I believed, incorrectly, that for you to build a profitable business, you were required to know everything about the business. You needed an MBA from a prestigious university, and you were an expert in:
- Business Creation
- Value-Creation & Testing
But over the course of many failures, I began to understand that obtaining expertise is more of a popularity contest, instead you should be developing the insight to solve interesting problems. I have found that the people who are labeled ”so good” are given that title, not because of their expertise but because they have mastered certain principles.
Charlie Munger’s Devotion to Mental Models
What are these principles: the thorough understanding of a few essential concepts that provide significant value. How do you then go about learning these principles? You must develop mental models. Josh Kaufman, the author of the Personal MBA shares:
”Mental model are concepts that represent your understanding of how things work.”
When you understand how business works, you can quickly build mental prototypes to test your preliminary ideas against the problem, and quickly iterate until you find the solution.
Warren Buffet states, ”Charlie can analyze and evaluate any kind of deal faster and more accurately than any man alive. He sees any valid weakness in sixty seconds. He’s the perfect partner.”
Buffet is describing his business partner Charlie Munger, who shares:
“I’ve long believed that a certain system - which almost any intelligent person can learn - works way better than the systems most people use [to understand the world]. What you need is a latticework of mental models in your head. And, with that system, things gradually fit together in a way that enhances cognition.”
”Just as multiple factors shape every system, multiple mental models from a variety of disciplines are necessary to understand that system… You have to realize the truth of biologist Julian Huxley’s idea that, “Life is just one damn relatedness after another.” So you must see the relatedness and effects from the relatedness.”
The Backdoor to Your Mental Models
So how do you build these multiple mental models? You read. You focus on big disciplines:
- Physics — Seven Brief Lessons On Physics by Carlo Rovelli
- Biology — The Origin of Species by Charles Darwin
- Psychology — Mindset by Carol S. Dweck
- Philosophy — Meditations by Marcus Aurelius
- Literature — Upstream by Mary Oliver
- Sociology — Man’s Search for Meaning by Victor E. Frankl
- History — Sapiens by Yuval Noah Harari
- Business — The Personal MBA by Josh Kaufman
The books listed are recommendations but they are a good starting point. You are not looking for expertise in these disciplines, you are working towards mastery, and by mastery, I mean leveraging your new mental models to solve interesting problems.
Building a latticework of mental models does not mean you will become the next Charlie Munger, the hope sits squarely on you being able to enhance cognition so you can see the relatedness of the solutions and apply them to the problem.