2020

Mental Models

Introduction

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Mental Models are simply a representation of a complex problem. They are powerful but their utility is limited to the contexts they were extrapolated from. We should continuously build a lattice of mental models.

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Lessons from Charlie Munger

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( Investor, Business man, Vice chairman of Berkshine Hathway, partner of Warren Buffet)

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How to gain Wisdom

No use of remembering isolated facts (should form a latticework of theory)

Have multiple model in your minds

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Mental Model Categories

Figuring out where to invest

Designing and Scoping

Shipping and Iterating

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General Thinking concepts

First Principal Thinking 🔑

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Break down problem into basic elements and build back up.

Questioning

Question your ideas

Why i did i think that

How do i know this is true

Elon Musk and cheaper rockets

Where this is useful:

doing something for the first time,

dealing with complexity

trying to understand a situation that you’re having problems with.

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Inversion

Go to a perfect solution and reverse back

Think opposite ( How do i become happy -> How does one person become depressed : Reduce sleep, Eat less, Isolated.. You know what not to do)

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80/20 Pareto Principle

80% effect comes from 20% of the work/causes

States that a small amount of some phenomenon causes a disproportionately large effect

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Black and White Thinking ✍️

Have a mental state where you can switch between black and white opinions

Don't be in a gray state (eg be semi-confident about what you do)

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Signal vs Noise

Recency bais

Goals vs System

Signal vs Noise -> information that actually matters

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High Agency behavior 🔑

One of the most important traits

"When you are told that something is impossible, is that the end of conversation or do you think how to get around that"

It is a sense that a story given by other people (on what you can or cannot do) is just a story

Question everything

Bend reality

Never outsource your decision making

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Return on Investment (ROI)

Resources consists of Time, money and people -> These are the things we invest in.

Impact on the customer is the return

Always choose the project that maximises the impact to customers for every unit of resources you have

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Time value of Shipping

Product shipped earlier is worth more to the customer

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Time Horizon

Right investment changes based on the time period your optimizing for

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Expected Value

Impact of a project -> Map out all possible outcomes and assign probabilities -> Do a probability weighted sum for the value of outcomes.

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References

https://fs.blog/mental-models/

https://www.youtube.com/embed/m_56L8EGLIk

https://blackboxofpm.com/product-management-mental-models-for-everyone-31e7828cb50b?source=collection_home---4------0-----------------------

https://youtu.be/a0K9cmPRBB8 (to listen)

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https://www.youtube.com/embed/m_56L8EGLIk⁠

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