5 Mental Models to Think Like a Strategic Genius

Summary

The video emphasizes the importance of strategic thinking and decision-making in achieving success, using lessons from competitive chess as metaphors. It introduces five mental models: controlling the center, understanding the true value of a piece, position before submission, owning the initiative, and the art of tactical retreat. These models are applied to both personal and business scenarios, illustrating how strategic thinking can lead to better outcomes and improved judgment.

Takeaways

• 🧠 The importance of good judgment in decision-making and its impact on success or failure in life.
• 🔍 The realization that most people are not taught how to make good decisions and often rely on emotions rather than logic.
• 💭 The introduction of mental models as a tool for strategic thinking to improve judgment and decision-making.
• 🤹 The application of mental models from competitive chess to various aspects of life and business.
• 🔑 The first strategic thinking framework: 'Control the Center', emphasizing the importance of focusing on the most influential areas.
• 🏆 Examples from life and business illustrating how to identify and apply the 'center' of a situation to maximize impact.
• 📈 The second framework: understanding the true value of a piece (or person) relative to its position and dynamics of the situation.
• 🚀 The concept of 'Position Before Submission', highlighting the importance of strategic positioning over immediate victory.
• 🌟 The third framework: 'Owning the Initiative', which is about dictating the pace and direction of actions for momentum and success.
• 🔄 The idea that maintaining momentum is easier than gaining it initially, and its implications on long-term success.
• 🛑 The fourth framework: 'The Hardest Move to Find', which is about recognizing and executing the strategic retreat when necessary to ultimately move forward.

Q & A

What does Nval Rant emphasize as a key factor in determining success or failure in the modern age?

Nval Rant emphasizes that judgment, not work, determines success or failure in the modern age. He believes that making good decisions is crucial, and this involves thinking clearly, strategically, and applying efforts towards high leverage opportunities.

How does Nval Rant describe the concept of 'mental models'?

Nval Rant describes mental models as pre-designed frameworks that can be used to make strategic decisions. These models help systematize the process of developing good judgment by plugging in different variables to produce an answer.

What is the first strategic thinking framework that Nval Rant discusses in the transcript?

The first strategic thinking framework discussed by Nval Rant is 'control the center'. It is a fundamental rule in high-level chess where controlling the four central squares on the board provides a massive advantage, as pieces have maximum influence from there.

How does the concept of 'control the center' apply to personal life and business?

In personal life and business, 'control the center' applies by identifying the most influential points or areas that can create the most impact. For example, in weight loss, focusing on nutrition and exercise (burning more calories or consuming fewer calories) is more effective than other options. In business, controlling key areas like marketing, operations, and finance can lead to success.

What is the importance of understanding the true value of a chess piece according to Nval Rant?

Understanding the true value of a chess piece is important because a piece's worth is relative to the board dynamics. A piece's value can change based on its position and influence on the board. This concept can be applied to business and personal life by recognizing that the value of people or resources depends on their capabilities and where they are utilized.

How does the 'position before submission' framework influence decision-making?

The 'position before submission' framework suggests that focusing on controlling the position is more important than immediately seeking a win or submission. It emphasizes the importance of strategic positioning and creating a favorable setup that naturally leads to success, rather than chasing quick solutions or hacks.

What does Nval Rant mean by 'owning the initiative'?

'Owning the initiative' refers to dictating the action and being the one to act rather than react. It's about having momentum and driving progress in a direction that leads to success. This mental model suggests that maintaining momentum and proactively shaping the course of action can often lead to better outcomes than reacting to circumstances.

Why does Nval Rant consider the 'hardest move to find' as a valuable strategic thinking framework?

The 'hardest move to find' is valuable because it represents the counterintuitive strategy of tactical retreats. It's about recognizing when moving backwards or taking a step back can actually lead to faster progress towards a goal. This framework encourages considering moves that might seem wrong or counterproductive at first glance, as they can sometimes be the most effective.

How did Nval Rant apply the concept of 'tactical retreat' in his own business experience?

Nval Rant applied the concept of 'tactical retreat' by firing a difficult customer who accounted for a significant portion of his business's revenue. Although this decision initially led to a drop in revenue, it freed up resources and allowed the team to focus on other customers, ultimately leading to a significant increase in overall revenue.

What is the main lesson Nval Rant wants viewers to take away from the discussion on strategic thinking frameworks?

The main lesson Nval Rant wants viewers to take away is the importance of strategic thinking in both personal and professional life. By using mental models like 'control the center', 'position before submission', 'owning the initiative', and 'the hardest move to find', individuals can make better decisions, improve their judgment, and ultimately achieve greater success.

What resources does Nval Rant recommend for further exploration of the concepts discussed in the transcript?

Nval Rant recommends the book 'Who Not How' by Benjamin Hardy and Dan Sullivan for deeper understanding of strategic thinking. He also refers to his own 'Hyperfocused Entrepreneur Newsletter' for additional insights on business, investing, and self-mastery concepts.

Outlines

00:00

🧠 Developing Good Judgment Through Mental Models

This paragraph discusses the importance of good judgment in determining success or failure. The speaker shares their personal experience of working hard in their 20s but making poor decisions due to lack of good judgment, leading to debt and less-than-ideal outcomes. They introduce the concept of mental models as pre-designed frameworks to help make better decisions and share their journey of applying these models from competitive chess to improve their strategic thinking in life and business. The speaker outlines their intention to share five mental models from chess that can enhance strategic thinking.

05:02

🎯 Control the Center for Strategic Advantage

The speaker delves into the first mental model, 'control the center', drawing parallels from chess where controlling the middle of the board grants significant advantage. They explain that strategic positioning is crucial in both life and business, using the example of weight loss where focusing on nutrition and exercise can be more impactful than other methods. In business, they emphasize the importance of focusing on key areas such as marketing, operations, and finance, depending on the stage of the business, to gain a strategic edge.

10:03

🏆 Understanding the True Value of Resources

In this section, the speaker discusses the second mental model, which is understanding the true value of resources or 'pieces' in the game of chess. They explain that while all pieces have different base values, their true worth is determined by their position and influence on the board. This concept is applied to business by highlighting the importance of placing the right people in the right roles to maximize their potential. The speaker also suggests looking for help outside one's capabilities, using the example of seeking a nutritionist's advice for weight loss, and recommends the book 'Who Not How' for deeper insights.

15:04

🥋 Position Before Submission: A Strategic Approach

The third mental model presented is 'position before submission', where the speaker explains that in chess, as well as in life and business, focusing on controlling the position before seeking a 'checkmate' or a win is crucial. They contrast the approach of beginners who seek quick wins with that of experienced players who understand the value of a dominant position leading to natural victories. The speaker advocates for a similar strategy in life, emphasizing the importance of setting up one's environment to naturally progress towards goals, and warns against the fallacy of seeking easy shortcuts to success.

🚀 Owning the Initiative: The Secret to Momentum

The speaker introduces the concept of 'owning the initiative' as the secret to gaining momentum, which is described as a powerful force against procrastination and inaction. They explain that momentum is like a universal law where an object in motion tends to stay in motion, and that gaining this momentum can be challenging due to the high activation energy required to get started. The speaker contrasts the maintenance energy required for a job with the potential for decreasing maintenance energy in a well-built business, leading to passive or leveraged income. They encourage viewers to consider the often-overlooked moves that may be the fastest path to progress.

🛑 The Hardest Move: The Tactical Retreat

In the final mental model, the speaker discusses the difficulty of recognizing and executing a tactical retreat, which involves stepping back to move forward more effectively. They share a personal story of firing a problematic customer, which initially led to a significant revenue drop but eventually allowed the team to focus on other customers, resulting in a much larger revenue increase. The speaker emphasizes the importance of considering unconventional moves and the potential benefits of retreating to gain a better position for future success.

Keywords

💡Judgment

In the context of the video, judgment refers to the ability to think clearly and strategically to make good decisions. It is crucial for success or failure and determining what is good. The speaker emphasizes the importance of developing good judgment to avoid poor decisions, which they personally experienced leading to debt and unsatisfactory outcomes.

💡Mental Models

Mental models are pre-designed frameworks that help in making strategic decisions. They are tools that can be applied to various situations to systematize the process of developing good judgment. The speaker discovered these models through competitive chess and found they significantly improved decision-making in both business and life.

💡Control the Center

Control the Center is a fundamental chess rule and mental model that emphasizes the strategic advantage of controlling the four central squares on the board. This principle translates to focusing on the most influential areas in life and business, where actions have the maximum impact and control.

💡High Ground

The High Ground metaphor is used to describe the advantage one gains from a position of control and influence, similar to controlling the center in chess. It is about having more reach without exposing oneself to more risk, which is a strategic advantage in any competitive environment.

💡Strategic Thinking

Strategic thinking involves making decisions that align with long-term goals and objectives. It requires foresight, analysis, and understanding of complex situations. The video aims to teach viewers how to apply strategic thinking to business and life by using mental models from chess.

💡Position Before Submission

Position Before Submission is a mental model that emphasizes the importance of establishing a dominant position before seeking the 'checkmate' or final victory. It suggests that focusing on short-term wins can compromise long-term success and that strategic positioning leads to natural victories.

💡Initiative

In the video, initiative refers to the ability to dictate the course of action, essentially being the actor rather than the reactor. It is a critical factor in gaining an advantage in chess and in life, as it leads to momentum and can often be the deciding factor in success.

💡Activation Energy

Activation energy is the effort required to get a process started. In the context of the video, it is the initial push needed to gain momentum in life or business. The speaker explains that activation energy is often overvalued, while the importance of maintaining progress (maintenance energy) is underestimated.

💡Tactical Retreat

A tactical retreat is a strategic move where one steps back or makes a concession to better position oneself for future success. It is often difficult to recognize and execute because forward motion is commonly associated with progress. The video stresses that sometimes retreating can lead to faster forward movement.

💡Leverage

Leverage, in the context of the video, refers to using minimal input to achieve maximum output, often associated with passive or leveraged income. It is about creating systems or strategies that require less personal effort over time, allowing for greater efficiency and potential returns.

💡Chess

Chess is a strategic board game that serves as a metaphor throughout the video for decision-making and strategic thinking in life and business. The principles and tactics used in chess are translated into mental models that can be applied to gain advantages in various non-chess contexts.

Highlights

In an age of infinite leverage, judgment rather than work determines success or failure and what is good.

Good judgment involves thinking clearly, strategically, and making good decisions.

Many people were not taught how to make good decisions, leading to choices based on emotions justified with logic.

The speaker developed better decision-making by using mental models for strategic thinking.

Mental models are pre-designed frameworks to help make strategic decisions.

The speaker discovered strategic frameworks from years of playing competitive chess.

The first strategic thinking framework is to control the center, a fundamental rule in high-level chess.

Controlling the center of the board provides maximum influence for your pieces.

In life, identifying the most influential 'squares' or areas can lead to more effective decision-making.

In business, controlling key areas like marketing, operations, and finance is crucial.

The value of chess pieces is relative to the board dynamics and their positioning.

In business, the value of people depends on their capabilities and where they are placed within the organization.

Strategic thinking involves focusing on position before submission in chess and life.

The concept of environment design helps create conditions that naturally lead towards achieving goals.

Initiative in chess and life refers to dictating the action, which often leads to momentum and success.

Momentum is a powerful force that can overcome procrastination and maintain progress with less effort.

Understanding the difference between activation energy (to get started) and maintenance energy (to sustain progress) is key in decision-making.

Sometimes taking a step back or a tactical retreat can be the fastest way to move forward.

The hardest move to find in chess and life is often the night retreat, which involves moving away from immediate goals for long-term progress.

Transcripts

nval rant said in an age of infinite

leverage judgment not work determines

success or failure and what is good

judgment if not the ability to think

clearly and strategically and then make

good decisions now I think about this a

lot in my own life because it's just

been so damn true see throughout my 20s

I busted my ass I worked really hard but

because I had poor judgment I made bad

decisions and I applied my efforts

towards low leverage opportunities all

that I had to show for that work was

$80,000 of debt and a 13 passenger van

parked in Downtown Oakland that I got to

call home now the problem for most of us

is that we never really taught how to

make good decisions so as a result we

tend to make decisions based on emotions

and then justify them with logic and

that's probably not going to get you

very far in life at least it didn't for

me but here's what did I started using

mental models for thinking more

strategically now a mental model is

nothing more than a pre-designed

framework that you can pull out whenever

a situation requires a decision you just

plug in the different variables and out

pops an answer and voila just like that

you systematized a process of developing

good judgment now as I started looking

around my life for mental models that I

could steal I realized that I was

sitting on a treasure Trove of strategic

Frameworks that I developed over years

of playing competitive chess and once I

started regularly tapping into these

Frameworks the quality of my decisions

and ultimately my results those started

to improve as well so in this video I'm

going to break down how to become a more

strategic thinker in business and in

life through five mental models I

learned from playing

chess so let's dive into our first

framework of strategic thinking it is

control the center this is perhaps one

of the most fundamental rules of highle

chess the player controlling the four

squares in the middle of the board has a

massive Advantage because from here your

pieces have maximum influence across the

battlefield just think of it like The

High Ground the reason The High Ground

is so important is because it gives you

more reach without necessarily exposing

yourself to more risk Anakin Skywalker

had to learn this the hard way so let's

take a lesson from his book all right so

let's illustrate this point to really

drive it home imagine a knight

positioned in one of the four key

squares in the center of a chessboard

from here it exerts influence on eight

different squares but if you take that

same Knight and you put it into the

corner for example Now it only

influences two squares and the same can

be said for the Bishop from the center

of the board they control 13 squares

whereas from the corner they only

control seven okay so the question to

ask yourself when using this Frame to

make a decision is this where is the

center of the board and what do I need

to do to get pieces there so that they

have maximum influence so let's break

this down into two examples one from The

Game of Life and one from the game of

business to show how you might think

through this in real time okay so first

in the game of life let's say you're

trying to lose 15 lbs the Strategic Way

To Think through this is to identify

those few squares on the board that are

going to give you the most influence now

when it comes to losing weight you got

all sorts of options you could could go

on a diet you could work out more you

could focus on getting better sleep or

go on a fast you could take a dieting

pill get lipos Section like there's

thousands of squares on the board but

which is at the center well when you

really boil it down to its essent weight

loss comes down to two things either you

burn more calories or you consume fewer

calories if you do that you're going to

lose weight but let's say you're a busy

bee and you can only commit to one of

these two options which is the better

Square exercise or nutrition so

thankfully the science on this is pretty

clear you can't out work your mouth for

example one Butterfinger is 275 calories

and to burn an equivalent to mount you'd

have to go for a 2 and 1/2 Mile Run good

luck exercise alone ain't going to get

you there then again good nutrition can

practically win the game on its own so

the correct strategic decision if you

can only choose one is to focus on your

nutrition all right so now let's apply

this framework to your business by

asking where is the center of your board

now as I see it there's three key

squares to control inside of a business

you have marketing that is how are you

getting customers you have operations

which is what is the actual product and

how do you deliver it to your customers

and then you have Finance which is how

do you manage the bank accounts to make

sure you don't run out of money while

you do number one and number two if

you're just starting out and you have

limited resources you'll probably not be

able to focus on all three squares

simultaneously which means you'll have

to decide which is the priority at any

given moment now if you don't have a

product to sell don't worry about

finance and marketing if you have a

product but no customers well then Focus

there in the beginning of every business

you the founder are literally every

piece on the board and unfortunately you

can't be everywhere all at once but

hopefully this framework of controlling

the center it gives you a useful frame

for Discerning where your focus should

be at any given moment until you can get

to that point where you can start hiring

other people to control squares on the

board for you and once you get to that

point it's time to master the next

framework which is to understand the

true value of a piece one of the first

things you learn in chess is that all

pieces have a different Value Pawns are

worth like a point Knights are usually

usually worth three points Bishops are

three to three and 1/2 points Rooks are

worth five the queen is worth nine and

the king is priceless because if you

lose him you lose the game now this is

just a quick easy way to calculate who

has the stronger Army at any given

moment for instance you could trade a

knight and a bishop which together are

worth about six points for a rook and a

pawn which are also worth about six

points or you could trade two Rooks for

a queen and a pawn all of which are

combined worth about 10 points all right

so this is a good starting point but

it's just the beginning because a

piece's true worth is actually relative

to something called board Dynamics again

think back to controlling the center a

knight in the center of the board has

more reach and influence and therefore

is more valuable than a knight in the

corner now one of the best examples I've

ever seen of this was in the 1985 World

Championship Match when Gary caspero

showed us that a single Knight if

positioned correctly can dominate a

queen and two Rooks simultaneously that

legendary little horsey was done the

octopus night and he lives on and infamy

to this very day at least amongst a very

small cabal of chest nerds like myself

so here's how to use this Frame to think

strategically inside of your business

the value of your people is dependent on

what they're capable of and where you

put them on the board Jim Collins

famously expressed this as getting the

right people on the bus into the right

seats and when you do this it's amazing

how much easier the game actually gets

but this doesn't just apply to business

this Frame can also work in your

personal life for example if you're

struggling with a problem let's say

weight loss the question we often ask is

how should I solve this but perhaps the

better question is who do I know that

could help me solve this maybe your best

friend's brother is a nutritionist and

you could reach out for guidance and

accountability Boom the problem just

became that much easier to solve now a

really great resource if you want to go

deeper on this topic is the book named

who not how by Benjamin Hardy and Dan

Sullivan highly recommend you you check

that out all right let's move on to the

third frame for thinking through

problems strategically this one is

called position before submission so in

chess there's a few different ways to

determine who's winning at any given

moment the most obvious way is you count

the pieces generally Whoever has the

more powerful Army has the advantage but

not always because like we just learned

in the previous two frames a smaller

Army occupying better terrain can hold

off a vastly superior force and we've

seen this multiple times throughout

history like really classic example is

the story of the 300 Spartans holding

back the Persian Empire at the Battle of

thermopolymerization

trying to submit one another one of the

biggest differences I noticed almost

immediately is that when you wrestle

with lower belts like a white belt or a

blue belt they're constantly looking for

the submission and you see the same

tendency when people first learn boxing

or M thae they're constantly looking for

that one punch kill shot that's going to

end the match instantly it doesn't

matter where these people are in the

position they're just throwing Haymakers

praying something lands if you compare

this to the more skilled Fighters the

black belts for example you you notice a

very very different strategy the upper

belts pretty much only ever go for

submissions after they've thoroughly

dominated the position they get to a

dominant position sitting on your chest

you got your arms spread over your head

all willy-nilly and then they finally

reach down and choke you out with

practically no effort the same thing

happens in chess in business and in life

new players fixate on attacking the

opponent's king at all costs and in the

process of hunting that Checkmate they

compromise their position Advanced

players understand that if you control

the position first the submissions will

naturally appear now I get it it's human

nature to want the easy solution that

one shot kill which is why trillions of

dollars are poured into Miracle fat loss

pills getrich quick schemes on YouTube

in the lottery somehow we think that if

we can just find that one little hack

everything in our life will fall into

place now I hate to be the bearer of bad

news but there is no hack not only that

but spending all your time looking for

one is what's keeping you from doing the

laborious work of controlling the

position that would if you give it

enough time lead to success so the

question to ask in all domains of your

life and business is what's it mean to

control the position here for me I like

to think a lot about the concept of

enironment design which is all about

setting up your life in such a way that

it creates a slippery slope towards your

goals now I unpacked this concept in

Greater detail in the video called how

to unfuck your life which I'll put a

link for down in the description but

before you check that out let's move on

on to our fourth mental frame for

thinking strategically in spoiler alert

this one is by far my favorite cuz it's

the one people think about the least I

call it owning the initiative all right

so we've already discussed two ways of

determining who has the advantage in a

game of chess You Can Count pieces to

figure out who has the more powerful

army or you can look at who's

controlling the position and these are

fairly straightforward and easy to

determine which is why most people

default to using them but there's

another way a top secret way that grand

Masters use to evaluate a position and

in my experience as the nth grade South

Dakota State chess champion this

Advantage is typically the one that

decides the game it's called the

initiative and it's determined by which

player is dictating the action that is

which player is acting and which is

reacting if you can answer that question

then you can reliably predict with a

high degree of certainty which player is

ultimately going to arise Victorious now

the classic example of this in my mind

is Napoleon who always just seemed to

have the initiative he dictated where

where when and how the action would

unfold and as a result despite often

having vastly inferior forces he still

managed to win time and time again in

business and in life a lack of skills or

experiences can often be overcome with

the appropriate amount of Gusto and the

reason for this is because the

initiative leads to momentum and

momentum is one hell of a thing it is

the cure to procrastination to overwhelm

to overthinking and more importantly

it's often The X Factor of success the

reason it tends to be so powerful is

because it Taps into a fundamental law

of the universe which is an object in

motion tends to stay in motion but

here's the problem and it's the reason

most of a struggle the reverse is also

true an object at rest tends to stay at

rest and if you've ever found yourself

feeling stuck in the mud of life like

you just can't get traction can't get

moving forward it's not your fault

getting momentum is the hardest part

because it requires an outsized amount

of what's called activation energy once

you've inserted that into the system the

energy required to suain sustain

progress substantially decreases I call

this maintenance energy and it's the

reason why it's easier to maintain your

current trajectory in life than it is to

change paths okay so the way we can use

this mental frame in the context of

thinking strategically is to understand

that when we're comparing two courses of

action often we'll overvalue the amount

of activation energy required to get

traction and undervalue the amount of

Maintenance energy required to sustain

for instance getting a W2 job requires

far less activation energy than starting

your own business however the day you

stop injecting maintenance energy into

your job is the day you stop getting

paid so you're going to have to pay this

cost of Maintenance energy into

perpetuity whereas in business if you

build it correctly the amount of

Maintenance energy that you'll

personally have to inject in the machine

is going to gradually decrease over time

and potentially even get to the point of

requiring zero energy from you and this

is when you're finally playing in the

arena of passive income or what what I

prefer to call leveraged income but

that's a different conversation entirely

if you want to learn more about

leveraged income I'll drop a video for

that down below but before you go check

that out I want to share with you one

more frame for thinking strategically

and this one is quite important because

it is as the name implies the hardest

move to find one of the greatest players

to never win a World Chess Championship

with a guy you probably never heard of

named vassel even chuk I think a lot

about this guy because he said something

that's stuck with me over the years he

said the hardest move to find is a night

Retreat which in my experience is true

but the question I always come back to

is why is it so hard to find well

there's really two reasons first

tactical retreats in games and in life

are always hard to see because we often

equate forward motion with progress if

we're not moving directly towards a goal

it can often feel like a waste of time

and energy now the second reason that a

night Retreat is so hard to find is the

result of the fact that the Knight

itself moves in a completely different

way than any other piece on the board

and particular there's one aspect of the

night's peculiar movement pattern that

can really screw with your mind that is

it can jump over other pieces when we

combine these two things we now have a

piece that moves in a very strange way

away from our goals as a result most

people never stop to even consider these

moves but the truth is sometimes taking

a step back is in fact the fastest way

to move forward for instance what of my

businesses back in 2018 was hyper

focused on growth we had poured a ton of

money into infrastructure and machines

for producing our products now we have

to drive a lot of Revenue to cover those

expenses now at that time we had one

massive customer in particular who

accounted for nearly 10% of our yearly

Revenue as you can imagine we were

terrified of losing this customer so we

would do pretty much anything and

everything to keep them happy the

problem was they were impossible to make

happy they called me at all hours of the

night they sent dozens of stressful

emails every single day to our shipping

manager and it got to the point that my

team and I were spending more time

dealing with them than we were with all

of our other customers combined

eventually we got to the point where we

finally saw the one move we've been

overlooking the entire time the Tactical

Retreat that is we fired that customer

and overnight our Revenue plummeted by

10% at a time when we really needed that

money but the result of that retreat was

that it freed up so much of my team's

time and mental bandwidth that we can

now pour into the other 90% of our

customers which led to a massive spike

in Revenue that far surpassed the % we'd

given up only a few months prior now the

moral of the story is that sometimes

taking a step back is in fact the

fastest and in many case the only way to

move forward so the question I like to

ask myself is what is the move that I'm

not even considering right now because

it just looks so wrong maybe that's

quitting your job maybe it's moving to

another city maybe it's ending a

relationship that no longer serves you

regardless of what it is answering that

question is often the key to finding the

winning move yo what's up guys thanks

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