Exit Strategy

Questions

What is Exit Strategy?

An Exit Strategy is a plan for leaving an investment, market or commitment: the conditions that trigger it, how you'll do it, and how you'll protect what you've built. At Gallipoli, a carefully planned withdrawal got over 100,000 troops out with very few casualties.

How do you use Exit Strategy?

Use it before you start anything uncertain: write your stop and continue criteria, set money rules while calm, and build review points into commitments. Revisit the plan as facts change.

When does Exit Strategy matter?

Exit Strategy is one of the 35 mental models for decisions, the situations where you ask: Which way should I go? Within that, it belongs to “Thinking ahead”, alongside Counterfactual Thinking, OODA Loop and Second-Order Thinking.

What is an example of Exit Strategy?

Two stories show it at work: Leaving Gallipoli (1915–1916) and eBay and Skype (2005–2011). Both are told in full in The Mental Models Daily Almanac, which has two stories for each of its 365 models.

Which mental models are related to Exit Strategy?

Preserving Optionality, Sunk Cost Fallacy and Margin of Safety. Exit Strategy itself comes from economics.