In the old days, trade was hard. Imagine traveling from one city to another on horseback for days. Or sailing with your ship without seeing the land for months, eating the same dried food or fish every day. But it was also lucrative. Traders were buying goods cheaply in one city, and selling them for…
Articles
Hindsight Bias Meaning, Examples, and How to Avoid It
Hindsight bias is a fallacy where people feel they knew how things would turn out after the events occurred. Take yourself back to December 2019. A new decade is about to start. Who was expecting a pandemic that’d keep us under lockdown and change how we live for years? Who was expecting a war in…
Goodhart’s Law: Soviet Nail Factories & The Power of Incentives
The Soviet Union had a shortage of nails during Lenin’s time. To increase production, his government started giving bonuses to the factories for the number of nails they produce. After hearing about the bonus, the factories reduced the size of the nails to produce as many nails as possible. In the end, they met the targets and…
10x instead of 10% – Exponential Thinking
10% faster, 15% more, 5% less… Our brains think incrementally by default. That’s why many people focus on making things slightly better. You can see it every day. Hiring 10 more employees, spending $10k more on ads, opening one more shop… And the best-case scenario, they get what they planned for: an incremental improvement. But…
Parkinson’s Law Meaning, Examples, and How to Overcome It
Parkinson’s Law means that work expands to fill the time available for its completion. Imagine you have two weeks to complete a project. How likely would you deliver the task earlier than the deadline? If your answer is not likely, you’re not alone. Because even if the project with a two-week deadline could be finished in three…
Concorde Fallacy: How to Avoid Making Decisions Like A Losing Gambler
The Concorde fallacy is a mental bias where people continue spending resources (money, time, or effort) on failing projects because of a prior commitment. Let’s see the story of Concorde and how a fallacy was named after it. Concorde was an impressive aircraft. It had an elegant design, with a maximum speed over twice the…
What Is Argumentum Ad Populum (And How To Question It)
Argumentum ad populum (Latin for “appeal to the people”) is a fallacy when people accept what is popular as true without logical reasoning. We live in a world of arguments. Some arguments shape how we make decisions and how we live without us realizing it. Especially when the majority accepts one as the norm. A…
A-B-Z Framework: The Right Way to Start
A-B-Z Framework is a mental model to save you from analysis paralysis while starting new projects or achieving your life goals. What is your career target? Building a successful company? Becoming a CEO? Having a long-term goal for yourself is good. But it might be overwhelming when you start thinking about how to get there.…
Napoleon’s Secret for Success: Compartmentalization
Napoleon was a unique person. He spent most of his life on the battlefields. His military genius is well known; he has fought against coalitions of European countries and won most of the battles. His soldiers loved him as he always spent time with them and knew the names of even the low-rank soldiers. He was a…
Via Negativa: Steve Jobs’ Favorite Mental Model For Problem-Solving
Via negativa is a mental model that looks for solutions not through addition, but through subtraction. Steve Jobs loved cutting things out. When he returned to Apple as CEO, before creating any new product, he killed dozens of existing products. And focused the company on what it does best. Later on, he made one of the…