Mark: The biggest business blunder of the 20th century—a decision so famously bad it’s become a legend—might have actually been a perfectly good decision. Michelle: Hold on. You're not about to defend the record label that rejected The Beatles, are you? Mark: Even bigger. I'm talking about the film studio that passed on Star Wars. Michelle: Okay, now you have my attention. Passing on Star Wars? That's like passing on the invention of the wheel. There is no universe where that was a good decision. It's the definition of a colossal failure. Mark: That's what our intuition screams, right? But this exact, counterintuitive idea is the starting point for a fascinating book called How to Decide by Annie Duke. She argues that our obsession with that outcome blinds us to the reality of the decision itself. Michelle: That name sounds familiar. Isn't she the poker player? Mark: Exactly. And that's what makes her perspective so powerful. She’s not just an academic, though she does have a PhD in Cognitive Psychology. She’s a former world champion poker player who won millions making high-stakes decisions with incomplete information, night after night. She lived in the world of uncertainty. Michelle: Wow. So she’s got the theory from the lab and the scars from the felt. That’s a combination you don’t see every day. Mark: It’s the perfect blend. And she uses that dual expertise to dismantle the very way we think about success and failure, starting with that legendary decision to turn down Luke Skywalker, a Wookiee, and a couple of droids.

Michelle: Alright, I'm listening. But you have a high bar to clear here, Mark. Convince me how passing on a multi-billion dollar franchise was anything other than a catastrophic mistake. Mark: Let's travel back in time, to the early 1970s. Forget the posters, the toys, the cultural empire. At the time, George Lucas was a promising but niche director. His first sci-fi film, THX 1138, was an art-house film, not a blockbuster. The studio he was dealing with, United Artists, had already passed on his previous script, American Graffiti, which went on to be a huge hit for another studio. Michelle: Okay, so they'd already made one mistake with him. You'd think they'd be careful not to make another. Mark: That's our hindsight talking! At the time, they saw a director whose last film was a commercial flop, and now he's pitching them a script that was, by all accounts, very strange. It was described as a "space opera" or a "fantasy western." It had laser swords and talking robots. In the 70s, serious science fiction was dark and dystopian, like 2001: A Space Odyssey. This was… different. And it wasn't just United Artists. Universal passed. Disney passed. Michelle: Wait, Disney passed on Star Wars? That’s almost funnier than the original story. Mark: They all did! Twentieth Century Fox only picked it up because one executive, Alan Ladd Jr., believed in Lucas. But even he didn't fully get it. The studio was so unsure, they gave it a relatively small budget. No one, and I mean no one, saw a global phenomenon coming. They saw a risky bet on a weird movie in an unproven genre. Michelle: I see what you're getting at. We're judging their 1973 decision with our 21st-century knowledge. Mark: Precisely. And Duke gives this a name. She calls it "resulting." It's the cognitive trap of judging the quality of a decision based purely on the quality of its outcome. The result was spectacular, a one-in-a-million shot that landed perfectly. So we look back and say the decision to pass must have been terrible. Michelle: Ah, it’s like a quarterback who throws a perfect spiral into tight coverage, but the receiver makes a miraculous catch in the end zone. The coach on the sideline is still furious, because it was a low-percentage, high-risk throw. The process was bad, even though the result was good. Mark: That is a perfect analogy. And the reverse is even more dangerous. Imagine that same quarterback throws a perfect pass to a wide-open receiver who then trips over his own feet and drops it. The outcome is terrible. If the coach only judges by the result, he might bench a quarterback who is actually making excellent decisions. Michelle: Right. And that's what Duke is saying happened with Star Wars. The decision to pass, given the information they had at the time—the weird script, the niche director, the genre's track record—was actually a reasonable, high-percentage play. They just got unlucky that the one they passed on happened to be the one that hit the jackpot. Mark: Exactly. And Duke argues this is the single biggest obstacle to learning from our experiences. If you get a good outcome from a risky process, you might learn to be reckless. If you get a bad outcome from a solid process, you might learn to be timid and abandon a good strategy. You learn the wrong lesson because you're confusing the quality of your decision with the roll of the dice.

Michelle: Okay, that makes a ton of sense for these huge, public decisions where we can look back at the facts. But it feels different in our own lives. When something goes wrong for me personally, I can't shake the feeling that I should have known. It feels less like bad luck and more like I was just blind. Mark: You've just set up the second major trap Duke discusses. It's the one that kicks in right after "resulting" has done its damage. She illustrates this with a brilliant thought experiment about a person deciding between two jobs. Michelle: I'm all ears. This feels very relatable. Mark: So, imagine a young person who grew up in sunny Florida and went to college in Georgia. They get two job offers: a decent one in Georgia, where they're comfortable, and a fantastic career opportunity in Boston. The only hang-up is the weather. They're terrified of New England winters. Michelle: A classic dilemma. The safe bet versus the risky, high-reward option. Mark: Right. So, to make a good decision, they fly to Boston in the middle of February to see what it's really like. It's cold, it's a bit gray, but they decide, "You know what? It's not so bad. The job is worth it." They take the job and move to Boston. Now, Duke asks us to imagine two possible futures. Michelle: Okay, the multiverse of decisions. I like it. Mark: In Universe A, the person is absolutely miserable. The cold is relentless, the sky is perpetually gray, and they feel a deep, seasonal depression they've never experienced before. They hate it. Within a year, they quit the job and move back south. Michelle: Oh, that's heartbreaking. Mark: Now, in Universe B, the opposite happens. The first snowfall is magical. They discover a love for skiing, they meet a great group of friends on the slopes, and they become an avid snowboarder. They love the crisp air and the change of seasons. They thrive in Boston and build a wonderful life there. Michelle: A much happier ending. So what's the punchline? Mark: Here's the critical part. In Universe A, where they're miserable, what do you think they and their family say? They say, "We should have known! You've always hated the cold. What were you thinking? It was obvious this was going to be a disaster." Michelle: Right. "I knew it all along." Mark: And now, what about in Universe B, where they're thriving? They and their family say the exact same thing: "We should have known! You've always been adventurous and loved new challenges. It was obvious this was going to be a huge success." Michelle: Wow. So no matter the outcome, the past gets rewritten to make it seem inevitable. Mark: That's it. Duke calls this "hindsight bias." It's that "I-knew-it-all-along" feeling that creeps in after an event has occurred. Our brain, desperate to make sense of the world, creates a neat and tidy story where the outcome was predictable from the start. It conveniently forgets all the uncertainty and doubt that existed before the decision was made. Michelle: Oh, I have absolutely done that. I remember convincing myself I "always knew" a past relationship was doomed from the first date. But if I'm being truly honest with myself, I was incredibly optimistic and excited at the start. My memory just edited out all the parts that didn't fit the "it was always going to fail" narrative. Mark: We all do it! It's a protective mechanism. It makes the world feel less random and more predictable. But it's poison for learning. If you think you "knew" the outcome all along, you don't learn anything useful about your decision-making process. You just learn a fake lesson: that you should have been able to predict the future.

Michelle: So it's a devastating one-two punch. First, we judge the decision based on the outcome because of "resulting." And then, "hindsight bias" swoops in and rewrites our memory to make that outcome feel like the only one that could have ever happened. Mark: That's the cycle. It locks us in place. We become convinced that good outcomes are the result of our genius and bad outcomes are the result of our foolishness, when in reality, there's a huge element of luck—good or bad—in almost everything. Michelle: So what's the big takeaway here? Are we just doomed to be terrible learners, constantly fooled by our own minds? Mark: Not at all. Duke's core message is actually incredibly empowering. It's that the only thing you have any real control over is the quality of your decision process. You can't control the outcome. You can't control luck. The goal isn't to become a psychic who can predict the future. The goal is to become a good strategist—a good poker player—who makes the best possible bet with the information available at the time. Michelle: I like that. It takes the pressure off getting it "right" every single time. It shifts the focus to having a good method. Mark: It's about separating process from outcome. That is the first, most fundamental step to getting better at anything. You have to be able to look at a great process that led to a bad outcome and say, "I'd make that same decision again." And look at a terrible process that got lucky and say, "I'm never doing that again." Michelle: That's a powerful reframe. So what's one practical thing someone listening can do today to start breaking this cycle? Mark: Duke provides a lot of tools, but a simple starting point is a two-question review for any decision, big or small, that you're evaluating. First, ask: "What did I know at the time, and only what I knew at the time?" This forces you out of the present. Second, ask: "What were the other plausible ways this could have turned out?" Michelle: Ah, so you force yourself to visit the multiverse. To acknowledge the role of luck and see the outcome you got as just one of many possibilities, not the only one. Mark: Exactly. It breaks the illusion of inevitability that hindsight creates. It's a simple mental exercise, but it's the beginning of thinking like a true decision scientist. Michelle: A powerful, simple check. It’s about being fair to your past self. Mark: This is Aibrary, signing off.