Tag: Heuristics

Do what works

I love this principle from Charlie Munger from last year’s Berkshire Hathaway Shareholder Meeting. It’s simple, and powerful. So I thought it deserves it’s own blog post:

“Figure out what works, and go do it.”

Charlie Munger

Do what feels good

Another dimension of this principle is to listen to how you feel. Generally speaking, you are on the right path, when you feel good and things appear effortless. And you are generally on the wrong path, when you feel resistance and things are hard.

Experiment a lot

The key is to try as many things as possible. The more you try, the faster you find what works. Continue what works and feels good. Discard what doesn’t.

Copy what works

Cloning is one of my favorite mental models. You don’t have to do the work yourself. You can be an observer and copy what works. This is mostly what I do. I rarely have original insights. Everything is a blend of things I have observed.

Positive vs. negative feedback

Here’s a related concept I learned from Psycho-Cybernetics:

The human brain and nervous system (= the subconscious) are an autonomous goal-achieving machine, using negative feedback to auto-correct.

So while finding what works is great (positive feedback), finding what doesn’t work (negative feedback) is equally important.

So don’t fret about your mistakes and failures. Instead use this negative feedback to improve your machine.

Image by adselwood

Posted on by Remo Uherek

The Lindy Effect

I love simple heuristics. Here is one:

The Lindy effect is a concept that the future life expectancy of some non-perishable things like a technology or an idea is proportional to their current age, so that every additional period of survival implies a longer remaining life expectancy.

In other words, the longer a product/company/idea already exists, the longer is its expected remaining lifespan.

A very simplified version might look like this:

  • Something that exists 1 year is expected to exist another 1 year
  • Something that exists 5 years is expected to exist another 5 years
  • Something that exists 100 years is expected to exist another 100 years

This might be good news for something like Bitcoin, which just celebrated its 10th birthday. And it might be bad news for the startup next door that was founded last year.

I recently experienced this effect firsthand:

When going through some old online accounts, I realized how many of the services that I used 10 to 15 years ago are offline. I probably went through 50 accounts, and the vast majority was out of business! Most services were probably less than 5 to 7 years old at the time that I used them.

How many of the companies and services that we use today will be out of business 10 to 15 years from now?


Posted on by Remo Uherek

Don’t overpromise

Two cautionary tales:

  • Theranos was a privately held health tech company, becoming infamous for its false claims to have developed blood tests that only needed very small amounts of blood. I recently read Bad Blood by John Carreyrou, detailing this whole story. Pretty scary stuff.
  • Robinhood recently announced a new Checking & Savings service with 3% interest, no fees, and free ATMs. Then it had to crawl back.

I know it’s tempting to exaggerate and overpromise. But it rarely works. When in doubt, strive for the opposite: underpromise, then overdeliver.

[Hat tip to Daniel Gladiš]


Posted on by Remo Uherek