5 Mental Models to Think Like a Strategic Genius

Naval 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 in a 13 passenger van

parked in Downtown Oakland that I got to

call home now the problem for most of us

is that we're 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 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 your

mouth for example one Butterfinger is

275 calories and to burn an equivalent

to mount you'd have to go for a 2 and2

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 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 decerning 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 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 dubbed 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

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 a 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 hay

makers praying something lands if you

compare this to the more skilled

Fighters the black belts for example you

know is 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

environment design which is all about

setting up your life in such a way that

it creates a slippery slope towards your

goals now I unpack 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

to 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

Grandmasters use to evaluate a position

and in my experience as the ninth 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

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

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 one of my

businesses back in 2018 was hyper

focused on growth we had poured a ton of

money into infrastructure and machine

for producing our products now we had 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 could

now pour into the other 90% of our

customers which led to a massive spike

in Revenue that far surpassed the 10%

we'd given up only a few months prior

now the moral of this 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 those