Mental Model

Creative Destruction, Progress, Innovation

Summary

Creative Destruction refers to the process where capitalistic markets result in a perpetual churn where newer and better ideas, products, processes, and organizations replace (destroy) older ones.

It is a byproduct of progress and innovation and is often used to explain how jobs or companies related to old technologies are frequently lost as jobs and companies related to new technologies are created.

The key idea is that markets are competitive and tend to reward adaptation while punishing those that fall behind. [Read more…]

Mental Model

Skill Stack, Talent Stack

Summary

A Skill Stack refers to the idea that having a wide range of complementary skills generates a multiplier effect towards success.

This is an idea I learned from Scott Adams, who calls it a Talent Stack (I prefer Skill Stack simply because, to me, Talent implies an innate ability while Skill implies something learned through hard work).

So, for each new skill you acquire, it combines with your existing skills to make you that much more marketable and/or able to create something new that people would be interested in.

It’s worth noting that, while similar, I believe that Mental Models and Skills are different things. Mental Models are filters on reality, helping you understand the truth behind what is occurring and why, while Skills are productive abilities you have acquired that you can use to perform acts to accomplish goals.

The key idea is that additional skills provide you with value exponentially (non-linearly), in an intentional Jack-of-all-Trades kind of way. [Read more…]

Mental Model

Incentives, Rewards

Summary

Incentives is the idea that you can motivate people to do something by promising to reward them with something they desire. It is based on the idea that people do what is in their own best interest.

Charlie thinks of incentives as a type of super power, and uses it to explain why all sorts of things that have happened throughout human history, both good and bad.

They key idea is that by providing people with the proper incentives you can alter their behavior towards whatever goal you have in mind (within reason). [Read more…]