Mental Models: How To Think Like a Genius (Part 2)

Use these mental models to improve your problem-solving and decision-making skills and overcome common [smoov.bra.in2023] reasoning errors.

Mental Models Part 1 | Mental Models Part 2

Greetings, my fellow plebeians.

I hope this message finds you well and thriving in your online intellectual adventures.

In Part 1 of this series, we introduced you to the concept of mental models and their significance in shaping our perceptions, decisions, and problem-solving abilities.

Today, in Part 2, we embark on yet another journey into the un-captivating realms of data science and bullsh*t analysis.

Or, in more practical terms, we’re ready to dive in even deeper.

Last time we covered the basics, delving into a few of my favorite foundational models — today, we’ll be discussing a new set of mental models, each with its own unique framework and perspective through which we can observe and understand the complexities of life and make sense of the world around us.

Think of it as the next chapter in our mental modeling adventure, where we’ll reveal new concepts, discuss basic theory, and outline practical applications that you can use right now to improve your critical thinking.

So, whether you’re a seasoned thinker or just a beginner, Part 2 should offer some practical wisdom that you can use right now to improve your reasoning skills and transform the way you see and engage with daily challenges and opportunities.

So, let’s pick up where we left off and continue our journey into the mind-bending (err I mean exciting) realm of mental models, where the horizon of understanding stretches endlessly before us.

And now, here is Part 2:

6. First Principles Thinking

“We’ve always done it that way,” has been described by many scholars as the most dangerous sentence in the world.

But not you.

You’re here today because you’re different.

You hate doing it the old way.

You a little bit of a rebel.

You like to challenge the status quo.

You’ve probably been told that you don’t know how to listen.

Perhaps you ask too many questions and are a bit of a disrupter.

Maybe you’ve even been called “annoying”.

If that sounds like you, then you’re in the right place.

Today (hopefully) all of that stuff will finally make sense.

You’re actually a lot further along on the path to brilliance than you even realize.

So, hopefully through this text, we will be able to take your inquisitive-annoying mind to the next level (to finally figure out the Why) by harnessing the power of First Principles.

So, what are “First Principles”?

and

What is “First Principles Thinking”?

First Principles Thinking (or Reasoning from First Principles) is a mental model that gives you the ability to challenge assumptions and solve hard problems by breaking them down into their most basic elements and then reassembling them from the ground up.

A First Principle is a foundational proposition or assumption that stands alone.

At its core, a first principle is a basic assumption that cannot be deduced any further.

It’s a fancy way of saying “think like a scientist.”

Scientists don’t assume anything to be true.

Instead, they begin with questions like:

“What are we 100% certain is true?”

“What has been proven?”

It is very similar to the maxim “Nothing is true, everything is permitted” from the novel Alamut, which is one of the inspirations for the video game series Assassin’s Creed.

At Deimos-One, one of our core principles is grounded in this school of thought. I always tell my analysts to “believe in nothing, but also, believe in everything.”

It’s sort of a fancy way of saying “don’t trust what you see, question everything, nothing is impossible, there are infinite possibilities.”

Note: First Principles can be useful if you are (1) doing something for the first time; (2) dealing with complexity; (3) trying to solve a difficult problem.

And just as a quick disclaimer, I’m not sitting here making up theories on the fly.

First Principles Thinking is thousands of years old and has been used by many great thinkers over the years, including John Boyd (the famous military strategist) and Aristotle (the famous philosopher from ancient Greece).

Aristotle, writing on first principles over two thousand years ago, said: “In every systematic inquiry where there are first principles, or causes, or elements, knowledge and science result from acquiring knowledge of these; for we think we know something just in case we acquire knowledge of the primary causes, the primary first principles, all the way to the elements.”

Later he connected the idea to knowledge, defining first principles as “the first basis from which a thing is known.”

Rene Descartes, the French philosopher and scientist, also embraced this approach and created a method in which he would systematically doubt everything he could possibly doubt until he was left with what he saw as purely indubitable truths.

We now call this method Cartesian Doubt.

But the search for first principles is not unique to philosophy.

All great thinkers do it.

Great coaches, business leaders, and scientists all reason from first principles.

The reason for this is simple:

The rules of “football” or “accounting” or “physics” are all first principles: they govern what you can and can’t do.

Everything is possible as long as it’s not against the rules.

So, when you’re trying to come up with new ideas or solve hard problems, reasoning using first principles removes the “junk” from imperfect assumptions and conventions to help you see what really matters.

All that usually remains is the essentials.

The meat.

It all seems simple enough, right?

So what stops 99% of the humans on earth from reasoning using First Principles?

Let’s dig in further.

Authority

Whether we like it (or choose to accept it) or not, a lot of what we believe is based on what an authority figure told us was true or taught us was “true” through the lens of their thoughts, assumptions, reasoning, and biases.

As kids, we are conditioned to stop questioning when we don’t understand something because someone in a position of authority (e.g. parents, coaches, teachers) told us “Because I said so” or “Don’t talk back” etcetera.

Later on, in college and/or as adults (especially in the workplace) we are further conditioned to stop questioning because people tell us “That’s just how it’s done” or “That’s how we’ve always done it” so we typically just become jaded and quit asking.

Is this lazy logic?

Sure, you could definitely argue that there is a big lazy component to it.

But it’s also very easy to fall into the trap of thinking “that’s just the way it is” so no one ever really questions it.

“It is what it is…” they say.

Are you still with me?

Great.

Now, for those of us who hate the idea of just abjectly complying and decided early on in life to question everything (aka rebel and outright reject dogma) you are usually labeled as a troublemaker.

For example, if you were ever the:

Kid who was always asking questions and never let your parents “chill” in peace.
Kid who never listened and was always challenging authority.
Kid who was always disrupting the classroom.
Employee who was always slowing things down by asking too many questions.
Adult who is always asking their friends/significant other “why” leading to heated discussions and arguments.

You may have been labeled a problem.

A nuisance.

An annoying person.

It’s me, I am that annoying person.

I asked a million questions as a kid.

I guess I was so annoying back then my kindergarten teacher locked me in a closet (true story).

I was always questioning everything and wondering “why”.

Why… why… why…????!

mental models without data — Image: Sketchplanations.com

Things just had to make sense to me, I guess, and usually they just didn’t.

I couldn’t bring myself to blindly follow any authority figure unless they gave me a reason to.

So, when they could not provide me with a satisfactory answer to my question(s), I’d simply put them in the “probably a dummy” box and disregard everything they had to say after that.

Forever.

My 6 year old brain reasoned (quite accurately) that it was probably dangerous to follow such people, so I always proceeded with caution.

I stayed in trouble a lot.

I guess you could say I was always somewhat of a rebellious nerd, even from day one.

I was always asking annoying questions and challenging the rules.

“The first rule is f*ck the rules.” —6 year old me

Today, not much has changed. Except for the fact that I have learned how to ask questions a lot better.

My close friends and I frequently argue and debate together.

And at Deimos-One, we have an Idea Lab culture where we’re always creating, modifying, and destroying ideas all the time.

We love to play around with ideas and disagree.

No ideas are off the table, and no one takes it personally when someone challenges their idea.

Everything is always put to the test and may the best ideas win.

We’re constantly learning.

(you can read more about our Idea Labs here)

That said, if I find too many of my friends agreeing with me in our Idea Lab, I know I am probably not analyzing the subject on a deep enough level.

Or that I have probably made a few errors in my reasoning.

Settling on the wrong answer usually leads to suboptimal outcomes.

So, I try to always stay aware of the possibility that I could be wrong (even if I really love my answer) and try not to engage in any sort of weirdo brain gymnastics to try to hold onto that false belief (if is is indeed false).

“Nobody knows it all, so I am probably wrong a lot, even though I feel I am right, I can’t trust my bias towards myself,” I often think to myself.

The only certainty is that there is no certainty. I am 100% certain of this.

Question everything.

Adapt or die.

This has been a fundamental principle of survival since the beginning of life on this planet.

The key thing in economics, whenever someone makes an assertion to you, is to always ask, “And then what?” Actually, it’s not such a bad idea to ask it about everything. But you should always ask, “And then what?” —Warren Buffett

If you get stuck in dogmas, ideology (or just can’t ever change your mind) you die.

Blockbuster was once an unstoppable force until Netflix took over.

Shopping Malls and Bookstores were once thought to be invincible before Amazon.

Legacy automakers thought they had everything figured out until Tesla arrived on the scene.

Many such cases.

I’m sure a bunch of them probably had internal meetings discussing SWOT but either nobody asked “why” or maybe the whys were just canceled out by “trust me bro” authority figures.

It’s an all-too-common story.

The leaders suddenly become the losers because they failed to see the world change.

And they failed to adapt to that change.

Worlds can change rapidly.

One day you’re on top and the next you’re dead.

Extinct.

Forgotten.

Of course, adapting to change is no easy feat.

It often requires a person to come into direct conflict with the very thing that created all that success.

And many humans still running [smoov.bra.in2023] struggle with this constantly.

There is a famous quote that goes something like this: “it’s difficult to get a man to understand something, when his salary depends on his not understanding it.”

This is a common reasoning error that happens in just about every workplace across the world.

And you could very easily make the case that the disruptors, the Teslas, The Amazons, the Netflixes will soon be under assault from the next new thing, but maybe they will respond differently and adapt.

Who knows?

Maybe not.

The moral of the story is: there is uncertainty and complexity in the world. Threats are everywhere, and threats lead to problems.

But if you learn how to analyze problems using First Principles, where you deconstruct the problem, test the assumptions, and then reconstruct it with new information, you will greatly reduce the probability of suffering suboptimal outcomes from said threats.

If you don’t, you’ll end up having to rely on the opinions and guidance of others — you’ll be trapped in a matrix of doing everything the way it has always been done — stuck in the realm of compliance and living in the shadow of the masters.

So, how do you analyze a problem using First Principles?

Let us examine the concept.

What problem are you currently facing?

What do you know about the problem right now?

What do you see?

Is the environment still the same as it was?

Are the initial conditions still constant?

What are you trying to prove?

What is the functional outcome you are looking to achieve?

Are you asking enough questions?

Are you asking the right questions?

Did you get an answer?

Do you believe it?

Why?

If this problem is recurring, are you trying to solve it in the same way you have in the past?

Having a 99 Madden Awareness Level is critical here.

If the environment is changing, if the temperature is warming up, if you are facing threats, you cannot simply continue as if things were the same.

You cannot blindly assume that “everything will be ok”.

Everything WILL NOT be okay.

Remove the blinders and you will see.

Easier said than done, however.

Removing the blinders is often the most difficult thing to do of all.

You see, reasoning from first principles is no easy task. First principles thinking is easy in theory, but quite difficult in the application.

As humans, we have a tendency to optimize FORM instead of FUNCTION.

We see clear examples of this in the space industry today.

For example:

Many people (who usually aren’t building anything themselves) like to criticize technical progress and ask silly questions like “Where are all the cool sci-fi toys they promised us in the movies I watched growing up?” or “How come we don’t have flying cars yet?”

Here’s the thing: We already have flying cars. We’ve had them for a long time. They’re just called airplanes.

Usually, the folks who ask questions like this are blindly focused on form (a flying object that looks like a car) or (a flying car that looks like a concept from a movie) that they overlook the function (flying vehicles with wings and wheels).

This is why we need to be very careful with ideas.

Inherited ideas can be dangerous.

Our brains are still running [smoov.bra.in2023] which is full of bugs, errors, and glitches.

Some of these bugs cause us to accept old ideas/conventions/forms without question and accept them as gospel — and once you accept them, you immediately set restrictive boundaries all around you that limit your creativity and critical thinking.

First Principles Thinking, on the other hand, cuts through a lot of the bullsh*t and the dogma and removes the blinders.

It allows you to see clearly.

You will see the world as it is and see what is possible.

Even in an infinite universe with infinite possibilities.

You will see through the trees and the haze and the muck and see through to infinity.

And to be honest, most of the time (you will find) that many things are bullsh*t.

Even data science.

Data science is bullsh*t.

Most analysis is bullsh*t.

The charts are bullsh*t.

Stats are bullsh*t.

It’s all bullsh*t.

Nothing is real.

Most of the time, we just make stuff up as we go.

At the end of the day, everything that is not a law of nature is just a shared belief.

Religion is a shared belief.

Politics is a shared belief.

Money is a shared belief.

Gold is a shared belief.

Poisson Regression is a shared belief.

“Here Lies Jamin Thompson. He Died Defending Poisson Regression Until the End.” pic.twitter.com/L90h6ovUcP
— Jamin Thompson (@jaminthompson) May 1, 2023

The list goes on.

Now, you’re probably thinking: okay that sounds all well and good but how the heck do I establish First Principles?

That’s a great question.

I’m glad you asked that question.

There are many ways to establish first principles.

Here are a few simple methods to get you started:

The 5 Whys

There is a deep-rooted instinct in children to always think in first principles.

We lose this instinct somewhere along the way (this is my working theory) as we experience the harsh realities of the “real world” (finish school, move out of your mom’s basement, pay bills, get a job, have a boss, pay taxes, join a political tribe, etc) and become more jaded/apathetic/immovably committed to compliance with authority (through incentives) as we grow older.

When we were kids, though, we saw the world from a much different lens.

First, we had a much deeper and more vivid imagination, we were a lot more creative, and we wanted so desperately to understand what was happening in the world all around us.

This led us to invent a game just about every parent out there has grown to hate:

The Why Game.

Kids naturally think in first principles. They are new to the world, and they want to understand it.

So they ask questions.

And, they intuitively play the legendary game many parents over the years have grown to hate.

“Why?”

I was a legend at this game growing up.

But even if you are a legendary player, the game is inherently risky.

You see, nobody really likes this game.

But nobody hates it more than parents and teachers.

Here is how it usually went down at my house (or at school):

“We need to stop turning all of these lights on in the house.”

“Why?”

“Because lights use energy and the more energy we use the more our energy bill is.”

“Why do these tiny lights cost so much money?”

“Because the energy company decides how to charge based on usage levels.”

“Why would they charge so much to keep people safe?”

“Because they are a publicly traded company and need to make a profit to keep shareholders happy.”

“Why don’t we buy some energy stocks so the more energy we use the more our stocks could go up?”

“I don’t know; you don’t need to be worried about that right now, just do what I tell you.”

This game is played by kids all over the world.

Some call it the ‘Why’ game and others call it the ‘Because I Said So’ game.

They are both the same game, played by kids trying to understand why adults are saying something or trying to make sense of why the adult wants them to do something.

Usually, when the adult doesn’t have a good answer, the kid is left wondering if the adult is actually someone they can trust for information, or if the world is a lot more complicated than they originally assumed.

Which often leads to even more questions.

Why?

Why??

Why???

Looking back on it now, I probably played this game with my parents and teachers thousands of times.

And now, all these years later, not much has changed — in fact I probably ask why now more than I did as a kid.

Is such a thing even possible?

Yes, it is!

I have a very curious (but critical) style and tend to make enemies with people and groups whose thinking is sloppy, small, or lacking abstraction.

I tend to seek out knowledge and insights which can dramatically change my world view.

I am constantly asking questions, constantly working to disprove and refine prior assumptions.

“I know you won’t believe me, but the highest form of human excellence is to question oneself and others.” —Socrates

I have always been this way, even when I was very young (sorry mom).

When I was asked “if you could only pick one, what superpower would you choose” as a kid I would always reply: “Unlimited knowledge”.

Unlimited knowledge, I reasoned, would provide a mere mortal with the ability to unlock and control every superpower in the universe, thus making him the ultimate hero — a god among men.

mental models - the learning pit — Image: Sketchplanations.com

Today, I push hard on new ideas and seek out critics to help me sharpen the sword.

The ones who are left standing usually become lifelong allies to whom I am forever loyal.

Many of these folks are actually part of our Idea Lab today.

You see, to me, the act of knowing is a sacred quest and it should never be tainted with bias, ideology, or fear.

Even in the office I try to never use “Because I said so” when people ask questions.

Not only do people hate it, but most of the time the “reasons why” can actually be helpful.

Sure, the Why game can often create unnecessary drag and slow things down.

And sometimes it can also create unnecessary confusion because sometimes we don’t actually know why.

What usually happens next in these situations is: the person who doesn’t know the answer, confronted with their own common [smoov.bra.in2023] reasoning errors and ignorance, usually resorts to self-defense and lashes out.

Suboptimal.

If you don’t believe me, try it in your next Zoom meeting: Wait for an important topic or task to come up and then ask everyone why we are doing it this way. Then, ask why they thought that was the best way to do it. Then ask why to the answer.

Usually after a few “whys” you’ll probably experience a bit of hostility, a private chat to “discuss” or a “can we take this offline” request.

It happens every time.

In most meetings, however, everyone just sort of casually “goes with it”, even if the plan is stupid.

Most of the time nobody really questions anything (even the silly stuff).

But WHY?

Nobody wants to be the unpopular troublemaker?

Nobody wants to think through difficult problems?

It seems like everyone is just coasting through.

How far can that really take you though, in your career?

Can you imagine how much different the meeting would be if Charlie Munger was on the call? Or Steve Jobs? Elon Musk? Mark Cuban?

It probably would not end well for you.

So, what should you be doing instead?

I suggest using “5 Whys”.

What exactly is the 5 Whys?

The 5 Whys (or Five Whys) is an iterative interrogative technique used to explore the cause-and-effect relationships underlying a particular problem.

It’s the practice of asking why repeatedly whenever a problem is encountered in order to get beyond the obvious symptoms to discover the root cause.

The primary goal of the technique is to determine the root cause of a problem by asking repeatedly asking the question “Why?” five times.

The answer to the fifth why should reveal the root cause of the problem (although you might need more or fewer iterations depending on the complexity of the issue).

The goal is to identify the underlying causes rather than just addressing the symptoms.

Here’s how it works:

Identify the Problem: Start by clearly defining the problem or issue you want to address.
Ask “Why?” (ask why the problem occurred and record the answer).
Repeat: Take the answer to the first “Why?” and ask “Why?” again. Record the response.
Continue Asking “Why?” (repeat this process at least five times, or until you reach a point where further questioning doesn’t yield meaningful insights). The key is to keep asking “Why?” until you identify the root cause.
Address the Root Cause: Once you’ve identified the root cause, you can develop and implement solutions to address it.

Got all that?

Great.

You’re doing great.

Here’s an example of using the 5 Whys in aerospace manufacturing:

Problem: A critical component failed during testing.

Why 1: Why did the component fail during testing?

Answer 1: Because it exceeded the specified temperature limit.

Why 2: Why did it exceed the temperature limit?

Answer 2: Because the cooling system couldn’t maintain the required temperature.

Why 3: Why couldn’t the cooling system maintain the required temperature?

Answer 3: Because the cooling fluid flow rate was insufficient.

Why 4: Why was the cooling fluid flow rate insufficient?

Answer 4: Because the flow rate was not properly calibrated during the maintenance check.

Why 5: Why was the flow rate not properly calibrated during maintenance?

Answer 5: Because the maintenance schedule didn’t include a calibration check for the flow rate sensor.

In this example, the “5 Whys” technique reveals that a critical component failed due to a breakdown in the maintenance process.

Specifically, it highlights the need to update the maintenance schedule to include calibration checks for the flow rate sensor, ultimately preventing similar failures in the future.

Without repeatedly asking why, managers could miss the primary issue and replace the wrong part leading to recurring failures.

That could end up costing the company a lot of money.

It could even cost you your job.

Not good.

Remember: the specific number five is not the point. The point is to keep asking until the root cause is discovered and eliminated.

The “5 Whys” technique is a simple but effective way to get to the bottom of problems, as it encourages deeper thinking and avoids merely treating symptoms.

Note: The 5 Whys is the brainchild of Taiichi Ohno (aka the Father of the Toyota Production System) and is widely used in various industries and fields for root cause analysis and continuous improvement.

Socratic Questioning

Now that we have one way to establish First Principles under our belt, it’s time to discuss one more.

It’s time to dig into Socratic Questioning.

What is Socratic Questioning, you ask?

Named after the ancient Greek philosopher Socrates (who used the method quite frequently in his teachings), Socratic questioning is a method of philosophical inquiry that uses a series of open-ended questions to stimulate critical thinking and elicit deeper insights.

Socratic questioning is a very disciplined process, it involves a rigorous and thoughtful dialogue between two or more people to unravel deeply held values and beliefs that frame and support what you think and say.

It can be used to establish first principles through stringent analysis as it encourages you to dig deep and challenge the accuracy and completeness of your thinking; to micro analyze your beliefs, assumptions, and knowledge, and then re-analyze them under a brand-new lens.

The goal is to help you acquire new knowledge that was previously outside of your awareness, uncover underlying assumptions, separate knowledge from ignorance, and establish truth.

So, how does it work?

I’m going to be honest.

None of this sh*t is easy.

Asking questions is hard.

Most people don’t even realize that questioning is a skill.

An art form.

And to get to the root of a problem, you cannot simply begin by asking vague, purposeless, low-quality questions.

You need to be good at it.

The questions you ask need to have purpose, they cannot be random or aimless — they need to elicit useful information and not waste time.

The Socratic method, often described as the cornerstone of Cognitive Behavioral Therapy (CBT), can solve this problem for you by asking a series of focused, open-ended questions that encourage reflection.

By providing structure towards a known purpose.

The idea is: that by using a series of focused yet open questions, you can unpack your beliefs and those of others.

So, what’s the difference between “normal questions” and Socratic questioning?

Well, one of the key distinctions between the two is that Socratic questioning uses a systematic approach to draw out first principles.

It generally follows this process:

Probe for Clarity: We need to be able to explain where our ideas come from. What do you think exactly? Why do you think this? What do you mean when you say X? Could you explain that point further? Can you provide an example?
Challenge Assumptions: We should challenge underlying assumptions and beliefs by asking questions. How do you know this is true? Why do you think that is true? What led you to that conclusion? What if you thought the opposite?
Search for Evidence: How can you back this up? How can you prove it? Can you provide an example that supports what you are saying? Can we validate that evidence? Do we have all the information we need?
Consider Alternatives: The search for truth often requires us to consider alternative viewpoints or solutions. Are there alternative viewpoints? How could someone else respond? How do you know you’re right?
Challenge the Original Questions: Why do you think that? Are you correct? How did you arrive at that answer? Can you show your work? What facts have you uncovered so far? What do you think was important about that question? What would have been a better question to ask?
Examine the Consequences: What if you’re wrong? What are the consequences? What are the tradeoffs?
Explore the Implications: A thorough analysis requires you to question the implications of any belief or statement you have. What would happen if everyone believed that? How would this affect someone?
Self-Reflect: The goal is to promote self-awareness and self-reflection, giving you greater ability to think more deeply about your own thought processes and reasoning. What have I learned? How does that make me feel? What may I have missed?

Bonus Round:

It’s very important to keep in mind that Socratic questions are usually meant to be open-ended and cannot be answered with a simple “yes” or “no.”

They require thoughtful and reflective responses.

Socratic questioning is also designed to be non-leading.

It does not impose the questioner’s beliefs but seeks to guide the individual to their own conclusions.

So. when you go through this process it’s important to always (1) ask open-ended questions; and (2) avoid asking leading questions.

At the end of the day, Socratic questioning can be a potent method for examining ideas rationally and logically to determine their validity.

Used correctly, it challenges your assumptions and gives you the ability to “rethink” and revise your thoughts and ideas.

If you follow the process (and with enough practice) you’ll eventually be free of having to “trust your gut” and reduce the probability of making critical errors through a strong emotional response.

That said, like any tool, it is only as good as the person who uses it.

Here are some great books to get you started:

To learn more about Socratic questioning (and good questioning in general) here are some great books to get you started — available on Amazon:

Great Dialogues of Plato by Plato (Amazon)
The Thinker’s Guide to Socratic Questioning by Richard Paul and Linda Elder (Amazon)
The Socratic Method of Psychotherapy by James Overholser (Amazon)

Applying First Principles in Real Life

When we are kids, we have no problem thinking big and dreaming about the possibilities of the universe, what we want to achieve in life, what we want to become.

We’re full of boundless energy, happiness, and wild ideas.

The problem is that as we age and experience the world as it is (in its real and brutal form) we often lose that spark.

We get beat down by bosses and bills.

By rules and regulations.

By people telling us what we can and can’t do.

By believing when others tell us what’s possible.

By listening and not questioning when someone tells us the best way to do something.

By trusting others when they set the limits for what we can become and achieve.

And by doing so we lose our imagination, our creativity, our inquisitive spirit.

And the older we get; the more we begin to rely on convention and to just “do what we’re told” because it’s much easier than running a first principles analysis and thinking for ourselves.

We are starting to behave like drones, not people.

We have outsourced our thinking to someone else.

Why?

And to whom?

Your boss? Your parents? Your spouse?

GPT-4?

Or worse, a politician?

mental models only dead fish — Image: Sketchplanations.com

When we stop thinking for ourselves, we become prisoners inside the thoughts of others.

And we live in their shadow.

But reasoning from first principles allows us to step outside of the constraints and conventions of dogma and the modern world to see the infinite possibilities of what the universe has to offer us.

It won’t be easy, it will take some study (theory and application), but once you truly understand how the principles work you will have a better understanding of what makes sense and what doesn’t.

Sometimes nothing makes sense, you have to throw the entire analysis away.

But usually, you’ll be able to see through the trees and figure out what is possible.

Technically, anything is possible for you, the sky is the limit.

But we live in a world of decisions and outcomes, and to give yourself the best chance of outcome optimization, it is imperative to improve your thinking.

Usually (for us mere mortals at least) the first step to accomplishing this is to stop let others think and solve problems for you.

Stop using the thoughts/beliefs/conventions/possibilities of others.

Refuse to accept a world that you did not create, but was inherited from another. A world that has been shaped and modeled after its creator.

Move away from incremental thinking and step into the realm of boundless possibilities.

Stop making weak assumptions.

And finally, you need to accept and acknowledge that thinking, questioning, and reasoning is an art form.

There is a science to it.

Sure, it can be difficult to see through the trees at first (especially when you still have blinders on) or your thinking has been framed by another human.

It will take time.

First Principles Thinking, however, will help slowly remove the blinders (clear the clutter and bias) so you can see the whole picture, the whole world, so you can rebuild your assumptions from scratch.

And this is where the magic happens.

Low key, this may be the single best way to learn how to think for yourself and come up with original ideas and solutions.

It is a lot of work?

Yes.

Will it require a lot of study and analysis?

Yes.

This is why so few people are willing to do it.

But this is the sort of thing that usually separates the winners from the losers.

The lions from the zebras.

The kings from the plebs.

The gods from the mortals.

Thinking in first principles allows you to adapt to a changing environment, see threats, deal with reality, and seize opportunities that others can’t see.

You’ll be able to see through the entire decision forest to infinity.

Everything will be possible for you.

7. Leverage

Archimedes is credited with creating the concept of leverage, over 2,000 years ago.

For the uninitiated: a lever is a fundamental mechanical device used to transmit or magnify forces and achieve mechanical advantage.

In physics and engineering, a lever is a rigid bar or beam that rotates around a fixed point called a fulcrum, and most of the engineering marvels of the world were built using applied leverage.

Leverage means making something lighter by raising it in a specific way.

As famously stated by Archimedes:

“Give me a lever long enough and I shall move the Earth.” —Archimedes

The mental model of leverage suggests that with a small amount of input force, you can create a great output force through leverage.

For example, in Propositions 6 and 7 of Book I of his work entitled On the Equilibrium of Planes, Archimedes wrote the statement of the Law of the Lever: “Magnitudes in equilibrium at distances are reciprocally proportional to their weights.”

But, while it is commonly agreed that Archimedes proves this law in these two propositions, there has been considerable debate as to what Archimedes really proved, what his stated postulates mean, what hidden assumptions he used, and what he actually proved.

For the action takers: a discussion of these points can be found in pages 291-304 of the following book: ARCHIMEDES by E.J. Dijksterhuis.

However, the following passage from the Mechanica, a work believed to have been written by the Peripatetic School (the name given to the followers of Aristotle) is believed to have been written before Archimedes was born.

“Why is it that small forces can move great weights by means of a lever, as was said at the beginning of the treatise, seeing that one naturally adds the weight of the lever? For surely the smaller weight is easier to move, and it is smaller without the lever. Is the lever the reason, being equivalent to a beam with a cord attached below, and divided into two equal parts? For the fulcrum acts as the attached cord : for both these remain stationary, and act as a centre. For since under the impulse of the same weight the greater radius from the centre moves the more rapidly, and there are three elements in the lever, the fulcrum,that is the cord or centre, and the two weights, the one which causes the movement, and the one that is moved : now the ratio of the weight moved to the weight moving it is the inverse ratio of the distances from the centre. Now the greater the distance from the fulcrum, the more easily it will move. The reason has been given before that the point further from the centre describes the greater circle, so that by the use of the same force, when the motive force is farther from the lever, it will cause a greater movement. Let AB be the bar, G be the weight, and D the moving force, E the fulcrum ; and let H be the point to which the moving force travels and K the point to which G the weight moved travels.”

The above translation from the Mechanica is from ARISTOTLE: MINOR WORKS.

The “kinetic” argument for the Law of the Lever given in the passage above comes close to the concept of the conservation of energy, the idea of energy as the product of force and distance, and to the principle of virtual velocities.

Therefore, one could make the case that it is a more seminal argument than the “static” one Archimedes appears to make, which may not provide much clarity as to why the law is valid.

Bla bla bla.

I digress.

Similar to the mental models discussed in this series, leverage is a scientific concept in reasoning and decision making which has applications in many other areas.

It’s an idea that humans have used to great effect for thousands of years, enabling them to gain disproportionate strength.

At its core, leverage is about emphasizing the strategic use of resources and efforts to achieve maximum impact.

It’s about finding points of influence that can amplify the outcomes of your decisions/actions/investments.

It underscores the significance of making strategic choices that yield exponential results, rather than simply expending more effort or resources.

Whether in business, investing, or personal life, understanding this mental model can help you identify the right opportunities and “leverage points” that can create a disproportionate return on the initial input, helping you to achieve an optimal outcome within a complex system.

In his famous cult classic book The Obstacle is the Way, Ryan Holiday argues:

“You don’t convince people by challenging their longest and most firmly held opinions. You find common ground and work from there. Or you look for leverage to make them listen. Or you create an alternative with so much support from other people that the opposition voluntarily abandons its views and joins your camp.” —Ryan Holiday

Here’s an example of how people use leverage for their own benefit in negotiations:

You are on a road trip driving across the country. It is one of the hottest days of the year and you are driving through the middle of the desert. Suddenly, your car begins to overheat and then it dies. You pull over to the side of the road, but you can’t get the car to start. You contact roadside assistance who promises to arrive within a few hours. You likely ask about a tow and the cost. They say it depends, but it could cost $100. Roadside assistance arrives later that afternoon. The guy tells you he thinks the problem is probably the radiator. He opens the hood and does an inspection. There is the problem: a blown head gasket. It will cost you $1,500 and he will have to tow you to the shop to get the work done, which will be another $200. Sound familiar? You are now at the mercy of the mechanic. You don’t know anything about car engines or head gaskets… you don’t really have a choice and agree to pay the price. This story has been repeated millions of times throughout human history, and probably dozens of times in your life alone. Each time, you felt like you were at a big disadvantage. They had leverage.

Leverage is a common tactic used in business today.

For example:

A hospital may send you a super expensive bill because you can’t just use a receipt to return the service (“hey doc, thanks for the life saving surgery but can you undo it? I found a better price online somewhere else”).

That’s just not how it works.

In the real world:

Buying drinks at a bar will usually be more expensive than buying them at a grocery store because the bar knows the people inside lack an alternative, giving the bar a lot of leverage.

Social Media apps take your data and subject you to endless ads because the service is usually free, but they can monetize your data based on your usage.

And of course, the timeless classic example from Warren Buffet when he said: “Don’t ask the barber whether you need a haircut” in one of his famous letters to shareholders. Because to do so transfers leverage to the barber, who will always say yes.

To keep your leverage, you’d need to tell the barber that you do not need a haircut, and/or that you think haircuts are a silly waste of money, which could lead them to offer you a great deal or free trial.

mental models - don't ask the barber if you need a haircut — Image: Sketchplanations.com

When it’s all said and done, leverage is a mental model that you can use to achieve more with less effort, resources, and/or time.

The key to applying it is learning how to think strategically so you can identify optimization opportunities and make decisions that deliver optimal/favorable outcomes.

By understanding the principles of leverage and recognizing application opportunities, you’ll be able to do less work, operate more efficiently, and maximize the impact of your efforts.

Well, I think I’ve rambled on enough for today.

I hope you gained some valuable insight from this series so far.

It’s my hope that you can leave the internet somehow smarter than you were when you first visited this site.

So, what Mental Model has helped you the most?

Let me know on X/Twitter.

Follow me for more shitty analysis: twitter.com/jaminthompson.

Here is Mental Models Part 1 in case you missed it.

Part 3 coming soon…

Best Mental Model Books for further study:

Poor Charlie’s Almanac by Charles Munger

The Great Mental Models by Shane Parrish

Principles by Ray Dalio