Nov 14, 2022: Overview Of Mental Models

Class Recording

Timestamps

00:13 Introduction: My Experience With Mental Models

12:09 To Compound Your Knowledge, You Need Knowledge That Doesn’t Get Outdated

23:51 Exercise: Audit

25:50 Solutions

30:53 See Knowledge Multi-Dimensionally

38:40 Learn Knowledge That Applies Across Disciplines

43:05 You Need To Be Deliberate. You Won’t Learn Them By Default

45:23 The Rep Is The Fundamental Unit Of Work

54:09 Don’t Use Mental Models When Triggered

1:00:48 Be A Full Stack Learner

1:09:25 It’s A Lifetime Endeavor

1:13:34 Use The Explanation Effect

1:17:47 Learn With Others

1:24:05 Q/A

Class Summary

Overview Of Mental Models

Over the past eight years, I've spent thousands of hours learning about mental models, teaching about mental models, and making mistakes with mental models, and they've had a really profound impact on my life.

Now I want to take a step back to share my reflections.

How It All Started

For me, it all started with the book Poor Charlie’s Almanack by Charlie Munger. I read it around 2014 time range. It's a huge book and it talks about Charlie Munger’s life and lessons learned. Charlie Munger is 98 years old. Starting at an early age, he realized the power of mental models, started applying them, and found that they were transformative for him. There’s a whole section in this book about mental models and how he applied them.

Even though he is an investor, I saw that many of the ideas that he was talking about apply to all of us because we're all investors in life. We have to spend our time and our money learning things so that there'll be a payoff in the future.

In 2015 I wrote the article How One Life Hack From A Self-Made Billionaire Leads To Exceptional Success which had some of my lessons learned from this book.

There’s a few-step process I really resonated with.

#1: Learn Multiple Models

The first rule is that you’ve got to have multiple models—because if you just have one or two that you’re using, the nature of human psychology is such that you’ll torture reality so that it fits your models.
It’s like the old saying, ‘To the man with only a hammer, every problem looks like a nail.’ But that’s a perfectly disastrous way to think and a perfectly disastrous way to operate in the world.—Charlie Munger

#2: Learn Multiple Models From Multiple Disciplines

And the models have to come from multiple disciplines—because all the wisdom in the world is not to be found in one little academic department.—Charlie Munger

#3: Focus On Big Ideas From The Big Disciplines (20% Of The Models Create 80% Of The Results)

You may say, ‘My God, this is already getting way too tough.’ But, fortunately, it isn’t that tough—because 80 or 90 important models will carry about 90% of the freight in making you a worldly-wise person. And, of those, only a mere handful really carry very heavy freight.—Charlie Munger

#4: Use A Checklist To Ensure You’re Factoring In The Right Models

Use a checklist to be sure you get all of the main models.
How can smart people be wrong? Well, the answer is that they don’t… take all the main models from psychology and use them as a checklist in reviewing outcomes in complex systems.—Charlie Munger

#5: Create Multiple Checklists And Use The Right One For The Situation

You need a different checklist and different mental models for different companies. I can never make it easy by saying, ‘Here are three things.’ You have to drive it yourself to ingrain it in your head for the rest of your life.—Charlie Munger

These five simple rules give a framework for how you could use mental models in your life.

At that point, I had been an avid reader for a long time, but all my knowledge was by discipline and I felt a huge information overwhelm by all of the knowledge growing exponentially.

I'm a curious person. I don't know how my curiosity is going to evolve, but I know it's going to evolve, which might mean I go into different fields and I didn't want to have to start from scratch every time I went into a new field.

Munger's ideas of having a few models that apply across disciplines, which are true throughout time, really resonated with me. So, I made the decision to go all in. However, I wasn't very deliberate about it and I would easily fall into my default mode of reading an interesting and popular book or listening to the most recent podcast on my podcast player.

That’s one of the things that led to the creation of the Mental Model Club.

Creation Of The Mental Model Club

In the fall of 2017 I decided I wanted to be deliberate about learning and applying mental models. I know I'm going to be a writer for a long time, I want to write about different topics, but I'm not being deliberate. So, I proposed to my partner Eben Pagan to create a club. The idea was, let's take the most important mental models and teach one per month going forward.

We launched in January 2018. We started off with the 80/20 Principle, which I think is one of the best places to start. You could easily spend a year just on the 80/20 Rule and apply it to every area of your life. We also created the checklist we named The Exponential Life Tool. When you first start learning about mental models, it can be a little bit abstract. It’s one thing to be aware of the idea that 80% of the results are created by 20% of the inputs in a lot of domains, especially where there's a positive feedback loop, and it's another thing to apply it to your life. That’s why we created this template.

Since that time, we've done over 50 mental models for the Club.

In many ways, it really lived up to and surpassed my expectations. In many other ways, it was much harder than I thought. I’ll share some of the things that were affirmed by doing it, but also the things where it took longer or didn't really work the way I thought it would.

Lessons Learned: Power Of Mental Models

First, I want to share the lessons related to the power of mental models.

Lesson #1: To Compound Your Knowledge, You Need Knowledge That Doesn’t Get Outdated

Over time, I've realized that most of the content that gets consumed online was created in the last day, week, or year. Here’s the timeline of how we got there…

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The paradigm started on social media, but it spread to the Internet overall. Reality is fed to us through a straw by:

  • Recency
  • Popularity
  • What we liked in the past

That works for a lot of social media platforms because of their ad-based business models, but it’s not necessarily good for learning. In fact, it creates junk learning, the illusion of learning. If you wanted to maximize learning, you would have the opposite filters:

  • Best of all time
  • Rare
  • Mind-blowing moving forward

On the other hand, most of the content you get through algorithms gets outdated within days. So, you're putting in the time, you're learning, and you're feeling good about yourself, but you don't realize all that you're losing.

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The book that brought this into focus for me was The Half-Life Of Facts by Samuel Arbesman.

It turns out that facts, when viewed as a large body of knowledge, are just as predictable [as uranium and other elements in their rate of decay]. Facts, in the aggregate, have half-lives: We can measure the amount of time for half of a subject’s knowledge to be overturned. There is science that explores the rates at which new facts are created, new technologies developed, and even how facts spread. How knowledge changes can be understood scientifically.—Samuel Arbesman

The image below is a good illustration of this…

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The following quote is telling as to how outdated knowledge can actually be a liability:

It takes 50 years to get a wrong idea out of medicine, and 100 ears a right one into medicine.—John Hughlings Jackson, British neurologist

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When knowledge becomes outdated, you don’t suddenly get a notification. Rather, something stops working and you have to identify why it stopped working.

If you want your knowledge to compound, you need a foundation of knowledge that doesn’t get outdated. For example, the 80/20 Rule is going to be just as true in 100 years as it is today.

Audit

  • Look at what you’ve read in the past day and week. Look at your history.
  • What percentage of it will be valuable in one month? A year? 10 years?

Solutions

There are two potential solutions you might want to look at:

  1. Derive mental models from current events
  2. Learn the most useful and universal mental models

Lesson #2: See Knowledge Multi-Dimensionally

Most of the time we're taught that knowledge is horizontal—there’s one discipline and another discipline, but we're not taught that that knowledge is vertical as well, that it's nested within each other.

I first started realizing this when I saw this quote from Elon Musk:

It is important to view knowledge as sort of a semantic tree — make sure you understand the fundamental principles (Musk calls these ‘first principles’), i.e. the trunk and big branches, before you get into the leaves /details or there is nothing for them to hang onto.—Elon Musk

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This is knowledge when you look at it from one dimension. It feels like everything's very different from each other, as if these were completely different fields not connected to each other.

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If you add the vertical dimension, you could see that there’s something connecting them, that applies to all of them.

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The 80/20 Rule:

  • 20% of exercises create 80% of the results
  • 20% of employees create 80% of the value
  • 20% of productivity hacks create 80% of the value

Going further, it’s like a tree that has a trunk, branches, and the branches of those branches. The more fundamental you get, the more you see how the knowledge is connected to each other.

It's in the nature of foundations, that the foundations in one field are also the foundations other fields…The way that we reach many truths is by understanding things more deeply and therefore more broadly. That's the nature of the concept of a foundation… just as in architecture, all buildings all literally stand on the same foundation; namely the earth. All buildings stand on the same theoretical base; namely the laws of physics and the laws of engineering and architecture.—David Deutsch (Beginning Of Infinity)

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Another book I recommend on the topic of perspective change is Flatland by Edwin A. Abbott.

Place a penny on the middle of one of your tables in Space; and leaning over it, look down upon it. It will appear a circle. But now, drawing back to the edge of the table, gradually lower your eye, and you will find the penny becoming more and more oval to your view. When you have placed your eye exactly on the edge of the table, the penny will then have ceased to appear oval at all, and will have become, so far as you can see, a straight line.
Place a needle on a table. Then, with your eye on the level of the table, look at it side-ways, and you see the whole length of it; but look at it endways, and you see nothing but a point, it has become practically invisible.
Behold yon miserable creature. That Point is a Being like ourselves, but confined to the non-dimensional Gulf. He is himself his own World, his own Universe; of any other than himself he can form no conception; he knows not Length, nor Breadth, nor Height, for he has had no experience of them; he has no cognizance even of the number Two; nor has he a thought of Plurality; for he is himself his One and All, being really Nothing.”—Edwin Abbott

As I looked at other innovators and entrepreneurs I saw how the way they held knowledge in their head was just fundamentally different than what we're taught in schools and disciplines.

When I asked Musk about his knowledge of business, he scolded me, explaining, “I don’t know what a business is. All a company is is a bunch of people together to create a product or service. There’s no such thing as a business, just pursuit of a goal—a group of people pursuing a goal.—Tim Urban (speaking on Elon Musk)

This is how most people think about business…

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… and this is how Elon Musk thinks about business:

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Power of multi-dimensional thinking:

  • Learn knowledge you can apply across more areas
  • Learn knowledge that is more stable
  • Improve your memory because everything is connected
  • Be more creative because you see things others don’t
  • Makes it more interesting

It’s like a tree in your head with no trunk—and without a trunk, when you learn something new about the topic—a new branch or leaf of the tree—there’s nothing for it to hang onto, so it just falls away. By clearing out fog all the way to the bottom, I build a tree trunk in my head, and from then on, all new information can hold on, which makes that topic forever more interesting and productive to learn about.—Tim Urban (speaking on Elon Musk)

Lesson #3: Learn Knowledge That Applies Across Disciplines

Typically, when we're in school, we learn a certain structure of knowledge and how disciplines are related to each other. This is an illustration of a typical classification of knowledge:

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Each discipline has its own…

  • Conferences
  • Publications
  • Paradigms
  • Language
  • Culture
  • Funding

We’re taught that…

  • Disciplines are not related to each other (siloed)
  • We should pick one discipline and specialize in it

But reality doesn’t work that way. Phenomena reoccur across disciplines, you see the same pattern over and over in different places. For example:

  • 80/20 Rule
  • Feedback Loops
  • Systems Theory
  • Network Science (brokerage / closure)

If you learn the most useful and universal models, every discipline becomes easier to grasp.

Lessons Learned: Application Of Mental Models

Lesson #1: You Need To Be Deliberate. You Won’t Learn Them By Default

We are not taught about mental models in school. It doesn’t come up in most conversations.

Social media steers us to the most recent, popular, concrete, and applied knowledge.

Mental models aren’t urgent.

You need to be deliberate and find the time!

Lesson #2: The Rep Is The Fundamental Unit Of Work

There are two types of mental model reps:

  1. Apply a mental model to a specific situation
  2. Derive a mental model from a specific situation

You can easily start practicing applying the 80/20 Rule:

  • Where in your life are you feeling overwhelmed?
  • How can you use the 80/20 rule to identify what matters the most?

Derivation of mental models:

  • What is a situation that happened to you that is surprising or confounding?
  • What mental model(s) were you missing?

Lesson #3: Don’t Use Mental Models When Triggered

One of my big lessons learned was not to try to outsmart the emotional brain and by trying to apply mental models to every situation…

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A lot of thinking is created in order to process feeling uncomfortable/unsafe.

When we are triggered, our thinking is poor, no matter how many mental models we have.

Key skills to learn:

  • Notice when you’re feeling off
  • Learn techniques to get ok
    • Breathe work
    • Havening
    • Forest bathing
    • Stargazing
    • Affirmations
    • Sauna / Exercise

Lesson #4: Be A Full Stack Learner

Don’t just learn hacks.

Don’t just learn mental models.

A full stack learner…

  • Focuses on the big tree trunks (fundamental / big picture)
  • Focuses on the leaves too (applied / details)
  • Builds the biggest and most detailed model of your company

Almost every person I talked to at both Tesla and SpaceX emphasized how much of an expert Musk is at their particular field, whether that field be car batteries, car design, electric motors, rocket structures, rocket engines, rocket electronics (“avionics”), or aerospace engineering.
He can do this because of a combination of his immensely thick tree trunk of fundamental understanding of physics and engineering and his genius-level ability to retain information as he learns it. It’s that insane breadth of expertise that allows Musk to maintain such an abnormally high level of control over everything that happens at his companies.
About SpaceX’s rockets, Musk said, “I know my rocket inside out and backward. I can tell you the heat treating temper of the skin material, where it changes, why we chose that material, the welding technique…down to the gnat’s ass.—Tim Urban (speaking af Elon Musk)

For the CEO of the company, he has an incredibly deep stack—he has all that info available to him, and he can drill down on any one thing, and often does… He can hold it all it in his head and recall it on demand in real time, as necessary, in order to be able to make good decisions.—Jinnah Hosein, SpaceX’s VP of Software

Lesson #5: It’s A Lifetime Endeavor

Application of the 80/20 Rule:

  • Go Deep (more granular)
  • Go Wider (more abstract)

Some of the books I found more abstract but very helpful:

Lesson #6: Use The Explanation Effect

There are a lot of different ways you can learn things better and one of the biggest hacks I've seen for learning anything is the Explanation Effect—teaching what you learn. Not only do you learn a lot, but you also build relationships with other people.

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This is the mechanism:

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No one learns as much about a subject as one who is forced to teach it.—Peter Drucker

Lesson #7: Learn With Others

One of my big challenges in learning over the years was actually applying it. Some knowledge is easy to apply but there often are other important parts that I resist doing. For example, right after college, I was starting a business and even though I was in debt, I was doing everything I could to avoid actually reaching out to people and doing sales calls. Finally, I realized I had to do this and that's why I started using accountability. We were a group of friends, entrepreneurs, we would buy a book, read a chapter every week, teach it to each other, do experiments, and hold each other accountable for how many outreaches we had done. The business made $100,000 that year, $200,000 the year after, and so on.

Just like I was almost expecting to run a business without doing sales, there are realities or some parts that we ignore because they are hard for us.

I attribute much of my later success with sales to this accountability group.

Over the years, I had thousands of accountability calls, I've done about 20 in-person masterminds, which I highly recommend, and I've also done thousands of getting-stuff-done calls where we get on a call, state the one thing we're going to do during that time that's the most important (that we're also maybe avoiding a little bit) and at the end of the hour we get together and share what we did.

About two years ago we created the Month To Master challenge to create such space for more people.

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How it works:

  • Pick a topic to master for the month
  • Join a daily co-learning call
  • Share what you learned with others on the call
  • Post what you learn publicly daily
  • Compile everything into a knowledge asset at the end of the month

Co-learning call format:

  • Warmup
  • Prioritize
  • Co-Learn
  • Debrief
  • Share
  • Post

Benefits:

  • Get accountability
  • Learn the topic more deeply
  • Get value from what you learn
    • Connect with your heroes
    • Build an audience
    • Build a knowledge asset