Useful Frameworks for Complex Situations
Useful frameworks collected and structured as a table for easy access from Sahil Bloom’s Twitter thread. Use them for guidance in situations where you need to take action or make decisions.
|Feynman Technique||Learn anything||Step 1: Identify a topic.|
Step 2: Try to explain it to a 5-year-old.
Step 3: Study to fill in knowledge gaps.
Step 4: Organize, convey, and review.
True genius is the ability to simplify, not complicate. Simple is beautiful.
|Directional Arrow of Progress||Predict the future||The future is extremely difficult to predict—but there are clues.|
Look at the trend line of progress and where it’s pointing- directionally, not precisely. Invest (or build) accordingly.
|Eisenhower Decision Matrix||Task Management||Place all your tasks on a 2×2 matrix of urgency and importance.|
1. Important & Urgent
2. Important & Not Urgent
3. Not Important & Urgent
4. Not Important & Not Urgent
Prioritize, delegate, or delete accordingly.
|Regret Minimization Framework||Minimize regrets in life||When faced with a difficult decision:|
1. Project yourself into the future.
2. Look back on the decision.
3. Ask “Will I regret not doing this?”
4. Take action.
|Pygmalion Effect||High expectations lead to high performance|
(and vice versa)
|If you consistently see people as their potential, they will achieve more. When you’re occasionally let down, consider it a tax you pay for all the benefit from those you believed in.|
|Look the Part||Choose between two options||If forced to choose between two options of seemingly equal merit, choose the one that doesn’t look the part. The one who doesn’t look the part has had to overcome much more to achieve its status than the one who fit in perfectly.|
|Decentralized Friend Groups||Grow in thoughts||Centralized Friend Group contains one cluster of friends with shared backgrounds and beliefs. Decentralized Friend Groups are small clusters of friends unconnected to each other. Opting for decentralized friend groups is the key to independent thought.|
|The Bragging Framework||Bullshit detector||Truly successful people rarely feel the need to boast about their success. If someone regularly boasts about their income, wealth, or success, it’s fair to assume the reality is a fraction of what they claim.|
|Lion Framework||Escape Monotonous Work||Modern work culture is a remnant of the Industrial Age. It encourages long periods of steady, monotonous work unsuited for the Information Age. To do truly great, creative work, you have to be a lion. Sprint when inspired. Rest. Repeat.|
|The Seinfeld Calendar Framework||Consistency||Jerry Seinfeld would hang a huge calendar on the wall and use a red marker to put an X over every day that he completed his daily writing. It wasn’t about the writing being good, it was about the consistency. Applies to more than just writing.|
|Christensen’s Disruptive Innovation Framework||Disruptive Innovation||New innovation may take root by providing a simple solution to a segment of a market that is under or over-served by incumbents. Upstarts provide the exact level of product/service needed and relentlessly drive this wedge to expand.|
|Skin in the Game||Deciding to do something||Skin in the Game means that the key principals participate in both the upside and downside associated with any decisions. Always look for its presence in any new situation. Avoid games where those making the rules don’t have any skin in the game.|
|7 Powers||Business Strategy||Hamilton Helmer’s “7 Powers” is a holy grail of business strategy. The 7 Powers are the foundation of durable value creation:|
1. Scale Economies: A business in which per unit cost declines as production volume increases.
2. Network Economies: The value of a service to each user increases as new users join the network.
3. Counter-Positioning: A newcomer adopts a new, superior business model which the incumbent does not mimic due to anticipated damage to their existing business.
4. Switching Costs: The value loss expected by a customer that would be incurred from switching to an alternative supplier for additional purchases.
5. Branding: The durable attribution of higher value to an objectively identical offering that arises from historic info about the seller.
6. Cornered Resources: Preferential access at attractive terms to a coveted asset that can independently enhance value.
7. Process Power: Embedded company organization and activity sets which enable lower costs and/or superior product.
|Play to Learn||Learning||Old Way: Learn to Play. – New Way: Play to Learn.|
We are living in an unprecedented era- historical boundaries are being broken, enabling anyone to participate. If you’re trying to learn anything new, insert yourself into the game. It’s the only way.
|Porter’s Five Forces||Analyze Market||A framework for analyzing the competitive intensity of a given market. The five forces to consider:|
1. Supplier Power: How easy it is for suppliers to drive up prices.
2. Customer Power: How easy it is for buyers to drive prices down
3. Competitive Rivalry: The number and capability of competitors in the market
4. Threat of Substitution: Where close substitute products exist in a market, it increases the likelihood of customers switching to alternatives in response to price increases.
5. Threat of New Entry: Profitable markets attract new entrants, which erodes profitability. Unless incumbents have strong and durable barriers to entry, for example, patents, economies of scale, capital requirements or government policies, then profitability will decline to a competitive rate.
Thoughtful consideration = better outcomes.
|The Weekend Test||Predict the future||“What the smartest people do on the weekend is is what everyone else will do during the week in ten years.” Observe the weekend projects of the smartest people in your circles. Odds are those will become a key part of our future. Invest accordingly.|
|The Crazy Idea Framework||Idea Filter||If someone proposes a crazy idea, ask:|
1. Are they a domain expert?
2. Do I know them to be reasonable?
If yes on both (1) and (2), you should take the idea seriously, as it may be an asymmetric bet on the future.
|The Duck Test||Observation||If it looks like a duck, swims like a duck, and quacks like a duck, it’s probably a duck. You can determine a lot about a company or person by regularly observing its or their habitual characteristics.|
|Newton’s Flaming Laser Sword||Arguments||If something cannot be settled by experiment or observation, it is not worth debating. This will save you from wasting a lot of time on pointless arguments.|
|“What Will Stay the Same?” Framework||Investing||Jeff Bezos famously said that investing in what might change is risky but investing in what will stay the same is safe. The future is hard to predict, so looking for constants you can deliver against may provide a cleaner path to success.|
 Frameworks and details collected and structured from Sahil Bloom’s twitter thread.