5 mental models that will make you smarter.

 Imagine you just graduated from college. Now, you’re headed to your new job for your first day of work.

One of the first things you’ll realize is that your new coworkers have completely different ways of thinking from you. The way they solve problems at your new job is completely different from the way you solve problems in college. It seems like their brains work differently.

You’ll notice the same thing if you go live in a foreign country: the way people think about stuff is different from how you think. Consider how Italians are passionate and relaxed, but Germans and Swiss are more serious. Or consider how Americans value the individual while the Chinese value the group.

These thinking patterns are called mental models. A mental model is basically a pattern in your brain that you use to solve a certain type of problem.

If you’re still confused, here are 3 examples of mental models in action:

· If you’re trying to decide what to have for lunch, you might say “Well, I won’t have chicken, because I ate that yesterday. I don’t want to have beef, because I’m trying to avoid red meat for health reasons. But I want to have some protein with my lunch. So I’d better have the fish.”

· A mom might use the following approach when her child is sick. First, take the child’s temperature. Then, give the child some chicken soup or some Pedialyte or something. If it’s really bad, take them to see a doctor. If it’s not that bad, tell them to rest in bed and check in on them every now and then.

· An entrepreneur might ask himself, “how much will people pay for my product?” Then, he’ll make several estimates of how big his target market is, how much disposable income his customers have, how much people pay for comparable products, etc. Then, he’ll settle on a price based on a complex intuitive calculation.

Mental models are really important. Mental models determine your thoughts, your thoughts determine your actions, and your actions determine your life. By having better mental models, you can solve problems better, adapt faster to new environments, and generally be a more effective person.

Humans evolved to think with a certain set of mental models. But some of those mental models aren’t very good. A bad mental model that humans evolved is usually called a “heuristic” or a “bias”.

For example, many people think they’re more likely to die in a terrorist attack than in a car crash. This is because humans have a faulty mental model called the “availability heuristic”. They assume that the things they see a lot on TV are more common than the things they don’t see a lot on TV, when often the opposite is true.

The good news is, you can learn new mental models. Humans have something called “neuroplasticity”, which basically means we can rewire our brains with practice. So, for example, you can learn to trust data more than what you see on TV by practicing overriding the availability heuristic and making data-driven decisions.

Here are 5 mental models I’ve developed over my life that have helped me in just about everything. These are mental models that don’t come naturally to most people. If you can pick up even 1 or 2 of them, you’ll have a much easier time understanding the world, and you’ll be able to solve bigger problems.

Mental Model #1: Assume There’s Something You Don’t Know

In 1982, hedge fund legend Ray Dalio was 33 years old. He analyzed the markets and came to the conclusion that all the American banks were about to crash.

So, he bet the farm. He put all his investors’ money and all his own money into shorting the stock market.

Turns out, he was totally wrong. There was no crash. Dalio lost all his money, had to fire all his staff, and restarted his investment brokerage from scratch.

Today, Ray Dalio is a lot less cocky. In fact, he’s probably the least cocky person on Earth. He factors a lot more uncertainty in his models. He hedges his bets, so one mistake won’t wipe him out completely. And he believes that what he doesn’t know is far greater than what he knows.

Human beings tend to assume they know everything. There are 2 reasons why. First of all, we have big egos, and admitting you don’t know something makes you look weak. Second, your brain will spend more time thinking about what you do know than what you don’t know, so it’s easy to forget about what you don’t know.

Because people tend to assume they know everything, they often make rigid plans, where they map everything out down to the smallest detail. The problem with that is that rigid plans usually fall apart, because there’s always something you don’t know that throws them off track. You can’t prepare for everything.

Military commanders and Mike Tyson have both observed this. Military commanders say that “no plan survives the battlefield”, while Mike Tyson says “everyone has a plan until they get punched in the face.” So it’s much better to have a loose plan that you can easily adapt when things change.

Assuming you don’t know everything also helps you get smarter. When you assume you know everything, you reject new ideas. But when you assume there’s a lot you don’t know, you accept new ideas faster, meaning you learn faster.

Mental Model #2: Optimization

When Albert Einstein was a professor at Princeton, you could often see him cutting across lawns and walking through hedges, instead of using the sidewalk.

What was going on? Well, he was trying to find the shortest distance between 2 points.

It probably wasn’t worth it to cut across the lawn just to save a few seconds, but that was the way his brain worked. He was always thinking about the very best way to do everything, including get from point A to point B.

When I was growing up I played the Pokémon Trading Card Game. I learned from the other players around me that there’s always a “right” move: the right card to play, the right attack to use, et cetera. That’s the move that maximizes your chances of winning, compared to all the other moves you can make. Your job is to find that “right” move.

Today I see all of life that way. I look at everything I do as a puzzle where I have to find the “right” solution. I try to find the strategically best way to do almost everything I do. For example, I rewrote this paragraph 3 times because I was trying to find the exact right words.

This is not how human beings evolved to think. Most human beings are “satisficers”, which means they stop looking for new ideas once they find an idea that’s good enough.

Sometimes satisficing is better than optimizing. For example, imagine you’re on vacation in Paris. “Optimizing” your vacation might mean hitting 5 museums in one day, without really taking the time to enjoy any of them. Whereas “satisficing” would mean taking a leisurely stroll along the Seine, having a 2 hour lunch, stopping at a patisserie for dessert, then maybe going to the Louvre if you’re up for it.

But when you’re solving big problems, you usually want to optimize. When you’re playing chess, don’t just make the first good move you see. Instead stop and look for a better move. Likewise, when you’re running a business, don’t get satisfied with selling a “good enough” product, or running a “good enough” marketing campaign. Try to get better.

Paris vs. Chess. When something isn’t a big deal, you should “satisfice” — find a solution that makes you happy, then stop. But when you’re trying to solve big problems, you should optimize — look for the BEST solution possible, and never stop looking.

Mental Model #3: First Principles Thinking

After PayPal went public in 2002, Elon Musk decided to dedicate his life to space exploration.

The first thing he did was get on a plane to go to Russia. He hoped the Russians would sell him one of their decommissioned ICBM’s, without the nuke. The Russians told him it would cost $21 million for just one ICBM — which he thought was outrageous.

On the plane home, Elon asked himself, “how much would it cost to build this rocket myself?”

Imagine you were in Elon’s shoes. You were on the plane home from Russia, trying to figure out how much it would cost to build a rocketship. How much would it cost to build a rocketship? How would you answer that question?

Daniel Kahneman and Amos Tversky found that when you ask someone a hard question, most people will substitute in an easier question. So to answer “how much would it cost to build a rocket myself?” you might substitute “how much were the Russians asking for the rocket?” Since they say $21 million, you might assume that building a rocket costs $21 million.

Elon did something else. He broke the question down into its component questions. The cost of building a rocket is equal to the cost of the materials you need, plus the cost of engineering and labor to put it together.

He figured out that building a rocket would actually be pretty cheap. And that’s how SpaceX was born.

Elon Musk calls “first principles thinking.” It was originally invented by Aristotle, and most great entrepreneurs are good at it. Most people know it from Elon Musk because he talks about it all the time.

These days, if you interview for a job at a big tech company, they’ll ask you a question like “how many refrigerators are in New York City?” By asking you this question, they’re testing your ability to think from first principles.

How do you answer this question? Most people would just throw out a guess. But if you’re good at first principles thinking, you boil the question down to its component parts. “How many people live in New York City? How many fridges do they have, on average? How many restaurants are in New York City, and how many fridges do they have, on average? How many grocery stores are in New York City, and how many fridges do they have, on average? Et cetera.”

So next time you have to answer a hard question, try your best to answer it. Don’t substitute an easy question. Instead, boil the hard question down to its root. Break it down into sub-questions. Then break those questions down into further sub-questions. This approach is harder, but it’s way more effective.

Mental Model #4: Everyone Has An Agenda

Imagine you’re a historian. You’ve decided to research Julius Caesar’s campaign to take over Gaul. Your first move is to review all the primary sources.

When you get to the library, you run into a problem. You discover that the only good primary source for Caesar’s conquest of Gaul was Caesar himself.

You go through Caesar’s writing. Most of it is self-aggrandizing. It describes heroic triumphs over the native people, with Caesar’s brilliant leadership front and center.

Do you believe him? Well… no. Obviously, Caesar wasn’t being honest about everything. He had an agenda. He was trying to make himself look glorious to the Romans, so he could win more public support.

You can’t be a good historian if you take everything you read at face value. You always have to consider the speaker’s agenda. You have to ask, why are they saying what they saying? And can I trust them?

When CIA analysts look at information from foreign governments, spies, terrorist organizations, etc., they ask themselves the same questions. Why are we seeing this information? And what’s the speaker’s agenda?

Most people do this. Humans tend to take what they see at face value. Viewing the world like a historian or an intelligence analyst is something you have to learn.

This goes double when we listen to authority figures. Humans are a lot like sheep: our instincts tell us to trust authority figures, no matter what. I suspect this is a form of large-scale Stockholm Syndrome: we evolved to kiss up to powerful people so they wouldn’t kill us. Kissing up to powerful people means gulping down their propaganda.

If you want to make sense of the world around you, you have to learn to not trust people sometimes.

Here are some examples. Let’s imagine you want to buy a used car. So you find someone selling their car on Craigslist. You meet up with the guy, and he tells you the car works perfectly. So you pay him, you sign some paperwork, and he gives you the keys. While you’re driving home, the car breaks down.

Or, let’s say you design some shoes, and you want to sell them. First, you want to know if the shoes are any good, so you show them to your mom. “They look wonderful, dear!” she says. “I bet they’ll fly off the shelves.” So you order 500 pairs of the shoes. You don’t sell a single pair.

I’m not saying to be rude or overly cynical. You should still try to have friends. You should still ask others for advice. But realize: at the end of the day, you can’t 100% trust anybody.

Mental Model #5: Quantum Thought

Imagine you’re the worst poker player in the world. You make horrible decisions and bad reads. You’re always drawing to inside straights and you’re always folding great hands. Et cetera.

Now, imagine you got to play poker with some of the top players in the world. To make up for your skill difference, the game organizer is gonna let you see the other player’s cards. Anytime you want, you can just ask the other players what’s in their hand, and they have to tell you. You would never lose!

Poker is all about having information. The better you know what’s in your opponent’s hand, the better you play.

Pro poker players try their best to guess what’s in the other guy’s hand, but… there are always way too many possibilities. Most of the time, you can’t know someone’s exact hand. If you try to “put someone on” a specific hand, you’re gonna be wrong. A lot.

So pro poker players do something else. They say their opponent has a range of hands. This is all the possible hands that they could have that are consistent with how they’ve played the hand so far.

Here’s an oversimplified example. Imagine you’re playing Texas Hold ’Em, and the flop comes ace-high. Your opponent bets big. What’s his range?

Well, he’s saying he has an ace. But he could be bluffing. So his range is, “ace or bluff”. A good poker player will keep both possibilities in mind as he plays the hand out.

Human beings don’t deal well with uncertainty, meaning we don’t naturally think in “ranges”. We don’t think about all the different possibilities that exist. Instead, we tend to pick one possibility. Then, we just assume we’re right until we’re proven wrong.

Even Einstein did this, once upon a time. There are 2 possibilities — maybe the universe is deterministic, meaning if you could input the variables from the Big Bang into a computer, you could predict everything that happens in the entire cosmos for all of history. Or, maybe the universe is not deterministic, meaning random, uncaused stuff happens sometimes, creating cosmic uncertainty. For his entire career, Einstein clung to the idea that the universe is deterministic, even though he didn’t really have any evidence proving it was.

The problem with the naïve “one possibility” mental model is that there’s usually more than one possibility. If you just pick your favorite possibility and stick with it, you’re gonna be wrong. A lot.

Call considering multiple possibilities at once “quantum thought”. A quantum particle can hold multiple states at the same time. Similarly, a quantum thinker can consider multiple possible realities at the same time. If you can learn quantum thinking, it’ll help you deal with uncertainty a lot better.

How to apply these mental models to your life.

This is the part where I give you some bad news. You can’t read one article on the internet about mental models and then expect to start using them.

Thought is a physical thing. You think according to how your brain is wired. So if you want to change your thinking, you have to rewire your brain.

How do you rewire your brain? You practice. If you start doing something new, then your brain will build the neural connections you need to do it well.

So, look for opportunities in your life to use these mental models. Look for situations where you can ask yourself what you might not know, or what alternate possibilities there are, or how you might do something better. Every time you think using one of these mental models, your brain changes a little bit.

Alternatively, try playing strategy games. They’re a great tool for learning new mental models. You can learn quantum thought by playing poker, for example. And you can learn about optimizing by playing chess.

Hey! Thanks for reading.