In life and business, the person with the fewest blind spots wins
This book is about how we approach problem solving and think better. It’s also about avoiding problems by doing things right in the first place
Thinking better isn’t just about having more knowledge, but its about the process we use to get closer to reality
These processes are known as mental models
Largely subconcious, but they tell us which factors are most important and which ones are superfluous
Why should we care: by having mental models, we reduce the risk associated with unknown environments because we can extrapolate from general first principles
Multidisciplinary thinking is the key to doing well in complex, interconnected problems
When understanding is separated from reality, we lose our powers of deep and incisive thought. Rather than pontificating about ideas, we need to put into action to test it out
This inability to conncect understanding with reality is because of: not having the right perspective, ego-induced denial or separation from consequences
Perspective: think of the analogy of someone throwing a box from a speeding plane. To the person in the plane, the box is moving straight down, but to the person who is on the ground the box is also moving horizontally
There are others who have different perspectives that can help us
Ego: we are afraid of being wrong and we bcome so invested in the defense of ideas
Distance: this is especially true in large organizations where you are removed from the implementation of a task
”A man who is commited a mistake and does not correct it is committing another mistake” - Confucius
Majority of the time, we don’t even pay attention to details that does not fit within our existing beliefs. For many of us, ignoring this is easier than updating our beliefs
We also tend to downplay the importance of simplicity and base knowledge is such a hyper-specialized world, which often helps avoid complex problems
The mindset that leads to poor decisions is one that is afraid of saying “I dont know” and learning
If we made a mistake or some piece of evidence flies against our pre-existing belief, we need to update it, regardless of how painful the process might be
Some mental models, like gravity, are particularly useful. We need to test out the mental models that we collect on our own and develop a list that can help us
Remember, some models only work in some situations
Variety is needed in our models, which prevents us from the overusing models (i.e. using certain models in places where they don’t work)
Models can be classified in terms of inorganic systems, organic systems and human history. Across space and time (look to the past, like millions of years ago)
Mental models should be in a lattice work because it helps us understand where they fit
The more you use models, the better you will be able to construct a library of triggers that maps to the best model to use in a certain situation
Reflect and journal out your uses
The Map is Not the Territory
A map of reality is not reality; it is a simplified representation that is both explantory and predictive
Couple of things to note about models:
They are not the same utility for everyone (eg. Tube drivers don’t use the maps that passengers use)
Similarities and differences on models/maps is found in reality
They should be self-reflexive to work best. This means that a model references another model to provide more detail to the model (eg. a guide to Paris could have a guide to the guide of Paris)
Don’t take these abstractions as fact, because things had to be left out
Take the example of physics: Newtonian and Einstein physics each drew maps and physicists know where the two are good and where they are bad at explaining (eg. quantum realm). In this case, the scientists don’t take these models as dogma and start over
Cannot assume that if a territory matches the map in certain respects that the territory matches the map in all respects
We fail to consider that certain assumption were made (eg. Tragedy of the Commons)
We start to neglect new information in the territory that was not in the map
There are three factors to consider when using maps/models:
Reality is the ultimate update: we need to update maps as we get a better understanding of the reality that we are in
Consider Karimeh Abboud, the first female photographer in Palestine. She had taken pictures in a totally different perspective than her European counterparts, contributing to a new map by showcasing reality in a dif. perspective
Consider the cartographer: maps reflect the standards and values of the creator
Take the Sykes-Picot agreement as a particular model. Western imperial powers drew countries in that way precisely to exert influence. Not surprising
Maps can influence territories: people try too hard to fit reality to models
City planners commit this mistake often
Maps should be simplified guides, but there are limitations
Circle of Competence
When ego drives what we work for, we create blind spots
Knowing where you are competent and where you are not creates better decisions
What is a circle of competence?
Deep knowledge of a subject (the Lifer) versus someone with superficial knowledge that can be easily stumped (the Stranger)
People that are competent are more efficient because they know exactly what works and what does’t
Without a few years of experience and a few failures, you cannot be competent
If we are in a certain domain where we are not competent, seek guides (eg. Sherpa)
How do you know if you have a circle of competence?
Within the circle, we know exactly what we don’t know, we can make quick and accurate decisions and we can describe the additional info we need
We can respond to problems with relative ease using multiple potential solutions
How to build and maintain a circle of competence
Since the world is dynamic, you must constantly update your circle
Willingness to learn: learn from your own experience or from others (much more efficient)
Monitor your track record: know what you did well and what you did bad. Be honest and focus on improving the things you messed up on
Keep a journal of your own performance
Solicit external feedback: need to get honest feedback from others
How to operate outside the circle of competence:
Learn the basics of the new realm and acknowledge that you are not a Lifer
Ask detailed and thoughtful questions to people who are Lifers in the field
Use mental models that you have picked up from other fields to augment
With knowledge asymmetry is the situation where people will take advantage of our naiveity, so beware
Example: Elizabeth I knew that in certain aspects, she was outside of her circle of competence. She hired people that were skilled and competent and used their advice to build the foundations of the English Empire
Warren Buffet recommends having an iron focus on things you are competent in
Falsification: try to show something is incorrect
If you cannot test the theory to be false, then try your best to predict how probable the theory is true
First Principles Thinking
One of the best ways to reverse-engineer complicated situations and unleash creativity
You can build all your knowledge in any field from just a collection of first principles
First principle knowledge changes as we learn more about the field. Everyone thus has different first principles in the field that they are in
Techniques for establishing first principles
Socratic questioning: clarify your thinking and the origins of your ideas → challenge assumptions → look for evidence → consider other perspectives → examine consequences & implications → question the questions
5 Why’s: repeatedly ask why and land on a ‘what/how’ or arrive at some falsifiable fact rather than an assumption
These techniques take time, but it helps expose our own ignorance of underlying facts
Example: discovery of stomach bacteria. Acidity from stress was considered the first principle for ill stomachs, but no one questioned why.
Incremental Innovation and Paradigm Shifts
Understanding why something is successful or not will help us improve it, so we need to resort to first principle thinking
Using first principle thinking for innovation will help us arrive at more probable conclusions rather than shooting in the dark (eg. curved chutes for cow transport)
Thought Experiment
Thought experiments are devices of imagination that are used to reflect upon nature
Opens up new avenues of inquiry because you can let the impossible be possible but also helps us understand the limits that we face in various scenarios
Thought experiments should be of the same rigour as a regular experiment i.e. it uses the scientific method to arrive at a conclusion
Imagining physical impossibilities:
Albert Einstein used thought experiments often to arrive at new conclusions
Re-imagining history:
Known as counter/semifactuals. Structure: If Y happened instead of X, would the outcome still have been the same?
We need to use a lot of caution here because history is a chaotic system that can give very different results based on the initial state of conditions
We can use thought experiments to explore unrealized outcomes and to determine which factors contribute most to an event
Intuiting the non-intuitive:
You can use the ‘veil of ignorance’ and remove yourself from the experiment
Necessity and Sufficiency:
Example: an amateur novellist has the necessary skills to create a best-seller, but it is often not sufficient enough
The difference between necessity and sufficiency is usually some factor that is out of our control
Second-Order Thinking
Second-order thinking requires use to think more than just our immediate actions and consequences. What are the consequences of the first consequences?
Failing to consider second and third order consequences can unleash disaster
If something is part of a dense web of connections, it is crucial to consider second and third order consequences
Always consider: how much is short term gain worth compared to potential long-term loss?
Example: if a couple people start using their tip-toes in a parade, then everyone else has to as well
Prioritizing long-term interests over immediate gains:
Second-order thinking prevents us from being too narrow-sighted
Ex: Cleopratra used this well by aligning herself with Rome at the chagrin of the existing king (her brother). However, she used second-order thinking and knew that this was the best decision
Constructing effective arguments:
Helps us address challenges in advance
Ex: Mary Wollstonecraft to show why suffrage for women will lead to a better society
Must be wary against slippery slope thinking, where the nth-order thinking gets more absurd. Need to remember that this is regarding the most likely consequences
Probabilistic Thinking
Probabilistic thinking uses math and logic to assess the likelihood of an unknown outcome
This helps us identify the most likely outcomes in a world that is as complex as ours where perfect information is rarely given
Three important aspects of probabilistic thinking:
Bayesian thinking
Use prior information to temper how much we change our views when we face new and useful data
Prior information shouldn’t be static. It should be constantly changing so as to reflect the changing nature of our world
Use conditional probability, where certain probabilities are higher or lower depending on conditions
Orders of magnitude: we are often orders of magnitude often when it comes to extreme events because we use the wrong prior information to determine future distributions
Fat-tailed curves
Unlike a normal curve, fat-tailed curves are thicker at the ends, meaning that extreme events are more likely than a normal curve
Correct way to approach fat tails is to become antifragile and benefit from these unpredicatble events
Better to prepare for these events than predict them
Seek out upside optionality: place yourself in a good situation so you can only gain
Fail properly: never put yourself in a situation where it could completely destroy you and be willing to learn
Asymmetries
Meta-probabilities: the probability that your guesses at probabilities are correct
Think about investor stock pitches and traffic jam predictions. Almost never correct
Example: Vera Atkins, who led Allied spy efforts in France. Needed to use probabilistic thinking to select spies and send them on missions in an information-poor environment
Causation vs. Correlation
Just because two events happen at the same time or near each other (correlation) doesn’t mean that one event caused the other (causation)
Consider in correlation that causation can be done the other way. For example, if high alcohol consumption by parents is correlated with poor academic performance of children, then alcohol could cause performance issues, or performance issues could cause parents to drink more
Regression to the mean: extremes appear to soften out
Eg: depressed children will mellow out as they age, but often people attribute this to certain treatments with no proof that it did anything helpful asides from being at the right time of regression to the mean
Only way to determine causation is with a control group, who is almost identical to the experimental group asides from the application of a treatment
Inversion
Requires you to upend the way you think problems by inverting them and approaching them in an original way
Think backward instead of forwards using inversion and see issue in multiple angles
Two approaches in using inversion:
State that what you’re are trying to prove is either true or false and then determine what else has to be true for your statement to be proven
Rather than thinking about your goal, think about what you want to avoid and then reconsider the remaining options
Example: Carl Jacobi, a famous mathematician, swore by this principle. He was able to create unintuitive and surprising results by inverting the problem and assuming certain properties were true
Mathematics often uses this (called a proof by contradition). An excellent example is the proof that √2 is irrational
Example: Sherlock Holmes use of inversion to find the valuable picture in Irene Adler’s house in Scandal of Bohemia
Holmes inverted the problem. He knew that the picture is quite valuable, so he contrived a situation where its safety was in peril, making Adler reveal where the picture was
Example: Edward Bernays used inversion to market cigarettes for women.
Assumed that the women already smoked cigarettes, but then he thought about what else had to be true if women were smoking. Went after designers, architects, engineers and more to remodel life as if women already smoke
He even linked the sufraggette movement with smoking
Bernays used this technique constantly; he always shifted how we approached life if he wanted to market something
Example: the creation of index funds by Vanguard.
The creator decided that the goal to beat the market is too difficult, so he decided to tackle the problems that investors faced, such as fees and poor selection
Thinking about what we want to avoid is often a lot better and more productive than thinking about what we want to do.
Take the example of getting rich. If we rather considered that we wanted to avoid being poor, its a lot easier to identify what we need to do to achieve that goal
Always think about both sides of the coin, not just the factors that can help you
Example: Florence Nightingale saving many British lives
Nightingale focused on what the British army should avoid doing rather than what they should do more
Detailed collection of statistics alongsides incredble graphics created life-saving changes
Occam’s Razor
The core of the razor states that simpler explanations are often more correct than complex
We often get caught up in creating elaborate narratives on phenomena that we see in our world and waste a lot of time worrying about it. Instead, considering the simpler implications often helps
Many of the things that we don’t currently understand are more likely aspects of some laws of nature that we have yet to uncover rather than something miraculous happening
Example: the discover of dark matter was resorted to something extremely simple - another type of matter. Otherwise, we would have come up with more complex theories that are more likely to be wrong as there is more interaction between variables
Occam’s Razor glorified simplicity, which creates efficiency as we are less likely to follow wild goose chases
Examples: shade balls in LA Resevoir (simple solution superior to more complex and costly solutions), medical issues, preventing tigers from eating humans, IBM bouncing back
Note that if a solution seems incredibly complex, Occam’s Razor may not be the way to proceed. Shouldn’t be used on everything
Hanlon’s Razor
States that we should attribute malice to something that is more easily explained by stupidity
Reminds us the people do make mistakes and that many of them are not out to get us
Example: Fallacy of Conjunction
Despite what is said about a certain person, we sometimes still pair the person up with attributes that were not mentioned, the root of Hanlon’s Razor
In other words, we are heavily affected by vivid details to the point where we make illogical conclusions
Considering that you were the reason why people did certain things or that they are ‘out to get you’ is an incredibly self-centred way of approaching life. People don’t care about you as much as you think.
Example: Honorios, one of the last Western Roman emperors, executed his best general for assuming malice behind a recent proposal rather than a mistake, dooming the empire
Example: Vasili Arkhipov, who refused to fire a nuclear torpedo during the Cuban nuclear crisis despite depth charges blowing up around the sub. Instead assumed a mistake from Moscow, which he was correct
Don’t be blindsided when it is obvious that people are trying to mess with you. Simply remember that the path of least energy is one of stupidity