[Note: This list of mental models and their descriptions will grow and change as I do. The majority of this content is not my own. I have merely aggregated content from more knowledgeable folks here for my own reference.]
First Principles
https://www.mikegorlon.com/first-principles
First principles is the idea of breaking down a problem into its most fundamental and simplest parts.For example, if I wanted to create the best chicken parmesan sandwich then I would want to break this down into what the most fundamental parts of a chicken parm roll are.
In other words, I want to know what the most basic ingredients are – bread, cheese, tomato sauce and chicken.I would then go about getting the best bread, the best chicken, the best sauce and the best cheese before I even think about what oven to use or what temperature to cook it at because the type of oven and the temperature of the oven are useless if I don’t have the right ingredients.
Hanlon’s Razor
https://www.mikegorlon.com/hanlons-razor
We should not attribute to malice that which is more easily explained by stupidity. When something goes wrong that affects us we tend to associate this wrong doing to someone who is doing something that is out to harm or get back at us. The great majority of the time, they aren’t out to harm us and their action is simply a mistake.
Hedonic Adaption (or the Hedonic Treadmill)
https://www.mikegorlon.com/hedonic-adaption
Hedonic adaption, or the hedonic treadmill, is the observed tendency of humans to quickly return to a relatively stable level of happiness despite major positive or negative events or life changes.
Humans are a very adaptive species and our brains are wired to constantly want more of something. Therefore, it is easy to understand why hedonic adaption plays a big role in all of our lives.
If we experience a negative outcome in life, we eventually get over it due to the passage of time. The old saying, “Time heals all” is a reason why we adapt to negative outcomes; time is what allows our mind the ability to return to its relatively stable level of happiness.
If we experience a positive outcome, our minds are wired so that we adapt to our better situation and crave for more whether it is more money, more awards, more toys, more houses or more of something else. This craving can be a good thing or bad thing depending on how it is handled.
The Law of Large Numbers
https://www.mikegorlon.com/law-of-large-numbers
The law of large numbers states that the more experiments that occur, the higher the chances are that the outcomes will trend toward whatever the probability is.
For example, let’s say that you are in a coin flipping contest and there are three rounds. The contest has two players and it is one-on-one. The probability of either contestant getting a heads or a tails is 50%.
Now let’s say that in each round the side of the coin that won was heads. So there were three heads in a row. Over three rounds, heads winning each time is pretty likely because the amount of rounds (or experiments) isn’t very large. In other words the sample size is small.
But what if there were twenty rounds instead of three? The chances of heads occurring twenty times in a row is possible, but very, very unlikely. So over twenty rounds there will be more tails occurring and this will cause the amount of tails to trend towards occurring ten times which is what the probability of flipping a coin is – 50%.
So the law of large numbers just simply states that the more an event occurs, the more the chances of that event occurring will trend towards its average over time.
Margin of Safety
https://www.mikegorlon.com/margin-of-safety
A margin of safety is a way of dealing with the reality that if things can go wrong, they will go wrong.
Webster’s dictionary defines margin as the spare amount or measure of degree allowed or given for contingencies or special situations. By adding safety to this definition we arrive at a definition for Margin of Safety as the spare amount allowed or given for contingencies or special situations to keep us safe from harm or risk. To make it even simpler, it is the extra gap given to keep one safe from a bad or unfortunate outcome.
Margin of safety is used widely in many areas of life such as cost accounting, engineering, investing and time management to name just a few.
Reversion (or regression) to the Mean
https://www.mikegorlon.com/reversion-to-the-mean
Reversion to the mean (also known as regression to the mean) is a mental model that is seen a lot throughout life.
The definition of reversion is to return to a previous state and the definition of mean is the average. So reversion to the mean is the idea that outcomes will get closer to the mean as they increase.
Reversion to the mean happens in lots of areas of life such as investing, sports, insurance, weather patterns, business, height of people in a room, and many others.
If 2 people in a room are 7 feet tall and the average height in the world is 5’6″ then as more people enter the room these new people will bring the average height down and make it closer to the world average of 5’6″.
This is very similar in effect to the Law of Large Numbers.
Supply and Demand
https://www.mikegorlon.com/supply-and-demand
Supply and demand is the most important factor in determining prices.
Supply is the amount of goods or services available for sale.
Demand is how badly people want those products or services.
If demand stays constant in both scenarios below then:
The more supply available, the lower prices will be and the less supply available, the higher prices will be.
Tolerance Level
https://www.mikegorlon.com/copy-of-reversion-to-the-mean
A tolerance level is when the body doesn’t react the same way to a substance as it did in the past because the body adapts to the previous intake and now it takes more to have an effect.
Human beings have been incredible adapters throughout their history and their bodies have a keen way of adapting to the intake of substances over time.
The below content is all from this post on Hubspot by Aja Frost @ajavuu, originally published Sep 13, 2018, updated October 17 2018: https://blog.hubspot.com/marketing/mental-models
Bayes’ Theorem
This describes the probability of something happening based on potentially relevant factors. These factors include evidence from past results and current conditions that could affect a new outcome.
To give you an idea of how this theorem might look in the marketing industry, imagine you launched an email marketing campaign four months ago that had a 20% open rate. The following month, you launched a similar email marketing campaign with the goal of a 20% open rate, but instead received a 25% open rate. In the third month, your email campaign saw a 26% open rate. Then, last month, you purged your mailing list of contacts who haven’t opened an email from your business in the last 60 days — and subsequently launched another email campaign.
Given the steady increase in your open rate over the last four months, and the fact that you removed your most inactive emails from your contact list, a realistic open rate goal under Bayes’ Theorem might be 30%.
Circle of Competence
We can thank Warren Buffett for this mental model. In 1996, Buffett told his shareholders, “You don’t have to be an expert on every company, or even many. You only have to be able to evaluate companies within your circle of competence. The size of that circle is not very important; knowing its boundaries, however, is vital.”
Concentrate on your area of expertise, and don’t be afraid to say “I don’t know” when you’re dealing with someone else’s circle of competence.
For example, a HubSpot content creator can write an article that teaches realtors how to use the inbound methodology to attract homebuyers, but she shouldn’t try to write about the real estate industry itself. Realtors know far more about their customers and how the industry operates than HubSpot content creators do.
Confirmation Bias
This is a human tendency to look for and interpret information in a way that reinforces or confirms what you already believe.
For instance, if you’re confident your website’s organic traffic for December will exceed its traffic from November, you might focus too much on December’s promising traffic level after just the first week, and not enough on the fact that the holidays later into December often cause B2B website traffic to decrease.
To protect yourself against confirmation bias, accept the idea that your perception doesn’t always (or even frequently) equal reality. Challenge yourself to find different interpretations of what’s happening.
In the above example, you might think, “Is there anything to suggest our organic traffic for December will drop before the month’s over? What might stand in the way of our goal?”
Being more skeptical will lead you to probe more deeply for objections — which, in turn, will help you set more realistic expectations before it’s too late.
Inversion Mental Model
The inversion perspective is one of the most powerful mental models. Rather than thinking about your desired outcome, consider the outcome you’d like to avoid.
For example, say you want to be promoted to senior marketing manager. Instead of asking yourself, “What are the top five things I could do to get promoted?” ask yourself, “What are the top 10 things that would prevent my promotion?”
Then, you’d make sure to do none of those things.
As Shane Parrish says, “Avoiding stupidity is easier than seeking brilliance.” While you won’t always find the answer by inverting the problem, you’ll definitely improve.
Fundamental Attribution Error
We’re more likely to believe someone is acting a certain way because of their character than the situation.
In other words, if your social media strategist doesn’t show up to a marketing team meeting, you’ll probably think, “They’re flakey,” not “They must have gotten stuck in traffic.”
Challenge yourself to give people the benefit of the doubt. Behavior is usually situational, so your predictions of how people will act will be more accurate if you don’t chalk things up to “how they are.”
Jealousy Tendency
There are two types of envy. The productive type is “inferiority,” or the desire to raise yourself up to another person’s level. Do you want to become as successful as your team’s marketing director? You’re motivated by this kind of envy.
The unproductive type is malicious envy, or the desire to take something valuable away from someone else — not for your own means, but so they don’t have it.
These motivators are worth remembering when, for example, you’re writing website copy for your online visitors. Your visitors might be personally invested in a particular goal because they want to do as well — or better — than another person at their company, or beat someone else’s record. Identifying your visitors’ desires will help you craft landing page copy that seeks to solve their personal goals.
You should also be conscious of the jealousy tendency in your own decision-making process. While a competitive streak (inferiority envy) might benefit you in a fast-moving startup, wanting other people to fail (malicious envy) will only distract you. Overcome envy by reminding yourself of your similarities to this person, which will trigger your empathy, and avoid the temptation to sabotage them. Turn those impulses into growth opportunities: What skill or habit can you improve to get their results?
Law of Diminishing Returns
At a certain point, the incremental benefits you get from an investment get increasingly smaller. The first month you go on a diet, for example, you might lose six pounds. The second month you might lose three. The third month you might lose two.
This concept applies to marketing in several ways. First, make sure you’re focusing on the most valuable activities. Let’s say you’ve spent a week researching your buyer persona before launching a blog dedicated to them. As crucial as a detailed buyer persona is to your business, know when to call it complete. You’re probably not going to double your results by spending another week sizing up your ideal buyer, and the more trivial the details get, the less those details will actually benefit your content. Instead, use that time to research a different buyer and establish multiple audience segments.
To ensure you spend your time on the things that offer the biggest returns, recognize what you need to know to be successful. Developing a brand voice and a series of calls-to-actions for your blog might be more productive than mastering the entire AP stylebook cover to cover.
There are diminishing returns to memorizing obscure details, and the sooner you notice them, the sooner you can jump on the projects that are more valuable to your business’s growth.
Occam’s Razor
This principle states the simplest explanation is usually the correct one. If you’re trying to understand what happened, develop the most basic hypothesis possible.
Opportunity Costs
Every choice comes at the cost of another. If you decide to send emails after lunch, you can’t use that time to write a blog post. If you pursue one large, unpredictable lead-generation campaign, you won’t have the bandwidth or the risk tolerance to pursue another at the same time.
Keep this in the back of your mind every time you’re deciding what to do. What’s the alternative? Are you willing to give that up?
Pareto Principle
The Pareto Principle, also known as the 80/20 rule, means most results aren’t distributed equally. In other words:
- 20% of the work generates 80% of the returns
- 20% of your traffic yields 80% of your leads
- 20% of features are responsible for 80% of your usage
- 20% of your time produces 80% of your results
If you can hone in on your top customers, selling activities, and so forth, you’ll be dramatically more successful.
At my former company, for example, we analyzed our customers and found those who spent the most (i.e., the 20% who created 80% of our revenue) worked in HR. Once we knew that, our sales and marketing teams could target HR professionals. As a result, the company’s revenue increased by 230%.
Preferential Attachment
Imagine two runners competing in a race. The first runner to pass the one-mile mark gets water and a protein bar. The slower one gets nothing.
This describes the preferential attachment, where the leader is given more resources than their competitors. Those resources give them an even greater advantage.
As a marketer, you see this effect in the lead-nurturing process. It can be tempting to spend all your time serving content to your most qualified leads. But in the process, you might be neglecting the people who are in the early stages of learning about your business, or take a bit more time to open their emails and download certain resources.
No matter how much you might “prefer” getting your furthest-along leads into the hands of a salesperson, it’s important not to develop preferential attachment to these people at the expense of other website visitors.
Redundancy
Along similar lines, redundancy describes what good engineers do to put back-up systems in place to protect against failure. This drastically reduces your chances of total failure.
As a marketer, you can use this strategy to create a campaign that keeps your readers, subscribers, leads, and existing customers happy and educated while also making a bet on a brand new offering. Maybe you’re promoting a huge product right now and have an ambitious lead-generation goal to hit next month. Pursue four or five smaller, low-risk content campaigns at the same time to ensure your lead-gen pipeline remains stable while also rolling out your new product.
Div Prakash 