-making in the real world requires action without complete information
  - Quitting is the tool that allows us to react to new information that is revealed after we make a decision
- Sticking with a course of action is the only way to find out for sure how it will turn out
  - Quitting requires being okay with not knowing what might have been
- Having the option to quit helps you to:
  - Explore more
  - Learn more
  - Ultimately find the right things to stick with
Section: Chapter 2 explores why, when you quit on time, it usually feels like you quit too early. - Escalating Commitment
- Harold Staw's story illustrates our tendency to persist in losing endeavors:
  - He built a successful retail chain, ABC Stores, in Southern California in the 1950s-60s
  - Competition from Kmart in the late 1960s made ABC Stores unprofitable
  - Despite pressure from shareholders and an opportunity to sell, Staw refused to quit
  - He invested his family's wealth trying futilely to save the failing business
  - Staw lost everything except one property he had a long-term lease on
- It's confounding that Staw ignored clear signals he was now in a losing game
  - The same determination that fueled his success ended up causing his downfall
- Barry Staw, Harold's son, became an influential researcher on escalating commitment
  - He was puzzled by our tendency to persist in the face of negative consequences
  - Staw saw parallels with the U.S. involvement in the Vietnam War
  - His 1976 paper "Knee-Deep in the Big Muddy" became a seminal work on the topic
- Common theme: Responding to information that an endeavor is unwinnable by increasing commitment to the losing course of action
Section: In Section II, I cover specifically how your decision to quit is affected by whether you are winning or losing (‘in the losses’) The Tragic Fall of Harold Staw
- Harold and Shirley Staw moved to California in the 1930s chasing the American Dream
- In 1952, Harold saw an opportunity in the booming factory town of Fontana
  - Fontana had many factory workers earning good wages that Harold believed were an untapped market for appliances
- With limited funds, Harold opened the Union Store in a small former chicken coop
  - The store did well, so he expanded to larger properties in Upland and Montclair
- In the 1950s, Harold's business ABC Stores grew rapidly alongside Southern California's population boom
  - He negotiated a 50-year lease on a property in Montclair
  - Bought out competitors and merged with another owner to create a major retail chain
- In 1961, Harold merged ABC Stores with Texas-based Sage Stores to form Sage International
  - Harold became CEO and the largest shareholder
  - Sage International went public in 1962 with a $10 million valuation
- However, the lucrative discount retail market soon attracted formidable competitors like Kmart
  - By the late 1960s, the ABC Stores in California were no longer profitable
  - Meanwhile, Sage Stores in Texas remained successful as Kmart had not significantly expanded there yet
- The Texas shareholders wanted to divest the unprofitable ABC Stores, but Harold refused
  - He was emotionally attached to the ABC Stores he had built from the ground up
- Tensions erupted into a proxy fight and lawsuit in the early 1970s
  - Harold negotiated to give up his stake in the profitable Sage assets to be sole owner of ABC Stores
- He then invested his family's accumulated wealth into the failing ABC Stores to try to compete with Kmart
  - Even turned down an acquisition offer from Fred Meyer, a successful regional discounter
- Harold eventually lost all his retail operations and nearly all his wealth
- His story illustrates how the same determination that fuels success can lead to downfall by causing inflexibility
  - He ignored clear signals, like being unable to compete with Kmart, that ABC Stores were now a losing endeavor
Section: Chapter 4 introduces the concept of escalation of commitment, where we respond to bad news by increasing our commitment to a losing course of action. - Ron Conway is:
- A legendary angel investor
- Founder of SV Angel
- Known for helping identify when founders should quit
- Conway’s philosophy on quitting:
  - Life’s too short
  - Founders face immense challenges and sacrifices
  - It’s crucial to recognize when perseverance isn’t worthwhile
- Conway’s process:
  - Recognizes ventures failing before founders do
  - He doesn’t try to convince founders directly
  - Asks founders to define what success looks like in the next few months
  - Sets specific performance benchmarks
  - Revisits benchmarks later to discuss potential shutdown
- Use of kill criteria:
  - Founders help generate benchmarks
  - Increases likelihood of rational decision-making
  - Refocuses attention from present difficulties to future outcomes
- Benefits of Conway’s approach:
  - Shortens the time founders spend on failing ventures
  - Frees up time for more promising opportunities
- Common pushbacks from founders:
  - Obligation to investors
  - Fear of being viewed as failures
  - Responsibility to employees
- Conway’s responses to pushbacks:
  - Returning capital is responsible and shows good decision-making
  - Investors appreciate flexibility and understanding of expected value
  - Demonstrates traits investors look for in future ventures
- Founders’ assumptions vs. reality:
  - Founders think investors will view them negatively if they quit
  - Reality: investors prefer rational decisions and potential capital returns
  - Founders believe they owe it to employees to continue
  - Conway highlights the true professional respect and future opportunities that come with making the right decision to quit Chapter Summary:
- Ron Conway’s strategy helps founders:
  - Recognize failing ventures
  - Set performance benchmarks
  - Make rational quitting decisions
- Importance of understanding sunk costs and cognitive biases
- Value of returning capital and maintaining investor relationships
- Emphasizes traits that attract future investment, such as flexibility and rationality
Section: Chapter 6 offers up strategies to improve decisions about when to quit, including the importance of tackling the hardest part of a project first, as well as ways to develop benchmarks, criteria, and signals, called kill criteria, that will help ensure you quit sooner when persisting is no longer in your best interest. - Find Someone Who Loves You but Doesn't Care about Hurt Feelings
- Ron Conway is:
  - One of the greatest angel investors of all time
  - Also a legendary quitting coach
- He sums up his quitting philosophy as:
  - "Life's too short"
  - To suffer with a failing start-up once success is unlikely
- When he sees a venture is failing, Conway:
  - Sits down with the founder to share his point of view
  - Doesn't argue when the founder disagrees
  - Asks what success would look like over next few months
  - Sets performance benchmarks with the founder to revisit
- This is an effective use of kill criteria because:
  - It increases chances the founder will see past biases later
  - Giving up a few more months can save years of struggle
- Founders often resist quitting by citing:
  - Duty to persevere for the sake of investors
  - Belief investors will view quitting as failure
- Conway counters this is actually the opposite, as:
  - Returning investor capital when failing is responsible
  - It shows good judgment investors want to back again
- He also counters the belief founders owe employees, as:
  - Persisting traps employees in a doomed venture
  - Prevents them from moving on to better opportunities
- Conway provides the outside perspective founders need, as:
  - It's hard to be rational when you're already "in it"
  - His quitting coaching helps founders see clearly
- (Over) Optimism
  - Unfettered optimism is widespread and encouraged in start-ups
    - 81% of founders believe odds of success are over 70%
    - 33% of founders believe their odds are 100%!
  - But more optimism doesn't necessarily improve performance:
    - Studies show optimists persist longer but don't do better
    - They quit later, but to no benefit
  - The problem is optimism causes you to:
    - Overestimate both likelihood and magnitude of success
    - Miscalculate expected value to be wildly too high
    - Prevents you from quitting when you should walk away
  - Ron Conway wants confident founders but knows:
    - Optimism should be checked by realism
    - Life's too short to stick to clear dead ends
Section: Chapter 7 explores how ownership, both of things and ideas, makes it difficult to change course, as well as the powerful pull of the status quo. - If I had to skill somebody up to be a better decision-maker, quitting is the primary skill because it allows reaction to a changing landscape.
- Decisions are made under uncertainty from:
  - Stochastic world:
    - Luck impacts predictability.
    - We operate with probabilities, not certainties.
    - Example: An 80% chance of success means a 20% chance of failure, but we don’t know when that 20% will occur.
  - Lack of complete information:
    - Decisions made with partial information.
    - New information reveals critical feedback.
      - New facts.
      - Different ways to model a problem.
      - Discovery about preferences.
      - Observation of outcomes.
      - Example: Learning a fact about your preferences or the future.
- Quitting makes decision-making easier:
  - Quitting allows different decisions with new information.
  - Silicon Valley mantras like “move fast and break things” and MVP strategies rely on the ability to quit.
  - Example: MVP requires quitting non-working elements to refine the product.
- Quitting maximizes speed, experimentation, and effectiveness:
  - Moving fast increases uncertainty.
  - MVP allows quitting before too much effort is invested.
  - Example: Richard Pryor developed new material by testing and quitting bad jokes.
- Practical applications of quitting:
  - Dating: Easier to quit a date than a marriage.
  - Mount Everest: Turn around if weather changes.
  - Career: Changing jobs, majors, relationships.
  - Example: Richard Pryor and comedians quit unfunny material to develop successful sets.
- Quitting is difficult due to uncertainty:
  - Example: Everest climbers like Hutchison, Taske, and Kasischke decided to turn around.
  - Example: Marriage and divorce decisions both made under uncertainty.
  - Perseverance is attractive because it promises certainty.
  - Example: Business failures like AOL, Blockbuster, Circuit City due to not quitting outdated models.
- Quitting and persevering are both decisions under uncertainty:
  - Only perseverance lets you know the outcome.
  - Example: Blockbuster’s refusal to adopt streaming led to its failure.
- Skill in quitting is essential:
  - Example: Kenny Rogers’ song emphasizes knowing when to quit.
  - Professional poker players excel by knowing when to fold and quit unfavorable games.
  - Example: Comedian’s strategy of testing jokes and quitting bad ones.
- Practical strategies for quitting:
  - Kill criteria: Predefined conditions to quit.
  - Example: Everest turnaround time, sales funnel management, stop-loss in trading.
  - Example: mParticle’s sales team uses kill criteria to manage leads.
- Thinking in expected value:
  - Calculate probabilities of outcomes and their value.
  - Example: Coin flips with different payouts and probabilities.
  - Example: Stewart Butterfield’s decision to quit Glitch based on expected value.
- Importance of feedback in decision-making:
  - Example: Portfolio managers should track sell-side decisions to improve.
  - Example: Professional sports teams faced with sunk costs and endowment biases in player decisions.
- Escalation of commitment:
  - Example: Vietnam War continuation despite negative outcomes.
  - Example: Tennessee-Tombigbee Waterway, Shoreham Nuclear Power Plant as sunk cost problems.
- Monkeys and pedestals:
  - Tackle the hardest part of the problem first.
  - Example: X’s strategy for Project Foghorn.
  - Avoid pedestal-building as it creates false progress.
  - Example: California bullet train’s focus on building track without addressing major challenges.
- Identity and quitting:
  - Example: Sears’ failure due to clinging to retail identity.
  - Example: Sasha Cohen’s struggle to quit figure skating.
- Practical application:
  - Use kill criteria and expected value thinking.
  - Embrace quitting as a strategic decision.
  - Example: Sales strategies, career decisions, personal projects.
- Conclusion:
  - Quitting is a critical skill for effective decision-making.
  - Emphasize predefined criteria and objective evaluation.
  - Use feedback and expected value to guide decisions.
Section: Chapter 8 looks at how our identity—and our desire for a consistent identity—becomes an impediment to quitting, and can cause us to escalate commitment to disastrous choices. - Cognitive Dissonance and Identity:
- Cult members' behavior after prophecy failure:
  - Seekers' identity tied to cult belief
  - Cutting off family, giving up possessions, facing ridicule
- Need for consistent identity over time:
  - Conflict with new information creates discomfort
  - Rationalize away new information to defend prior beliefs
  - Example: Political candidate scandal
    - Supporter rationalizes scandal to avoid changing belief
  - Actions can cause dissonance:
    - Lying about being late conflicts with truthful self-image
    - Rationalize lie: exception, no harm done
  - Cognitive dissonance increases commitment to belief
    - Seekers' rationalization of failed prophecy
- Public identity influences decisions:
  - Adults define themselves by profession
  - Children understand identity through future roles
  - Quitting means abandoning part of identity
  - Example: Sasha Cohen's commitment to skating
- External judgment affects quitting decisions:
  - Barry Staw's "Big Muddy" experiment
    - Participants increased funding to failing division to avoid admitting mistake
    - Impact worsens with external evaluation
  - Staw and Fox's 1979 study
    - Participants allocated more funds when job security and external validation were at stake
- Perception of rationality affects decisions:
  - Desire to be viewed as rational leads to irrational commitment
- Impact of identity on extreme positions:
  - Katy Milkman and John Beshears' study on stock analysts
    - Analysts with non-consensus forecasts escalated commitment despite contrary evidence
    - Consensus forecasts were updated based on new information
  - Example: Andrew Wilkinson's identity tied to bootstrapping
- Mistaken fears of others' judgment:
  - Sarah Olstyn Martinez's experience quitting ER job
    - Boss and director were understanding, contrary to her fears
- Hope for rational quitting:
  - Examples of successful quitting: Stewart Butterfield, Sarah Olstyn Martinez, Alex Honnold
  - Companies like Philips pivoted successfully away from core identity
  - Strategies to improve quitting decisions:
    - Identify hard parts, set conditions for quitting, precommitment contracts, kill criteria
  - Seek outside perspective for rational quitting decisions
- Chapter 8 Summary:
  - Cognitive dissonance explains why people rationalize away conflicting information
  - Desire for internal and external consistency influences decisions
  - Escalation of commitment worsens with external evaluation
  - Extreme positions are defended more vigorously
  - Fear of others' judgment is often exaggerated
- Chapter 9: Find Someone Who Loves You but Doesn’t Care about Hurt Feelings
  - Ron Conway as a quitting coach:
    - Founder of SV Angel, invested in successful companies like Facebook, Google, PayPal
    - Helps founders recognize when to quit
    - Philosophy: Life’s too short to persist in failing ventures
    - Sets performance benchmarks with founders to signal when to quit
    - Uses kill criteria to help founders make rational decisions
  - Importance of recognizing when to quit:
    - Founders' identity tied to their venture, making it hard to quit
    - Conway's approach helps founders see the futility of persevering
    - Founders often believe they owe it to investors and employees to continue
    - Reality: Returning capital and freeing employees are responsible choices
  - Overcoming irrational fears:
    - Founders fear investors will view them as failures
    - Conway reassures that returning capital increases future investment opportunities
    - Employees benefit from moving on to better opportunities
  - Value of external perspective:
    - Fresh perspective helps founders make rational quitting decisions
  - Optimism and its limits:
    - Helen Keller and William James on optimism
    - Don Moore's critique of excessive optimism
    - Optimism doesn't always improve performance
    - Study: Optimistic participants didn't perform better on tasks
    - Optimism unchecked by realism prevents quitting when necessary
Section: Chapter 9 offers an additional strategy for mitigating the cognitive biases that make walking away so hard: a quitting coach, or someone who can see our situation from the outside and help us to change course when the time is right. - The Difference between Being Nice and Being Kind:
- When asked about being a good quitter, Daniel Kahneman said:
  - "What everybody needs is the friend who really loves them but does not care much about hurt feelings in the moment."
- When facing the decision to quit or stay, decision-making is most vulnerable to cognitive biases.
  - An outside observer, like a friend or loved one, has a more rational view because they are not in it.
- As an outside observer:
  - You might think withholding the hard truth is the nice thing to do, as it spares feelings, but:
    - In sparing feelings, you deny them the opportunity to see what you see.
- Trying to spare feelings is often due to love, but:
  - It's only sparing feelings in the short run.
  - Long-term pain is worse if they fail.
- Need someone who loves us enough to speak the unpleasant truth for our long-term happiness.
- Kahneman suggests finding a quitting coach, a person who helps you figure out when to abandon course.
  - Even Kahneman, an expert on cognitive biases, has a quitting coach, Richard Thaler.
- Not everyone has a Nobel laureate as a coach, but:
  - We should find someone who tells us the truth (friend, mentor, coworker, sibling, parent).
  - They should have our long-term best interests at heart and tell us what we need to hear, not what we want to hear.
- Often, people spare feelings rather than being honest, leading to regrets later.
  - Examples:
    - Friends revealing they thought you should have ended a relationship earlier.
    - Family noting they knew you were unhappy at a job.
- Hearing you should quit is better than wasting time on something that doesn't contribute to happiness.
- Andrew Wilkinson experienced this when friends didn't tell him to fire a CEO sooner.
  - Realized honesty would have saved time and resources.
- Ron Conway values his role in giving fresh perspectives to founders, considering it a win when he gets them to quit.
- Two goals:
  - Find at least one person to be your quitting coach.
  - Serve in that role for those you love.
- Some Coaches Can Pull the Plug:
  - A quitting coach offers a fresh perspective but you decide to walk away.
    - Having a coach improves chances of quitting sooner.
  - Sometimes, a quitting coach has the authority to make the quitting decision.
    - Managers can shut down projects.
    - Sales leaders can stop pursuing leads.
  - Combination of kill criteria and an authoritative quitting coach is effective for cutting losses.
    - Example: Navy SEALs' grittiness and Admiral McRaven’s role in deciding when to quit.
      - SEALs are selected for their endurance but need commanders to decide when quitting is necessary.
  - Ron Conway desires the authority to shut down failing startups but must wait for founders to agree.
  - Frustration when unable to make others quit despite knowing they should.
    - Recognizing this means sometimes you should hand over the reins to a quitting coach.
- Divide and Conquer:
  - Handing off decisions to someone else can be a powerful quitting strategy.
    - Example: Bank loan decisions.
      - New management quicker to recognize and write off troubled loans.
  - Strategy for businesses:
    - Separate decision-makers for starting and stopping projects.
  - For institutional investors:
    - Different committees for buying and selling decisions.
  - Individuals can't split themselves, but a quitting coach can help implement this strategy.
- The Importance of Giving and Getting Permission:
  - For a quitting coach relationship to work:
    - Give explicit permission to hear hard truths.
    - Example: Kahneman and Thaler.
  - Asking for advice doesn't always mean wanting honest opinions unless permission is given.
  - Andrew Wilkinson learned this:
    - Brutal honesty without permission leads to escalation of commitment.
  - Ron Conway's approach summarized:
    - Step 1: Suggest quitting.
    - Step 2: Retreat if they push back.
    - Step 3: Set clear definitions of success as kill criteria.
    - Step 4: Revisit if benchmarks aren't met and discuss quitting.
  - Permission is key to a fruitful coach relationship.
  - Even with permission, guiding someone to make their own decision is better.
    - Example: Sarah Olstyn Martinez and framing choices as expected-value problems.
  - Leaders should create a culture that celebrates quitting when rational.
    - Example: Astro Teller at X.
- Chapter 9 Summary:
  - Optimism can hinder quitting while not increasing success chances.
  - Outsiders see your situation more rationally.
  - Best quitting coach prioritizes long-term well-being over short-term feelings.
  - Separate decision-makers for starting and stopping projects improve quitting decisions.
  - Permission is crucial for a successful quitting coach relationship.
Section: Chapter 10 highlights the lessons we learn when we’re forced to quit, and how to apply those lessons preemptively. - Being forced to quit forces you to start exploring new options and opportunities. But you should start exploring before you're forced to.
- Even after you have found a path that you want to stick to, keep doing some exploration:
  - Things change, and whatever you are doing now may not be the best path for you to pursue in the future.
  - Having more options gives you something to switch to when the time is right.
- Exploration helps you to diversify your portfolio of:
  - Skills
  - Interests
  - Opportunities
- A diversified portfolio helps to protect you against uncertainty.
- Backup plans are good to have especially because some backup plans can turn out to be better than what we're already pursuing.
Section: I hope that as a result of reading this book, you will learn to recognize why quitting should be celebrated and how it can become a skill you can develop and use to enrich your life, encouraging you to value optionality, execute better on the things you stick with, and continue exploring so you can flexibly change with (or in advance of) a changing world. - You can set kill criteria before you:
- Accept a position at a company
- Decide on your major or what college to attend
- Decide on the house to buy or the place to live
- Purchase a concert ticket by considering weather conditions to stay home
- Kill criteria work well in investing:
  - Setting a stop-loss or take-gain are examples
  - Set criteria broadly by asking what market signals would cause a change in investment strategy
- Good news about kill criteria:
  - You can set them even after starting an endeavor
  - Think about future unhappiness with a situation and identify missed benchmarks or signals that prompt walking away
  - Set a stop-loss or take-gain at any point
- States and Dates:
  - Best quitting criteria combine a state (objective, measurable condition) and a date (when)
  - Example formats:
    - "If I am (or am not) in a particular state at a particular date or time, then I have to quit."
    - "If I haven’t done X by Y (time), I’ll quit."
    - "If I haven’t achieved X by the time I’ve spent Y (amount in money, effort, time, resources), I should quit."
  - mParticle example:
    - Lack of decision-maker in the room triggers executive alignment offer
    - State and date format: "If I can’t get an executive in the room (state) by the next meeting (date), then I’ll kill the deal."
- X’s charter:
  - Projects must have the potential to be 10x world-changing (state), commercially viable within five to ten years (date)
- Admiral McRaven’s Operation Neptune Spear:
  - 162 phases with states to continue or quit during phases
  - Example criteria:
    - Falling an hour behind schedule would abort the mission
    - Being detected by Pakistani government up to 50% of the way to bin Laden’s compound would abort the mission
    - Detection beyond the 50% mark was a command decision
- Operation Eagle Claw:
  - Criteria: abort if aircraft inventory fell below six operational helicopters
  - Sent eight helicopters but only five arrived operational, triggering the kill criterion, leading to aborting the mission
- States and dates in personal decisions:
  - Academic jobs:
    - Limited tenure-track positions make setting kill criteria crucial
    - Criteria example: "If I haven’t secured a tenure-track position (state) within four years (date), quit."
  - Olympic sprinters:
    - Mark milestones based on age-specific performance of top runners
    - Continue if hitting milestones, quit if missing them
  - Relationships:
    - Goal: marriage or long-term commitment
    - Criteria: "If my partner hasn’t proposed by a certain date, move on."
  - Career advancement:
    - Criteria example: "If I haven’t received a raise, promotion, or additional responsibilities by a certain time, quit."
- Poker example:
  - Used stop-loss criteria to quit after losing a certain amount
  - Maintained stop-loss even after turning pro
  - Quit after six to eight hours of play or if game conditions changed unfavorably
  - Not perfect but helped reduce losses
- Better, Not Perfect:
  - Important to be better at quitting, not perfect
  - X’s success due to relentless aspiration to improve quitting decisions
  - Monkeys-and-pedestals mental model and kill criteria help limit losses and improve quitting decisions
- Chapter 6 Summary:
  - Monkeys and pedestals mental model helps you quit sooner
  - Focus on identifying and solving the hardest part first
  - Beware of false progress and pedestal-building
  - Create kill criteria to increase chances of quitting sooner
  - Kill criteria help inoculate against bad decision-making
  - Use "states and dates" to develop simple kill criteria
- Interlude II: Gold or Nothing:
  - Sasha Cohen’s story illustrates the challenges of quitting when identity is tied to the goal
  - Persisted despite injuries and setbacks
  - Struggled to retire, identifying as a figure skater
  - Eventually found happiness after quitting, building a new life and career
- Section III: Identity and Other Impediments:
  - Identity can hinder quitting decisions
  - Endowment and status quo bias affect quitting behavior
  - Cognitive dissonance and desire for internal consistency complicate quitting
- Chapter 7 Summary:
  - Endowment effect: value what we own more than identical items we don’t own
  - Can be endowed to objects, ideas, and beliefs
  - Endowment is an obstacle to quitting
  - Status quo bias: preference to stick with current decisions, methods, and paths
  - Omission-commission bias: more concerned with errors of commission than errors of omission
  - In highly data-rich environments like professional sports, sunk cost, endowment, and status quo bias distort decision-making
- Chapter 8 Summary:
  - Quitting is painful when tied to identity
  - Cognitive dissonance: new information conflicts with prior beliefs
  - Desire to maintain internal consistency affects quitting
  - External validation increases escalation of commitment
  - Extreme positions are harder to quit
  - Fears about how others view us are usually overblown
- Chapter 9:
  - Ron Conway’s philosophy: "Life’s too short"
  - Founders face significant struggles and stress
  - Importance of helping founders know when to quit
Section: So let’s get to it. It’s time to rehabilitate quitting. - Life’s Too Short: Ron Conway’s Quitting Strategy
- Understanding the Role of an Outsider:
  - Founders often can't recognize when their venture is failing because they’re emotionally invested.
  - As an outsider, Conway uses his experience to help founders see the futility of persevering.
- Recognizing the First Obstacle:
  - The main challenge is getting founders to acknowledge the failure and consider quitting.
  - Founders’ identity is tied to their venture, making it hard to let go.
  - Emotional and financial investments create resistance to quitting.
- Common Founder Rationalizations:
  - “This is just a rough patch.”
  - “We just need to finish the next version of the build.”
  - “The product just needs more time to catch on.”
  - “I know how to turn things around.”
- Conway’s Approach:
  - Agrees with founders’ optimistic views but asks them to define specific success benchmarks.
  - Sets performance benchmarks with the founders to revisit later.
  - Uses “kill criteria” to increase founders' rationality about quitting.
  - Founders believe they’ve convinced Conway, but he remains skeptical.
- Outcome of Conway’s Strategy:
  - Founders continue for a few more months, but this time frame is shorter than if left unchecked.
  - The strategy helps founders move on to better opportunities sooner.
  - Despite this, founders may still push back due to perceived duties to investors and employees.
- Addressing Investor and Employee Concerns:
  - Founders often feel obligated to exhaust all resources for investors.
  - Conway clarifies that returning capital responsibly increases chances of future investments.
  - Continuing failing ventures traps employees in unproductive work, hindering their growth.
- Optimism’s Double-Edged Sword:
  - Cultural Beliefs in Optimism:
    - Optimism is deeply valued in culture and business, often linked to success.
    - Books like "The Power of Positive Thinking" and "Think and Grow Rich" reinforce this.
  - Historical and Psychological Context:
    - William James advocated for positive visualization in challenging situations.
  - Research Insights:
    - Don Moore’s research highlights the limits of optimism in performance.
    - Optimism leads people to overestimate their chances of success.
  - Contrarian Views in Silicon Valley:
    - Ron Conway’s approach contrasts with the widespread optimism in Silicon Valley.
    - Founders often have unrealistic success expectations, influenced by optimism.
  - Empirical Findings:
    - Research shows more-optimistic individuals don’t perform better despite sticking to tasks longer.
    - Over-optimism prevents quitting when necessary, reducing overall expected value.
  - Balancing Optimism with Realism:
    - Conway supports confident founders but urges realism to avoid dead-end pursuits.
    - A quitting coach helps balance optimism with rational decision-making.
- The Difference Between Being Nice and Being Kind:
  - Kahneman’s Insight:
    - The best quitting coach is a friend who loves you but doesn’t shy away from hard truths.
    - Decision-making is vulnerable when you are deeply involved.
  - The Myth of Sparing Feelings:
    - Withholding hard truths to avoid hurt feelings often leads to long-term harm.
    - It’s crucial to have someone who prioritizes your long-term happiness over short-term comfort.
  - Effective Quitting Coach Traits:
    - Must have permission to speak freely and bluntly.
    - Helps you abandon unproductive paths without fear of hurting feelings.
  - Finding and Being a Quitting Coach:
    - Everyone needs a quitting coach for objective decision-making.
    - Be that person for others who helps them see the truth, even when difficult.
  - Real-Life Examples:
    - Andrew Wilkinson’s frustrations with friends not giving honest feedback.
    - Ron Conway’s role in providing fresh perspectives to founders.
  - Strategic Steps for Quitting Coaches:
    - Identify potential quitting points (kill criteria).
    - Set clear definitions for success and agree to revisit them.
    - Be prepared for pushback and remain patient.
- Conclusion: The Necessity of Quitting:
  - Escalation of Commitment:
    - Persistence is beneficial only for worthwhile pursuits.
    - Quitting is essential when the pursuit is no longer valuable.
  - Reevaluating Failure and Waste:
    - Redefine failure as not adapting to new information.
    - Understand wasted efforts in a forward-looking context.
  - Life’s Long Game:
    - Success comes from knowing when to quit and move on to better opportunities.
    - Winners quit often and strategically, which is how they win.

Quit The Power of Knowing

Mindmap

Notes