Mental Models

In every aspect of our lives, we make decisions. They need to be taken fast, and they should be right. But how can you think of the right choice in such a short amount of time?

Reality is hard to understand. To make the right decisions fast, you need to simplify it. That’s a reason why mental models are great.

A mental model is an abstraction over reality that helps you make better decisions.

Abstraction over Reality

Abstraction is the process of extracting significant and characteristic details. We do it every day. It’s how we comprehend reality. Consider Alex, a 5-year-old weirdo (who likes grabbing mugs?!).

Alex’s father likes drinking his morning coffee in a red mug. Alex has tried grabbing his mug while there was hot coffee inside the mug, so she inevitably burned her hand and felt pain.

Here’s what she currently thinks of pain-inflicting mugs:

• They are red
• They are hot

In Alex’s mind, a blue mug can’t burn her hand (since she thinks only red mugs can burn). This is a significant flaw that we all can experience that arises from not stress testing your mental model properly (more on that later).

—

This morning Alex’s father decided to drink from a blue mug. Alex tried to grab it again and not-so-interestingly burned her hand.

Here’s what she thinks now:

• Pain-inflicting mugs are hot
• Dad is a sadist trying to burn my hand (This is a joke.)

Her assumption about mugs is now right. She has now learned which mugs not to grab.

Alex unknowingly created a mental model and improved it. It’s essential to be aware of the assumptions that underlie our decisions since they might be incorrect. The best way to do this, as Ray Dalio says,

(to) have smart people who disagree with you.

— Ray Dalio

Why mental models are so powerful

Warren — for some unknown reason — wants to know how to hit a baseball perfectly. So he searches every bookshop in the city and finds a book about the science of hitting a baseball. In the book there’s a graphic:

Which shows the hitter’s circle of confidence. If he hits a red circle, the ball will go the farthest, and if he hits a gray one, it won’t go far at all.

Warren grows up and goes into stock trading, where he realizes that he is more confident in investing in certain stocks than others. He uses the same model that he had seen when he was a little baseball scientist.

Warren’s last name is Buffett.

Here’s a short video of him talking about this.

The moral of the story is that you can apply a mental model to a variety of tasks. That’s a reason why they are so powerful.

3 Examples of Mental Models

We have seen what mental models are and why they are so powerful. In this section, I’ll go through three examples.

Rule of 3

When you need to persuade a superior show 3 reasons, no more, no less.

Some mental models are based purely on experience. This is one of them.

The creator of this mental model probably tried persuading their superiors more than a few times. Then, they realized that when you present three reasons, it’s easier to convince them.

Note: this might be the reason why I am presenting 3 examples, just might.

Hanlon’s Razor

You hate jerks, everyone does… except for Hanlon. When people are being jerks, he attributes this behaviour to their stupidity, not malice. Because he believes that people are good (That’s one of his assumptions about life.).

This model may seem a bit optimistic at first, but it works. (This ties in very well with Extreme Ownership. For more on that check out my article Krav Maga of Leadership)

• If attributable (yup, that’s an actual word) to stupidity, do that
• If not it’s out of malice

When to use this

Whenever somebody is being a jerk, it’s the perfect time to use this model.

Occam’s Razor

First of all, let’s address the matter with razors and these people.

Philosophical Razor

A philosophical razor is a “rule-of-thumb” that prevents decision-makers from unnecessarily thinking. In a sense, it shaves certain thinking paths.

Mental Model

Occam was a scholastic philosopher and theologian. Here’s what he believed:

The simplest solution is probably right.

Here’s what he said:

When presented with competing hypothesis, take the one with fewer assumptions.

When to use this

Whenever you are trying to solve a problem. It will save you valuable resources. You should not use this when you are looking for an exceptionally creative solution, for that use Musk’s first principles (which we’ll cover in a sec).

How will all this simplify your life?

You make decisions in all aspects of your life. They need to be taken fast, and they should be right. Sound familiar?

Knowing mental models like this will eliminate the process that Alex went through and the burns.

When you need to make a decision fast, you don’t have enough time to experiment or to create a mental model. So learn some early on and use them.

A Map of Mental Models

Copyright: Michael Simmons

Tips for Learning Mental Models

• Learn when to use them
• Look at problems you face from the perspective of that specific mental model.
• Learn the larger class of mental models and how they work (for example, philosophical razors instead of Occam and Hanlon’s razors separately). This will save you time.

Creating Mental Models

Here’s the Ray Dalio way.

First, you need to record how to make decisions and their outcomes. This will allow you to understand what works and what doesn’t objectively.

Principles (Mental Models) are recipes for dealing with decisions that happen over and over again. — Ray Dalio

Dalio also has a process for creating principles (mental models).

1. Ambitious goals are what you want to achieve, keep in mind that you can achieve anything but not everything.
2. Failure: something goes wrong
3. Diagnosis this is the reflection part
4. Design you create countermeasures against the problem in order to prevent it.
5. Back-on-track do your thing… until the next problem :)

Pain + Reflection = Progress

You feel pain about your failures, but the reflection process is joy because it’s how you improve.

Watch Ray’s video here

Problem of Oversimplification

Oversimplification: when your mental model gets so deviated from reality that it doesn’t yield correct decisions.

How to counter this

The Dalio Way

Thoroughly validate your mental models by testing them with a diverse set of smart people who disagree with you.

The Musk Way

Reason from first principles rather than by analogy.

— Elon Musk

This method is specifically for being more creative. You think by only using fundamental principles, like physical truths and reason from there.

For example, if you want to build a spaceship, don’t consider the previously built spaceships, instead think of what makes the spaceship and reason about the price from there. Using only the absolute truths (such as the price of iron) and logic.

Here’s an interview of Elon about first principles.

Conclusion & Key Takeaways

Many successful people use mental models in their decision-making process as it makes decision-making simpler and more manageable.

• Mental models are how we naturally think, but they are more organized. This is what makes them so efficient.
• You can learn mental models, as well as create your own. I recommend creating a few of them, just for the experience.
• Oversimplification is a problem you need to be aware of when using and creating mental models.