There’s no such thing as an average leader. Or employee. Neutral impact is a myth.
One is either a multiplier in the organization or one is actively destroying value.
In some ways I think this dichotomy is fairly obvious to most managers. But why then do so many net-negative employees seem to remain in their jobs far longer than they should?
Would you like to build a business with your friend to $120,000+ in revenue while keeping your full time job?
I’m sure many of you are screaming, YES.
Well, I’ve done it, and I’ve done it in about the stupidest way possible. Let’s talk about what to do, and what not to do.
Achieving mastery requires some uncommon things. That’s obvious enough, if it were simple and common, there would be many more masters.
There’s no doubt that mental models are powerful. Whether rules-of-thumb, more elaborate heuristics, or complete scaffolds on which to hang components of knowledge, each mental model serves as a framework to better understand the world. That’s why, amongst others, Charlie Munger stresses their utility across all professions.
In this post, I want to talk about several related mental models from finance that have been invaluable in all parts of running a business (GoStudy) and scaling the G2M organization of another (CB Insights).
The eleven models covered here are:
- Opportunity costs
- Time Value of Money (+ compound interest)
- Net Present Value
- Expected Value and Tree Diagrams
- Sunk Costs vs. Thinking on the Margin
- The Normal Distribution
- Comparative vs. Absolute Advantage
- Game Theory & Prisoners Dilemma
- Pareto Principle and Power Laws
- Economic Moats
Let’s dive in.
A few days ago, one of the most junior people on my team: a bad-ass, intelligent, driven woman asked the team what we do when we’re not working.
I half-jokingly said, ‘do more work.’
The team laughed (thank god), but their laughter seemed to acknowledge that there was more than a little truth in the boss’s line. The laughter spoke to me that for the most part this is a team of vets. We all work really hard, none of us measure our productivity in hours, and therefore you’ll often find us going above and beyond to get where we feel we should be. Hitting world class isn’t free.
Which sometimes means we work after work.