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Quick Summary
The best entrepreneurs know this: every great business is built around a secret that’s hidden from the outside.—Peter Thiel
The first time I considered the importance of original thinking was when I listened to an interview with Peter Thiel, one of Silicon Valley’s top investors (first investor in Facebook) and a co-founder of PayPal.
In the interview, Thiel shared that when he vets employees to hire and founders to fund, he always asks some version of the following question:
What do you believe is true that no one else agrees with you on?
Take 30 seconds and try to answer the question for yourself.
How many answers were you able to come up with? Were they high-quality answers?
How someone answers the question says a lot about them. A typical person defers to social or expert authority for their opinions. Therefore, they have trouble answering Thiel’s question. In many ways, humans are designed for social conformity. Conforming is easier, and it works 99% of the time. Hence the phrase, “Don’t reinvent the wheel.”
An original thinker knows that social and expert authority is often right, but that it can also be incredibly wrong too. So, the original thinker looks for holes on the consensus view and capitalizes on them by:
- Making unique investment decisions
- Starting a business
- Creating and sharing a new idea
- Etc.
Because the original thinker can’t simply depend on outside authority, the original thinker must be an independent thinker and be able to reason from first principles. This takes a lot more effort.
This Mastery Manual is about the Outlier Algorithm. In it, you’ll learn:
- The Outlier Algorithm of the world’s most successful investors.
- How to apply the Outlier Algorithm across key areas of your life.
- How to find your “trademark idea.”
View Full Mastery Manual
Watch Class
Other Resources
Slides
Articles Where I Mention The Outlier Algorithm
Navigate Other Mental Models On Super Thinking
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In many ways, humans are designed for social conformity. Conforming is easier, and it works 99% of the time. An original thinker, however, knows that social and expert authority is often right, but that it can also be incredibly wrong too. So, the original thinker looks for holes in the consensus view and capitalizes on them. This model shows how you can do it too.
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Humans have evolved over tens of thousands of years in an environment that is very different than the one we live in now. During this process, we developed unconscious biases which helped us survive in those tough environments, but can hinder us in today’s modern society. By recognizing those biases we can make infinitely better decisions.
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The Fundamental Attribution Error states that when we try to explain other people’s bad behavior, we tend to overemphasize their personality and underemphasize the situation they were in. This leaves people feeling unappreciated and destroys relationships. It can lead to a chain reaction of frustration, disengagement, subpar performance, further judgment, toxicity, and ultimately parting ways.
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Most of the time when we say “insight,” we’re referring to realizations we have, often related to our relationships or personal lives. These insights are great but for this manual, we’re talking about market-based insights, where “market” is about building products, services, art, or ideas that people give their money or attention to.
Dr Paul MacLean, the author of the Triune Brain Theory, was a neuroscientist who discovered that, basically, our brain is a three-nested organ. Having this model in mind can help us move through the world by de-composing a situation and looking at it through different lenses, each corresponding to a different reality.
There are consequences to each action, and there are consequences to consequences. These are called Second-Order Effects. Ultimately, it’s impossible to predict all the consequences perfectly, but some of them are really predictable, and the better of a model you have, the better you'll be prepared to notice the opportunity in your industry.
When most people think about scenarios, they either think only about the positive scenarios (if they’re setting a goal), or only about the negative outcomes (if they’re in worry mode), and they usually focus only on the short term. With scenario planning, you expand your perspectives by thinking about both the positive and negative and by extending into the long term.
Polarity Map is a simple model. When you're talking about an issue, there are always two sides, and there's a pro and con to each side. However, on each issue where there's a polarity, the opportunity is to see both sides of the polarity. It’s about collecting information, being open to hearing “the other side,” and actually being actively open-minded by going out and searching for opposing perspectives.
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In this session we're focusing on reinventing our thinking.
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The Wisdom Wheel is a method for solving problems that uses humanity’s collective wisdom instead of relying solely on our own thinking and on trial and error.