The third book in the great mental model series by Shane Parrish and the team at FS blog. How to use mental models from a variety of disciplines and apply them to your life
Rating: 4/5
Immediate feedback isn’t the only feedback. Sometimes it takes time for feedback to happen
Customer loyalty programs are an example of positive feedback loops
An example of an information cascade is restaurants keeping people in line to make it look busy
For prisoner’s dilemma games, if only playing once then it’s best to blame the other side. But if you’re playing multiple times, like in life, you need to build trust
Just because a system is at equilibrium doesn’t mean it’s functioning as well as it can
Life is a dynamic equilibrium, constantly adjusting to many complex variables
Bottlenecks can move around systems. You fix one and introduce another
Medical science tends to advance fastest during times of war
Systems become more complex as you soak up. Greater size means more connections and interdependencies between parts
Success often sows the seeds of its destruction
Expect the unexpected - always have a margin of safety
Be careful w/ margins of safety because they can make you overconfident
Knowledge can be conceptualized as a margin of safety, a bugger against unexpected challenges you will face
The greater the threat, the more important it is to plan for the most
Within any system, parts need replacing from time to time to keep the whole functioning well and to remove anything that’s a hindrance
An algorithm is a foolproof recipe
A static algorithm uses the same input every time with the same desired output
Emergence: when systems as a whole function in ways we can’t prediction when looking at it’s parts
If you have a simple starting point on the right trajectory, surprising things can happen through the power of emergence
Working and sharing with others can create unexpected possibilities
Simplicity can convey a powerful meaning but too much simplicity conveys no meaning at all
Law of diminishing returns: more effort leads to less return past a certain point
‘What the wise do in the beginning the fools do in the end’ - Buffet
Don’t let early success make you feel complacent
Close human relationships are the greatest source of pleasure in life
Knowledge, experience, relationships and money compound
We cannot know all the opportunities that will arise as a results of investments we make today
Friendships should always come before business
The larger the sample size, the more the result obtained will converge to the true value
The insights you get from large data sets are only as good as the range of possibilities they cover
Making rules and changes based on data needs to look hard at the data being used
Randomness is the rule, not the exception
Add randomness to the creative process and see where it takes you
Pareto principle: 80% of the outputs are the result of 20% of the inputs
Extreme events and results tend to be balanced out and revert to the mean
Lost of average results do not preclude the occasional big success
A zero in a system has the power to negate everything that comes before it
The history of invention shows us smart people fail dozens of times before they succeed
People in similar situations facing similar incentives are likely to behave the same way
Surface area is recognizing when increasing our exposure will help and when it will cause problems
Sometimes we have to go down to go back up
We cannot reach our full potential if we aren’t willing to stretch ourselves, take risks and fail once in a while
It’s more powerful to make big changes before we optimize the details
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