Picasso had a blue period, early in his career where he was living in poverty and struggling to survive as an artist. Me? I’m having a podcast period as I generate myself as a VC with a ton of learning, fundraising, network expansion, technical ability improvement, consistent writing, and as I’m discovering, a very important part of being a VC, exits and decision making.

Let’s talk about quitting.

Adam’s Substack is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

I was listening to an episode of Capital Allocators with Annie Duke on The Power of Quitting. To say this episode has had a profound influence on me is an understatement. Annie is a former professional poker player and author in cognitive-behavioral decision science and decision education.

Historically, I don’t like gambling. A lot of my friends will spend time at Casinos or playing online poker and I’ve always felt left out. I think it was because I always thought that I would lose money. Or just lose in general. I never felt the thrill of victory of a hand or the excitement of the game play even if I lost. Just hasn’t been my thing. I’m a grit guy. I’m a Capricorn. The worker bee of the zodiac. Hard work, step by step and I’ll achieve. I’ll get there, I’ll reach the summit. And that’s worked well for me up to this point in my life. However, since starting to invest more seriously in 2017, and after joining a fund last year, I wondered, what am I missing about playing the game. What am I missing about taking big swings and winning that I could learn from gambling and betting.

Grit vs. Quit

Essentially, Annie is saying we see grit as a virtue and quit as a vice. We’ve all heard the familiar phrase ‘winners never quit and quitters never win’. To grit is to win and to quit is to lose. And our narratives in popular culture celebrate grit right? And that’s not wrong either. Angela Duckworth’s book on Grit: The Power and Passion of Perseverance, should be celebrated. What Annie adds here, that is new and nuanced for me, is that Grit and Quit are really the same decision. When you show grit you’re refusing to quit, and when you quit you’re refusing to grit.

Grit and Quit are really the same decision. When you show grit you’re refusing to quit, and when you quit you’re refusing to grit.

Her elevator pitch is that humans are really bad at decision making. This I get!

This is the real skill that we need to work on. Telling the difference between the two. When is it worthwhile to stick to things and when is it not. As humans we generally stick to things too long, and life is too short for that. Boom, mic drop!

Summiting Everest

The initial story she gives in her book starts on the top of Everest. Objectively an ‘in your face’ grit story. You’re super uncomfortable, you have to climb up down the mountain to get acclimated to the oxygen levels, it takes months, it’s freezing cold, you get frostbite, and yet, you continue up to the summit. A story about grit. However, she flips it, and says if we’re telling a story about quitting, let’s start on the top of Everest as well.

This story is about 3 climbers who are in a group of 8 total, including other climbers, sherpas and an expedition leader. Down at base camp they’re all given certain ‘turn around times.’ Turn around times in climbing are, simply put, for any days climb there is some point in the day, no matter where you are, you have to turn around and return to the camp you started from. Camp 1 to Camp 2, back to Camp 1. Camp 3 to 4, back to 3, so you’re climbing safely, acclimating and, importantly, not getting trapped on the mountain. The execution of this plan, as you can imagine, has life and death consequences. At time x, no matter where you are, you must turn around!!!

For summit day, (Camp 4 to Summit and back down) the turnaround time is set at 1pm. Clear to all. You leave at midnight from Camp 4, navigate a very perilous southeast ridge, and ideally arrive to the Summit before 1pm allowing you to return and descend to the southeast ridge in daylight. (The danger is on the descent) Most people die here. You’re tired, you don’t have enough adrenaline, oxygen is low, and if you’re in darkness, super dangerous for climbers.

Back to the story. These climbers leave at midnight and it’s a slow day on the mountain. This was in the 90s as climbers flocked to summit Everest, so there were more people, and they’re in a traffic jam. Here’s the conversation from one climber to the expedition leader:

Climber 1: “Hey looks like we’re moving pretty slow, how much farther until the summit?”

Expedition Leader: “I think it’s going to be about 3 hours” (as he moves past them and heads up the mountain…(GRIT)

Climber 1 then holds Climber 2 and Climber 3 back and says:

Climber 1: “ We have a problem. It’s 11:30, the expedition leader just said it’s 3 hours to the summit. I can do math. That will put us at 2:30, which is well past the turnaround time. So given what we know now, and we know we won’t make the summit until after the turnaround time, it makes sense to stop now and return to camp 4. (QUIT)

After a little back and forth the other two climbers agreed, turned around and lived. Kind of a boring story right? I mean nobody’s going to make a movie out of that story. Where’s the hero?! Three guys, they followed the rules, they went back to camp, they lived. Boringgggg.

BUT, here’s the thing about this story. They climbed this mountain in 1996. The year famously chronicled in John Krakauer’s “Into thin Air'“. And, they were part of Rob Hall’s expedition! Rob, famously, went to to the top of the mountain, arrived at 2pm, waited for one of the other climbers until 4pm, (who upon reaching the summit immediately collapsed and died) and by that time Rob Hall didn’t have the strength to come down and he also perished that day on the mountain.

And guess what? He was the expedition leader for Climbers 1,2 and 3 that day on the mountain. Those 3 climbers that day followed a QUITTING rule.

Yet we never hear about the quitters. They were the best decision makers on the mountain that day. They turned around. They quit at the right time. Yet because grit is virtue and quit is a vice, we don’t even see them. In fact, we celebrate those who died on the mountain as having ‘what it takes’ to be a hero, they just were unlucky that day.

The heroes of the story, are people who had the exact same information as these 3 climbers and yet continued on to great disaster.

Gulp. If that doesn’t make you question your decision making I don’t know what will.

Sooooo, the heroes we glorify died. And the folks who lived to see their families, climb more mountains in the future, are a footnote in history.

Taking Exits

I won’t go deep here. As a VC I don’t want anyone to conflate my personal opinions with that of the investment thesis of the fund. I’ll speak from personal experience.

I’ve learned from others and the hard way myself (assets dropping of a cliff, wallet hacks, not taking exits at the top et al) how essential this decision making skill is investing. I get emotional about my investment decisions and I want to be a part of the team, of something that grows. A HODLER (grit) not a SPECULATOR (quit) And why not? I believe in the team and the product. However, what I’m learning is that I need to treat myself and my investment decisions with the exact same ‘fiduciary responsibility’ that I carry for our LPs. I’m becoming the investment manager for myself. I am my own LP. There’s always a spectrum of when to hold and when to fold. Understanding this and having the details crafted out in advance that look a lot like ‘turnaround times’ for climbing is the way. Sometimes the bubble needs to burst and, often, I want to be the person with the courage to pop it.

This process of getting clarity on what we’re worth transcends into all areas of our lives.

What is your portfolio worth? When do you exit?

What’s your time worth?

What’s your love worth?

…the list goes on…

Become inconsistent with your past

I know what you’re thinking. My patterns are pretty well set. This is tough. I’ve tried this before, I’m just going to continue to play my hand the same way. Fear not, there is hope.

The quote you need here is “become inconsistent with your past.”

No matter where you are today and what you’re holding onto there’s always an opportunity to train yourself to become inconsistent with your past decisions and past decision making. You’re the one who gets to decide when to grit and when to quit. They’re the same decision. Have as clear of an indication of ‘turn around times’ for every area of your life and I promise you, little by slowly, you’ll be better at this very important skill.

I’ll be with you every step of the way. Unless I decide to quit.

Adam’s Substack is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.