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Business Modeling

Models allowing you to Read a Business Like a Book!

Latticework of Ideas

2 min readFeb 15, 2020

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Plato is the inventor of the term “Idea”

This is a collection of Ideas I commonly use in decision making. This list is never final and will be updated from time to time. If you believe I am missing an important Idea, or if you believe I did not sufficiently explain an Idea, please let me know.

I use the term “Idea” instead of the term “Mental Model” to honour Plato, to whom I attribute the discovery.

Where possible, the following Ideas are presented in the following form:

  1. USEFULNESS: What is useful about the Idea?
  2. APPLICABILITY: When does the Idea apply?
  3. SYNTHESIS: When the Idea does not apply, which other Idea does apply?

“The better decision maker has at his/ her disposal repertoires of possible actions; checklists of things to think about before he acts; and he has mechanisms in his mind to evoke these, and bring these to his conscious attention when the situations for decision arise.” Herbert Simon, Nobel Laureate

In describing the individual models, I am expanding on the now discontinued website ThinkMentalModels.com.

Big Thinking Ideas

As Simple As Possible

Big Picture Math

Deduction or Induction

Disconfirming Evidence

Game Theory

Getting to Why

Ideas

Incentives

Information

Invert

Marginal Thinking

Metaphors

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Opportunity Costs

Probabilistic Thinking

Red Queen Effect

Reductionism

Scientific Method

Business

Nature of Goods

Network Effect

Surfing a Wave

Engineering

Margin of Safety

Psychology

Pavlovian Association (includes Authority bias by Robert Cialdini + Marketing Brands)

Social Proof

Physics

Newton`s Law of Inertia

Momentum

System Models

Bottleneck

Complex Adaptive Systems

Evolution

Feedback Loops

Power Law

Reflexivity

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Jakub Smrček

Written by Jakub Smrček

Qualitative investment analysis is about understanding a business before taking out your calculator. This blog teaches you how to do it for common stocks.

Business Modeling

Published in Business Modeling

Models allowing you to Read a Business Like a Book!