Actionable Book Summary: The Great Mental Models (Vol. 1) by Shane Parrish
The Book In Three Or More Sentences:
The first volume of the series The Great Mental Models, General Thinking Concepts, introduces nine, fundamental for our existence, mental models. Through short stories and easily understandable examples, Shane Parrish’s goal is to equip our minds with tools that can not only upgrade our decision-making process but also bring us closer to where we want to be in life.
The Core Idea:
You can imagine mental models as lenses you put to see the surrounding world differently, better. These mental tools offer a unique way of tackling problems and making smarter decisions – they help you spot opportunities and avoid mistakes. The primary task of this book is to explain in plain English, nine of the most popular mental models and also show you how to apply them in your everyday life.
Understanding more about the world will increase your chances of making wise decisions.
Pursuing endless gain leads to someone else’s peril.
Always think about the consequences of your actions.
By removing blind spots you’re increasing your chances to win.
To win in what?
Well, in everything.
Or as Shane Parrish writes in the book, “In life and business, the person with the fewest blind spots wins. Removing blind spots means we see, interact with, and move closer to understanding reality. We think better.”
You don’t have to be a genius to live a good life and make wise decisions. You simply need to understand how the world works.
But the world is too broad of a definition. Let’s narrow it down: To be good at your craft, you need to uncover enough blind spots to master it.
And how exactly you remove blind spots?
By learning from the best in the field. That’s actually the slogan of Shane Parrish’s website, the author of this book: “To help people master the best of what other people have already figured out.”
Let me give you an example so you can understand this idea better:
Say you want to start your own business – it will be your first entrepreneurial venture. While you can start and learn as you go – as most people suggest – it’s a good idea to first learn a bit about the market you want to enter and the troubles most people encounter. How to do this? By reading articles, books, and watching videos on the subject from the best in the field.
This process might seem like a total waste of time – you’re not actually building a business while reading. But it helps in numerous ways: You’ll refine your idea; You’ll be prepared for at least some of the obstacles; You’ll have a general sense of what to expect.
While this concent of removing blind spots is presented as an introductory chapter in the book – meaning, it’s not an actual mental model. It’s a great way to look at things.
When you have a broader knowledge about a specific subject, you’re able to quickly spot your flaws, avoid problems and potentially take on the right path.
Having said all of the above, your task, no matter what you’re doing, is to continuously learn. This will widen your scope of expertise and therefore, make you a kick-ass decision-maker.
Lesson #2: Do not Seek For Unlimited Gain In a Limited World
Since the online world allows us to scale pretty much everything. People’s main desire these days revolves around increasing their gains exponentially. But while this seems good for the individual, it’s always bad for society.
A famous parable mentioned in the book -The Tragedy of the Commons – is shared to reinforce this specific idea: that there are certain limits in this world which we should consider. But people forget that.
Let me give you an example:
While there is virtually no cap for gains these days if your app or site gets funded, there are consequences when we don’t consider the limitations that are imposed by nature. Some of these are: When we expand our costs will grow. We’ll start producing more waste. Our competitors will lose clients which will lead to layovers and people losing jobs. Therefore, The Tragedy of the Commons.
Or in other words, pursuing endless gains pleases a small portion of the people involved but badly influences the larger population.
While the rich are getting richer, when they are looking for their own best interest, society as a whole is suffering because the average person doesn’t have access to the wealth the first group has.
The solution here to restore the balance is twofold: First, rich people should give back. Secondly, our individual goals should shift. Instead of trying to maximize on everything. We should set limitations on our consumption and desires.
You don’t necessarily have to dominate the market. You can grow to a certain point and stop.
This applies to both business owners and corporations who harvest natural resources.
…Each man is locked into a system that compels him to increase his herd without limit—in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons. Freedom in a commons brings ruin to all.” Garrett Hardin
Lesson #4: Navigate Easily Outside of Your Circle Of Competence
To be competent means to be smart at something specific.
But while you can be a kick-ass accountant, you can be a lousy manager or a bad investor.
And that’s normal.
You can’t be good at everything. Usually, a person, if he’s completely honest about his level of expertise, is competent at two to three things at most.
Fortunately, we can follow the 3-step method mentioned in the book to increase our expertise in fields foreign to us.
Here’s the process in short:
Learn the basics: If you don’t know a thing about investing, you should start with the general information. That’s usually widely available online. You just need to search. However, keep in mind that learning the basics doesn’t make you an expert, yet. Admit your flaws and acknowledge that you’re still stranger to the subject. This will remove all the biases and prevent you from making stupid, ego-driven decisions.
Talk to experts in the field: Find a person who’s competent in the field you want to understand. Later, take some time to prepare questions for them. Aim for thoughtful queries that will be difficult for the expert himself to answer. If you don’t know a local expert, don’t worry. Read the best books on the subject and find experts online.
Use mental models: Take some time to understand the mental instruments (more about them below) and use them to boost your understanding of the subject. Question what you know and outline what you don’t know.
Part of successfully using circles of competence includes knowing when we are outside them—when we are not well equipped to make decisions… We must develop a repertoire of techniques for managing when we’re outside of our sphere, which happens all the time.” Shane Parrish
Lesson #4: Use Second-Order Thinking To Prevent Problems and Advance In Life
Second-order thinking is one of the (best) mental models mentioned in the book. While I’ll provide a squished version of the tool below, it’s something that deserves a bit more attention.
In essence, second-order thinking is about considering the consequences of your actions. Ignoring the immediate results, even if they feel good, and focusing on the effects our actions will have later on.
Let me give you an example:
You’re hungry. You want to grab something to eat. The local McDonalds that’s a few minutes away is a great initial idea. It’s fast, cheap, and you’ll be well-fed in a couple of minutes. However, the second-order effects are that your blood sugar will increase, you’ll feel puffy, bloated, even swollen, and the excess calories will cause weight gain.
What do you do?
It really depends on the situation but if you want to lose weight it’s best to either find another restaurant and order a salad or cook something yourself.
Second-order thinking just saved the day!
This simple thought process will allow you to spot errors in your initial decision and help you adjust. You just need to stop and think.
It’s a tool that can literally save your life.
We suck at considering the outcomes.
That’s why we end up addicted to alcohol, cigarets, and simply sitting and doing nothing – we don’t think about the consequences. We focus on immediate gains.
Watching TV feels good now, but it doesn’t help you become a better manager, investor, or whatever.
Spending time chatting with friends online is a cool way to spend the afternoon, but it won’t help you advance in your career.
Second-order thinking comes to the rescues in all of these occasions. Consider it a way to prevent bad things from happening to you.
To use it, do the following: Before you act, pause for a moment and weigh your options. Usually, if something feels good right off the bat, it won’t improve our long-term health. Thus, you need to find another solution.
We don’t make decisions in a vacuum and we can’t get something for nothing. When making choices, considering consequences can help us avoid future problems. We must ask ourselves the critical question: And then what?” Shane Parrish
Lesson #5: Use The General Thinking Concepts To Make Better Decisions:
Lastly, my attempt to compress the great work Shane Parrish did into a couple of sentences.
Here’s a summarized version of the nine mental models presented in the book:
The Map is Not The Territory: Maps (this also includes guides, manuscripts, etc.) can help us navigate through a foreign terrain but they are not the actual place – they are not reality. They are a summarized version of something. They can serve us well, but we shouldn’t rely solely on them to make decisions. Consider the information presented on a map, but don’t stop looking around. Don’t stop adding up on your knowledge.
Circle of Competence: Both what you know about a specific topic and what you don’t know about the same thing form your circle of competence. When you know where your skills are lacking, you are aware of your limitations. Thus, you have a clear idea of what you can improve. While building competence is a slow process, you can accelerate it by reading books and talking with experts in the field.
First Principles Thinking: This mental model suggests disassembling an idea, a project, a structure even, into particles and finding the foundation. When you remove all of the fluff, the essential, base thing remains. And when you know the core reason something exists, you can build the rest of your knowledge around this to produce something new.
Thought Experiment: We have brains. They are able to think. Thinking lets you do things in your head before executing them in real life. That’s the whole idea of the thought experiment. Plus, you can bend time, space, and imagine even the impossible to test an idea or to explore something from a different perspective. It’s like daydreaming but better – purposeful daydreaming. It’s really handy and it can help you avoid really nasty outcomes. The great thing about this is that you can use it unlimited times. You can test different variations of a situation until you find the best solution. Requirements: time, brain, imagination.
Second-Order Thinking: If you don’t consider the consequences when you make decisions you’re focused solely on the immediate results. But this is a bad long-term strategy. Before acting, always consider “the effects of the effects,” as stated in the book. Think about the worst-case scenario. What can potentially go wrong in the future when you do X today? If the negative outcomes outweigh the good ones, go back to the drawing board.
Probabilistic Thinking: This mental model is about considering what you already know when making decisions or when consuming outside information. Confusing? Let me throw an example: If you hear in the news that car accidents are increasing, what will you do? If you rely solely on this information you’ll most probably stay at home. But when you consider your past experiences you’ll conclude that it’s safe to go out. After all, you’ve been driving for 3 (5, 10?) years without a single bruise.
Inversion: In essence, inversion is about looking at something – a problem, a situation, a task, a goal – from the opposite side. If you rush to solve problems without looking at what’s “behind,” there’s a huge chance that you’ll miss some detail and potentially make a mistake. Consider the following example of inverting something: Instead of trying to be genius, you can simply focus on avoiding being stupid.
Occam’s Razor: Whether you’re thinking about starting a business or about solving a particular problem, the simplest solution is usually the best. Occam’s Razor is about finding simplicity in things. The world is already too busy and noisy. You don’t have to complicate things further. Aim to explain and to do things simply. When there are fewer parts in the engine, for example, the likelihood of this motor to run longer is greater.
Hanlon’s Razor: Most people don’t wish you harm. In most cases, if someone did something bad to you it was a mistake, not an attempt to sabotage your existence. Few are actual villains. Most people simply do mistakes and don’t wish to harm others.
Use the mental models: Understanding the mental models is just part of the learning process. You need to use them. Otherwise, what you just did was pointless. To start, pick two and learn more about them. Then, make sure to apply them the next time you need to make an important decision.
Hire a coach: Or at least someone unbiased who can evaluate your work/performance/life. Think about what you want to improve and ask someone for feedback. Your ego is going to suffer but it’s good in the long run.
Try to crush your idea: Or in other words: use falsification. It goes like this: Before deciding what to do, try to prove your idea wrong. If while attempting to break it, your idea lasts, you’ll basically strengthen it.
Consider the necessities but don’t rely on them: The ability to write words on paper is a necessary skill to become a writer but it’s not sufficient to become a best-selling author. The gap between necessities and sufficient is what will make you a great writer. Master the necessities but don’t think they will be sufficient. Think of other skills (ideas) that will help you become better.
Focus on the long-term results: Second-order thinking is something you need to use on a regular basis. Always consider the consequences and focus on the long-term gains over the short-term wins. A simple example to explain this: Buying a new watch feels good (short-term sensation) but if you’re using your credit card it will lead to some negative effects – paying interest.
Commentary And My Personal Takeaway
Your brain is a toolbox and you already have things like a hammer, saw, knife, screwdriver. While these help in various situations, they are nothing compared to the mental models presented in this book.
Outstanding work by Shane Parrish. He manages to explain these complex cognitive tools in an incredibly engaging way so that even people like me, easily distracted and not really wise, can understand them and also learn how to apply them.
Though the mental models are primarily advertised as tools that can help you make better decisions, they can also help you understand how the world works and what are the relationships between stuff around. By using these mental models you’ll approach life consciously and finally perform tasks the right way.
“But wait for a second, isn’t this total BS? I mean, thought processes, how the world works? Really?”
Yes, it might sound a bit… sophisticated. But believe me, you need to read this book and understand the mental models described inside. They will allow you to approach situations, and life in general, more purposefully and avoid making stupid mistakes.
My personal takeaway?
I’ll quote part of the book: “The quality of your thinking depends on the models that are in your head.”
I can’t wait to read volume 2!
We are afraid to learn and admit when we don’t know enough. This is the mindset that leads to poor decisions.” Shane Parrish
Sometimes making good decisions boils down to avoiding bad ones.” Shane Parrish
You can’t improve if you don’t know what you’re doing wrong.” Shane Parrish