The Great Mental Models by Shane Parrish
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Short Summary

In life and business, the person with the fewest blind spots wins. Removing blind spots requires us to have a better understanding of reality. We can improve our understanding of how the world works by using mental models to shape how we think, how we understand, and how we form beliefs. A mental model is simply a representation of how something works so we can simplify the complex into organizable chunks for us to understand.

Favorite Quote

“Well, the first rule is that you can’t really know anything if you just remember isolated facts and try to bang ’em back. If the facts don’t hang together on a latticework of theory, you don’t have them in a usable form. You’ve got to have models in your head.”

Charlie Munger

Book Notes

Whether you realize it or not, you use mental models every day to help make decisions. They are the tools used to describe the way the world works. They simplify the complex into understandable and organizable chunks so you can think, decide, and better understand the world around you. The better your models, the better your thinking.

While there are millions of mental models to choose from, some true and some false, these nine mental models will help improve your thinking right away:

  1. The Map is Not the Territory
  2. Circle of Competence
  3. First Principles Thinking
  4. Thought Experiment
  5. Second-Order Thinking
  6. Probabilistic Thinking
  7. Inversion
  8. Occam’s Razor
  9. Hanlon’s Razor

The Map Is Not The Territory

“The map appears to us more real than the land.”

D.H. Lawrence

The map of reality is not reality. The description of the thing is not the thing itself. The best maps are imperfect because they are reductions of what they represent. If a map were to represent a territory with perfect fidelity, then it would no longer be a reduction that is useful to use. Maps are useful to the extent they are explanatory and predictive.

Maps are models whose value is related to its ability to predict or explain reality. To use a map accurately as possible, you should take into account:

  1. Reality is the ultimate update – if reality changes then the map must change
  2. Consider the cartographer – maps reflect the values, standards, and limitations of their creators
  3. Maps can influence the territories they represent – reality can be changed to fit the expectations of the map

Circle of Competence

“I’m no genius. I’m smart in spots – but I stay around those spots.”

Thomas Watson

Being honest about where your knowledge is lacking, so you know where you’re vulnerable and where you can improve. The only way to build your circle of competence is through years of work and by learning from your failures. There are a few ways to identify if you have built a circle of confidence:

  • Within your circle, you know exactly what you don’t know
  • You know what is knowable and what is unknowable and can distinguish between the two
  • You have years of experience, of making mistakes, and seeking better methods of practice and thought

It’s going to take years of hard work to build a circle of competence, but there are three key practices to build and maintain to achieve success:

  1. Curiosity and a desire to learn – learning from your own experiences and the experiences of others
  2. Monitoring – keeping track of your decisions so they can be measured
  3. Feedback – keeping a journal  of your performance and seeking feedback from others to overcome any biases

Since it’s impossible to be competent in all aspects of your life, you will also need to know how to operate outside your circle of competence. You can successfully navigate outside your circle using these methods:

  1. Learn the basics of the realm you are operating in while acknowledging your ignorance
  2. Talk to those who have a strong circle of competence in the area you seek. Ask questions to probe the limits of their circle
  3. Develop a broad understanding of the basic mental models of the world to augment your limited understanding

First Principles Thinking

“I don’t know what’s the matter with people: they don’t learn by understanding; they learn by some other way – by rote or something. Their knowledge is so fragile!”

Richard Feynman

Also known as reasoning from first principles, this tool is used for clarifying complicated problems by separating the underlying ideas or facts from any assumptions. You are identifying the elements that are non-reductive. There are two approaches for getting to first principles:

Socratic Questioning. A disciplined questioning process with six steps:

  1. Clarify your thinking
  2. Challenge assumptions
  3. Look for evidence
  4. Consider alternative perspectives
  5. Examine consequences and implications
  6. Question the original questions

The Five Whys. You keep asking yourself “why” until you reach a “what” or a “how.” If your “whys” result in a statement of falsifiable fact, then you have hit a first principle.

Creativity is a result of breaking things down into first principles so you can learn to think for yourself instead of copying others.

Thought Experiment

“Creativity is intelligence having fun.”

Anonymous

Using devices of the imagination to investigate the nature of things. Thought experiments resemble the scientific method by using these steps:

  1. Ask a question
  2. Conduct background research
  3. Construct hypothesis
  4. Test with (thought) experiments
  5. Analyze outcomes and draw conclusions
  6. Compare to hypothesis and adjust accordingly

Thought experiments are useful for imagining physical impossibilities, re-imagining history, and intuiting the non-intuitive. They are useful for exploring unrealized outcomes. Popular thought experiment prompts to spark the imagination include asking “What if money were no object” or “If I had all the time in the world” since they consider impossible scenarios.

Second-Order Thinking

“Technology is fine, but the scientists and engineers only partially think through their problems. They solve certain aspects, but not total, and as a consequence it is slapping us back in the face very hard.”

Barbara McClintock

It is not enough to only consider your actions and their immediate consequences; you must also consider the subsequent effects of those actions as well. Second-order thinking is critical because we live in a complex world where everything is highly connected, making it easier for actions to have far-reaching consequences.

There are two areas where second-order thinking provides great benefit:

  1. Prioritizing long-term interests over immediate gains
  • Ask yourself if what you’re doing now is going to get the result you want
  • How will things look in one month, one year, and beyond
  1. Conducting effective arguments
  • Evaluate the most likely effects and their consequences
  • A first-order solution may have an immediate payoff but long-term consequences

First-order thinking is fast and easy because it only looks to solve the immediate problem. Second-order thinking is more deliberate because it stops to ask, “And then what?”

There is a caveat: don’t let second-order thinking lead to paralysis of the Slippery Slope Effect.

Probabilistic Thinking

“The theory of probability is the only mathematical tool available to help map the unknown and the uncontrollable. It is fortunate that this tool, while tricky, is extraordinarily powerful and convenient.”

―Benoit Mandelbrot

Probabilistic thinking uses tools like math and logic to estimate the likelihood of any specific outcome coming to pass. There are three aspects of probabilistic thinking:

  1. Bayesian Thinking
  • The process of taking into account what we already know when we learn something new as much as possible
  • Any new information you encounter that challenges a prior means the probability of the prior being true is reduced
  • It requires knowing the relevant priors and how to use them to understand reality better
  1. Fat-Tailed Curves
  • The more extreme events that are possible, the longer the tail of the curve and the higher the probability they will occur
  • Curves with fat tails have no real cap on the potential impact of extreme events
  • Knowing when you’re in a fat-tail domain is critical for positioning yourself to survive or even benefit from the unpredictability by becoming antifragile
  1. Asymmetries
  • Give a probability to your probability estimates since most estimates are wrong on the “over-optimistic” side rather than the “under-optimistic” side
  • Seeking out opportunities you expect to have positive asymmetries can lead to having a high upside
  • Never put yourself in a position where being wrong will completely do you in (i.e., betting the farm on it)

Inversion

“The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function. One should, for example, be able to see that things are hopeless yet be determined to make them otherwise.”

F. Scott Fitzgerald

A tool for approaching a situation from the opposite end of its natural starting point. Being able to combine the ability to think forward and backward allows you to see reality from multiple angles. There are two approaches to using inversion:

  1. Start by assuming that what you’re trying to prove is either true or false, then show what else would have to be true
  2. Instead of aiming directly for your goal, think deeply about what you want to avoid and then see what options are leftover

In any situation where change is desired, successful management of that change requires applied inversion using a tactic called force field analysis. Force field analysis follows this process:

  1. Identify the problem
  2. Define the objective
  3. Identify the [positive] forces that support change towards your objective
  4. Identify the [negative] forces that impede change towards your objective
  5. Strategize a solution (add forces in step 3, eliminate forces in step 4)

Think about not only what you could do to solve a problem, but what you could do to make it worse – and avoid doing that, or eliminate the conditions that perpetuate it.

Occam’s Razor

“Anybody can make the simple complicated. Creativity is making the complicated simple.”

Charles Mingus

Simpler explanations are more likely to be true than complicated ones. Instead of wasting time on trying to disprove complex problems, make decisions in confidence by basing your explanations on what has the fewest moving parts.

When selecting among competing explanations, if all else is equal, it’s more likely that the simplest solution will suffice. Complexity is often a product of confusion used to mask systematic flaws or a lack of understanding. Opting for the simple solution allows you to make decisions based on how things really are.

There is one caveat: some things are naturally complex and do not have a simple solution.

Hanlon’s Razor

“I need to listen well so that I hear what is not said.”

Thuli Madonsela

You should not attribute to malice that which is more easily explained by stupidity. In other words, don’t assume people cause harm because they are evil when stupidity or ignorance is more likely to be the cause. The explanation most likely to be right is the one that contains the least amount of intent.

When something bad happens that you don’t like it’s easy to assume that it was intentional, but it likely wasn’t. Of all possible motives behind an action, the ones that require the least amount of energy to execute (such as ignorance or laziness) are more likely to occur than one that requires active malice. It helps to remember that people are humans who make mistakes and fall into traps of laziness, poor thinking, and bad incentives.

Read More on Amazon:
The Great Mental Models: General Thinking Concepts