Card 1 of 16: Expected Value
Expected value multiplies each possible outcome by its probability and sums them. A 10% chance of winning $100 has an EV of $10 — worth paying up to $10 for. It sounds mechanical, but it's the discipline that separates gambling from investing.
Before starting a project, gather the team and say: 'It's a year from now and this project has failed catastrophically. Write down why.' The prospective hindsight unlocks concerns people wouldn't otherwise raise, because it feels safe to describe a failure that has already occurred.
When forecasting, most people describe what makes their situation unique and forget the base rate — how often the outcome occurs across all similar situations. Most startups fail. Most books don't sell. Most projects run over budget. That prior should be the starting point.
Bezos used this to decide whether to leave a stable Wall Street job for an internet bookstore. He asked: at 80, will I regret trying and failing? No. Will I regret not trying at all? Yes. The answer collapsed the decision instantly.
Every decision is also a rejection of every other option you could have taken. Buying a $5 coffee doesn't just cost $5 — it costs whatever else that $5 (and the time) could have produced. The price tag is never the whole cost; the forgone alternative is.
Most jobs are negatively asymmetric: upside capped at your salary, downside total if you're fired. Positive asymmetry flips that — a capped, known cost paired with an open-ended payoff. Writing a book costs a few months regardless of outcome; it can sell ten copies or ten million. The downside is fixed; the upside isn't.
The Cynefin framework helps leaders figure out what kind of problem they are facing so they can make better decisions. It divides situations into five domains: Clear, Complicated, Complex, Chaotic, and Confusion. If you treat a chaotic situation like a clear one, you will fail.
When we struggle to make a decision, we often assume there is a 'right' answer we just haven't found yet. The Hard Choice Model reveals that in truly hard choices, the options are simply on par with each other. Neither is clearly better overall.
Critical thinking isn't a personality type. It's five specific habits you can practice like any other skill.
A conclusion can be true and the argument for it can still be garbage. Those are two separate questions, and most people only ever check one of them.