Decoding Better Decisions: Mental Models Unveiled with Shane Parish

[00:00:00] Hello. Hello and welcome to the moonshots podcast. It's episode 138. I a co-host mate persons. And as always I'm joined by the guy who's kind of mental it's Mark Pearson Freeland. Good morning, mark. Well, if I'm the excitedly more mental one, then Mike, that must mean that you're the model of the two of us, because we're obviously in the mental model series.
Aren't we? We are indeed. I am just a model citizen and I've recovered from the epic nature of Einstein. But mark, who are we going to delve into today? Who's work. Are we going to take a bite off and try and digest some pretty heavy stuff? Yeah, we're picking up the magpie himself, Mr. Shane Parrish, who's booked the great mental models, general thinking concepts.
It's a pretty great almost encyclopedia or collection Mike of these great mental models that we're starting to run into with Einstein and some of the other thinkers that we've been touching upon. [00:01:00] Yeah. I would have to agree. I have my copy right by me actually. And it is indeed encyclopedia. Like it is a great book.
So it's called the great mental models by Shane Parrish. And I am so delighted that we have got to spending some time on his work and you're absolutely right. You said he's like a magpie, but he's quite a Hawk as well. He's pretty sharp on some of these observations, but what he has done is he's basically created one book for all of us knowledge workers and said, if you want to think better, if you want to perform better through your thinking.
Here is a guide to a whole body of principles of different models to use. And we saw some of them from Einstein and he actually does mention Einstein in the book a fair bit, but we're going to go beyond Einstein's thinking, we're going to look at some of the best mental models that help you have great insights to challenge assumptions, to [00:02:00] breakthrough the status quo and to come up with big tasty, original ideas.
Mike, this is a right up my alley. Yeah, it certainly is up mine as well, because, you know, last week we had Einstein and I think what surprised me perhaps with the Einstein work was how creative and considered he was when he actually followed practices. Of mental model behavior. And I think really digging into more of Shane parishes collection, like you say, is going to be quite surprising and quite interesting as well, because we're just sort of narrowing our, our minds.
Aren't we, Mike, focusing down onto problem solving and being the best version of ourselves day to day with a book like this, this encyclopedia or roadmap, it feels pretty, pretty helpful. It, it is not any helpful. I think it's like this idea that like every problem has been thought about previously in history.
So [00:03:00] imagine rather than looking at a person. In your business, in your startup, in your community group, in your life and saying, I'm stuck. You could go to like a list, literally an inventory of how to think differently. And that's exactly what we're going to do in this show. We're going to give you a kind of a, a taste tester of some of the best models that Shane Parrish has in his book, the great mental models.
And we're going to do, you know, what we call inversion model first principles. Those are two of the models we're going to use. Then we're going to go really deep into second order thinking and another great one that's in the book circle of competence. And just as it tastes, it, we will even get a sprinkle of Warren buffet in the show, but more over mark, we're going to really kind of set the scene, set the context for how to think better.
And quite frankly, if I think about in my career, I was. Wasn't really until my thirties where I was [00:04:00] really even aware of mental models. So I'm really hoping that the last 10 or 15 years I've spent learning how to think better that today you and me ma we can like break down these models, share them.
And I really do hope our listeners can feel like, aha. That's a great way to think. I'm going to try that. I really think that's what's on offer today, don't you? Yeah, I think you're right. I think if anything, these have become more essential than ever. And if somebody like Einstein, this unbelievable physician mathematician can use them and find results through following frameworks and mental models, then I think you and I can as well, Mike, well, in that case, let's crank it up.
Let's not only hear from Shane parish, but here. Not only from Shane, but Adam Grant and Shane in the same room, thinking about thinking. I think one of the things we need to do is we need to give ourselves permission to enter rethinking cycles. [00:05:00] And there are a lot of ways to do that. We could, we could talk about, but Shane, I'm going to ask you about this because a couple, a couple of years ago you wrote a post about how we should have more, second thoughts.
And I had literally started writing about that. I think it must've come out around the time that I was writing the think again, book proposal, and I had proposed a tentative title for this book as second thoughts. I was like, this is amazing. You're on the exact same wavelength as me. And this is what you do for a living.
Right? You, you rethink things. You also ask the Farnam street community and your whole audience here at the knowledge project to rethink a lot of their convictions. So where do you start your rethinking cycles and how do you know when it's time to write. I think like, I I've just summed this up as like outcome over ego.
And so I usually try to wrap my outcome wrap my, my sense of identity or ego in the outcome. And that's something I learned when I was working for the intelligence agency. Right. Like it wasn't about me having the best idea. It was like, who's got the best idea because that's going to get the best outcome.
And then. You sort of grow up in an [00:06:00] environment where that becomes, I would say the norm by and large, it's hard in a knowledge environment though, right? Because you have so much of your, your worth, you, you want to contribute to something. I think there's a biological need to contribute to something larger than us.
And if your identity, you're not mechanically making something, you can't see, there's nothing tangible to what you're producing. Then you, you, you effectively are a knowledge worker in one way or another, and then you're paid for your judgment. So if your judgment isn't right, what is it? And then what you do is you, you, you force your way, right?
Like you, you don't intentionally sabotage other people, but you only look for confirming evidence. You, you're not open to changing your mind because your sense of identity is tied to being right. Because that's how you contribute to the organization. It's it's interesting, but not at all surprising to me that, that you really learned this in the intelligence community, because the way you're describing your process of rethinking is exactly what, what I learned from studying superforecasters right.
Which is they will often come in to making [00:07:00] a judgment and say, okay, the only way to have a better shot at getting right, or excuse me, the only way to, to have a better shot at, at being right, is to recognize all the places where I'm wrong. Yeah. And I love this practice in particular, that they came from one of the superforecasters in the book, John pare Begum, who, when he forms a tentative opinion, we'll actually make a list of the conditions under which he would change his mind.
And I've actually started doing this over the past few months, because I don't want to get locked into something that was maybe sort of a soothing belief, but ultimately one that's not going to serve. We used to do that too. We used to sort of like track here, the, the, the key variables that are going to drive this, and here's the range at which we expect those variables and the moment they go outside of that range, it triggers a a rethinking, if you will of, oh, maybe we're wrong, maybe we got this wrong and now we can course correct.
And the earlier we can course correct a, the less costly it is and be the more likely we're going to be correct in the ultimate outcome. And that's what we're focused on [00:08:00] is like not, not the when you're dealing with what we were dealing with, you want the ultimate outcome to be success. Mm Adam Grant, Shane Parrish.
They can come around to my house for dinner. Anytime Mike, it's a little intense, it gets a little meta with these guys, but I thought what they were getting into was like, if you want to think the best you have to go to this base idea. It's okay. To be wrong. Did you feel that when they were how we're so busy, just trying to prove that we're right, rather than accept that we may be wrong and then ask, how do I get better at this idea?
It felt like a nice extension of our show on Adam Grant's latest book. Think again, which was show 125 that we did well about 12, 13 episodes ago. Now this idea of second thoughts and [00:09:00] questioning your judgment. And I think what's perhaps easy to assume or easy to follow and a behavior that you can kind of repeat is like you say to think you're always right.
And nowadays we're in a community and a lot of us are in jobs where we, as, as Adam Grant calls out, you get paid for your point of view for your thinking. And sometimes it's quite easy to fall into a pattern of just saying something that's quite easy. Giving a point of view that you think is right, but you haven't gone to validate it or question it with anybody else.
You haven't really stress test that idea. And what ends up happening is you're probably wasting your opportunity to be part of a good team by bringing forward a good idea or an original idea by just saying something that you're kind of comfortable with, maybe you're safe with, or maybe you think it's right, but it's your pride or your ego [00:10:00] that's getting in the way of it.
Yeah. I think we all face this challenge that we all want to come up with a good, smart idea, but it's okay to be wrong. It's okay. To, and what you saw is already this leaning into having the wrong point of view, asking yourself under which conditions would I change? My opinion, you know, this is all about robust.
Critical thinking, logical thinking, thinking that can stand up to the test of time. And what was also really interesting is Shane was talking about, look, I just want the best outcome. If it's my idea or Mark's idea, it doesn't really matter. Once you kind of divert away from me trying to good and rather focusing on the best outcome.
And then you just go in search of the facts, the answers, instead of like, you know, this confirmation bias of, oh, look [00:11:00] that proves my ideas. Right. And I know there have been moments in my career where I've had this niggling feeling, mark that I'm wrong, but my ego prevented me from leaning into that feeling and wait for this.
Maybe weeks, months, sometimes years later, I was like, Oh my God, I should have listened to it, but my ego was the blocker. So what we're getting into here is these are frameworks and mental models that you can use to avoid those moments. I mean, mark, have you ever had this moment where you've had this niggling feeling where your thinking's not quite right, right.
But you didn't go there. Yeah, I have. And gradually as I get older and I'm mature and I'm learning about, for example, these different meta-model mental models and ways of thinking and working, I'm starting to be more aware of my behavior [00:12:00] and my attitude towards things. And only by that penny drop moment of thinking, well, I can control the way that I respond to.
A certain situation. I, I can take ownership of the way I think about things and, and, you know, like I say, the Adam Grant show on on think again was a big moment in, in my mindset as I, as I thought about my behavior with regards to knowledge projects and so on and just thinking, okay, well maybe I can just pause for a second.
I don't need to go out and shout from the rooftops. The, my idea is the best one. Maybe it's not, maybe I shouldn't take a moment to sense. Check it, or fact check it or ask somebody else to review it before I send it out. You know, I think that's quite a practical way. Isn't it? Mike, of actually putting yourself out there and thinking, okay, well, how can I remove my ego?
Maybe it'd be a bit more bringing a bit more humility. I can [00:13:00] collaborate with somebody on my team and sense check whether my idea is correct or not. Maybe I'm drinking the Kool-Aid so maybe turn it off. Your idea to our idea, maybe turn it from a guest to a really well studied hyper hypothesis. These are all possible for us.
And in fact, in the end, if people will come to you, if you can apply the right mental model, what you'll find is you'll be like the, the, the Sage of your team of your organization, because people will know that when they come to you, they'll be able to think about it. Maybe get a different point of view, think it through reveal some hidden challenges inside of the problem or hidden answers.
All of this is in front of us, mark. So why don't we jump into the first of these mental models? We did a bunch with Einstein, but today we're going to get into, to so many good ones. I mean, just to prime you, we did the thought [00:14:00] experiment. And you remember how Einstein was like, what happens if I could actually run a long bias by an array of.
That was really good probabilistic thinking. Ockham's razor. The simplest explanation is often the right one. We did all of those. So you're already armed with those, but we have got another four big tasty mental models. There's first one is inversion, and this is all about the capacity to when you're thinking about a problem.
Imagine solving the opposite part first, imagine doing an need completely 180 degree fashion. So let's have a listen to this mental model that features in shame parishes book, the great mental models, and it is all about inversion, the ifs and what ifs are three thinking methods, better known as mental models that help reveal blind spots [00:15:00] and uncover creative solutions to problems.
The I, and what ifs stands for. When you're having trouble solving a problem, try solving the opposite problem first, instead of asking, how can I make a really good video ask? How could I make a really bad video? And instead of asking, how can I be more productive today? Ask how can I be as unproductive as possible today?
Once you've generated a list of ideas in them, when I consider how to make a really bad video, I think of using PowerPoint slides with no images or examples, I think of using a monotone voice that will put my audience to sleep. And I think of making the video much longer than it needs to be when I invert those ideas.
I think of making a video with minimal text and plenty of colorful examples. I think of using lots of vocal variety and making the video as short as possible. When I wonder how I can be as unproductive as possible today, I think of sleeping till noon, [00:16:00] eating a big stack of pancakes for breakfast. That leaves me feeling lethargic and responding to emails.
By inverting those ideas. I can plan a highly productive day. That is I'll wake up at 5:00 AM, fast til noon so I can focus better and only check my email after completing my most important tasks for the day solving opposite problems or deliberately coming up with bad ideas is fun. And it typically gets your creative juices going plus bad ideas are surprisingly valuable once you invert them.
The next time you feel pressured to come up with a brilliant solution. Use the mental model of inversion ashamed Paris says avoiding stupidity is easier than seeking. Oh, the power of inversion, Mike, I think can be fun coming up with anything. The idea, I love that. I love that. Like let's just avoid being stupid.
How good is that? That's just avoid being stupid and you know, it is a great way to almost warm up your creative [00:17:00] muscles. Isn't it thinking about? Okay. Well, if we're trying to make the best podcast, how can we make this worst podcast? Exactly. Now, now I would say like, let me build on this for a second.
Let's say we're both founders and we're going to start this new company and you can, you know, obviously your desire is to make this wildly effective, successful startup. But here's the thing if we said to ourselves, okay, we've done that exercise now. Right next to that, let's go through the conversation.
What would be the most unsuccessful startup look like? You'd run out of cash. You wouldn't have enough people. You wouldn't have the right people you'd have a product that nobody wants. And what's really interesting is when you were identified that the characteristics and traits of failure of unsuccessful, what you then do is go it kind of, it makes you aware of the things you need to [00:18:00] avoid in order to be successful.
And there's some pretty sharp edges there. Like if you're having real problem explaining your product to the client, that would, that would be really a bad situation. So if that moment happens, what will you, you will have this moment of awareness where you go, oh my gosh, we are literally doing something that we said would be stupid, which is we've got a product we can explain.
So, interesting thing is we have such a bias towards the dreams and the hopes and the aspirations of success that we kind of don't even call out. Failure would look like what a bad in this case startup would look like because we're too romanced with all the other notions of success, but you can actually specifically call out things that might happen in the organism that you don't want to do, because that will be failure.
People are not aligned. People can't communicate properly. If you start to see a frequency of this, [00:19:00] why the sirens should be going off, you should be freaking out and what's good. You've already caught it out. This is something we need to, but we're doing it. I just want to come back to something that you said just then, because there was a real penny drop moment for me.
We are caught up in this romanticism of success. So we avoid even considering failure. But if I was to. Hop in my car, I'm going to be afraid of crashing it. Right? I'm going to be afraid of mounting the curb or whatever, any, any nightmare scenario. So what'll happen is I'll pay attention. I'll give him my best go.
I'll make sure that I drive safely. And it feels as though it makes no sense to go about business, unless you're doing it in the same way. Unless you think about what the worst case scenario could be. Well, we could get fired or we could create an environment where nobody [00:20:00] wants to work with us, or we could all fall out and everybody quits.
These are all those kind of nightmare or failed scenarios on there. And we can't avoid those. They're so important. Yes. So I think here, what we're seeing is let's say whatever your goal is, You can do this exercise of saying, well, here's what we think needs to happen to achieve. So you kind of have a vision, then you put a kind of like a strategy in place to kind of realize, and you measure the results.
You could do exactly the same exercise to say, like, if we were to fail completely, what thing, what strategy would we have? What sort of characteristics would we have? Whether it's for a business or a sports team. For example, if it's a sports team, success, is everybody turning up to training successes.
People don't even know when training is hardly anyone's there. We don't have the right equipment. So then, you know, manager's point of view of that sports saying, we need to get all [00:21:00] that stuff down. Have we told them everybody, you know, and I like this because I think we're all right. Suffering from degrees of wishful thinking of hope.
Right. And what inversion does is like, let's name the enemy, let's name failure. Let's paint it in all its glory so that we so acknowledge it, that if we ever veer close to it, where like warning signal and you course correct. Don't think. Yeah. Well, you can only recognize those warning signals when you've considered them.
Right. We're getting dangerously low. Nobody's aligned. Somebody else thinks the product is, is completely different to what we've been saying. Okay. Thinking thing, these are alarm bells. You only by considering them, can you actually see those in the road? Yeah, totally agree. And we have this when we're working together.
Mark, do you notice, for example, let's say, let's say someone needs to supply us with some data, with some [00:22:00] requirements, with some critical information for a product that we're buying. We know that if we've requested it and let's say we've requested five documents and we've only received two or three we've instantly know through our inversion process of thinking that the lack of input means that we will struggle for our output to build this while in your product.
So isn't it interesting. As soon as we see those almost inversion, like signals starting to happen, we both are like, oh my gosh, we didn't get those documents. I'm really concerned. It's been a week now. This is a bad sign for us. This is a signal of what a failure could look like, because if we don't have inputs, there's just no way we can produce our outputs.
Right. Yeah, exactly. You can't solve that problem when those challenges still remain. And by. Imagining or planning in advance of a project in this [00:23:00] case. Okay. Well, let's make sure that an individual knows how important those documents are or let's understand why there might be limitations so we can try and help them.
These, these are perhaps solutions to the inversion or the opposite problem. And we can almost brainstorm leading up to the kind of vertical has worst case scenario. And it's probably not going to be the worst case scenario that happens. But if you're prepared through the method of inversion for those scenarios that you wanted to avoid, you're going to be far faster, more efficient and productive when occasional speed bumps come up.
Hmm, totally, totally. Now, if you imagine inversion is about, you know, success or failure, you know, it could maybe look at those as left or right now, I want you to think mark more in terms of top and bottom and at the very top of kind of mental model [00:24:00] thinking is, and, you know, I would almost go as far to say, this is sort of the most primary.
This is the most, one of the most important mental models. And it's called first principles. Now, the interesting thing is mark. We will actually do a complete study of this in our master series. So head over to moonshots.io, become a member because we're going to do a whole show on first principles.
But today, right now we're going to get a little primer, a little introduction to first principles. This is one of the key models in shame parishes, the great mental models book. And for me. The two great exponents of this in modern entrepreneurial life would have to be paid at tail. And Elon Musk. First principles are incredibly important because what they do is they become these long-term undeniable truths that become a north star that you can do so many amazing things around.
[00:25:00] So with that introduction, mark, I think it's time for us to get into first principles, the F in what ifs stands for first principles thinking Elon Musk had a problem. He wanted to go to Mars, but acquiring a rocket to get to Mars was simply too expensive. So Musk asked himself what is a rocket and made of well aerospace grade aluminum alloys, plus some titanium copper and carbon fiber.
Then he wondered what is the value of those materials on the commodity? After some research must discover that the materials made up roughly 2% of a typical rocket price. After a simple examination of the underlying components, Musk saw an opportunity to create a better solution to his rocket, to Mars problem.
And years later, space X was born. Most people assume existing solutions exist for good reason and never questioned them. First principle thinkers don't take existing solutions at face value. They drill down to understand why a solution works [00:26:00] a few decades ago. A group of food researchers liked the taste of meat, but didn't like the idea of harming animals to get their meat.
After some first principles thinking, they realized that the fundamental components of great tasting meat was simply a collection of amino acids and sugars, no animal necessary. This discovery led to the creation of the fake meat industry. The next time you're faced with a highly consequential decision.
Use first principles thinking to examine existing solutions, test assumptions, and understand the fundamental components that make a solution work. Then either go with that solution or use those first principles to come up with a better solution. Yeah, this is really the foundation. Isn't it? Mike, of thinking about how to solve a problem and go against your, perhaps a classic behavior, your traditional mindset of thinking about a problem and trying to approach it.
And you know, using that Elon Musk [00:27:00] example, the natural traditional method was this very costly process that, you know, he an individual, I mean, almost could never break into the, by drilling it down to its essential and starting from the bottom up, he was then able to enter that space. I think this is the kind of crux point.
Isn't it? When you're trying to think on how to solve. Yeah, because you know, we can caught up in the moment and new trends and things that are happening and think, you know, I would say an example of being caught up in not first principles thinking is every startup. Wow. Was the Uber of XYZ, wasn't it?
And that that's not a very profound thought. That's just like, oh wait, just copying something and applying it to a different industry. I think at the heart of this first principles thinking is like getting to the fundamental truth, things that are. [00:28:00] Absolutely unchanging over a long period of time because you can really build a company or product and organization around fundamental truths around first principles.
It becomes, you know, if you've built your business around the idea of being an Uber for whatever, or what happens when that model doesn't work very well anymore, you've kind of lost it all. So you'd want to defer back to a fundamental truth. So that's why fundamental trues. These first principles are like, they're the bedrocks.
And there's a great book called built to last, which is a whole series of companies that Jim Collins studied that had at their heart first principles. So let's break down first principles, like where do you see first principles in the world? How do we get them? How do we cook these first principles in the kitchen?
Well, I think the first step I would say is to. [00:29:00] Be aware of trying to change your mindset. You know, like I say, my own experience is one that follows maybe a traditional approach to thinking to problem solving. And I might initially start with thinking, okay, well, okay, well, what can I not do? Right? I've got this challenge, we've got a problem.
We've got a product that we want to go and build what can't I do. So we've already where we're limiting ourselves with how we approach an idea. Aren't we we're closing the boundary. We're looking off the sandbox and within you. Okay. Well only in this space in this country, this region, we can only do X because you know, maybe the audience isn't here or maybe the taste, the culture doesn't make sense for this particular problem.
But I think right away, Mike that's when a first principle thinker would ring an alarm builders and it, because we're limiting ourselves by closing off a much larger idea of possibilities, [00:30:00] Yeah, because you know, whether it's the flavor of the day is being the Uber of this or the Airbnb of that, that that is very short-sighted.
But if you start with big possibilities and defining new ways of getting there, you're able to think differently because you're focused much more on the first principles then the trend of today, right? And this is for me, this rigorous way of once you have, you know, some basic first principles, then with that clear north star, you can really invite some different thinking on how you can make those possible.
I mean, to think that using first principles, Elon Musk was able to create a rocket that was reusable and that was considered crazy. And do you remember when we did our Elon Musk show? Even esteemed astronauts and people [00:31:00] in the space industry that were his heroes criticized him because they didn't have the power of his thinking.
Did they? No. And see, excuse me, they couldn't see what he was. He was trying to work for. Instead, they were seeing that closed environment one day they were seeing concerns that they had rather than the opportunities and the potential. And I think, you know, the, the, the the search for these trues, I think, you know, it takes a while to get there.
And I think that these principles that are fundamental and undeniable can be like so powerful because you can completely disrupt existing industries. And again, to go back to email, He just thought about a better way for a car to work. And he's introduced all sorts of [00:32:00] things that you know of. But what I was thinking about the other day, mark is, I don't know if you've seen that the latest up and coming models of a Tesla are going not going to have a circular steering wheel.
Have you seen that? They've got more like a joystick, a steering wheel, trying to think of the right name for it. I read it yesterday. Your ride, the steering wheel has now changed design for the first time in forever. The yolk is changing, isn't it? So here's the thing. Steering wheels has been the same for a hundred years, but because he's going back to the first principles of optimizing transportation, optimizing the automobile experience, he has done all of these crazy things in yet.
Just this week. Another thing comes out. Yep. The steering wheel was totally changed and people will criticize him like they're criticized Tesla. Like they criticize space X because they lack the ability to see the first principles pretty powerful, huh? [00:33:00] Pretty powerful, pretty huge. And he just shows bonds as single individual or business can try and stick to that potential.
Try to make it more regular. Try to think about a problem in a different way. They can go out and make a huge difference within their certain category or business sector. They absolutely can. And you know, talking about thinking different, we have got some great feedback the last week or two from all of you.
Our moonshot is who have joined us on this journey of thinking out loud together. Mark, we've got feedback coming in from all over the globe. Who do we need to do a shout out to? I want to give them shout out to David melanin. Thank you so much for taking a listen to it. We're so glad to have you with us, David.
Same with Andres, but Mark David recommended a great author. Oh, he did. You're right. David apologies. We have not missed out your recommendation of novel rather. Can't thank you so much [00:34:00] on the long list we love hearing from our listeners, especially with recommendations. So please keep them coming. Now, talking about recommendations, mark Andreas.
He, he, he actually says in his note to us that he hails from all around Europe. So he says brackets, Bosnia, Croatia, Germany, and Spain, all of which we are quite a few listeners in. So thank you to you, Andres and mark. Do you remember? He came to us with a classic book recommended. Yep. Absolutely huge classic think and grow rich by Napoleon hill undress.
Again, it's on the list. Thank you for your recommendation. And thank you for listening. I've actually read, think and grow rich. It's quite a good one. We could perhaps do like a personal wealth series mark, but who would we need to confirm such an assumption? Well, I think the only people that we really need to tell you, and I. [00:35:00]
What to cover is our listeners. You know, you and I, we don't do this each week just to to appease ourselves, Mike, we're doing this for the listeners. So please get in touch with individuals, with books, with recommendations that you have for us to follow, because we love coming together. We love doing our research.
We love putting together a show for you, our listeners, but it's your ideas and your directions that we want to follow. So please get in touch and give us your guidance. Now, while we're talking about all the moon shutters that are out there in the world, I think we've got to give kudos to Canada. Don't you, Matt?
Yeah, that's right. And Rue hung as well. Thank you so much for leaving us a review as special shout out for you. And we're so glad that you're enjoying us coming together and learning out loud with you. And, you know, he, he seems to be pretty fired up, pretty motivated. Andy, he, he really appreciate the fact that you reached out to him. [00:36:00]
Another great review online. I think we can never ask, are you all of our listeners too much to ask that you go out and review us on the iTunes podcast application or in Stitcher or wherever you're listening to show, give us a thumbs up. We really do appreciate it. And because it helps more moonshot is find us.
It helps us all learn out loud together and get fired up to go out and be the very best version of ourselves and mom. If you're feeling a little bit motivated, there's something new in the world that you could go. That might just be the turbo boost. You're looking for. The turbo boost that everybody's looking for is live via moonshots.io and the member page listeners.
You can pop along to our members section of the website, or pop along and search for us on patrion.com. We have our first episode of the master series live. You just need to become a [00:37:00] patron to unlock this post. This is a brand new exclusive episode, all about motivation. And boy, Mike, we went deep into motivation.
Didn't we, we dissected the coded motivation for you. Our listeners on the moonshot master series, which is available to you. If you become a member@moonshots.io, we've had several people join up, but not nearly enough. I know that you want to get motivated and we will do that job for you. $1 a week. So I think that's a pretty good trade off.
And Hey, you. Share in all of the workings of the moonshots of podcasts, you can make suggestions for shows. You can reach out to us. It's really easy via Patriot on. So go on, go to moonshots.io, become a member of, try it out, check out this this motivation show. It is a huge D dive. It's an extended show it's 90 minutes.
It comes with frameworks and [00:38:00] downloads and goodies, and you can get it all from moonshots.io. I mean, the downloads alone are pretty handy, Mike. I mean, I've had them to my side ever since we did the show and before, and they're just really handy to refer back to when I'm considering how to, to find motivation.
And I'm really excited for episode two on first principles. I think today, you and I have dug into just that little bit of a taster I'm Shane Parrish episode two. On the master series for first principles, I cannot wait. Yeah. And you know, once you've kind of thought up and down, you know, first principles, once you've thought success and failure, what it looks like you really getting warmed up into the mental models world and you can apply different men or mental models in different ways.
And in this new twist, in the mental models plot, we're going to look at second order thinking, which is all [00:39:00] about going deeper. And this is one of the real highlights of the book, the great mental models by Shane Parrish. And I really like this because I would admit that I sometimes fall for the temptation of thinking.
The idea at the first principle. I got it. No problem. I've thought about failure. I've thought about success, but often when we create brand new things in the world, we need to go a level deeper. We need to understand the consequences that may happen. The unintended, the unexpected consequences, and how many times in the world do we see people doing things?
And it causes these knock on effects that nobody thought about. And we've got all this drama where there's a mental model for this, and it's called second order thinking after world war one, the British and French forced Germany to disarm, give up territory and pay reparations. That would be worth roughly $500 billion today.
The British [00:40:00] and French got what they wanted, a weak Germany that could not wage war again or something. The British French and other allied powers failed to consider the second order effect of their actions. Namely feeling the rise of fascism in Germany that will lead to far more destruction, world war two second order thinking gets you to think beyond the outcome you're going for and consider the reaction to that outcome.
It's important to incorporate second order thinking in your decisions to avoid disastrous unintended consequences that come from second order effects. If you're a CEO of a company and you demand that everyone comes back to your office after a year from working at home, thanks to COVID. You might get what you want, namely improving the culture with everyone back together, but your actions might have the second order effect of getting people to realize how much they hate commuting to work and miss the convenience of working from home.
Those people might lead the company, which could ultimately destroy the culture before implementing any solution or making any important. Do [00:41:00] some second order thinking by taking a minute to simulate what the reaction to your solution or decision might lead to. I love this mental model because it really challenges you when you're thinking about solving or coming up with a, with a solution.
And the natural, I suppose, reaction is okay. Great, cool. Done. I found the issue. I found the solution packing my bags, wash my hands. I'm outta here, but actually my, this, this challenge to yourself and thinking, okay, well, let's think about the knock on effect. Let's think about the consequences or the splinters that might happen from making this one decision, this solution, what might happen for the partners that we work with, what might happen to our workers, what might happen to their motivation on the next project?
I love this idea of thinking about all the different knock on effects, all the dominoes that might happen. From that first solution that you've chosen and forcing [00:42:00] yourself to come back and think, okay, well let me just check. Let me just rethink that second order thinking and why that might be my first solution.
Yeah. So let's, let's throw around some examples of second order thinking and the one that comes to mind, this is completely random. It just always bugs me when I'm out and about in my neighborhood. So I'm in you know, mark and I live in the very sunny city of Sydney, Australia, and it's, you know, it's pretty big city.
It's like, I don't know, six, 7 million people, huge geographic area. And it always just surprises me so much that when urban neighborhoods build a large apartment blocks and they fail to think about traffic and parking conditions as a result. So what happened. So you've had a an existing urban neighborhood that's maybe, you know, 10, 20 minutes from [00:43:00] downtown.
They put in these massive apartment blocks and then it's instant congestion because they haven't done second order thinking. So what second order thinking would be like, Hey, great. Let's build a new apartment block. Let's house, more people. It's been more efficient with that. Okay. Not a bad idea. Then don't go in identify future consequences of this decision.
And then what you would want then do, is look at that. Look at all those different factors and go hang on with all these people. Do we have a bus stop? Do we have a train station? Do we have underground parking? Is there, do we have the right turn-offs in that neighborhood? So what happens is the developer of this apartment block?
Well, they get their job done, but then go on to cause all these unintended consequences for me, it was another great example. The Olympics are on at the moment. Everybody goes and says, let's build amazing sports facilities for the Olympics, but then they don't ask [00:44:00] themselves the famous, famous mistake with Olympics developments.
What are you going to do with it when it's finished? And actually mark, you know, it's quite a well-known now that if you host the Olympics, it's a guaranteed money loser because you spend so much time building the infrastructure, but it doesn't. But how long is the Olympics? Two, three weeks long, maybe a month, maybe.
Yeah. So that would be second order thinking, what are the consequences and of what we're doing? What would happen on the second and third level, if that's happened, then what, and what are the risks associated with that? I think that's a great example of the value of doing second order thinking. You're right.
It serves the individuals, the architects, the builders, whatever, whoever created that, that that building [00:45:00] without questioning. Okay. Well, what's going to be that knock on effect. That's a really nice visual way of, of demonstrating the value of the second order thinking. I mean, for me, Mike, another example that I would probably run into quite easily with, with day-to-day work might be making a.
Decision about a product. So I might think, okay, well we found out some pieces of information. It serves us because we know how to build it. It says our client because that's kind of what they want, but we haven't necessarily considered what will be the knock on effect of only following our instincts here.
You know, we haven't necessarily tested maybe other ways of building it, or maybe we haven't tested the changes that we could bring in from working with customers. Perhaps. Do you think that that's another example maybe of a second order thinking? Yeah. [00:46:00] It's thinking about if you do something, what are the changes?
The knock on changes, the knock on consequences that it's going to create and then saying, what are the risks associated with it? What would be the implications. So if you build a new house or building your apartment, what are the transport considerations by health and safety? What kind of services where they need, what's going to happen?
When we get, go from a plot of land that housed maybe five families to housing, 50 families in an apartment block, do we have utilities and services that can provide to that quantity? There's all those sort of second order thinking, what is the consequence of this future state? If we do this, what's the knock-on very, very important.
Cause how many times do people go and build these really elaborate Olympics villages? And then I think it was Brazil. I mean, they they've, they've had to tear down half of it. Some of them turn into ghost towns and they [00:47:00] spend billions of dollars because they didn't. Have second order thinking. So this is where you can see in real life, in business, in your personal life.
Second order thinking, if you say, Hey, let's have a kid. All right. Second order thinking is, well, can we still live in this place? Do we have the services? How's it fit in with work? You know, like how, like this is the second order risk consequence to your actions. And it just, you know, the classic one is, you know, when people build things in physical spaces, you know, shops, offices, factories, and then they fail to think about the consequences that they have.
And remember. This is just second order thinking, how much are we able to riff on this first principles? Thinking like the art of getting to the highest fundamental truth, inversion thinking opposite in order to avoid the wrong outcome. I mean, this is so great. And mark, if people are like, well, these guys are covering a lot of ground [00:48:00] is super strategic, where would be their home base.
If they want to collect their thoughts and go back over all the things we've just. You can pop along listeners to www.moonshots.io, where you can find all the information about today's show. And Shane Parrish is the great mental models. We'll have our show notes as well as a collection of video clips that have helped us really grasp the concepts of the great mental models.
And also you can find our transcript I'll pass shows, archive as well as our upcoming shows in the series as well. So a bit of a bit of a plethora, maybe this is our onsite, our encyclopedia Mike moonshots, diag. Absolutely. Now we still got a couple more clips to go, and I think you want to hit us with the, who they call the Sage from Omaha.
Right? The Sage from Omaha has the, of introducing our next couple. Perhaps we have the honor of hearing from the Sage of Omaha, and this is another great mentor model. Shane Parrish popped into his book, great [00:49:00] mental models, and it's all around the circle of competence.
I was genetic basically blessed with a certain wiring. That's very useful in a highly developed market system where there's lots of chips on the table. And I happened to be good at that game. Ted Williams, I wrote a book called the science of hitting and in it, he had a picture of himself with a bat and the strike zone broken into I think, 77 squares.
And he said, if he waited for the pitch, that was really in his sweet spot. He went back 400 and if he had to swing at something on the lower corner, he would probably back to 35. And in investing, I'm in no called strike business, which is the best business you can be in. I can look at a thousand different companies and I don't have to be right on every one of them or even 50 of them.
So I can pick the ball I want to hit. And the trick in investing is just to sit there and watch pitch after pitch, go by and wait for the [00:50:00] water right in your sweet spot. And that people are yelling swing you bum ignore them. There's a temptation for people to act far too frequently in stocks, simply because they're so liquid over the years, you develop a lot of filters.
And I do know when I call my circle of competence. So I, I stay within that circle and I don't worry about things that are outside that circle, defining what your game is, where you're going to have an edge is a normal, partially important and no, mostly important. I couldn't agree more knowing. What a winner looks like for you in your day, what works for you?
You should do what you're naturally born for. And equally what Warren's talking about there is when you see something that you know is not in your circle of courage, avoid the temptation of trying to hit a ball that you're not designed to hit because your [00:51:00] odds of success are drastically reduced. I love this circle of competence thing is.
Yeah, that that's huge. Don't worry about things outside your circle is it's quite a consistent message. I think that also came up Mike, when we did a lot on stoicism with Ryan holiday, I think, you know, where Warren is showing us there is, you know, in investing in, I love the, this there's a sports field analogy with baseball.
I totally, I can visualize that very, very clearly in my mind, but I also see the connection with anxiety or worrying about things that are outside, not only your circle of competence, you know, your knowledge, but also your country. You know, the circle of competence, I think includes things that I can action that I can react to maybe influence.
So it's almost a kind of circle of competence and influence, I guess, is where my [00:52:00] mind goes. Yeah. And that I think is a real valuable thing to remember. Isn't it, you can't, there's no point in worrying or getting too stressed about things that are outside your circle of competence because he can't control them.
Exactly. And I think it's also about designing an environment and a day, a week, a month, designing a role for yourself, both personally and professionally, where you're at your best, where you really know the subject manager matter. You're really comfortable with it and you can have a degree of control over it.
You know, this to me is what's exciting to what happens for you mark. When you think about your circle of competence. Well, I think it starts by having awareness. Doesn't it? Of what. I can confidently do and I can do with a level of competence and therefore being aware of perhaps the things that I'm not so good at.
So combining, you [00:53:00] know, the circle of competence and maybe even the second order thinking and, and knowing, okay, well, here's something that I maybe am a bit weak on. That's okay. We all know that it's, that it's something to be improved upon the circle of competence. I think Mike can grow content. I can grow my circle and become maybe more competent in different things.
Yeah. Having it starts with awareness. Doesn't it. And I think, how do you know to unlock that process you just described for us? How would you start to answer the question to know what you're good at? Well, I think it comes from collaboration. I think working with others will help me understand. If I, if I'm good at a certain thing, cause I can ask them for feedback.
No, that that'll be something that's immediately available perhaps to a lot of our listeners as well. You know, advice, feedback Elon [00:54:00] Musk calls it out in, in our previous show with Albert Einstein you know, where he's referring to the value of physics in his work and as well as the advice and vice from friends and family, I think that's a real first stage.
Yeah. Not knowing it, but also something more practical, right? Yeah. Down. See if you can describe the product in question or the methodology or the practice in a really simple way to another person, or maybe you can write it down on a piece of paper and if you can do it very, very clearly. No, what that product is all about.
Maybe you can demonstrate that that knowledge is settled in your mind by trying to describe it to somebody else. I, you know, obviously I totally get you with like, you know, if you want to understand something, you know, teach it right. You know? So sharing it as a, as a proxy for that, I would add to what you said.
And so ask [00:55:00] yourself today. Where did you feel that you were working king in a natural way where the work came naturally to you? Not necessarily easy because. There was work to do. And you had to like get going and be productive. But where did that your work feel? Natural. What are the times in your day?
What are the things in the activities that you do where you feel good? There might be a lot of it to do or there might be some complexity, but you, you fundamentally feel good. How do you know when you feel good? You start to get in a bit of a flow state, or maybe you look forward to the work or maybe you're, you know?
Yeah. You have a sense of satisfaction or pride when you complete it. The work. I think if you want to know where your circle of competence is, you must ask these questions of when are you at your best during the day, identify the pattern within those and say, okay, how do I spend more hours of my day doing this?
[00:56:00] Yeah, you can talk to people, but study yourself, unlock where you feel like you're Superman, you're doing the thing you were born to do. And I liked the reminder that it's not always easy, you know, it's not going to be something where you're working in an easy manner. It's a way that feels natural to you.
I like that distinction that you caught out. Yeah. Yeah. So just get into that self discovery and, you know, find out where you're really feeling good about the things you do, where you feel at your best, where you're coming, the most impact. You're doing stuff that matters that people love and matters to them as well.
And then you're really sort of locking into not only your circle of competence, but your purpose as well. And I feel like mark with that said, it's time to round out things with Shane Parrish. And we've got some thoughts from the author himself talking about the people you should [00:57:00] surround yourself with in order to expand your mind.
You need to be around people who think differently than you. How do you actually recommend. Access these individuals who think differently. So, so wait is asking how can someone like me meet someone who thinks differently? Like how do I find these other crowds or individuals who maybe are overlooked because we tend to naturally surround ourselves with people that think and act like us.
Yeah. I mean, there's never been a better time alive to do that than right now. Right. Because you have access to it. And other social media where you can follow, literally follow almost anybody in the world. And so what you're looking for when you're following people is people you attended disagree with they might offer, but you respect, right?
So people who articulate how they're thinking, why they're thinking things, but offer an opinion that's different than yours and people that surprise you like that surprises me. I don't agree with that worldview because it, it doesn't compute with what I think the world looks like. And those are moments that most of us gloss over, but [00:58:00] those are the moments you want to dive into if you're trying to think better.
And I think that it's really important that you explore those and you can follow. Crazy. You know, I wouldn't follow, like just if you're left wing far right. Wing people, or if you're right wing, follow the left wing people, that's not enough. That's not a thoughtful. And that's sort of like convincing yourself.
You're doing the work without doing the work. You want to find somebody who thinks differently than you, but you respect the way they think. And they're articulating the reasons they think. And they're opening up their thought process to you because that's how you're going to learn. And at work, you want to do the same thing, right?
It's not enough to just find somebody above you in the organization. I mean, that's a lazy approach to sort of like getting better. It might actually be effective for getting a promotion. But it's a lazy approach to thinking better. You want to find the people closest to the problem. And you want to start developing your associative memory.
You don't want to develop your direct memory. And so if you think of computers, computers use direct memory, you need an exact match to see the problem you, our [00:59:00] brains use associated memory. We were intuitive machines. We match in perfectly and you want to start intelligently preparing to build up that intuitive memory.
And one of the ways that you intelligently prepare your associative memory is you start going to the root of a problem, right? So you start talking to the people closest to the problem. And what you're trying to do is you're trying to vacuum up these details of the problems. So you're trying to vacuum up not what the person thinks you should do or what the solution is, but you're trying to vacuum up their experience into your brain.
So you can start making connections that other people can't pay. And that's sort of like how you, it's a, I mean, it's a journey. There's no, there's no end to it. There's no destination, but that's the slog of like how we learned to think about. Shane Parrish ringing us home, Mike with associated memory and choose of memory.
And I'd say demonstrating the power of, of all mental [01:00:00] models, being able to create these new memories and these new reactions that your mind has to certain situations in life finding that route. I mean, that's, that's kind of first principles, right? Yeah. And, you know, building off what he was saying earlier, like, you know, outcome over ego he's he's also saying, Hey, don't just search out people that are going to agree with you go to the people closest to the problem.
I think that's really, really powerful because sometimes we're all finding it a bit uncomfortable if someone says, well, I don't agree. I think of it differently. I think you're wrong. But imagine if you could say great, tell me more, explain that to me. I mean, embracing difference from people and the way they think only makes us stronger.
Yeah. Only by being exposed and finding, you know, maybe, maybe those uncomfortable conversations, Mike, you know, you, maybe you could extrapolate it as far as to say, finding individuals [01:01:00] that have a different point of view to you is kind of like embracing a situation that it doesn't come easy to you. Right.
Finding yourself in a sense, it kind of pushes your boundaries a bit makes you feel that a little bit. Yeah. Comfortable is really good for you in the long run. And I think it's the same with, with people much, like you've just said, if I'm around individuals who have a different point of view, my brain will grow because it's hearing these different ideas, ideas that perhaps I've glossed over in the past.
And he said, by being exposed to them, I'm making those new, new memories, new signups. Is it. Yeah. Yeah, it's good stuff. And boys it's really heady stuff. I mean, just think about it. We started with Shane Parrish chatting with Adam Grant. I mean talk about two moonshot favorites in the same room. We got four big mental models and a call to arms, to follow people that you respect go straight to the problem and embrace people that [01:02:00] disagree with you.
My question for you, mark, as always on the moonshots podcast is which one has sparked your interest the most? I think one that sparked my interest the most has to be first principles. It's gotta be first principles and how to come up with that solution by drilling, drilling, drilling, and Mike, I just can't wait to really get in yeah.
To the next master series episode on first principles. Very tasty stuff. And if you want to know more about anything that we discussed on this show, you head over to moonshots.io. Mark. I want to thank you for coming on this great mental adventure, this journey into mental models. I hope you're feeling fired up to think about thinking.
I, I think I, I think that I am, I think I am and I'm ready to go and put some of these mental models into practice. Fantastic. Well, [01:03:00] thank you to you, mark. Thank you to you. All of our listeners, the moonshot is out there who are joining us on this adventure of thinking out loud of really wrapping our minds around these great mental models.
And we did that today with Shane Parrish and his book, the great mental models. And it started with this whole notion of put the outcome before your ego to invert things, try solving the opposite problem first and apply lots of fundamental thinking, lots of first principles, and then we can move forward forward into the future.
We can think about second order consequence, the risk associated with these new things that we might do. And we might make sure that we're hitting the right bulb. We're doing it as Warren Buffett would have us do being in our circle of competence. And if we do all of those things, You can be on the way to great thinking and great thinking will lead to action and great outcomes, but you must surround yourself with people that are close to the poem, [01:04:00] people that you respect and embrace people that disagree with you.
If you do that, you will have not only thought about how you think you will live improved the judgment calls that you make, the impact that you have on yourself and the people around you. And boy is that moonshot thinking if I ever heard it. So once again, thanks for joining us on the moonshots podcast.