10 Mental Models Explained

hey everyone welcome back to my channel i'm vicki and thank you to all of those who has participated in the poll and if you're new here i share mental models frameworks on clear thinking and clear communications so today as you guys have told me we are going to talk about mental models and specifically 10 that's going to give you an edge in life by one helping you simplify complexities and also to help you think different this video is structured so we go through the mental model itself and then we talk about how you can use

it because that was the most difficult thing for me when i started was that i didn't know how to put them together how to apply it to daily life so hopefully this video will give you a good intro as to how you can use these mental models and i'll point you to the different deep dive videos wherever necessary so you can learn more about these mental models so first let's get over analysis paralysis and get to simplifying complexities the first mental model is the 80 20 rule this is a rule of uneven distribution where 80

of your results come from only 20 of your efforts since everyone has only 24 hours a day those who can prioritize and focus their efforts on the right things will be able to achieve more if you've been around for a while you know my management consulting background this 80 20 rule is drilled into my head it's the first filter i apply to any problems i see how to prioritize how to structure the problem solving and so if you're interested in the details you can check out my more detailed dedicated video on this topic but even

if you just know the basics of this uneven distribution how can you apply it in life it's really simple take your to-do list and identify the 20 of tasks that's going to give you 80 of the results in terms of getting you closer to the goal that you want to achieve we have a tendency to focus on the easy things on our to-do list right it feels good to cross things off quickly but those things are usually not the ones that's going to take us closer to our goals so while creating some sort of momentum

is important we also need to look at the 20 of our efforts that can give us the maximum amount of results now the natural question is but how do i know which 20 are going to lead to 80 of the results well this leads us to our next mental model number two theory of constraints this is another management principle which states that the system is only as strong as its weakest part for the system to succeed you need to identify the bottleneck the constraint where the flow is slowed or stopped the bottleneck might be small

but it has disproportionate impact on the system's performance as a whole and sometimes it only takes 20 percent of your effort to fix the bottleneck and get 80 of the results so how can you use this let me give you an example of when i first started my business that i felt really stuck i was doing all these things but i wasn't seeing results and i just didn't know why so how do i figure out what should i work on the 20 that's going to give me 80 of my results and one of the question

i asked was what is the one thing that i need to do but i'm putting it off where is that bottleneck and for me at the beginning it was i was too afraid and didn't want to talk to real users with the problem i'm trying to solve i knew i had to get market validation but i made up all sorts of excuse to try to get out of it oh you know i'm in the market i know the market well i know exactly what people are looking for and that was holding me back so instead

of spending my day doing the 80 that didn't really give me much results things like oh i need a beautiful and perfect brand guide i need to have a beautiful website i need to have the perfect business name i just got down there talk to people who had the problem of not being able to articulate their business that they didn't have the message market fit talk to these people and i had so much feedback that i could make effective decisions know exactly where to go with my business looking for the bottleneck is a great way

to find that 20 that will give you 80 of the impact but if you want to train and discipline your brain to think from the fundamental level then you want to check out the next mental model number three thinking in first principles i was first introduced to this principle in law school talking about logic and legal reasoning and it was one of those aha moments where there was life before thinking in first principles and then there's life after put it very simply thinking from first principles is when you face a complex situation you want to

break it down to the fundamental truths and the assumptions i've talked about this also in another video where i give you examples of how elon musk thinks about first principle jeff bezos warren buffett charlie munger also talk about this in one way or another so you can check out the details here but the important thing here the key thing to focus on with first principles is understanding that there are fundamental truths and there are assumptions and the assumptions are usually what lead us astray so in order to solve something that's very complex you want to

be able to understand the essence of the problem which lies in the fundamental truths and then you want to reason up from there so how do you think in first principles well charlie munger has a really easy way of reminding us is that you look for the no brainers since some of you are interested in business frameworks let's take one first principle from business which is profit equals revenue minus cost so if you want to improve your profitability then there are only two things you need to look at the revenue and the cost doesn't matter

if the industry doesn't matter the size everything comes back to these two components now of course there are intricacies as to you know where the problem lies what exactly is the problem and there are a lot of interdependencies usually and it's really hard to break those apart and when that happens we want to look at the next mental model number four oh kemp's razor as albert einstein said there are five levels of cognitive prowess at the very bottom is smart then it's intelligent brilliant genius and at the very top is simple and this is exactly

what ochem's razor is trying to underline that when there are multiple explanations of a situation the simplest explanation is more likely to be true base your decision making on an understanding that has you guessed it the least number of assumptions it's all starting to tie together right and by the way i forgot to mention this at the very beginning but these mental models are for how to think not what to think so if there's anything that surprises you anything that you don't agree with or if you agree with some of these let me know in

the comments share with me how you think about problem solving decision making i'm fascinated with this topic so please do share in the comments below and with that let's get back to mental model number five the hawk principle this comes from the founder and former ceo of visa d hawk simple clear purpose and principles give rise to complex and intelligent behavior complex rules and regulations give rise to simple and stupid behavior i can't even begin to tell you how many times i've experienced this firsthand the second hand i'm sure things come to mind when we

talk about stupid complex rules and regulations organizations that treat people like kids who don't understand what's going on is hurting themselves in the long run it's really easy to use the hawk principle in everyday life if you are working with others make sure you lead with simple clear purpose and principles and with yourself hold yourself to a higher standard with einstein's rule if you can't explain it simply you don't understand it now up till now these five mental models are focused on simplifying the complex world we live in today so if you ever feel stuck

not sure which direction to go how to break down something massive in front of you then these five mental models should give you hints as to how to get started there are of course more than five mental models that help you simplify the complexities of life so if you're interested in more let me know in the comments i can always do another video on this now i want to shift gears and look at some counter-intuitive mental models they are going to be able to give you an edge over the masses as to how you think

and see reality let's kick it off with game theory and game theory's interest-based counting imagine you're at a poker game there's a poker table there's five people sitting around the table you've got chips you've got cars ready to be dealt so how many players are there but most obviously there are five people around the table so there are five players right and while that is true it misses a really crucial point in decision making which is the interests at hand let's say two players decided to form an alliance and they will share the winnings and

the losses then the way that they play this game would be very different from if five players were just playing for theirs themselves and how you judge what is going on will be distorted if there are two people playing for the same interest but you weren't expecting it or if you think about the house right they also have an opposing interest to your own so how many players are there it's a lot more complicated than just the number of people sitting on the table so how do you use this in real life well every time

that you are negotiating you are maybe looking for a promotion you're maybe competing against others in a game in a competition of some sort by thinking in terms of interest rather than just the number of competitors that exist it really gives you a fuller understanding of what is really going on i think survivor the tv show is a really good example of this where alliances always shift because the interests are always shifting and so by seeing the opposing interests at play you can make better decisions and prioritize what you need to do next now following

this line of thinking thinking about things beyond the obvious number seven the mental model is via negativa it's a latin word for focusing on what something is not i think most of us have heard at least a version of this advice from successful people which is in order to succeed avoid doing something stupid it's quite intuitive for us when something is not working to think okay what can i do differently what can i add into my life so that i can be better at x y and z even though we think we need to add

more in order to do better sometime it makes sense to subtract for example sometimes it's not about the information that you do consume but rather the information that you don't consume same thing with food to improve health sometimes it's not about how much more superfoods you can stack into your meal but rather what can you take away that will give you better results again not giving health advice but just highlighting the perspective of focusing not just on additions but subtraction as well and while we are on this topic of focusing on what something is not

let's talk about mental model number eight which is inversion now most of us are trained to think in a linear fashion right think from the beginning and go to the end but sometimes it really helps to think through problems backwards instead of just forward now this this is a powerful tool for flexible thinking for being creative and when you invert which is turning something upside down you're upending things this is where you see the obstacles and you see creative ways of getting around them i actually talked about this in detail just in the last video

here so you can go in and see examples like cirque du soleil of how they recreated the circus experience by turning things literally upside down or combine it with via negativa right list out all the things that you don't want in order to see what exactly it is that you do want and if you do feel stuck know that it's actually normal because in the next mental model relativity from physics the idea is that we can't fully understand a system that we are a part of a simple illustration if you're on applying you don't feel

like you're moving at 900 kilometers an hour because you are moving at the same speed as the plane but an observer can see how fast the plane is moving because they are not part of that system and this is really easily applied to everyday life there are so many moments where we cannot see the full fuller picture so don't be too quick to write off different perspectives when people say something don't agree with that's actually where the gold lies it's a blind spot so to speak in your understanding of the world and what they say

could help you improve your understanding and while we're talking about airplane and speed i want to mention the next mental model velocity versus speed our societies love to glorify going fast but sometimes we confuse speed with velocity speed is how fast you go and velocity is how fast you go to get somewhere and that makes a huge difference you can move backwards really fast but that doesn't help you get to where you want to go so whenever you feel pressure to go faster remind yourself velocity versus speed where are you really trying to go this

video is getting really long so i will do another video to this focus more around mental models in economics and in behavioral economics specifically of how we make decisions based on monetary incentives also talk about human misjudgment human irrationality so if you're interested in that then stay tuned if you've learned anything new in this video please give it a big thumbs up subscribe if you haven't already leave comments down below and let me know anything surprising anything you agree with disagree with and i will see you in the next video thanks for watching bye