Grit vs. Quit

Insights from Annie Duke's "Quit: The Power of Knowing When to Walk Away".

Mar 04, 2023

Thanks for subscribing to SatPost.

Today, we’re talking about Annie Duke’s book Quit, which has the subtitle “The Power of Knowing When to Walk Away” (I love a good explanatory subtitle).

Also this week:

How Subway took over South Korea
Salesforce employees don’t use Salesforce
Plus some dope memes (including the IRS)

Last week, I wrote about James Dyson and perseverance. It took the dude 15 years and 5,127 prototypes to get a bagless vacuum to market (I would have lasted 15 days and 0.5127 prototypes).

The email struck a chord and readers sent a bunch of replies.

There was one theme in the replies that I want to address: knowing when to quit is also important (h/t Adam Singer for conversation we had on this topic).

Take Dyson. While he has a well-earned reputation as Mr. Perseverance, the British billionaire very publicly threw in the towel on an electric vehicle in 2019. Dyson did so after spending 5 years and $600m+ on the project.

As a society, we’re very attracted to the idea of “grit” and “gutting it out”. Meanwhile, there’s a huge stigma around “quit” (related terms include include backtrackers, chickens, defeatists, deserters, dropouts, wimps and anytime I try to do 20 burpees in a row).

But if you think about it, “grit” and “quit” are two sides of the same coin. By sticking with a project, you are choosing not to quit and vice versa.

That framing is from Annie Duke — a former pro poker player turned decision strategist and investor — who explores the concept in her book Quit: The Power of Knowing When to Walk Away. Critically, she provides an actual framework to make good quitting decisions.

“While grit can get you to stick to hard things that are worthwhile, grit can also get you to stick to hard things that no longer worthwhile,” writes Duke. “The trick is in figuring out the difference”

Here are 3 insights from the book:

1. Why quitting is hard

Duke starts the book with the story of boxing legend Muhammad Ali, who is truly the GOAT. In 1968, Ali was famously suspended from boxing because of his refusal to fight in the Vietnam War. He lost the prime of his career and was ready to lose his freedom by going to jail for what he believed.

When he returned to the ring, Ali pulled off one of the most shocking boxing victories ever with his Rumble in the Jungle match against George Foreman in 1974. Ali was the epitome of never giving up. But it was this same attitude that kept him fighting for too long, including a brutal bout against Larry Holmes in 1980. By then, Ali was showing early symptoms of Parkinson’s disease (which got much worse). There was clearly a point in Ali’s career — which was built on courage and grit — when his inner circle should have stepped in. One of Ali’s doctors actually quit in protest.

Similarly, Duke talks about “Into the Air”, a best-selling book about a disaster on Mount Everest that led to stranded climbers and the death of 8 people. However, she highlights the individuals that “quit” the climb and made it to safety (the ones that we never hear about, even though they made the correct climbing decision that day).

With these stories as backdrops, Duke explains the psychology of why it is so hard to quit:

Sunk-cost fallacy: Many of you readers probably know this cognitive bias. It’s the idea that people are hesitant to quit or abandon an investment, project or relationship because of how many resources (time, money, work) has already been put into the endeavour. As explained by economist Richard Thaler, fully rational people only consider the future costs of continuing an endeavour. If the expected value of doing so is positive, they persist. If it’s negative, they quit. But because of the sunk-cost fallacy, many persist even if the expected value is negative.
Identity: As mentioned earlier, there is a huge stigma around quitting. People don’t want to be known as “quitters”. Further, all of the time and effort that an individual has put into something (project, relationship etc.) is also now a part of their identify. It’s cognitively difficult to walk away from that.
Status-quo bias: It’s often much easier to keep doing what has always been done rather than try something new. What looks like “grit” might just be resistance to change.

2. How do you become a better quitter? Here are two useful techniques:

The Kill Criteria: Climbers on Mount Everest typically have a turnaround time, which is a time — say 1pm — when they have to descend the mountain. Descending is much more dangerous than ascending (8x more deaths happen on the way down). And the turnaround time is a safety measure to protect climbers from going down during darkness and while they are overly fatigued.

The turnaround time is an example of what Duke calls a “Kill Criteria”, which are circumstances established in advance to quit something. Duke says you don’t want to make the hard decision to quit in the heat of the moment, so it’s better to “create a pre-commitment contract to quit”. You can have a Kill Criteria for investing (stop loss), startups (budget limits) or hobbies (number of California rolls when I try to shutdown an all-you-can-eat sushi joint).

When creating a Kill Criteria, Duke says it’s important to have a "state and date”:
Kill criteria, generally, include both states and dates, in the form of “If I am (or am not) in a particular state at a particular date or at a particular time, then I have to quit.” Or “If I haven’t done X by Y (time), I’ll quit.” Or “If I haven’t achieved X by the time I’ve spent Y (amount in money, effort, time, or other resources), I should quit.”
If you make it to a date without meeting your criteria, you can always set a new one. At a minimum, a Kill Criteria forces you to analytically consider the question of whether or not to quit.
The monkey & the pedestal: Astro Teller is the CEO of Alphabet’s moonshot division, X. In Quit, Duke walks through a thought experiment that Teller uses when deciding to take on new projects: if you were to train a monkey to juggle torches on top of a pedestal, would you build the pedestal first or train the monkey?

The answer is to train the monkey. Why? Because training the monkey to juggle is way harder than building a pedestal (although, I probably can’t even do that). The monkey is the bottleneck, which means you should solve that part first or realize that you can’t and quit.

Duke applies this model to the California bullet train meant to connect LA and SF. Approved in 2008, the project was estimated to cost $33B and be completed by 2020. Spoil alert: it’s not completed and the new finish date is 2033 with a revised budget of…$105B!

Among many issues with the project is that California’s government started building pedestals (track on flat land ) before tackling the monkeys (mountain passes that may not be economically feasible to overcome).

Building pedestals are not only the wrong order of operations, the action also creates the illusion of progress and introduces the potential for the sunk cost fallacy to takeover (“well, we already built so much track”). When starting a new project, know if you can actually tackle the hardest parts before starting with some low-hanging fruit that might lock you into a non-worthwhile project.

3. “Pivoting” = quitting by another name: Chat platform Slack gets quite a bit of coverage in Quit. Why? As many of you may know, Stewart Butterfield launched the company out of a failed video game.

Here’s the story: Butterfield created an online game called Glitch that was popular amongst a niche fanbase. When it became clear that the business couldn’t reach venture scale, Butterfield shut it down. But within Glitch was an internal communication system that combined instant messaging and e-mail. Butterfield ultimately slapped a name on the tool — Slack (aka Searchable Log of All Conversation and Knowledge) — and launched it in August 2013. It went public in 2019 at a $20B valuation and was acquired by Salesforce in 2020 for $28B.

This was actually the second time that Butterfield launched a successful tech firm out of the ashes of a failed video game. In the early-2000s, the British-Columbia native (yeah!) shut down an online video game but salvaged a game feature that displayed photos of items that players collected. That feature was spun out as photo sharing app Flickr and acquired for $25m by Yahoo!

In both instances, quitting one endeavour freed up resources to pursue a more viable idea. Embedded in Butterfield’s stories are two ideas:

Opportunity Costs: “Gritting” out the wrong idea can cost you building the real winner.
Myopia: When you are “head down” and “gritting out” on the wrong idea, you don’t even see the real opportunity in front of you.

In Silicon Valley lore, Butterfield pulled off two epic “pivots”. That framing is actually another example of the stigma around “quitting”. Let’s call a spade a spade: “pivot” is literally just “quitting and trying something else”. Butterfield quit twice and it was the right move both times.

Final thoughts

Duke is completely right that “grit” and “quit” are two sides of the same coin. And there are more stories and tactical tips in the book that are well worth learning.

The one thing I add about the topic of quitting is that in 2023 it is so easy to start and stop new project. You want a turnkey newsletter? Substack. You want to source and sell cashmere beanies? Alibaba and Shopify. You want to learn how to cook? Meal-delivery kits.

The inclination to start and stop is also everywhere. You scroll on social media and see how “well” people are doing and the “just-launched” ventures for a new trend. When you see so many new shiny objects, mimetic desire kicks in and makes it very hard to stay the course on an endeavour that isn’t yielding immediate fruit.

What does this mean? You really have to understand what it is you are good at and actually want to do for a long time.

As noted at the top of this piece, last week’s email was primarily about perseverance as captured by Jack Butcher’s fantastic “This is Pointless” visual…

…well, here is another great visual from Jack that pairs very well with one more excerpt from Duke’s book: “Success does not lie in sticking to things. It lies in picking the right thing to stick to and quitting the rest.”

Today’s SatPost is brought to you by Bearly.AI

Why are you seeing this ad?

Because I co-founded an AI-powered research app called Bearly AI. And I stare at the user metrics 19 hours a day to see if it ticks up. Oh, also, we just added ChatGPT to the Bearly platform (to augment our other reading, writing and text-to-image tools).

The best part: it’s all available in a single keyboard shortcut.

Try Bearly AI for FREE

Links and Memes

How Subway took over South Korea: In South Korea, TV broadcasts aren’t allowed to have advertising breaks. The way brands reach TV-viewing audiences is by product placement. And one of the most prolific product-placers on South Korean television is Subway, as detailed in a YouTube video by Johnny Harris.

I first found out about this Subway trend because my wife and I have different Netflix binge-ing modes. I was too slow for her but also didn’t want her watching ahead on shows we’re supposed to watch together. As a compromise, she went all-in on Korean dramas and I kept seeing Subway pop-up in the corner of my eyes. The sandwich chain is in so many Korean shows and often completely out of context (example: a ghost eats Subway as its first contact with the real world).

Subway’s product placement investment is genius, though. Why? Because Subway has major mindshare in South Korea and now that Netflix picked up the Korean shows…Subway gets exposure again with Western audiences. That’s some 10D chess.

What’s up with Salesforce? The Wall Street Journal has an interesting piece on the cloud customer relationship platform. The viral snippet is that Salesforce founder and CEO Marc Benioff got his buddy Matthew McConaughey an annual contract of $10m to be “creative adviser and TV pitchman.” The “alright alright alright” actor holds this role even as Salesforce laid off 8,000 employees in January (like other tech firms, Salesforce over-hired during COVID…adding 30k jobs from the pandemic to end 2022, a 60% increase).

Activist investors have targeted Salesforce for its profligate spending. And even though Salesforce has shown steady revenue growth ($4B in 2014 to $31B in 2023), its margins are lagging industry peers 19% vs. 26% for Service Now and 45% for Adobe. Salesforce’s performance is also somewhat disguised by the fact that its stock-based compensation (SBC) has exploded in recent years (TLDR: In GAAP accounting, SBC is considered a non-cash expense…which typically makes a company’s performance look better than it really is).

It sounds like activist demands are being met as Benioff said the company will improve margins and return more cash to shareholders. Salesforce also disbanded its M&A unit (the $28B Slack acquisition is looking very expensive in the current market environment and with Microsoft Team’s effectively capping Slack’s ceiling).

Other than the McConaughey news, here was the wildest nugget: Salesforce employees sound like they are using Microsoft Excel instead of Salesforce to track their own customers: (“More recently, managers have been diving into spreadsheets, analyzing metrics and scrutinizing number of deals salespeople close during the quarter.”)

SatPost by Trung Phan

Discussion about this post