20VC: Michael Mauboussin on Good vs Bad Investment Decision-Making Processes, How To Improve Your Process, How To Know When it Needs Improving and The Single Biggest Mistakes People Make In Their Decision-Making Process

This podcast episode explores the concepts of luck, skill, persistence, decision-making processes, and portfolio sizing in the context of venture capital investing. It discusses the distinction between luck and randomness, the role of persistence in the success of top firms, the importance of having a well-defined and adaptable decision-making process, techniques to manage biases, and the significance of thesis-driven investing. The episode also delves into the premises of the premortem technique and being an appropriate Bayesian, as well as the economic fundamentals and cash flow generation in investment evaluation. The conversation touches on the episodic nature of venture returns, the question of portfolio sizing, the historical perspective in times of instability, and the influences of interest rates on younger companies. Finally, it explores the value of combining different disciplines, the assessment of managers in challenging situations, and the difficulties of holiday gifting for both individuals and businesses.