Have you ever noticed how some of the world’s most successful entrepreneurs and leaders see reality in a fundamentally different way? When they talk, it’s almost as if they’re speaking a different language.
Just look at this interview where Elon Musk describes how he understands cause and effect:
“I look at the future from the standpoint of probabilities. It’s like a branching stream of probabilities, and there are actions that we can take that affect those probabilities or that accelerate one thing or slow down another thing. I may introduce something new to the probability stream.”
Unusual, right? One writer who interviewed Musk describes his mental process like this:
“Musk sees people as computers, and he sees his brain software as the most important product he owns — and since there aren’t companies out there designing brain software, he designed his own, beta tests it every day, and makes constant updates.”
Musk’s top priority is designing the software in his brain. Have you ever heard anyone else describe their life that way?
Self-made billionaire Ray Dalio is no less “weird.” In his book, Principles, he describes how he sees reality: “Nature is a machine. The family is a machine. The life cycle is like a machine.” Dalio’s company, the largest hedge fund in the world, records every conversation (meeting or phone call) inside the company and has built several custom apps that allow any employee to rate any other employee in real time. The data is then added to profiles that each employee can see and is subsequently fed into an artificial intelligence system that helps employees make better decisions.
Dalio also describes his day in much different terms than you would expect from a CEO:
“I’m very much stepping back. I’m much more likely to go to what I describe as a higher level. There’s the blizzard that everyone is normally in, and that’s where they’re caught with all of these things coming at them. And I prefer to go above the blizzard and just organize.”
Charlie Munger uses a “cognitive bias checklist” before making investment decisions to ensure he properly applies the correct mental models. Warren Buffett uses decision trees. Jeff Bezos thinks of Amazon as being at Day One even though it’s been around more than 20 years.
What’s going on here? Are these just the idiosyncrasies of geniuses, or do these entrepreneurs employ a way of using their brain that we too could learn from in order to become smarter, more successful, and more impactful ourselves?
How I Learned to Think Like the World’s Best and Brightest
Over the years, as I’ve studied all of the above entrepreneurs, I’ve also aggressively applied their teachings. Even if I didn’t understand what they were saying at first, I took their advice on faith.
I’ve applied Ray Dalio’s root-cause analysis approach to our company. Now, throughout the week, everyone on our team logs any problems they’re facing. Then, we have a weekly phone call to discuss our biggest, recurring problem and its possible root cause.
I’ve applied Charlie Munger’s approach to mental models and collected thousands of pages of notes in order to create in-depth briefs on each model.
I’ve applied Musk’s probabilistic thinking to major decisions by listing out all of the potential decisions I could make and then assigning a cost, potential value, and probability to each one.
I’ve also created an experimentation engine like Bezos and Zuckerberg, and we now perform more than 1,000 experiments each year at our company. Finally, I now follow the 5-hour rule and spend at least two hours a day on deliberate learning.
After five years of emulating the leaders I most admire, I realized something surprising was happening to my thought process. I wasn’t just learning new strategies or hacks. I was learning a deeper and fundamentally different way of understanding reality — like I’ve accessed a hidden, secret level in the game of life. It’s thrilling to uncover deeper layers of understanding that I didn’t even know existed.
When I look back on my former self, I feel like I’m looking at a different person altogether. As previously “unsolvable” problems from my past come up again, I find I can solve many of them now. It is a great feeling to see previously insurmountable problems — both personal and professional — and realize I now have the tools to surmount them.
I’ll give you an example. In my twenties, I invested $100,000 into a business idea that never took off. Now that I understand cognitive biases — thanks to Charlie Munger — I see how the pernicious sunk cost fallacy wreaked havoc upon my decision-making. Today when I consider new business ideas, instead of just imagining how great they’re going to be, I spend just as much time envisioning what could go wrong — another Munger hack. I no longer have to remind myself to think this way anymore. I’ve internalized these concepts and now my mind actually works differently.
I once heard a coach talk about changing a client’s way of seeing the world in a way that would blow their mind. When he looked into his client’ eyes and could see him or her really getting it, he’d say, “Now, you’re in my reality!” That’s how I felt. Reality somehow feels different on an aesthetic level — as if I’m cutting through the levels of illusion and noise we normally see and getting a more direct view. The best example I can think of is that it’s like wearing augmented reality glasses that constantly feed you relevant wisdom about the situation you’re in.
Ultimately, what I’ve learned is that billionaires don’t have odd ways of talking. They, instead, are visionaries who see the world in a deeper way — one that is both incredibly effective and also learnable.
The Difference Between Average and Brilliant: Effective Mental Models
“Mental models are to your brain as apps are to your smartphone.” -Jayme Hoffman
According to Model Theory, we all always use mental models in our thinking. “Mental models are psychological representations of real, hypothetical, or imaginary situations,” according to the formal definition. Less formally, a mental model is a simplified, scaled-down version of some aspect of the world: a schematic of a particular piece of reality. A model can be represented as a blueprint, a symbol, an idea, a formula, and in many other ways. We all unconsciously create models of how the world works, how the economy works, how politics works, how other people work, how we work, how our brains work, how our day is supposed to go, and so on.
The more effective the model, the more effectively we are able to act, predict, innovate, explain, explore, and communicate. The worse the model, the more we fall prey to costly mistakes. The difference between great thinkers and ordinary thinkers is that, for ordinary thinkers, the process of using models is unconscious and reactive. For great thinkers, it is conscious and proactive.
All of the extraordinary people mentioned above collect the most effective models across all disciplines, stress-test them, and creatively apply them to their daily lives. Mental models are so valuable that billionaire Ray Dalio’s only book is full of his best mental models. Charlie Mungers’ only book is packed full of his top mental models too. One of the most common pieces of advice that Elon Musk gives is to think from first principles. Mental models and first principles are similar in that they each model deeper levels of reality.
While most people think about knowledge just horizontally (ie — across fields), these great thinkers also think about knowledge vertically in terms of depth. Musk explains deep knowledge in a Reddit AMA, “It is important to view knowledge as sort of a semantic tree — make sure you understand the fundamental principles (Musk calls these ‘first principles’), i.e. the trunk and big branches, before you get into the leaves/details or there is nothing for them to hang onto.” In another interview, Musk gives an example, “I tend to approach things from a physics framework. Physics teaches you to reason from first principles rather than by analogy.”
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