Successful people should not give advice

I’ve consumed a lot of advice content from many successful people and more often than not, I wonder if the similar actions they’ve taken will replicate the same success or not. These actions are a result of their decisions which often comes out as advice. My personal observations is that there are rarely a few things similar between two success people. In fact, what’s similar are common skill sets which I have also seen in people who aren’t as successful.

What’s interesting to note is that context plays a huge role in the outcome of a decision. The same decision can lead to a positive or a negative result depending on the environment, subjectivity of the situation and so on, which is nothing but context.

But as humans, we like shortcuts. Listening to successful people give advice makes us feel like our time is being spent productively. And it’s not even the fault of these folks. Often, they are placed under the spotlight and asked to reveal their secrets. In the process of being polite and accommodating, successful people end up recollecting as to why they think they’ve been successful and share this advice with others. And this is barely applicable to anyone else, as the context is entirely different.

Our quest for a recipe or a shortcut makes motivational and inspirational content so popular. For the same reason, I am guessing that quotes are one of the most shared and saved posts on Instagram/YouTube etc.

The trick is very simple, but hard. It’s to create or discover your own path to success. If recipes and shortcuts really worked, we’d barely have any consumption of motivational context!

Recipes and shortcuts work in scenarios where the possible outcomes are defined, with limited possibilities, such as cooking and competitive exams. But when it comes to a dynamic game like life with infinite possibilities, attempting to look for recipes is a sure shot way to fail.

And if the above sounds like advice, don’t take it 🙂


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Create more than you consume

We live in a time where information is in abundance. It’s information overload. Tens of apps in your phone screaming for your attention. All seem too important to not miss out on. Apps like Pocket help you save content for later, which in reality rarely get consumed. FOMO is a very common feeling when you try and ignore the content coming at you. Over time, over-consumption of content leaves us incapable of creating.

Try this, create something new everyday for the next 7 days. It could be a short article, a new tweet to publish or an Instagram post.

It’s way harder than you think. But consistently creating over time helps you think deeply, structure your thoughts better and overall make you more mindful and deliberate.

It’s easy to scroll your phone mindlessly and your chemicals reward you for it as well! I had a realization very recently when I was reading an article on product management, which was that, in reality I am not achieving much by reading this article right now, but I feel like I am actually reading something that could be potentially useful to me sometime in the future. But by the time the article could be useful to me, it’s hardly useful as very likely I’d not remember much about it. It just made me feel productive and barely contributed to any real productivity.

Consuming a huge quantity of information often feels productive, but in reality, we don’t remember most of it. Rather, what is more useful is a deliberate consumption of information and reflection of it, that gets registered better. And if you want to remember it even better, create something around it, a note, article, bullet points, something.

So the next time you are reading a seemingly important article, or watching a potentially useful video, ask yourself if this is simply making you feel productive right now or something that you will actually take something away from. And to increase the chances of the latter, make it more deliberate. Make notes or reflect upon what you just consumed.

Over time, as you consume information more deliberately, you will naturally start creating a lot more. And creating more than you consume ensures that what you consume actually has an impact on you vs just releasing some dopamine and make you feel accomplished.


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1 person company

I am in the creator/influencer business and on a daily basis, come across creators who run a one person army and are raking in more revenue than many of the funded startups.

Some are running courses, some are selling premium content, many are working on brand deals and few are trying to monetize from their audiences directly. The model is simple, gather attention via content and then monetize that attention.

As a creator, these folks manage their entire operation end to end, often with little to no external support. Content creation, editing, distribution, finances, logistics etc. Over time as they can afford support, creators start focusing on their core product (content) whereas the rest of the functions/activities get outsourced.

MKBHD, a popular tech YouTuber with 14.3 million subscribers and an estimated revenue of $3 – $5 million, currently has just five team members to support him, with some of them working part time. With a per employee revenue of $600,000 to $1 million, this puts him in comparison to some of the the top tech companies like Microsoft and Twitter.

Something very fundamental about the internet is the distribution of power from corporations to individuals, with crypto accelerating this even further. Over time (a few tens of years maybe?), I think large corporations will cease to exist.

The Top 20 Tech Companies by Revenue Per Employee

As shown in the above infographic, in any industry, newer companies tend to have higher revenue per employee. One of the primary reasons why companies are large is because apart from their core functions, there are other departments which are required to run the core operation.

For example, a technology company like Google needs finance, legal, operations, sales etc., to generate revenues. As time progresses, I think companies will focus more on their core functions and outsource the rest, very similar to creators. With smart contracts, NFT’s, currency and other use cases that crypto enables, trust becomes a commodity and outsourcing becomes a lot easier.

When outsourcing functions becomes the norm, company sizes will start tending towards 1.


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As a leader, you should make yourself irrelevant

I’ve been building teams for the last 5 years and there’s one thing I’ve realized – the more my team depends on me, the more work I have to do to actually make the team work. My personal ambition is to get to a point where my team doesn’t really need me. To a point where they have all the skills, context, information and ownership to take decisions and keep moving forward. Most dependencies come in, where there is a lack of context and/or when there is a lack of ownership & freedom to take decisions.

Lack of context is a slightly easier problem that can be fixed by communicating a lot, very often. But a lot of leaders often find difficulties in letting go and giving somebody else complete ownership of something.

The tradeoff here is that in the short term, there will be screwups and mistakes – most of which can be reversed and corrected.

And when your team goes through the process of screwing up and fixing, they will automatically start taking more ownership. As a leader, all you should do is cheer them from the sidelines and only step in if they ask for help.

Giving up control becomes easy when you think of decisions as reversible and irreversible.

The reality is, most decisions are reversible. There are only a handful of decisions that you will take in a year, that are truly irreversible. All the reversible decisions should be taken by your team by default and you should only worry about the irreversible ones.

Over time, leaders should free up their time from day to day business to focus on those few large decisions that are going to make a large impact. Being truly productive doesn’t mean having your calendar blocked for meetings  all day long. Being productive means, having the time to think and make deliberate decisions that can potentially have large outcomes.

Now obviously, this doesn’t happen in the initial days when the team is small. But when the team starts scaling beyond 10-15 people, is when you should strive to make yourself irrelevant to the team.

Making yourself irrelevant is possible only when leaders are highly self aware, else they will always be an amount of insecurity. When you truly know your strengths and weaknesses and have the right intentions of empowering your team to become future leaders, making yourself irrelevant is even possible. Else, there will always be the need to control everything, and that is a precursor to micromanagement.

If you’re worried that your team will do better than you, leaders should work on this before anything else. If there is a problem with someone being better than you at something, that itself is a problem.


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Book Notes: Psychology of Money

This is one of those books which I randomly picked off, thanks to Amazon suggestions and what a journey it has been reading this over the last couple of weeks. This is one of those books that’s a breeze to reach and understand. The language is simple. The ideas common but profound, and the author has done a great job on the brevity aspect.

My review of this book will contain the takeaways from each chapter.

No One’s Crazy

Your personal experiences with money make up maybe 0.00000001% if what’s happened in the world, but maybe 80% of how you think the world works.

We often are very judgmental of other people’s behavior with money. Buying a lottery ticket is stupid? Maybe not for people who dream of living a live that you and I live. Think that people are too scared to take risks with crypto or stock? Often, their life experiences determine their risk appetite. The point is, people in this world have very personal experiences which are similar from a macro lens, but very different from a more micro perspective.  These micro level events determine the behavior of people with their money.

So most actions people take with their money – could be gambling, buying lottery tickets, blowing it off on parties or even saving at the expense of comfort, are a result of their experiences. And each of these behaviors is justified to them, while it may look crazy to an outsider. No one is trying to act crazy, it’s all justified.

Luck & Risk

Nothing is as good or bad as it seems.

The primary takeaway from this chapter for me was the fact that luck has a very large role to play in the outcomes in our life, a lot more than we realize because we like to take credit for any positive outcome and usually blame an external event in case of a negative outcome. On the other hand, every decision we take has an element of risk attached to it. Nothing worth pursuing comes with 0% risk. The difference between who is features of the cover page of the Forbes magazine is often the difference between who ended up on the fortunate and unfortunate side of risk.

For every Bill Gates and Elon Musk out there, there’s someone equally brilliant but just ended up on the unfortunate side of risk with little luck to favor. While it isn’t to say that we should not work hard and try to be smart about the decisions we take, but what’s to realize here is that things are largely out of our control. This is very humbling and lets you stay in the game for long.

Never Enough

When rich people do crazy things.

The realization here is that no amounts of money is ever enough. Rich people often do things that risk their entire wealth and reputation to be able to keep upgrading their net worth. Someone with a $100k annual income will always want to earn $1 million. A millionaire will want to get into the tens millionaire club, who would want to get into the hundred millionaire club, and so on.

A large number of people throughout history have taken risks just to upgrade which have potentially destroyed their reputation and wealth, because no amount of money is ever enough.

One of the hardest financial skills is getting the goalpost to stop moving. Have truly enough money is life changing, whatever maybe the amount. Easier said than done, and social comparison is the problem here. And with Instagram, Twitter, TikTok etc., its easier to compare ourselves to others and to feel inadequate, all the time. So much so that you will never truly be happy, no matter how much effort you put in to make that money.

Confounding Compounding

$81.5 billion of Warren Buffet’s $84.5 billion net worth came after his 65th birthday. Our minds are not built to handle such absurdities.

One of the most commonly discussed yet barely understood things is compounding. With compounding at play, you do not need tremendous force to create tremendous results. A little growth over a long enough period of time can result in outcomes that seem suddenly surprising. This is very difficult for our minds to process as it seems to defy logic. It can be so logic defying that you underestimate what’s possible, where growth comes from and what it can lead to.

Warren Buffet maybe a phenomenal investor. But the real key to his success isn’t his investing acumen, but time. Had he started investing in his 30s and retired in his 60s, few people would have ever heard of him.

Getting Wealthy vs. Staying Wealthy

Good investing is not necessarily about making good decisions. It’s about consistently not screwing up.

Gathering wealth and protecting it requires different skill sets. The former requires an ability to identify opportunities and take risks, whereas the latter is more about frugality and paranoia.

Tails, You Win

You can be wrong half the times and still make a fortune.

It’s all about the power law. To win and be successful, you need to give yourself enough time and chances. Most major wins, come in a very few number of cases. For example: a majority of returns for a VC fund come from less than 5% of the companies they invest in. To ensure you have a shot at winning, the answer is to simply give yourself a large number of shots and manage your resources (time/effort/energy) in a way where it gives you the opportunity to have enough shots.

Freedom

Controlling your time is the highest dividend money pays.

Wealth and money should be viewed as tools to allow you to do whatever you want, without having to work for money. With enough money, you can buy this freedom of doing whatever you want. In essence, this allows you the feeling of having control over you life, which is corelated to high levels of happiness. So in essence, money buys you freedom, which gives you happiness! Money = happiness, but not in the material way most people think.

Man in the Car Paradox

No one is impressed with your possessions as much as you are.

When you see someone driving a nice car, you rarely think “Wow, the guy driving the car is cool.” Instead, you think, “Wow, if I had that car people would think I’m cool.” This is the paradox. People want wealth and the ability to buy fancy stuff to be able to signal to others. But what ends up happening is, people use your wealth as a benchmark for their own desire to signal to others (to be liked and admired).

Wealth is What You Don’t See

Spending money to show people how much money you have is the fastest way to have less money.

When you see someone owning an expensive car etc., we tend to think that the person in rich and wealthy. But the irony is, that person is poorer by the value of the car. A large number of people, use up significant percentage of their net worth to signal their wealth via fancy cars, big houses etc.

Save Money

The only factor you can control generates one of the only thing that matters.

Building wealth has little to do with your income or investment returns, and lots to do with your savings rate. As savings rate is something which is directly in your control as opposed to returns, this has a higher likelihood to making you rich.

Reasonable > Rational

Aiming to be mostly reasonable works better than trying to be coldly rational.

The reality is, we are not spreadsheets or bots. We are people, irrational and emotional. Something that gets overlooked: Do not aim to be coldly rational when making financial decisions. Aim to be pretty reasonable, which is more realistic and you have a better chance of sticking through it in the long run, which is what matters most when managing money.

Surprise!  

History is the study of change, ironically used as a map of the future.

It’s hard to predict future events. Even if you spend a lot of time studying history in any specific field, things that have never happened before happen all the time. A few events in history shape the future events in a massive way, but can’t be predicted. For example, the book talks about how 9/11 resulted in the 2008 recession via a series of events, which was totally impossible to predict in advance.

The key lesson is to always have the humility to be surprised by events.

Room for Error

The most important part of every plan is planning on your plan not going according to plan.

When dealing with money, accounting for enough room for error will always make things easy. The wisdom in having room for error is acknowledging that uncertainty, randomness and chance are an ever present part of life. The only way to deal with them is by increasing the gap between what you think will happen and what can happen while still leaving you capable of fighting another day.

You’ll Change

Long-term planning is harder than it seems because people’s goals and desires change over time.

The important takeaway here is that what you imagine you want in the future will most likely change when you get to that point in the future. While long term financial planning is essential, but things change – both the world around you and your own goals and desires. When things change, it’s always a good idea to avoid the extreme ends of financial planning. Assuming you will be happy with a very low income or choosing to work endless hours in pursuit of a high one, increases the odds that one you will find yourself at a point of regret.

Nothing is Free

Everything has a price, but not all prices appear on labels.

The key to a lot of things with money is just figuring out what that price is and being willing to pay it. The problem is that the price of a lot of things is not obvious until you have experiences them firsthand, when the bill is overdue.

For example: the S&P 500 increases 119x in the 50 years ending 2019. All you had to do was to sit back and let you money compound. But of course, successful investing looks easy when you are not the one doing it. Like everything, successful investing demands a price. But the currency is not dollars, it’s volatility, fear, doubt, uncertainty and regret- all of which are easy to overlook until you are dealing with them in real time.

You & Me

Beware taking financial cues from people playing a different game than you are.

The key takeaway here is that everyone’s circumstances are different and financial advice that suits you may not entirely suit my circumstances. So when you listen to someone giving advice that may sound amazing, always think it that makes sense you to and your circumstances.  

The Seduction of Pessimism

Optimism sounds like a sales pitch. Pessimism sounds like someone trying to help you.

Optimism is the best bet for most people because the world tends to get better for most people most of the time. But pessimism is special. Not only is it more common, but also sounds smarter, is intellectually captivating and it’s paid more attention than optimism.

When you’ll Believe Anything

Appealing fictions and why stories are more powerful than statistics

Stories come in all shapes and sizes with all kinds of narratives. The more you want something to be true, the more likely you are to believe a story that overestimates the odds of it being true. And, given that everyone has an incomplete view of the world, we use stories to form a complete narrative to fill in gaps. The interesting part is, while stories can be very convincing, most of them are far away from reality, hard facts and data.


That’s it folks! This is a summary that I hope to revisit in the future to revise my own learnings. I have tried to keep this post very brief, you will find a lot more examples and explanations in the book.


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My north star metric

Every great company or a business usually focusses on one single metric. The metric that helps them take decisions, the metric that helps them measure success, the metric that gives their employees a clear guidance and direction, like a north star. The north star varies for different companies. For companies like Facebook, it’s the number of daily/weekly active users. For Uber, it’s no. of weekly trips and so on.

This north star metric is not some random number but a very conscious choice. It makes sure; everything that is important to the company is accounted for and is directly or indirectly affected by the north star metric.

So if you are improving on the north star metric, it automatically means all the other metrics important to you are improving. Case in point; Uber. If the no. of trips are increasing, it means the below —

  1. The number of repeat users (users who take more than 1 trip) are increasing
  2. The number of new users (new trips) are increasing
  3. The number of drivers on the platform are increasing

Notice how the single north star metric takes care of everything else. Say if Uber chose their north star metric as the number of new users, it doesn’t necessarily mean that either the repeat usage or the number of drivers are increasing, which can be disastrous for a two sided market place like Uber.

It’s easier to assign a north star metric to companies but how do we do it for humans? How do we make sure that we align ourselves with a very objective metric to define our success or progress in life? This, like companies will vary from individual to individual. For many people who I’ve come across, it’s bank balance, no. of countries/places visited, designation in a corporate structure and so on.

Not that these are any wrong, but the point of a north star metric is to make sure the metric offers a wholesome approach to measure progress. And for me, neither of the above are wholesome. After few weeks of thinking, the north star metric for me is the number of major regrets in life. Lesser the number of major regrets, better is my life.

Optimising for this metric takes care of a few things —

  1. Makes sure I do the right things in the long run
  2. Makes sure I don’t do something just for instant gratification (it’s a trap), something that I could regret later on
  3. Makes sure I do the things that I would regret not doing at a later point, no matter how hard or difficult it may get at the moment

Given how often I change my point of view, this could change as I gather more knowledge and understanding. But it definitely gives me a singular focus towards my life in the coming year, and something with which I can measure my progress with.

What is your north star metric?


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Book Notes – What You Do Is Who You Are

I have been an admirer of Ben Horowitz’s writing. The previous book of his which I read a few years ago offered deep insight with examples (most books have little to no examples) into how to tackle the hard things about startups, the things no one talks about, what happens when shit is hitting the fan.

More than anything else, The Hard Things About Hard Things offered comfort knowing that it’s possible to steer a company into a favorable outcome even with all that goes wrong on a day to day basis. And like you probably guessed, we were fire fighting on a daily basis at Winkl, while trying to keep our heads above the surface.

Point is, the book (Amazon link) really helped.

Interestingly, when I picked up What You Do Is Who You Are — a book about culture building, we were at a place where we were struggling to figure out how to build the right culture at Winkl. Getting the culture right is a constant process with no end, so much so that I’d say getting on the path of right culture building is one of the hardest things you can do as a leader. And what a book it has been! I would read a chapter and go apply it the very same day at Winkl.

Below, I have summarized my takeaways from the book, while it’s not exhaustive, this can serve as a quick read for you to decide if you want to read the book or not.

Blind trust is the most important thing between a team

  • Telling the truth isn’t easy. It’s not natural. What’s natural is telling people what they want to hear.
  • Trust derives from candor, your company will fall apart if your team doesn’t trust you. If they don’t trust you, you will never know the truth, which could lead to a brewing bad situation becoming potentially company destroying.
  • State facts clearly — never sugar coat. Assign your meaning to an unpleasant fact before others get a chance to assign their own meanings.
  • If your leadership led to or contributed to a setback, own it. Period.
  • If you are taking an action like a layoff, shutting down a project etc., always communicate as to why you are doing, how doing this will contribute to the larger mission.
  • Openness to bad news — if any growing organization, there’s certainly bad news at any given moment and something somewhere has gone terribly wrong. Also, sharing bad news doesn’t align with most employee’s short term goals. Always keep asking your team, what is going terribly wrong that we need to fix together?
  • Encourage bad news — if you explode at people when they share bad news, they will never share it. Instead, you need to share bad news about the company first with everyone, for them to trust you back. Once they do, help them understand that we will all be in a much better place once we fix the issue that caused the bad news.
  • Look for bad news in the regular course of business — always appreciate people who bring up issues to the surface and want to discuss it. Getting to the root cause and working on a fix builds trust and gets more people to share what’s breaking apart. Questions such as Is there anything that is preventing you from getting your job done? or If you were me, what would you change in the company? go a long way in encouraging people to share the bad news.

Cultural checklist

  1. Cultural design — make sure your culture aligns with both your personality and your strategy, Anticipate how it might be weaponized and define it in way that is unambiguous.
  2. Cultural orientation — an employee’s first day in the organization is the day where they learn what it takes to succeed in your organization than on any other day.
  3. Shocking rules — any rule so surprising that it makes people ask “Why do we have this rule?” will reinforce key cultural elements. Think about how you can shock your organization into cultural compliance.
  4. Incorporate outside leadership — sometimes the culture you need is so far away from the culture you have that you need to get outside help. Rather than trying to move your company to a culture that you do not know well, bring in an old pro from a culture you aspire to have.
  5. Object lessons — what you say means far less than what you do. If you really want to cement a lesson, use an object lesson and make an example. It need not be a Sun-Tzu style beheading but it must be dramatic.
  6. Make ethics explicit — one of the most common and devastating mistakes leaders make it to assume people will do the right thing even when it conflicts with other objectives, don’t leave ethical principles unsaid.
  7. Give cultural tenets deep meaning — make them stand out from the norm, from the expected. If the ancient samurai had defined politeness the way we define it today, it would have had zero impact on the culture. Because they defined it as the best way to express love and respect, it still shapes Japanese culture today.
  8. Walk the talk — do as I say, never works. So do not pick cultural virtues that you do not practice yourself.
  9. Make decisions that demonstrate priorities — it was not enough for Louverture to say his culture was not about revenge. He had to demonstrate it by forgiving the slave owners who caused great harm to sales for hundreds of years.

Note: there are a few references in the above to historic events and people in the book, have linked to external pages for better context.

While no culture is perfect, your goal is to have the best possible culture for your company so it stays aimed at the target.

If you want people to treat every single company penny like it’s their own, having them stay at a Oyo sends a better signal. But if you want them to have the confidence to ask for a Rs. 10 cr order, the opposite might be true.

If you do not know what you want, there is no chance you that you will get it.

Culture begins with deciding what you value most. Then you must help everyone in your organization practice behaviors that reflect those virtues. If the virtues prove ambiguous or just plain counterproductive, you have to chance them. When your culture turns our to lack crucial elements, you have to add them. Finally pay close attention to your people’s own behavior, but even closer attention to your own. How is it affecting your culture. Are you being the person you want to be?

This is what it means to create a great culture. This is what it means to be a leader.


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Book Notes – Mental Models: 30 Thinking Tools that Separate the Average From the Exceptional

I was first introduced to the concept of mental models by Paras Chopra when he spoke about it on a podcast with Kunal Shah. Mental models are like a map which can help us navigate this highly complex thing called life, or maybe a better way to think of them is comparing it to a compass.

Amazon link

I was first introduced to the concept of mental models by Paras Chopra when he spoke about it on a podcast with Kunal Shah. Mental models are like a map which can help us navigate this highly complex thing called life, or maybe a better way to think of them is comparing it to a compass.

Mental models may not have very clear/apparent answers, but they can help a lot in helping you think through how to deal with decisions in your life by offering you guidance on rough direction and a path forward. While no mental model is perfect and they all do have their exceptions and anomalies, I’ve found them to help me take better decisions, faster. Over a period of time, this compounds and really adds up. They are almost like a cheat sheet, which guide you towards making more right decisions.

Here’s the summary of the book for my own reference, Mental Models: 30 Thinking Tools that Separate the Average From the Exceptional.

Mental Model # 1: Address important, ignore urgent.

These are entirely different things that we often fuse together. Important is what truly matters, even if the payoff or deadline is not so immediate. Urgent only refers to the speed of response that is desired.

You can easily use an Eisenhower Matrix to clarify your priorities and ignore urgent tasks, unless they so happen to also be important.

Mental Model # 2: Visualize all the dominoes

We are a shortsighted species. We think only one step ahead in terms of consequences. We need to engage in second order thinking and visualize all the dominoes that could be falling.

Without this, it cant be said that you are making a well informed decision.

Mental Model # 3: Make reversible decisions

Most of them are, some of them aren’t. But we are not doing ourselves any favors when we assume that they are all irreversible, because it keeps us in indecision far too long.

Create an action bias for reversible decisions, as there is nothing to lose and only information and speed to gain.

Mental Model # 4: Seek satisfaction

This is a mixture of satisfy and suffice, and it is aiming to make decisions that are good enough, adequate and serve their purpose. This stands in stark contrast to those who wish to maximize their decisions with just in case, and that sounds nice extras. Those who maximize are looking to make a perfect choice. This doesn’t exist, so they are usually just left waiting.

Mental Model # 5: Stay within 40–70%

This is Colin Powell’s rule. Make a decision with no less than 40% of the information you need but no more than 70%. Anything less and you are just guessing, anything more and you are just wasting time. You can replace information with just about anything and you will realize that this mental model is about encouraging quick yet informed decisions.

Mental Model # 6: Minimize Regret

Jeff Bezos developed what he calls the regret minimization framework. In it, he asks one to visualize themselves at age 80 and ask if they would regret making a decision. This simplifies decisions by making them about one metric: regret.

Mental Model # 7: Ignore Black Swans

This mental models warns us against our tendency to jump to conclusions based on imperfect or skewed or incomplete information. A black swan event is an entirely unpredictable event that comes out of nowhere. In doing so, it skews all data and beliefs and people start to take the black swan into account as a new normal. But there are just outliers which should be ignored.

Mental Model # 8: Look for equilibrium points

This is about noticing trends in progress. When you first start something, you from zero to one, than an infinite rate of progress. Then you go from one to two, two to three and so on., and the rate of progress slows and the returns start diminishing. Somewhere around there is an equilibrium point that truly represents what the average mean will be. Don’t make the mistake of not waiting for it.

Mental Model # 9: Wait for the regression to the mean

A change without reason for the change is not really a change, it’s just deviation. As such, it does not represent what will continue to happen in the future. A regression to the mean is when things settle back down and resume what they were doing before, this is representative of reality.

Mental Model # 10: What would Bayes do

Bayes’ Theorem is something that actually does allows us to draw conclusions about the future, based on probabilities and taking into account events that already occurred. All you need are the rough probabilities of three elements to plug into the Bayes’ formula and you will come to a more accurate conclusion than so called experts. This is basic probabilistic thinking.

Mental Model # 11: Do it like Darwin

Darwin apparently was not a genius but he did have one trait that set him apart from others, his undying devotion to truth. In doing so, he developed his golden rule of giving equal weight and attention to arguments and opinions that opposed his own. Instead of growing defensive when presented with something that opposed him, he grew critical and skeptical towards himself. This radical open mindedness puts aside conformation bias and ego.

Mental Model # 12: Think with system 2

We each have two systems of thought, courtesy of Daniel Kahneman: System 1 and System 2. System 1 focusses on speed and efficiency of thought, while system 2 focusses on accuracy and depth of thought. System 2 is smart, while system 1 is dumb. System 1 does more harm than good but unfortunately it is the one we default to because it is easier. Gain awareness of the difference between the two.

Mental Model # 13: Peer review your perspectives

Many of the ways we fail at solving problems are related to our inability to look at other perspectives. In fact, we should be continually checking our perspectives through triangulation against those of others. Thinking and solving a problem in vacuum will never work because if you didn’t experience it firsthand, it wont make sense to you.

Mental Model # 14: Find your own flaws

This mental model is about resisting the comforting allure of confirmation bias and attempting to scrutinize yourself before others ever get the chance. Assume that you are wrong, this especially applies to interpersonal relationships. If you assume that you are at least 1% responsible for conflict, then your illusion of superiority and infallibility is broken an important factor in social interaction.

Mental Model # 15: Separate correlation from causation.

They are entirely different things. Forcing a relationship where none exists will cause you to chance the wrong issue. In addition, you must separate proximate cause from the root cause — root cause is what we always want and it can be reached through a series of questions.

Mental Model # 16: Story-tell in reverse

When it comes to causation, sometimes we just need to get better at thinking in a certain manner.. You have a visual aid in a fishbone diagram, which goes on to document causes of causes and so on. This is storytelling in reverse because you start with a conclusion and you work backward through sometimes ambiguous means.

Mental Model # 17: SCAMPER it

The SCAMPER method stands for seven techniques that help direct thinking toward novel ideas and solutions. S — substitute, C-combine, A-adapt, M-minimalize/magnify, P-put to another use, E-eliminate and R-reverse.

Mental Model # 18: Get back to first principles

When we try to solve problems, oftentimes we attempt to follow methods or a specific path just because they are the conventional means. But are they the best? First principles thinking strips away assumptions and leaves you with only a set of facts and a desired outcome. From there you can forge your own solution.

Mental Model # 19: Avoid direct goals

Direct goals are like shooting for the moon while anti goals or inverse foals are about avoiding falling and doing everything to prevent that from happening. This has just as good a chance of achieving the outcome you wan through direct goals, but it might get you there quicker and more efficiently. Simply articulate the factors involved in a worst case scenario, then devote your time from preventing them.

Mental Model # 20: Avoid thinking like an expert

Experts think about the big picture and sometimes can’t be bothered with small details. Small details counterintuitively are mostly paid attention to by novices because they are absorbing new information and going slowly through a process. Thinking like an expert in a given field will probably mean that you make small mistakes because you engage in assumption thinking and focus on overall effects and conception.

Mental Model # 21: Avoid your non genius zones

All of us have natural advantages in some things and despite how hard we work, we will never be more than mediocre in other areas. Recognize your strengths and while you should not stop trying to improve upon your weaknesses, understand where you will have the most impact.

Mental Model # 22: Avoid to-do lists

In fact, construct don’t do lists. Narrowing down what you should be avoiding, and what really does not matter, will drastically free up your time. This means you will have less stress and anxiety and know what exactly your priorities are.

Mental Model # 23: Avoid the path of least resistance

Does something appear too easy? It’s too good to be true. Avoid it. Seek resistance, because that is a sign that you are on the right path. On a daily basis, we are faced with two choices, the easy thing and the right thing. We usually don’t even realize we have a choice, but when you start to honestly categorize your choices, you might realize that behavior change in needed.

Mental Model # 24: Murphy’s lay — anything that can go wrong will go go wrong

So, make sure it doesn’t have the opportunity. Don’t reply on just getting by; make sure that you are as fail-safe as possible.

Mental Model # 25: Occam’s Razor

The simplest explanation with the fewest variables is most likely to be the correct one. Our instinct is to go for the most mentally available explanation which says more about what we want to see or avoid.

Mental Model # 26: Hanlon’s Razor

Malicious acts are far more likely to be explained by incompetence, stupidity, or neglect; assumptions about one’s intentions are likely to be wrong. Improve your relationships by giving the benefit of the doubt and assuming at worst, absent mindedness.

Mental Model # 27: Pareto’s principle

There is a natural distribution that tends to occur, where 20% of the actions we take are responsible for 80% of the results, thus we should focus on the 20% for maximum input to output ratio. This is in the name of becoming results driven and simplify following what the data is telling you. This is not about cutting corners, its about understanding what causes an impact.

Mental Model # 28: Sturgeon’s law

Ninety percent of everything is crap, so be selective with your time. Start with the 10% absolute non-crap and slowly work your way out.

Mental Model # 29 & 30: Parkinson’s law

First, triviality can easily set in because it feels good to feel productive and voice your opinion. Know your real priorities and ask if progress is actually being made toward them. Second, work expands to full time it is given, so give it less time. Wanting to work at a relaxed pace often just causes self sabotage.

Hope you enjoyed going through the above mental models. Remember, use them as guiding principles to help you make better decisions faster. But do not blindly reply on them without your own thought.


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