I was biking to the grocery store a few days ago. As I was pedaling along happily, a bright-red car door materialized in front of my face…

I swerved. I almost fell off my bike, but was able to recover. As soon as I was stabilized, I looked back to yell at the man who’d opened the car door and almost killed me.

“What a @#$%ing dick,” I muttered to myself as I pedaled into the parking lot of the grocery store. In that moment, this man was clearly an asshole.

Or was he?

As I walked through the grocery aisles, I realized that I’d failed to apply Hanlon’s Razor to the situation:

“Never attribute to malice that which is adequately explained by stupidity.”

Direct Download – Subscribe in iTunes – Subscribe on Android – Subscribe on Stitcher

Most People Aren’t Out to Get You

Hanlon’s Razor is a specific case of Occam’s Razor, so to understand it we must first define Occam’s Razor:

The more assumptions you have to make, the more unlikely an explanation is.

Assuming someone’s actions are motivated by malicious intent is a big assumption. If there are simpler explanations for their actions, those explanations are more likely to be correct.

Here’s a more explicit definition of Hanlon’s Razor:

1. Never assume malice when stupidity will suffice.
2. Never assume stupidity when ignorance will suffice.
3. Never assume ignorance when forgivable error will suffice.
4. Never assume error when information you hadn’t adequately accounted for will suffice.

As you work through these explanations, you slowly zoom out to a larger picture of what’s going on in a situation.

Going back to my bike example, the most likely explanation is that he didn’t check his mirrors before opening his door. He’s not a dick — it’s a forgivable error, so it falls into category #3 above.

Becoming a Better Human Being

By understanding and working Hanlon’s Razor into the way you see the world, you’ll realize a whole host of benefits:

You’ll be less judgmental. If you zoom your perspective out a bit, you’ll realize that most people are focused on their own lives and how to best get through their days. They don’t think about you as much as you might imagine and certainly don’t go out of their way to malign you. Therefore it’s far easier to cut them some slack for their actions, especially when those actions affect you.

You’ll develop deeper relationships.

You’ll look at the world more rationally. Most of us walk around focused on ourselves all day long. Things don’t just happen during our days, they happen to us. But this is often not the case, because as we’ve learned:

• People can be stupid, even intelligent people
• People can make simple mistakes due to being tired, hungry, angry, etc.
• People can be incompetent
• We might not have enough information to see the situation clearly

You’ll be a more empathetic person. All of the benefits above sum up to an overall increase in your ability to empathize with others. After all, empathy is the ability to understand and share the feelings of another. By seeing their actions more clearly, you can step into their point of view and truly empathize.

Hanlon’s Razor in Relationships

The most obvious and most valuable application of Hanlon’s Razor is in relationships. Most of us make somewhat Machiavellian maneuvers, whether we’re aware of it or not. We’re constantly attributing the actions of people around us to all sorts of motivators, most of which are incorrect.

We might think that a coworker knows we’re annoyed when he chews with his mouth open. Or a boss is intentionally keeping us from the promotion we so clearly deserve. Or a significant other doesn’t care about us enough to wash the dishes in a timely manner.

To escape the trap of false assumptions, picture people as children. Children know far less about the world than we do, and often make mistakes that we (rightly) attribute to a lack of experience or knowledge. Adults aren’t so different from children. Most of us have massive gaps in our knowledge, skillsets, and social awareness.

It’s far more likely that our coworker is oblivious to the fact that he’s chewing with his mouth open. That our boss might be too busy worrying about a more pressing issue in the company and is simply overlooking us. That our significant other has no idea how much we’re bothered by dirty dishes in the sink.

Hanlon’s Razor in the Media

Because of the incentive structure of modern media (see our book short on Trust Me, I’m Lying for more information), media outlets are using emotional triggers in their coverage instead of rationally covering the news.

Some outlets are bigger offenders than others, but almost all that rely on advertising revenue have a perverse incentive to maximize their page views and clicks, meaning they have become experts at deliberately manufacturing malicious intent when simpler explanations exist.

A perfect example is a hit-piece by Vice’s Motherboard outlet, who released a piece titled “Elon Musk Follows Zero Women on Twitter.” Shortly after they tweeted the article out, Elon responded:

@motherboard I use twitter for news orgs. My Insta has same women as men. What’s up with the phoney PC police axe-grinding?

Instead of thinking of a few other reasons besides “Elon is a misogynist,” Vice’s Motherboard pushed the article out, knowing it would spread virally due to the combination of Elon being a massive public figure and the anti-women implication that the title suggests.

Becoming familiar with Hanlon’s Razor will help you detect when other entities and organizations are deliberately not applying it in order to further their own agendas.

Sometimes, People Are Assholes

The purpose of this piece is to introduce you to Hanlon’s Razor and encourage you to add it to your mental toolkit. But don’t let it turn into to the proverbial hammer and over-apply it in the world.

When over-applied, you become blind to actual bad actors in the world. While it’s rare to encounter a truly malicious person or organization, they do exist. Attributing every action to stupidity or incompetence would be a mistake. If it’s more complex for a person to have been acting stupidly or incompetently, it might be the case that they were acting maliciously.

Not all malice needs to be conscious. It’s possible for someone to be unconsciously malicious towards us, yet another nuance of interpersonal relationships we need to watch for.

Hanlon’s Razor belongs in your mental toolkit, but so do a wealth of other mental models that help you navigate the world.

Direct Download – Subscribe in iTunes – Subscribe on Android – Subscribe on Stitcher

Kevin Espiritu

Founder / CEO of Epic Gardening. Gardener, business-builder, curious.

www.kevinespiritu.com

Kevin Espiritu -

Direct Download – Subscribe in iTunes – Subscribe on Android – Subscribe on Stitcher

In January of 2015, I joined a startup that my friend co-founded called Book in a Box. After giving one of the worst interviews of my life — not surprisingly also one of the only of my life — I was hired on to build out book marketing services and run marketing for the authors that we worked with.

My role was twofold: I would be both building out core services that we would offer to authors, and running those services (in their fledgling state) for our authors.

This was a dream role for me. I got to play in my own sandbox, solving problems quickly, systemizing them, and moving on to the next thing.

But, I got bored. Once I figured out how a problem “could” be solved, I’d ship it to 80% completion and then move on to the next one. This is a good trait in situations where you need to solve a problem quickly, but not precisely. However, there also comes a time where a problem needs to be fully worked out and solved.

For example, I’d designed a book launch process for our authors that was pretty solid, but had holes in the process here and there. It was “good enough” for me — but for our authors, it needed to be perfect.

My brain resisted doing that extra work to perfect the process.

My experiences at Book in a Box led me to ask myself this question:

How do we know when we should put in the effort to make the best choice, product, or decision, versus picking something that is simply “good enough?”

The answer is the mental model of maximizing vs. satisficing.

Maximizing

Maximizing is based on rational choice theory, which is an economic principle that states that you and I always make decisions that lead us to the most benefit, satisfaction, or utility. We make choices that are in our highest self-interest.

If you took economics in high school or college, most of your course material was built off of the assumptions that rational choice theory lays out.

But is it missing the psychological elements of being human? Many (including me) would say yes. You don’t need to look too far for examples of humans violating rational choice theory.

Satisficing

Another theory for how humans make decisions, the ideas behind satisficing stem from the core concept of bounded rationality.

In plain English, bounded rationality states that when you and I make decisions, that the information we have, our own mental limitations, and the amount of time we have to make our decisions affect how rational those decisions are.

For example, if I give you 10 seconds to choose the best dress shirt for you from a pile of 20, you’ll most likely pick the first one you grab. If I give you an hour, you’ll have more than enough time to try them all on and pick the one that fits your body and style the best.

We Have Too Many Options for Unimportant Things

In The Paradox of Choice, Barry Schwartz notes that as our options for every aspect of our lives have increased, so has the cognitive load of making decisions in everyday life.

It wasn’t hard to choose a shampoo 100 years ago — there were probably 5 brands. Now, you have an aisle of 100+ options to choose from. If you’re a maximizer at heart (like me), this abundance of choice will prompt you to spend a great deal of time evaluating the best shampoo for you.

Problems Associated With Too Much Choice

In general, more choice means we make better objective decisions, but feel less satisfied with the decisions themselves. Here’s an example from a study:

Participants were more likely to purchase exotic jams or gourmet chocolates when they had 6 options from which to choose than when they had 24 or 30, respectively. And perhaps more importantly, those with fewer options expressed greater satisfaction with the choices they made. Similarly, university students were more likely to write an extracredit essay, and wrote better essays, when they had 6 topics to choose from than when they had 30. – Source

Here are more problems that too much choice can bring:

• Time spent gathering enough information about every single choice
• As options expand, our standards for an acceptable outcome rises (more choice = should be able to maximize more = standards raise)
• As options expand, any mistake is believed to be our fault, since the abundance of choice should mean we make a better choice.

These are only problems if you are a maximizer.

If you are a maximizer, all of these problems affect you because you must seek out the optimal choice and take it personally when you fail.

If you are a satisficer, all you need to do is find a choice that crosses the threshold of acceptability…then you just choose it, and move on.

Why, When, and How to Satisfice

At this point, you might be wondering why satisficing is a better path than maximizing. The answer is: it’s not, but for most mundane decisions in life, satisficing is the way to go. This is because if you take into account all of the costs of making a decision (time, stress, importance, etc.), most decisions simply aren’t that important.

Who cares what shampoo you get, really? Is your hair clean at the end of the day? If so, you chose the right shampoo.

To satisfice means to not go into “obsession research mode” for every single decision you make. We’re mortal human beings — we only have so much cognitive capacity.

Don’t waste it maximizing unimportant decisions.

The next time you’re faced with a decision, ask yourself how important the result is to your life overall. If it’s not very important (what to wear tomorrow), then choose the first option that crosses the threshold of “good enough.” Then move on with your life.

The Maximizing / Satisficing Spectrum

No one is a pure maximizer or satisficer in all domains. We all have areas where we tend to maximize and areas where we are content with ‘good enough.’

If you tend to be a satisficer, you probably only care about the result of the decision you make.

Did the shampoo clean my hair? Yes? OK, I’m satisfied with my choice.

If you tend to be a maximizer, the results of your choice may also bleed into how you perceive yourself.

Did I choose the best shampoo? Well, I got close, but there were a few other features that I didn’t consider and I also didn’t think about the types of chemicals in shampoo and how they affect my hair in the long run, so I probably could have made a better choice. God, I always do this! If I could just put in a bit more effort into my decisions, I’d be more of a success in life. It’s the same thing at work…

Does that monologue sound familiar to you? I know it does for me — I’m very clearly on the maximizing side of the spectrum.

More Thoughts on Maximizing

Maximizers are looking for the best outcome, satisficers are looking for an outcome that is good enough. While maximizers may actually attain better objective outcomes, the psychological costs that come with it may still make maximizing a bad strategy to adopt.

At the same time, your ability to maximize outcomes is domain dependent. If you’re good at choosing the best marketing CRM because you work in the industry, it doesn’t follow that you’ll be good at choosing the best types of clothing to wear among the plethora of options.

Maximizers also experience more regret than satisficers when they do not fully exhaust all possible options.

The finality of a decision also helps how we feel about our choice. If our choice is reversible, then we feel less satisfied with it. Once we choose, psychological processes such as dissonance reduction, rationalization, etc. come into play to solidify our choice and further reject the choices we passed on.

Overall, maximizers achieve better outcomes than satisficers. For example, a study found that recent college graduates with high maximizing tendencies accepted jobs that paid 20% higher starting salaries than their satisficing peers. Despite higher salaries, however, these maximizing students were less satisfied with the jobs they accepted. Why? Once maximizers have made a choice (e.g., a job offer), they are likely to second guess themselves, and wonder whether they could have made a better choice. They are more prone to make social comparisons in order to gauge the optimality of their decisions.

Direct Download – Subscribe in iTunes – Subscribe on Android – Subscribe on Stitcher

Kevin Espiritu

Founder / CEO of Epic Gardening. Gardener, business-builder, curious.

www.kevinespiritu.com

Kevin Espiritu -

Direct Download – Subscribe in iTunes – Subscribe on Android – Subscribe on Stitcher

The concept of information asymmetry seems fairly obvious from its name. However, as a mental model, it deserves deeper study to fully understand all of its nuances.

At its most basic, information asymmetry describes a situation where two parties have different quantities or qualities of information. When one person has either more or better information than another, they have a massive advantage.

This mental model shows up a lot in investing, but can be applied in many areas of life.

For example, I remember being intuitively aware of information asymmetry during my poker days, despite not knowing the concept by name.

Information Asymmetry in Poker and Other Games of Strategy

In Poker

By design, poker is a game of incomplete and asymmetric information. The information is incomplete because you don’t know your opponent’s hand. It’s asymmetric because you either act before or after your opponent based on your position.

This is what makes “having position” (acting after another opponent) so powerful. By definition, you have more information than they do when making a decision and should be able to take advantage of that fact.

Any poker player worth his salt will make more money per hand while “in position” than while “out of position.”

In Competitive Video Games

In many competitive video games, “game knowledge” is exceptionally underrated. Most games have a technical skill component (physically being able to execute), and a meta-knowledge component (knowing how the game works on a deep level).

While technical skill is important, most players who rise through the ranks do so on the back of their game knowledge, along with their ability to control their emotions. Those that have high levels of game knowledge have a massive informational advantage over other players, even if both players have the same level of technical skill.

Another Flavor of Information Asymmetry

As the poker industry grew, some poker players started businesses coaching and training other players. As more people got into online poker for its lucrative money-making opportunities, the demand for high-quality training increased. However, there weren’t many places to go to get this information.

I remember having to scour forums and chat rooms to get in touch with skilled poker players just to pick their brain about strategy, which was quite inefficient. It wasn’t until the advent of poker training sites that high-quality poker knowledge was more accessible to the masses, which was fantastic…unless you were already a highly-skilled player.

These training sides began to erode the informational advantage that highly-skilled players had over the competition. Players who were once dominant at their level started to win less from mediocre players or break even with players slightly worse than them.

Of course, these skilled players also had the opportunity to improve their play, but the simple fact is that the poker training and coaching markets made the games harder because high-quality information was easier to attain.

The lesson here is clear: eroding information asymmetry in a market is a great way to create a successful business. 

Examples of Information Asymmetry in Common Industries

1. Landlords: Know more about their properties than tenants
2. Mortgages: Borrowers know more about their ability to repay a loan than a lender, lender may not do enough due diligence
3. Car Insurance: Companies cannot pinpoint individual’s risk accurately so they must pool people
4. Students: Some are more aware than others of what they must do to get into a prestigious school, despite equal
5. Doctors: More aware than patients of drugs and appropriate treatments
6. Used Car Salesmen: Knows more about quality of car they are selling than a buyer
7. Insider Trading: Closer someone is to a company’s operation, more information they have to trade on relative to others

Other situations:

1. Vintage clothing experts can go into a thrift store and pick out items that are worth far more than they’re being sold for to resell them.
2. People running estate sales, garage sales, or storage sales usually know far less about what’s being sold than the people rummaging through, leading to incredible deals.

Using Information Asymmetry In Your Life

There are an unlimited number of ways to apply this concept in your life. One way is to realize when you have an advantage in either the amount or quality (or both) of information and use that to your benefit:

• You’re selling an item and you know more about its quality and condition than a buyer
• You know more about the fundamentals of a game than another player and can exploit that advantage
• You’re hiring at your company and know what you pay other employees for the same role, but the potential hire does not

Another way to use this concept is to seek out market where there information asymmetry is rampant and seek to equalize it:

• Glassdoor arms job-seekers with information about company culture, salaries, and quality of life.
• The Wirecutter arms consumers with in-depth information about consumer products.

Originally published on Kevin’s personal blog.

Direct Download – Subscribe in iTunes – Subscribe on Android – Subscribe on Stitcher

Kevin Espiritu

Founder / CEO of Epic Gardening. Gardener, business-builder, curious.

www.kevinespiritu.com

Kevin Espiritu -

“I have nothing to add.”

The Do / Say Something Syndrome is an important mental model that stems from a talk that Charlie Munger gave called The Psychology of Human Misjudgment. If you haven’t read that meticulously, I would highly recommend doing so before you read any other material on mental models. It’s a goldmine.

In the talk, the last mental model that he references is what he calls the “Say Something Syndrome.” He uses this story to illustrate our innate vulnerability to this psychological bias:

“…And a honeybee goes out and finds the nectar and he comes back, he does a dance that communicates to the other bees where the nectar is, and they go out and get it.

Well some scientist…decided to do an experiment. He put the nectar straight up. Way up. Well, in a natural setting, there is no nectar where they’re all straight up, and the poor honeybee doesn’t have a genetic program that is adequate to handle what he now has to communicate.

And you’d think the honeybee would come back to the hive and slink into a corner, but he doesn’t. He comes into the hive and does this incoherent dance, and all my life I’ve been dealing with the human equivalent of that honeybee.”

And it’s a very important part of human organization so the noise and the reciprocation and so forth of all these people who have what I call say-something syndrome don’t really affect the decisions. – Charlie Munger, The Psychology of Human Misjudgment

It’s important to note that Munger considers the Say-Something Syndrome a major source of development and organizational confusion.  This is where I’ve seen it be most offensive as well, especially when it comes to company communication.

With the rise of popular and useful chat applications like Slack, it’s very easy for every member of a small team to chime in on every issue, just because they’re able to. Slack is best used as a passive communication tool, but it’s very hard to resist not chiming in on matters, even if they’re outside of your circle of competence.

Warren Buffet has a funny example of the Say Something Syndrome expressed in a ridiculous way:

Here’s one story I can’t resist relating: In 1985, a major investment banking house undertook to sell Scott Fetzer, offering it widely — but with no success. Upon reading of this strikeout, I wrote Ralph Schey, then and now Scott Fetzer’s CEO, expressing an interest in buying the business. I had never met Ralph, but within a week we had a deal.

Unfortunately, Scott Fetzer’s letter of engagement with the banking firm provided it a $2.5 million fee upon sale, even if it had nothing to do with finding the buyer. I guess the lead banker felt he should do something for his payment, so he graciously offered us a copy of the book on Scott Fetzer that his firm had prepared.

With his customary tact, Charlie responded: “I’ll pay $2.5 million not to read it.”

How To Think About The Say Something Syndrome

The Say Something Syndrome is essential describing our innate bias towards action or expression – our confusion of activity with results. Most of us, whether consciously or unconsciously, believe that more action will equal better results.

To make sure we’re not falling prey to this bias, we should be asking ourselves questions like:

1. Will expressing myself here help further a desired result?
2. Am I qualified to take action or voice my opinion?
3. Is the best course of action doing nothing at all?

Bringing it back to Munger, one of the phrases he is most known for is his trademark “I have nothing to add” quip when Warren asks him for his opinion at Berkshire Hathaway shareholder’s meetings. At first blush, you might think he’s simply unable to offer a cogent point of view, but in fact it’s the opposite.

When Warren asks him for feedback, Munger first decides if he has anything of value to say. If he does, he then figures out what that is and how to express it best. But many times, Warren has said all that needs to be said on the subject and Charlie recognizes it and says…

“I have nothing to add.”

Kevin Espiritu

Founder / CEO of Epic Gardening. Gardener, business-builder, curious.

www.kevinespiritu.com

Kevin Espiritu -

The Pareto principle, or the 80:20 rule, has become incredibly popular over the last 10 years or so, thanks to people like Tim Ferriss popularizing the concept outside of strictly business and economics.

It’s an incredibly helpful model to add to your toolbox, especially when you dive a little deeper than most on some of the ways you can apply it to your life, business, or the world at large.

Vilfredo Pareto is the original discoverer of the principle, though it wasn’t named after him until later after he was long gone. The origin story is as follows:

Essentially, Pareto showed that approximately 80% of the land in Italy was owned by 20% of the population; Pareto developed the principle by observing that 20% of the peapods in his garden contained 80% of the peas.  – Wikipedia

The simplest and most broad way to define the Pareto principle is this: most things – in all areas of life – have an uneven distribution.

Here are some examples:

Business

• 80% of your revenue comes from 20% of your customers
• 20% of your customers cause 80% of your customer support tickets
• 80% of your sales are made by 20% of your salesmen

Personal Life

• 20% of your wardrobe makes up 80% of your daily wear

Software

• 20% of bugs cause 80% of crashes
• 80% of your monthly website traffic happens in 20% of the month

It’s Not Always 80:20

However, many people seem to stick steadfast to the 80/20 percentage breakdown. That’s not the point of this principle. The point is that many phenomena in life tend to follow a power law distribution, or what is known as a Pareto distribution.

From Better Explained:

Also recognize that the numbers don’t have to be “80%” and “20%” exactly. The key point is that most things in life (effort, reward, output) are not distributed evenly – some contribute more than others.

A helpful thought experiment is to crank the ratio up as high as possible and apply it to a situation.

Let’s take the example of a popular article on Reddit. Participation in internet communities typically follows a Pareto distribution, but split into three different sections instead of two.  It’s known as the 90/9/1 rule and states that of the people that use a website (or see an article), 90% consume it passively, 9% interact in a small way, and 1% actively create and interact (comment, write a follow up post, etc).

The Pareto principle helps shine a light on why certain internet communities are the way that they are, especially when you layer a few psychological mental models on top.

Using the Pareto Principle In Our Lives

Because of the versatility of this principle, there are many ways to apply it in our lives. The simplest question to ask yourself is this:

“What is the smallest input that will bring the largest relative output?”

Imagine you want to lose 50lbs, but you’ve struggled with diet and exercise for as long as you can remember. A common strategy is to figure out the perfect exercise and nutrition plan, and doggedly commit to sticking to it until you get to your goal. Unsurprisingly, and for many different reasons, this usually fails.

Approaching the problem with the Pareto principle in mind, you might ask yourself:

• “What food or drink am I consuming on a regular basis that contributes the most negative health effects?”
• “What is the lowest effort exercise or movement I can perform that will provide the most health benefits?”

In the first case, simply remove the offending food or drink. In the second, simply do that low effort exercise (for example, extremely obese people are encourages to just walk a mile or so per day and change nothing else).

Neither of these changes will result in losing those 50lbs, but they’re incredibly low-effort relative to their payoffs. That makes them easy to stick to when contrasted with the massive lifestyle changes that most people end up trying when they embark on a fitness journey.

When Not to Use the Pareto Principle

With any mental model, it’s important to not over-apply it. When we’re acquainting ourselves with a new concept, it’s natural to start seeing it everywhere due to our reticular activating system.  This can go haywire, making us attempt to apply a concept where it has no place being used.

The biggest takeaway the Pareto principle provides is the idea that most things in life are not distributed evenly.  

While we should be seeking to invest our time in the highest output activities, the fact remains that for many things, we can’t just do 20% of the work for 80% of the result. Sometimes you need to grind out the last 20% – even if you’re suffering diminishing returns – to get the job done.

Building 80% of a car isn’t the best strategy, nor is completing 80% of your thesis.

For example, when building Book in a Box, we found that most of the process we use to take an author from idea to published book was done in a few weeks. But we’re still working on refining that process to 100% – and our client satisfaction and company growth are living proof of the need to iron out every last detail.

To close it out:

When you are seeking top quality, you need all 100%. When you are trying to optimize your bang for the buck, focusing on the critical 20% is a time-saver. See what activities generate the most results and give them your appropriate attention. – BetterExplained.com

Kevin Espiritu

Founder / CEO of Epic Gardening. Gardener, business-builder, curious.

www.kevinespiritu.com

Kevin Espiritu -