How To Tell If Someone Is Truly Smart Or Just Average
Authorâs Note: This article was written over 60 hours with love and care using the blockbuster mental model.
Have you ever noticed how some of the worldâs most successful entrepreneurs and leaders see reality in a fundamentally different way? When they talk, itâs almost as if theyâre 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. Itâs 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 â and since there arenât companies out there designing brain software, he designed his own, beta tests it every day, and makes constant updates.
Muskâs 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 âweird.â 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.
Dalioâs 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:
Iâm very much stepping back. Iâm much more likely to go to what I describe as a higher level. Thereâs the blizzard that everyone is normally in, and thatâs where theyâre caught with all of these things coming at them. And I prefer to go above the blizzard and just organize.
Charlie Munger uses a âcognitive bias checklistâ 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 itâs been around for more than 20 years.
Whatâs going on here? Are these just the idiosyncrasies of geniuses, or do these entrepreneurs employ a way of using their brains that we too could learn from in order to become smarter, more successful, and more impactful ourselves?
How I Learned to Think Like the Worldâs Best and Brightest
Over the years, as Iâve studied all of the above entrepreneurs, Iâve also aggressively applied their teachings. Even if I didnât understand what they were saying at first, I took their advice on faith.
Iâve applied Ray Dalioâs root-cause analysis approach to our company. Now, throughout the week, everyone on our team logs any problems theyâre facing. Then, we have a weekly phone call to discuss our biggest, recurring problem and its possible root cause.
Iâve applied Charlie Mungerâs approach to mental models and collected thousands of pages of notes in order to create in-depth briefs on each model.
Iâve applied Muskâs 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.
Iâve 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 wasnât just learning new strategies or hacks. I was learning a deeper and fundamentally different way of understanding realityâlike Iâve accessed a hidden, secret level in the game of life. Itâs thrilling to uncover deeper layers of understanding that I didnât even know existed.
When I look back on my former self, I feel like Iâm looking at a different person altogether. As previously âunsolvableâ 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 problemsâboth personal and professionalâand realize I now have the tools to surmount them.
Iâll give you an example. In my twenties, I invested $100,000 into a business idea that never took off. Now that I understand cognitive biasesâthanks to Charlie MungerâI 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 theyâre going to be, I spend just as much time envisioning what could go wrongâanother Munger hack. I no longer have to remind myself to think this way anymore. Iâve internalized these concepts and now my mind actually works differently.
I once heard a coach talk about changing a clientâs way of seeing the world in a way that would blow their mind. When he looked into his clientâs eyes and could see him or her really getting it, heâd say, âNow, youâre in my reality!â Thatâs how I felt. Reality somehow feels different on an aesthetic levelâas if Iâm 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 itâs like wearing augmented reality glasses that constantly feed you relevant wisdom about the situation youâre in.
Ultimately, what Iâve learned is that billionaires donât have odd ways of talking. They, instead, are visionaries who see the world in a deeper wayâone that is both incredibly effective and learnable.
The Difference Between Average and Brilliant: Effective Mental Models
Mental models are to your brain as apps are to your smartphone.
âJayme Hoffman
According to Model Theory, we all always use mental models in our thinking. âMental models are psychological representations of real, hypothetical, or imaginary situations,â 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 Dalioâs only book is full of his best mental models. Charlie Mungersâ 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 (i.e., across fields), these great thinkers also think about knowledge vertically in terms of depth. Musk explains deep knowledge in a Reddit AMA, âIt is important to view knowledge as sort of a semantic treeâmake sure you understand the fundamental principles (Musk calls these âfirst principlesâ), i.e. the trunk and big branches, before you get into the leaves/details or there is nothing for them to hang onto.â 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.
Physicist David Deutsch explains it even further:
Itâs in the nature of foundations, that the foundations in one field are also the foundations of other fieldsâŠThe way that we reach many truths is by understanding things more deeply and therefore more broadly. Thatâs the nature of the concept of a foundation⊠just as in architecture, all buildings all literally stand on the same foundation; namely the earth. All buildings stand on the same theoretical base.
By understanding verticality and depth, you can see how learning mental models connects things that were previously separate and disconnected. Just as every leaf on a tree is connected by twigs, which are connected by branches, which are connected by a tree trunk, so too are ideas connected by deeper and deeper ideas.
One of the most effective and universal mental models is the 80/20 Rule: the idea that 20 percent of inputs can lead to 80 percent of outputs. This same 80/20 idea can be applied to our personal lives (productivity, diet, relationships, exercise, learning, etc.) and our professional lives (hiring, firing, management, sales, marketing, etc). As such, you can see how the 80/20 Rule connects many disparate fields. This is what all mental models do.
To apply the 80/20 Rule, at the beginning of the day we can ask ourselves:
Of all the things on my to-do list, what are the 20 percent that will create 80 percent of the results?
When weâre searching for what to read next, we can ask ourselves:
Of all the millions of books I could buy, which ones could really change my life?
When considering who to spend time with, we can ask ourselves:
Which handful of people in my life give me the most happiness, the most meaning, and the greatest connection?
In short, consistently using the 80/20 Rule can help us get leverage by focusing on the few things that really matter and ignoring the majority that donât.
My team and I have spent dozens of hours assembling the largest list of the most useful mental models in the world (that weâre aware of). Weâve done this by curating and combining the most useful models of other mental model collectors. To access this spreadsheet for free, visit the download page.
Mental Models Are the New Alphabet
You canât do much carpentry with your bare hands and you canât do much thinking with your bare brain.
âBo Dahlbom, philosopher and computer scientist