“Thinking in bets starts with recognising that there are exactly two things that determine how our lives turn out: the quality of our decisions and luck. Learning to recognise the difference between the two is what thinking in bets is all about.”
Annie Duke, “Thinking in Bets”
In business terms, ‘bets’ are the investments or projects that bear a high level of risk but could be very valuable if they success. Product Managers will prioritise based on assessing value and effort, identifying ‘quick wins’ and ‘big bets’.
Spotify uses a so-called ‘Bets Board’ which is part of a broader DIBB framework: Data (D), Insight (I), Belief (B) and Bet (B). The purpose of this framework is to cascade different points of alignment across an organisation. It was developed as part of the wider ‘Spotify Rhythm’, as a way to scale its Agile approach.
Similar to the steps involved in creating and aligning on a strategy, the DIBB framework starts with data and observable facts and ends with a number of bets to pursue a certain belief:
Data (D) – Analyse the available data to better understand the current state of play. Think about collating data like market trends, sales stats or customer behavioural data.
Insights (I) – Translate the data into (actionable) insights; working through the available data to look for patterns or potential questions. You can also predictive modelling to understand trends and implications.
Belief (B) – A belief is a hypothesis based on the insights generated. This isn’t a fact, but purely based on your understanding of the data and insights.
Bet (B) – A bet is an action to either test or capitalise on a (strong) belief. Bets often require significant investment in return for a large upside. It’s important to define the outcome for each bot and measurable success metrics.
By going through the DIBB framework, Spotify uses a consistent approach to moving from beliefs to bets, crossing different points of alignment in the process. Podcasting and audiobooks are recent examples of a big bet made by Spotify based on its strong beliefs. At Spotify beliefs come in three different types:
Company Beliefs – The strategic understanding of the world and the resultant company focus for the next 3-5 years.
North Star and 2-year Goals – The handful of ambitious and measurable targets aligned to the beliefs.
Bet – As explained above, a ‘bet’ is an action to either test or capitalise on a (strong) belief. Similar to Basecamp, a bet sets a certain expectation, it’s a strong statement of intent. Spotify uses three types of bets: Company Bets, Functional Bets and Marketing Bets.
Company Bet – Company bets are large cross-organisational projects that often last 6-12 months.
Functional Bet – Functional bets are typically large function-based projects that are aligned to Company Bets.
Marketing Bet – Marketing bets are smaller, more rapid initiatives and investments by teams.
Main learning point: Bets are constantly evolving, based on the learnings and outcomes from action taken. Spotify uses its Bets Board as an important communication tool; being transparent about company wide, stack ranked priorities.
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