The Great Mental Models, Volume 3

1. Feedback Loops: Listen and incorporate

The key to the feedback loop is the information it provides. You need to know whether you are moving toward your goal or away from it, and you need to know if your actions are having the intended effect.

Ubiquitous information flow. Feedback loops are fundamental processes where a system's output becomes its input, refining and improving it over time. These loops are everywhere, from a thermostat maintaining room temperature (balancing loop) to fashion trends amplifying popularity (reinforcing loop). Understanding them helps us grasp why people and systems behave as they do, highlighting the importance of filtering useful feedback from noise.

Human behavior and incentives. Much of our daily lives are governed by feedback. Our body language, tone, and reactions provide constant feedback to others, shaping their future interactions with us. Similarly, incentives act as feedback, encouraging or discouraging certain behaviors. For instance, if you react negatively to constructive criticism, you incentivize colleagues to withhold valuable improvement opportunities, trapping yourself in a reinforcing loop of missed growth.

Societal and legal systems. Adam Smith's "invisible hand" of the market, and his earlier work on moral sentiments, illustrates how societal approval and disapproval act as feedback, guiding cooperative behavior and sustaining civilization. Legal systems, too, operate on feedback loops, with court decisions setting precedents that influence future cases and deter unwanted actions. Contracts, for example, provide a framework for trust, creating feedback loops that promote cooperation by outlining consequences for defection.

2. Bottlenecks: The limiting factor

In trying to improve the flow of your system, focusing on anything besides the bottleneck is a waste of time.

Identifying the choke point. Every system has a bottleneck—the slowest part that limits overall output, much like a bottle's neck restricts liquid flow. These constraints create waste as resources pile up behind them, making it crucial to identify and address them. Focusing efforts anywhere but the bottleneck is inefficient, often just increasing pressure on the already strained point.

The Trans-Siberian Railway's lesson. The construction of the Trans-Siberian Railway faced numerous challenges, with labor shortages becoming a critical bottleneck. To expedite the project, skilled workers were imported and convicts were used, often at excessive costs. This led to:

• Sacrificing safety and material quality due to budget constraints.
• Steep inclines and tight curves, making the railway dangerous and inefficient.
• The need to rebuild sections almost immediately, effectively building the same railroad multiple times.
  This example highlights how addressing a bottleneck expediently without understanding systemic consequences can create worse problems down the line.

Innovation through constraint. Bottlenecks aren't always negative; they can be powerful catalysts for innovation. During wartime, for instance, shortages of materials like silk (leading to nylon) or natural rubber (leading to synthetic rubber) forced the invention of alternatives. Similarly, medical science often advances rapidly during conflicts, as new demands and supply limitations drive creative solutions for injuries and diseases, ultimately benefiting everyone.

3. Scale: Bigger or smaller = different

As systems expand, complexity does too; more connections breed more potential blockages.

Non-linear growth. Systems don't just multiply when they scale; they fundamentally change. What works for a small team or a local market often breaks down when magnified. Understanding scale means recognizing that growth introduces new complexities, potential bottlenecks, and requires different organizational structures, like a small startup needing an HR department as it grows into a large corporation.

Longevity through smallness. While scaling up is often lauded, some entities thrive by staying small. Japan's shinise—thousands of companies over a century old—demonstrate this. These family-run businesses often:

• Remain small, typically under a hundred employees.
• Maintain close-knit relationships and traditional values.
• Operate within small geographical areas, fostering loyal customer bases.
  This approach allows them to adapt to economic shifts and preserve their core identity, proving that for longevity, being the "right size" can be a superpower.

The story of illumination. The evolution of artificial light dramatically illustrates how systems change with scale. From simple animal-fat lamps to gaslight and then electricity, each advancement required:

• Scaling up infrastructure (whale oil industry, gas pipelines, electric grids).
• Transforming human activity (extending productive hours, creating "nightlife").
• Introducing new dependencies and vulnerabilities (reliance on utilities, surveillance concerns).
  As light scaled, it didn't just get "more light"; it created entirely new societal structures and challenges, demonstrating that increased scale brings unanticipated possibilities and impacts on other systems.

4. Margin of Safety: Expect the unexpected

A margin of safety is necessary to ensure systems can handle stressors and unpredictable circumstances.

Building in buffers. A margin of safety is a crucial buffer, a meaningful gap between what a system can handle and what it's typically required to handle. Engineers design bridges for extremes, not just averages, adding extra capacity to withstand unforeseen loads or future growth. This principle applies across life, from emergency funds to health insurance, providing resilience against inevitable shocks.

Knowledge as a buffer. On an individual level, continuous learning acts as a powerful margin of safety. Astronauts, for instance, are perpetual students, training for an incredibly vast array of potential scenarios to reduce blind spots and respond effectively in hostile environments. This "overqualification" creates redundancy within a team, ensuring that even if one member is incapacitated, others possess the knowledge to troubleshoot and adapt, highlighting that preparation is everything when stakes are high.

The Louvre's wartime preservation. Jacques Jaujard, director of the French National Museums during WWII, exemplified anticipating the worst. Foreseeing Nazi invasion, he orchestrated the secret evacuation and dispersal of the Louvre's priceless art collection days before the war reached France. This proactive measure:

• Dispersed treasures across multiple locations to minimize loss if one stash was found.
• Included meticulous planning for temperature, humidity, and even importance labeling.
• Ensured that by war's end, not a single item from the Louvre was lost or damaged, preserving France's cultural soul against an unpredictable future.

5. Compounding: Play the long game

All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest.

Exponential growth. Compounding is the "eighth wonder of the world," where small, consistent gains accumulate exponentially over time. Like a snowball rolling downhill, it grows faster and faster, with most of the significant returns realized towards the end of a long timeline. This principle applies not just to money, but to knowledge, experience, and relationships, emphasizing the power of incremental, continuous progress.

Knowledge as capital. Investing in knowledge, even without immediate economic returns, can compound into unforeseen opportunities. Early Jewish education norms, requiring all fathers to send sons to school to study the Torah, initially seemed a sacrifice in agrarian economies. However, this widespread literacy later provided a comparative advantage, allowing Jewish people to:

• Transition from farming to lucrative urban professions like craftsmen, merchants, and moneylenders.
• Leverage numeracy and accounting skills in growing economies.
• Gain mobility and migrate to places where their skills were most valued, demonstrating how early investments in human capital can unlock future options.

Reinvesting experience and relationships. Experience, like money, compounds when we deliberately reinvest its lessons into new situations. Explorer Mireya Mayor's journey from NFL cheerleader to National Geographic primatologist showcases this, as she consciously applied lessons from early expeditions and even cheerleading to tackle increasingly complex challenges. Similarly, relationships compound through "preferential attachment," where existing connections lead to more, as exemplified by Sidney Weinberg's rise on Wall Street through meticulously built and leveraged networks, proving that consistent investment in win-win dynamics yields accruing influence.

6. Sampling: Your samples become your reality

Your personal experiences with money make up maybe 0.00000001 % of what’s happened in the world, but maybe 80 % of how you think the world works.

Drawing conclusions from subsets. Sampling involves selecting a small, manageable portion of a larger population (people, things, or events) to infer information about the whole. While a census aims for everyone, samples are practical. The "law of large numbers" states that larger sample sizes generally yield results closer to the true value, reducing the margin of error and increasing confidence in generalizations.

Beware of bias. A sample's accuracy depends not just on its size, but also on its representativeness. A large sample can still be misleading if it's biased. For example:

• George Gallup's "stirred soup" analogy highlights the need for randomness.
• The "healthy worker effect" can skew occupational health studies.
• Anecdotes, being a sample size of one, are often unreliable, though a single outlier can prove possibility (e.g., first heart transplant survivor).
  Our tendency to overemphasize personal experiences or anecdotes, especially those confirming existing beliefs, can lead to significant biases in our understanding of the world.

Quality of inputs matters. The first Oxford English Dictionary (OED) project, which involved millions of volunteer submissions, demonstrated the value of a vast and diverse sample for defining a language. Similarly, in scientific and social research, using "WEIRD" (Western, Educated, Industrialized, Rich, and Democratic) populations as representative of all humanity can lead to flawed conclusions. Data gaps, particularly concerning women in medical trials or public safety reports, can perpetuate discrimination and misallocate resources, underscoring that deep data on a homogeneous population is only relevant to that specific group.

7. Randomness: Predictability is often an illusion

The human mind is built to identify for each event a definite cause and can, therefore, have a hard time accepting the influence of unrelated or random factors.

The illusion of order. Humans are wired to seek patterns and attribute causality, making it difficult to accept true randomness. We often misinterpret sequences of random events, like a coin landing on heads multiple times, as having underlying meaning or predictability. This cognitive bias leads us to misunderstand that much of life is governed by chance, not predetermined order.

Embracing unpredictability. Randomness is not an anomaly but a fundamental aspect of the universe, and leveraging it can foster creativity and adaptability. For instance:

• Our immune systems generate diverse lymphocytes randomly to combat varied pathogens.
• Ants forage randomly, using pheromone trails to coordinate food discovery without central control.
• Authors like Jane Smiley embrace randomness in their creative process, allowing unplanned scenes or new experiences to break through writer's block and steer stories in novel directions.
  Making use of chance can be a deliberate and effective part of approaching complex problems and fostering innovation.

True vs. pseudorandomness. It's crucial to distinguish between true randomness (detached from causal factors, like radioactive decay) and pseudorandomness (appearing random but having underlying patterns). Magicians like Chan Canasta exploited human pseudorandom behavior—our tendency to pick "random" numbers or words that fall into predictable patterns (e.g., "carrot" for a vegetable, "7" for a number between 1 and 10). This highlights that our choices are often influenced by subtle biases, making us less unpredictable than we perceive, and that genuine disorder requires methods that override our brain's inherent pattern-seeking.

8. Multiplying by Zero: The ultimate destroyer

Multiplication by zero destroys information. This means there cannot be a reverse process. Some activities are so destructive they cannot be undone.

The weakest link. In any multiplicative system, the presence of a "zero" component negates all other efforts, regardless of their strength. This mathematical principle highlights that a system is only as strong as its weakest link. Optimizing other components is futile if a critical part is fundamentally flawed or non-existent, like a restaurant with beautiful decor and attentive service failing due to tasteless food.

East Germany's tech failure. The East German quest to build a self-sufficient computer industry during the Cold War is a stark example of multiplying by zero. Despite spending billions on espionage to steal Western technology, their efforts failed because they lacked the foundational element of organic innovation. Their system:

• Punished creativity and collaboration, essential for R&D.
• Relied solely on pirated blueprints and hardware, without developing in-house knowledge.
• Could not troubleshoot, adapt, or innovate when stolen machinery failed or information was incomplete, turning all other investments into nothing.
  The Stasi's cult of secrecy, clashing with the scientific ethos of openness, created a zero that no amount of stolen technology could overcome.

Transforming personal zeros. Individuals often perceive certain characteristics or conditions, like stuttering, as personal "zeros" that negate their other strengths. However, many successful stutterers, such as B.B. King, Emily Blunt, and Rubin "Hurricane" Carter, demonstrate that while a stutter may not be "cured," it can be managed and transformed. By:

• Finding alternative modes of expression (singing for B.B. King).
• Leveraging acting roles to step away from the impediment (Emily Blunt).
• Diligently practicing speech therapy techniques and public speaking (Rubin Carter).
  They shifted their perceived zero into a "one," activating the power of their other qualities and achieving remarkable success, proving that perceived limitations can be overcome through adaptation and effort.

9. Equivalence: Equal doesn't mean same

The art of doing mathematics consists in finding that special case which contains all the germs of generality.

Many paths to the same outcome. Equivalence highlights that things can be equal without being identical. In mathematics, different symbols or methods can yield the same answer. This model encourages us to look beyond superficial differences to find underlying commonalities, especially when traditional solutions are no longer viable or when seeking to connect with diverse perspectives.

Simultaneous discoveries. The myth of the solitary genius is often debunked by the phenomenon of multiple discoveries, where equivalent scientific breakthroughs or inventions occur independently around the same time. Examples include:

• Darwin and Wallace conceiving natural selection.
• Multiple chemists discovering oxygen.
• Various individuals developing color photography methods.
  This demonstrates that innovation is often a product of broad scientific and cultural landscapes, with many people inching toward the same conclusion, proving that different paths can lead to equivalent results.

Universal human needs. Despite vast cultural diversity, humans often solve universal problems in equivalent ways. Death, for instance, is a common human experience that evokes similar emotions of grief, anger, and fear across all cultures. The myriad death rituals—from somber burials to vibrant cremations, or Tibetan sky burials—all serve the equivalent purpose of:

• Consoling the living.
• Helping individuals process loss.
• Providing closure for the deceased's transition.
  These diverse practices, though not the same, are equally effective in meeting fundamental human needs, showcasing the power of equivalence in understanding human behavior.

10. Global and Local Maxima: Embrace the peaks and valleys

We may need to temporarily worsen our solution if we want to continue searching for improvements.

Navigating the landscape of progress. Global and local maxima represent the highest possible value (global) and smaller peaks within a given range (local) in a mathematical function or a system's performance. This "hill-climbing" model illustrates that progress isn't a steady upward climb; we often reach local peaks where further incremental improvement is impossible without first descending into a "valley" to find a new, higher slope.

The sports bra's journey. The development of the sports bra by Lisa Lindahl and Polly Smith exemplifies navigating these peaks and valleys. Their journey involved:

• Reaching an early local maximum with a successful prototype.
• Then descending into the "valley" of learning production, sales, and marketing for the Jogbra company.
• Lindahl's personal growth, overcoming limitations like epilepsy, also involved pushing past personal local maxima.
• Strategic decisions, like selling in sporting goods stores rather than lingerie, required a willingness to challenge existing norms and take risks, ultimately leading to higher peaks of market success.

Optimization and team dynamics. In optimization, we often get stuck at local maxima by fine-tuning details too early. The "basketball vs. giant ball" analogy suggests that for significant improvement, we sometimes need to make large, foundational changes before refining specifics. For a rock band like Queen, this meant:

• Years of individual members (Freddie Mercury, Brian May, John Deacon, Roger Taylor) experimenting in various "local maximum" bands.
• Recognizing that changing individual chords (basketball) was less impactful than finding the right combination of people (giant ball).
• Their eventual formation as Queen, after numerous iterations and personnel changes, allowed them to reach a global maximum by optimizing the core components—the band members—before fine-tuning their sound and image.

11. Diminishing Returns: Hard work stops paying off

Past a certain point, diminishing returns almost always set in.

Non-linear effort-reward. The law of diminishing returns states that beyond a certain point, additional inputs into a system yield progressively smaller increases in output. Eventually, more effort can even lead to a decrease in total output. This principle applies widely, from adding fertilizer to soil (initial yield increase, then stagnation) to working extra hours (initial productivity boost, then increased mistakes).

The Viking raids of Paris. The repeated Viking raids on Paris illustrate diminishing returns in historical context. Initial raids were highly profitable, yielding large ransoms due to unprepared defenses. However, over time:

• The Franks built stronger fortifications and defenses (walls, bridges, towers).
• The wealth available for plunder in the region diminished.
• Raids became more costly, time-consuming, and dangerous for the Vikings, yielding smaller returns.
  Eventually, the effort outweighed the reward, leading Viking leader Rollo to accept land and a title in exchange for protecting the area, demonstrating that a successful strategy can become less effective as the system adapts.

Exploitation films' escalation. Our reactions to novelty are also subject to diminishing returns. Exploitation films from the 1950s-70s constantly pushed boundaries with sex, violence, and taboo subjects to shock audiences. However:

• Each successful shocking element was quickly copied, leading to audience habituation.
• Directors had to continually "raise the bar" with more graphic content to elicit the same reaction.
• Eventually, mainstream cinema absorbed these fringe themes, desensitizing audiences and making the genre's original shock value obsolete.
  This cycle shows how strong reactions cannot continue indefinitely; what was once shocking becomes mundane, requiring ever-greater extremes to provoke a response.

12. Critical Mass: Going critical

Once a system passes a certain threshold and enters a critical state, it takes only a tiny nudge to change it.

The tipping point. Critical mass refers to the threshold at which a system rapidly changes from one state to another, often with a disproportionate impact from the final input (the "straw that breaks the camel's back"). In social systems, it's the point where enough people adopt an idea or product for its growth to become self-sustaining. Understanding critical mass helps identify inflection points and target efforts for maximum impact.

New Zealand's suffrage movement. Women's suffrage in New Zealand, the first self-governing country to grant women the vote, was not a sudden event but the culmination of years of effort to build critical mass. Factors included:

• A desire for a fairer society among settlers.
• Early support from male politicians.
• Equal access to education for women, leading to increased social influence.
• The temperance movement providing a framework for women's political organization.
  Kate Sheppard's petitions, amassing thousands of signatures, were the final nudge that tipped public opinion, demonstrating that sustained, multi-faceted effort is crucial for achieving systemic change.

Organic vs. planned cities. In urban planning, critical mass relates to the density of interactions needed for a city to thrive. Jane Jacobs argued that a city's safety, vibrancy, and adaptability stem from a "critical mass" of diverse, self-sustaining interactions on its sidewalks, not just infrastructure. Planned cities like Brasília, which segregated functions and prioritized visual order over human interaction, often fail to foster this critical mass, leading to:

• Lack of street culture and community cohesion.
• Over-reliance on cars and limited pedestrian activity.
• The emergence of unofficial, unplanned areas to meet unmet needs.
  Conversely, Copenhagen's Strøget, a pedestrianized network, succeeded by combining diverse uses in a dense area, facilitating the interactions necessary for a lively, adaptable urban environment.

Last updated: December 21, 2025