Concepts

A list of ideas, principles and mental models that I’ve found useful or interesting.

Concept	Popularized by	Tags
▶ Asymmetric upside	Nassim Nicholas Taleb	Mental models
Situations where potential gains far exceed potential losses, creating favorable risk-reward profiles
▶ Circle of competence	Warren Buffett	Mental models
Operating within your areas of genuine expertise and understanding your limitations
▶ First principles thinking	Aristotle	Mental models
Breaking down complex problems into fundamental truths and reasoning up from there
▶ Inversion	Charlie Munger	Mental models
Thinking backwards from failure to find success by considering what could go wrong
▶ Occam's razor	William of Ockham	Mental models
The simplest explanation is usually the correct one
▶ One way doors vs Two way doors	Jeff Bezos	Mental models
Distinguishing between reversible and irreversible decisions to optimize decision-making speed
▶ Opportunity cost	Abraham Wald	Mental models
The value of the best alternative foregone when making a choice
▶ Second-order thinking		Mental models
Considering the consequences of consequences, not just immediate effects
▶ Steel manning		Mental models
Arguing against the strongest version of opposing views rather than weak strawman versions
▶ Systems thinking	Jay Forrester	Mental models
Understanding how interconnected parts work together as a whole system
▶ The map is not the territory	Alfred Korzybski	Mental models
The representation of something is not the thing itself - models are simplifications of reality
▶ 20-punch card rule	Warren Buffett	Mental models Investing
If you only had 20 investment decisions for your lifetime, you would focus intensely on quality over quantity
▶ Incentives superpower	Charlie Munger	Mental models
Understanding that incentives drive behavior more than anything else, and designing systems accordingly
▶ Mr. Market	Benjamin Graham	Mental models Investing
Viewing market prices as quotes from an emotional, irrational partner rather than accurate valuations of business worth
▶ Pareto (80/20) principle	Vilfredo Pareto	Mental models
80% of effects come from 20% of causes - the vital few versus the trivial many
▶ Tragedy of the commons	Garrett Hardin	Mental models
Individual rational behavior leads to collective irrationality when shared resources are overused by self-interested actors
▶ Anchoring	Amos Tversky Daniel Kahneman	Cognitive biases
Initial information heavily influences subsequent judgments and decisions
▶ Base rate neglect	Daniel Kahneman	Cognitive biases
Ignoring statistical base rates when making decisions, leading to poor probability judgments
▶ Choice architecture	Richard Thaler Cass Sunstein	Cognitive biases
The design of contexts in which people make decisions significantly influences those decisions
▶ Confirmation bias	Peter Wason	Cognitive biases
The tendency to search for, interpret, and recall information that confirms pre-existing beliefs
▶ Conjunction fallacy	Amos Tversky Daniel Kahneman	Cognitive biases
Incorrectly believing that specific conditions are more probable than general ones
▶ Curse of knowledge	Chip Heath and Dan Heath	Cognitive biases
Difficulty remembering what it's like not to know something, leading to poor communication
▶ Endowment effect	Richard Thaler	Cognitive biases
People value things more highly simply because they own them
▶ Framing effects	Daniel Kahneman Amos Tversky	Cognitive biases
The way information is presented significantly influences decisions and judgments
▶ Frequency illusion	Arnold Zwicky	Cognitive biases
The tendency to notice something more frequently after becoming aware of it, creating the illusion that it has increased in frequency
▶ IKEA effect	Michael Norton Daniel Mochon Dan Ariely	Cognitive biases
People value things more highly when they've put effort into creating or building them
▶ Loss aversion	Daniel Kahneman	Cognitive biases
Losses feel roughly twice as painful as equivalent gains feel good
▶ Mere exposure effect	Robert Zajonc	Cognitive biases
The tendency to develop preferences for things we're familiar with through repeated exposure
▶ Paradox of choice	Barry Schwartz	Cognitive biases
Having too many options can lead to anxiety, decision paralysis, and regret
▶ Reciprocity	Robert Cialdini	Cognitive biases
People feel obligated to return favors and repay debts, even unsolicited ones
▶ Sunk cost fallacy	Richard Thaler	Cognitive biases
Continuing poor investments due to past investment rather than future value
▶ Survivorship bias	Abraham Wald	Cognitive biases
The logical error of concentrating on success stories while overlooking failures
▶ Bystander effect	John Darley and Bibb Latané	Cognitive biases
The tendency for people to be less likely to help someone in need when other people are present, due to diffusion of responsibility
▶ Minto pyramid (SCQA)	Barbara Minto	Communication
A structured way to present ideas starting with the conclusion, then supporting arguments
▶ Perceived value is value	Rory Sutherland	Communication
What customers perceive as valuable is what drives purchasing decisions, regardless of objective measures
▶ Show, don't tell	Anton Chekhov	Communication
Demonstrate through actions and examples rather than explaining with words
▶ 100 minus your age		Heuristic
A rule for determining how many pages to read before giving up on a book
▶ Two-pizza rule	Jeff Bezos	Heuristic
Teams should be small enough that two pizzas can feed the entire team
▶ A players hire A players, B players hire C players	Steve Jobs	Leadership
High performers hire other high performers, while mediocre performers hire people worse than themselves
▶ Barrels & Ammunition Framework	Keith Rabois	Leadership
The constraint in scaling organizations is finding people who can execute ideas, not generating ideas themselves
▶ Disagree and commit	Andy Grove	Leadership
Teams should debate decisions thoroughly but commit fully once decided, ensuring both quality discussion and unified execution
▶ DRI	Apple	Leadership
Directly Responsible Individual - one person accountable for specific outcomes
▶ Growth mindset	Carol Dweck	Personal development
The belief that abilities and intelligence can be developed through effort and learning
▶ You become the average of the people you spend the most time with	Jim Rohn	Personal development
Your character, habits, and success are heavily influenced by your closest relationships
▶ Don't talk to the Police	James Duane	Principles
Legal advice about exercising your right to remain silent during police interactions
▶ Funnel friction paradox		Principles
Adding friction to a process can sometimes improve conversion rates by qualifying users and increasing perceived value
▶ Less is more	Ludwig Mies van der Rohe	Principles
The principle that simplicity and clarity are better than complexity and clutter
▶ Marginal gains	Dave Brailsford	Principles
Small, incremental improvements that compound to create significant results over time
▶ Order off the secret menu		Principles
Look for hidden opportunities and options that aren't immediately visible
▶ Parkinson's Law	C. Northcote Parkinson	Principles
Parkinson's Law states that work expands to fill the time available for its completion.
▶ Skin in the game	Nassim Nicholas Taleb	Principles
Having personal stake in the outcomes of your decisions or advice
▶ Compound interest is the 8th wonder of the world	Warren Buffett Terry Smith	Principles
The result of reinvesting earnings, so that earnings generate their own earnings over time
▶ Peeking problem (A/B Testing)		Principles
Repeatedly checking A/B test results and stopping when significance is found inflates false positive rates due to multiple comparisons
▶ Barbell strategy	Nassim Nicholas Taleb	Investing
Combining extremely safe and extremely risky investments while avoiding the middle