Category: Learning

Elon Musk is known as a first principles thinker when it comes to inventing new things, but he has recently started applying this type of thinking across all the different processes in his company.

In a letter to his employees he outlined how he will reform the spending practices in the company.

“Going forward, we will be far more rigorous about expenditures. I have asked the Tesla finance team to comb through every expense worldwide, no matter how small, and cut everything that doesn’t have a strong value justification.”

“All capital or other expenditures above a million dollars, or where a set of related expenses may accumulate to a million dollars over the next 12 months, should be considered on hold until explicitly approved by me. If you are the manager responsible, please make sure you have a detailed, first principles understanding of the supplier quote, including every line item of parts & labor, before we meet.”

So basically he wants to have his managers apply first principles thinking to all the things they do, including how they source different components from suppliers.

In an analysis of how subcontracting works in his company, Musk found out that it is a complicated system that creates a lot of overhead.

“I have been disappointed to discover how many contractor companies are interwoven throughout Tesla. Often, it is like a Russian nesting doll of contractor, subcontractor, sub-subcontractor, etc. before you finally find someone doing actual work. This means a lot of middle-managers adding cost but not doing anything obviously useful. Also, many contracts are essentially open time & materials, not fixed price and duration, which creates an incentive to turn molehills into mountains, as they never want to end the money train.”

What this means is that all his employees, especially the ones in management positions, need to be first principles thinkers, no matter whether they sit in the lab and create new inventions, or sit in front of the computer looking at Excel tables all day.

Should you be a first principles thinker 100% of the time?
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The robots are coming and you better be prepared. They might not wipe out humanity, but they will certainly be gunning for your job.

In a world where artificial intelligence and robots will be able to carry out many of the tasks currently done by humans, a special set of skills will allow a certain set of people to thrive.

Yeah you guessed it. These skills are Renaissance Man skills. The time of the expert-generalist has come.

The importance of being able to take in lots of information from various sources and then apply it in different ways will only rise. The people who are able to do this effectively will be rewarded.

With the world changing at the speed of light and becoming more and more unpredictable, the ability to work in a multi-disciplinary and agile way will make a person anti-fragile. Their value will skyrocket.

The key will be to make sense of things quickly, and then embark on a course of action. You will have to take in information, determine what it means, and then make a decision based on this information.

What skills and abilities are necessary for this?

Take in information stage: curiosity, know how to deal with information (especially in an era of information overload and fake news).

Determine what it means stage: creativity, abstract thinking skills, critical thinking, logical reasoning.

Make a decision: problem solving skills, emotional intelligence (not fall for biases).

Joseph Aoun, educator and author of the book “Robot-Proof: Higher Education in the Age of Artificial Intelligence” believes that the way to be able to do all this is to change the way you learn.

He proposed a new curriculum which is based on life-long learning and called it “humanics”. This involves an integration of technical and non-technical skills. A set of technical literacies (like working with data, and other technical skills), should be complemented with a set of human literacies (like creativity and psychology).

“When I talk to business leaders, they tell me that they are seeking people with strong technical skills. But most of them quickly add that they also would give their right arm for more systems thinkers—“quarterbacks” who can lead diverse teams by seeing across disciplines to analyze them in an integrated way. And every student should be culturally agile, able to communicate across boundaries, and think ethically.”

The way you will get ahead is if you construct a learning curriculum for yourself, which will combine different skills, abilities and knowledge areas.

All these things are very relevant for each other. Knowledge is a set of facts and theories that serve as the fundamental inputs for skills.

If you want to apply skills in order to do a certain activity, then you need to have a certain amount of knowledge in order to do that.

Skills can be subdivided into generic cross-functional skills, and technical skills.

Generic skills consist of two types: cognitive (to do with information-processing and problem-solving), and non-cognitive skills (social skills like giving presentations and behavioral skills like perseverance). These can be easily transferred from one job to another.

Technical skills on the other hand, usually consist of job-specific skills and cannot be transferred so easily.

Abilities are the capabilities (physical or mental) that are needed in order to perform a job.

Which knowledge areas, skills and abilities do you need for future work and how do you get them? We will use the O*NET groupings of skills (and their definitions) in order to examine this further.

The first thing that you need is to know how to learn. This came up as a highly important skill among the various surveys, but is also fundamental if you want to be able to improve your skills and knowledge.
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My 200th post is symbolically the post where I celebrate my 4th year as a blogger on this blog. What a ride it has been.

If you want to know more on the changes that I have made, you can read the post I wrote on my 3 year blogging anniversary, as well as the one I wrote on my 2 year blogging anniversary.

What have been the results of my blogging so far?

Amount of money made: 0 (in fact I had spent thousands of dollars/euros for running my blog and getting all the books that I use as sources for my posts, not to mention all the countless hours).

Knowledge gained: Priceless

This proves the power of intrinsic motivation. Had I been driven only by money, I would have ended the blog a long time ago. Instead, what has driven me is my quest for knowledge and self-improvement.

The blog not only helps me to summarize all the stuff I have learned along the way for myself, but also to share it with the world. I thank the few regular readers and supporters that this blog has and I hope the thoughts posted here have been helpful to you in your daily lives as well.

In my 2-year anniversary post, I mentioned how I am building up the Renaissance Man Framework. Whereas, I started off by exploring some of the key basic building blocks for this, things like knowing yourself, having a vision, and all the key traits like willpower and motivation, in the past year or two I have jumped around a bit and started writing about the more complex and higher-level issues like how to think, acquire knowledge and make decisions.

I have explored cognitive biases (if you don’t know these, then you are likely to make the wrong decisions), first principles thinking (a very unique way of coming up with creative solutions), as well as ways to be successful and happy.

One key aspect of the original Renaissance Men was that they went back to Antiquity and used ancient sources to inspire them. There is a lot of wisdom in these sources and that is why I have written about them extensively. Much of this wisdom can guide you even today. The world has changed, but many of the basic problems remain the same.

Boethius – The Consolation of Philosophy and how a man about to die found happiness.

Epictetus – The wisdom of a Stoic master and the secrets to living a good life revealed.

Some of my articles have been read by a lot of people, while some others are almost never visited. Two of these less visited articles however contain some of the key messages of this blog and are quite profound for anyone trying to improve themselves and understand how the world works.

In the article on James Hutton and his discovery of deep time, I explore what makes an idea succeed above other ideas. The answer might surprise you (or not). Have a look:

How a contrarian idea gains traction: the incredible story of James Hutton.

People often want to take lessons from others, but even after taking these lessons to heart, they end up failing. Why is that so? There are reasons for this and I explore them in my article on survivorship bias. Have a look:

Beware of advice: What can we really learn from successful people.

These two articles summarize some very important lessons, and even though they are quite long and heavy reading, if you read something, it should be this.
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For many people, if you are told to think of a wacky scientist, the name of Nikola Tesla usually comes up at the top of the list.

Anyone remember his Tesla coil in “Command and Conquer: Red Alert”? I always loved that thing when playing the game on my computer. Unfortunately this was one of his ideas that did not see mass production.

He was a veritable genius who came up with very creative ideas, and his propensity for first principles thinking can serve as an inspiration for any budding inventor in training.

Tesla was a very original thinker and one technique that he used to come up with ideas is visualization. He would literally picture his inventions in his head.

This is something that he learned to do through experience and it can be learned by you as well.

As a boy, his head was full of things that annoyed him and so he started using the visualization technique to get rid of these thoughts:

“By that faculty of visualizing, which I learned in my boyish efforts to rid myself of annoying images, I have evolved what is, I believe, a new method of materializing inventive ideas and conceptions. It is a method which may be of great usefulness to any imaginative man, whether he is an inventor, businessman or artist.“

The first step of the visualization method is the incubation period. You gather building blocks of knowledge and let your mind ruminate on them in the background:

“Here in brief, is my own method: after experiencing a desire to invent a particular thing, I may go on for months or years with the idea in the back of my head. Whenever I feel like it, I roam around in my imagination and think about the problem without any deliberate concentration. This is a period of incubation.“

In the second step, there is a period of direct effort, or thinking of the specifics:

“Then follows a period of direct effort. I choose carefully the possible solutions of the problem I am considering, and gradually center my mind on a narrowed field of investigation. Now, when I am deliberately thinking of the problem in its specific features, I may begin to feel that I am going to get the solution. And the wonderful thing is, that if I do feel this way, then I know I have really solved the problem and shall get what I am after.“

The mind starts playing around with all the different building blocks and then connects them subconsciously.

“The feeling is as convincing to me as though I already had solved it. I have come to the conclusion that at this stage the actual solution is in my mind subconsciously though it may be a long time before I am aware of it consciously.”

The key is to think of everything in your mind first, to examine different features and make improvements to this mental model before you put anything on paper:

“Before I put a sketch on paper, the whole idea is worked out mentally. In my mind I change the construction, make improvements, and even operate the device. Without ever having drawn a sketch I can give the measurements of all parts to workmen, and when completed all these parts will fit, just as certainly as though I had made the actual drawings. It is immaterial to me whether I run my machine in my mind or test it in my shop.“

An important thing to remember is to always keep the big picture in mind and start with a holistic view before you start working on the details:

“Some people, the moment they have a device to construct or any piece of work to perform, rush at it without adequate preparation, and immediately become engrossed in details, instead of the central idea. They may get results, but they sacrifice quality.“

Tesla came up with many great inventions using this method:

“The inventions I have conceived in this way have always worked. In thirty years there has not been a single exception. My first electric motor, the vacuum tube wireless light, my turbine engine and many other devices have all been developed in exactly this way.“

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A great idea or invention is usually a combination of other different ideas or inventions. Things don’t happen in a vacuum and as the old saying goes, you stand upon the shoulders of giants.

One of the greatest skills that you can have is to be able to combine ideas from different sources. And this is something that expert-generalists, or Renaissance Men, excel at. Their greatest assets are their combinatorial and associative skills.

However, how do you develop and cultivate these types of skills?

Step 1: Collect pieces of information

The first thing you need to do is to know the information and have it available. So the first step is the collection phase.

This has been described in different ways, as collecting pieces of a puzzle or different building blocks. If you want to glue together a picture out of a puzzle or build a house, you need to have the pieces ready in order to do that.

Each piece of knowledge is a like a building block, you can use it in different ways and combine it with other building blocks. The combinations are endless and every resulting structure can look different, even if you use the same building blocks (or it can look the same, up to you really).

How do you go about collecting these building blocks? One thing is by reading a lot. That’s why I wrote a short article on the reading habits of guys like Warren Buffett or Charlie Munger. It is kind of obvious, but a lot of people don’t do it.

Another way is to collect different experiences, like Steve Jobs says. Go to different places, expose yourself to different ideas, try different things. All of this will enrich you, and give you some building blocks which you can use later.

Once you have a good selection of building blocks (information) ready, you can go on to creating a few useful mental models to guide you. These are basically representations of real, or imaginary situations or things that you create in your head.

Scottish psychologist Kenneth Craik proposed the idea (although similar ideas were proposed earlier by others as well) that the mind works by constructing small-scale models of reality in order to reason and to offer explanations for events. Modern research so far seems to prove this assertion.

You can actively use these workings of your brain by building a latticework of mental models, something that comes from Charlie Munger, one of the greatest financial investors of all time.

From all the studying he does, Munger selects a handful of big ideas and stores them for later. These can come from things like physics, chemistry, economics, humanities, or any other type of discipline. As long as you think it will be useful later.

To quote Charlie Munger:

“You have to learn all the big ideas in the key disciplines in a way that they’re in a mental latticework in your head and you automatically use them for the rest of your life. If you do that, I solemnly promise you that one day you’ll be walking down the street and you’ll look to your right and left and you’ll think “my heavenly days, I’m now one of the few competent people in my whole age cohort.” If you don’t do it, many of the brightest of you will live in the middle ranks or in the shallows.“

The sources of mental models can come from anywhere. When you are reading books or collecting experiences, try to summarize some of the big lessons that you get out of them. These can then serve as your own personal mental models.

Step 2: Things start clicking automatically

You might not believe me, but collecting the information is the most important step. By collecting more and more information, things will start clicking automatically. Trust me! 🙂

You might have had the experience of you not understanding a problem, trying to go at it through different ways and failing. Then you forgot about the problem, but were walking one day and suddenly things clicked.

This is often called the “Eureka” moment, just like Archimedes had his “Eureka” moment when he was entering the bathtub.

Maria Popova, in an article for “Smithsonian Magazine” writes:

“There is a curious cultural disconnect between our mythology of spontaneous ideation – the Eureka! moment, the stroke of genius, the proverbial light bulb – and how “new” ideas actually take shape, amalgamated into existence by the combinatorial nature of creativity. To create is to combine existing bits of insight, knowledge, ideas, and memories into new material and new interpretations of the world, to connect the seemingly dissociated, to see patterns where others see chaos.“

These sudden flashes of the lightbulb are quite common. This doesn’t mean that something appears out of nothing. The building blocks of your idea are already there in the brain. It is that your brain is just playing around with them subconsciously.
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In 2007, Steve Jobs got on stage to reveal a device which would go on to revolutionize the way we work in the world today. The device in question is the iPhone and it ushered in the era of the smartphone.

Ever the showman, Jobs gave a riveting speech. There is one part that really stands out and describes the essence of what the iPhone is.

“An iPod, a phone, an internet mobile communicator. An iPod, a phone, an internet mobile communicator. An iPod, a phone, an internet mobile communicator. Do you get it? These are not three separated devices. This is one device, and we are calling it iPhone.“

He mentioned three things: an iPod, a phone, and an internet mobile communicator. All of these things existed on the market when the iPhone came out. However each one was its own device.

What did Jobs and Apple do? They combined them and put them on one device!

This is what combinatorial knowledge is all about. You take different already existing pieces and combine them together to make something new. This something new can be another piece of knowledge, or a new device or anything else.

It is very, very hard to be truly original and come up with something totally new, something that has never existed before and which truly changes our understanding of the world. For the most part, to do that, you truly need to dedicate a lot of time to your field. This is what Albert Einstein did with his theory of relativity.

However, if you dig deeper, you will notice that even Einstein used some previously discovered knowledge, which served as inputs. He then combined it with his own things. James Hutton, when coming up with his theories on geology, also combined different strands of knowledge that were floating around in his time.

Combinations of knowledge from different sources is the key to new knowledge. It is also the key to new revolutionary devices like the iPhone.

An article in “Wired” magazine describes how Jobs came up with the idea:

“In 2002, shortly after the first iPod was released, Jobs started thinking about developing a phone. He saw millions of Americans lugging separate phones, BlackBerrys, and — now — MP3 players; naturally, consumers would prefer just one device. He also saw a future in which cell phones and mobile email devices would amass ever more features, eventually challenging the iPod’s dominance as a music player. To protect his new product line, Jobs knew he would eventually need to venture into the wireless world.“

The article goes on to list some of the challenges that such a product would have to overcome:

“If the idea was obvious, so were the obstacles. Data networks were sluggish and not ready for a full-blown handheld Internet device. An iPhone would require Apple to create a completely new operating system; the iPod’s OS wasn’t sophisticated enough to manage complicated networking or graphics, and even a scaled-down version of OS X would be too much for a cell phone chip to handle. Apple would be facing strong competition, too: In 2003, consumers had flocked to the Palm Treo 600, which merged a phone, PDA, and BlackBerry into one slick package. That proved there was demand for a so-called convergence device, but it also raised the bar for Apple’s engineers.“

These challenges lay in vastly different fields, not only with the technology, but also the way the wireless industry was structured and the business models. In order to make the iPhone a success, all these things would have to be pulled together.

Compare this description of what Steve Jobs (and his Apple team) did, and what Johannes Guttenberg did when coming up with his printing press. A passage in Samuel Arbesman’s “The Half-life of Facts” describes the process:

“It turns out that the printing press is far from simple. The technological innovations that Gutenberg developed were much more than the modification of a wine press and the addition of the idea of movable type. Gutenberg combined and extended a whole host of technologies and innovations from an astonishing number of areas, and that is what made his work so powerful.

He used metallurgical developments to create metal type that not only had a consistent look (Gutenberg insisted on this), but type that could be easily cast, allowing whole pages to be printed simply at once. He used chemical innovations to create a better ink than had ever been used before in printing.

Gutenberg even exploited the concept of the division of labor by employing a large team of workers, many of whom were illiterate, to churn out books at a rate never before seen in history. And he even employed elegant error-checking mechanisms to ensure that the type was always set properly: There was a straight line on one side of each piece of type so that the workers could see at a glance whether any letters had been set upside down.

Only by having the combined knowledge of all of these technologies does the printing press become possible and cost-effective.“

Just like Steve Jobs had to combine different elements when coming up with the iPhone, Johannes Guttenberg had to do something similar when he came up with the printing press. If you look at other types of inventions that revolutionized our world, you will most likely see a similar process at play.
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Warren Buffett is one of the richest men on the planet and in the investment world he is seen as one of the best investors of all time. His decisions have made him billions many times over.

However what is his secret? What does he do that gives him that mental edge?

It’s actually quite simple. He reads a lot!

One time he was asked what the secret to success is. This is his reply:

“Read 500 pages like this every day. That’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.“

That’s it. This is what gives him the combinatorial mental powers that he has. The more he reads, the more information he has, the more things he can combine.

It also makes him less impulsive and more rational. To quote him again:

“I read and think. So I do more reading and thinking, and make less impulse decisions than most people in business. I do it because I like this kind of life.“

His investment partner, Charlie Munger, also reads a lot. From all the information he reads, he creates a select amount of mental models, which he then uses to guide him when making investment decisions, as well as many other decisions in life.

For him, reading a lot (and a variety of books) is fundamental:

“In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time – none, zero.“

If you look at many of the successful people of today, the expert-generalists that have created the iconic enterprises of the past decades, they share this exact same trait with Buffett and Munger. They read a lot.

When he was young and beginning his investing career, Buffett would read between 600 and 1000 pages a day! He still spends about 80% of his day reading.

I already mentioned that Elon Musk also reads like 2 books a day. Bill Gates reads 50 books a year. In the old days, guys like Thomas Jefferson or Benjamin Franklin would also spend their days reading a variety of books.

As Benjamin Franklin said:

“An investment in knowledge always pays the best interest.“

The elite thinkers spend much of their time sucking up as much knowledge as they can.

What does the average person do? This:

There is a book by Tom Corley called “Rich Habits: The Daily Success Habits of Rich Individuals”, where the author mentions some very interesting findings.

There was a study done that surveyed the reading habits of different people. The results were quite telling.

Rich people (those with an annual income of over 160 000 Dollars) read primarily for self-improvement. Poor people (annual income of 35 000 Dollars or less) read for entertainment.

To quote him:

“The rich are voracious readers on how to improve themselves. They’re reading self-improvement books, biographies, books about successful people, things like that.“

You see what I am getting at? If you want to be successful, you need to start reading a lot. You might not become a multi-billionaire like Warren Buffett, but you will definitely have a leg up on the average dude on the street.
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“He’s back!”

No, I am not talking about the Terminator, although with the recent advances in AI and robotics, he could be here as well. I am talking about the almost forgotten, and nowdays often maligned, jack of all trades, the polymath, the Renaissance Man.

Now he is referred to as an expert-generalist. Just like the 20th century belonged to the specialist, the 21st century seems to belong to the person who can pull on different strands of knowledge from a wide variety of disciplines.

Elon Musk, Steve Jobs, Charlie Munger, all of these guys have one thing in common: their strength comes not in being good at one thing, but in knowing a lot of different things. They are the expert-generalists, the modern Renaissance Men who have gone on to become the icons of our modern age.

The advantage of expert-generalists is that they can bring in new perspectives from a variety of fields, unhindered by the often narrow viewpoint of a specialist.

A specialist can get bogged down in the little nitty-gritty details of their field, forgetting to see the whole picture. A great danger, one that they often fall for, is functional fixedness.

This is because they were taught to do something in a certain way and over the years they have become great at doing things that way. On the negative side this can put blinders on them and result in tunnel vision.

They are great at innovating within their paradigm, but this can also make them a bit stiff when it comes to paradigm change. All kinds of little cognitive biases can prevent them from seeing the forest for the trees.

If you look at the great innovators of our age, most of them were able to combine the knowledge of different fields and come up with something new. They have the ability to not only think in analogies, but also to be great first principles thinkers.

Henry Ford was able to go back to first principles and change the way that cars were manufactured by applying an analogy of conveyor belts from a different discipline.

Tomas Bata was able to revolutionize the way shoes were made and make his company one of the first true global companies, not only because he had a good understanding of making shoes, but also because he had a deep knowledge of other things, such as the psychology of people.

If you go back to Charlie Munger and his investment strategy, you will see that the secret of his success is the fact that he has a wide variety of mental models from different fields that he can call upon when needed.

The idea of an expert-generalist is as old as humanity, but the term itself was coined by Orit Ganiesh, who is the CEO of Bain Consulting. Her definition of it is:

“Someone who has the ability and curiosity to master and collect expertise in many different disciplines, industries, skills, capabilities, countries, and topics. He or she can then, without necessarily even realizing it, but often by design: Draw on that palette of diverse knowledge to recognize patterns and connect the dots across multiple areas. Drill deep to focus and perfect the thinking.“

The role of an expert-generalist is not in the trenches, doing the routine work, but instead high on top, doing the strategic thinking and making crucial decisions. This is where their expertise is needed.

Now that I have convinced you of the value of expert-generalists, one question arises: What you need to do to become one?

Well, that’s the whole point of this blog, to give you the tools that you need in order to become an expert-generalist and be able to smash through any obstacle in your way.
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Most people pass their entire life doing things the same way, never considering that it is not the only way of working. Yet sometimes things change and the old ways don’t work anymore. That’s when you need to step up in order to survive.

Aesop’s Fables have been told to kids for thousands of years to teach them moral lessons and help them navigate in a complicated world. One such fable is that of “The Crow and the Pitcher”.

The allegory starts off with a crow flying around on a hot, dusty day. The crow is exhausted from thirst, but keeps on circling in the sky, eyes alert, but struggling to find anything to drink.

Finally, he spots a pitcher. Excited, he descends down to it, only to discover that it contains very little water.

He puts his beak into the pitcher, hoping to be able to reach at the water, but can’t. He tries pushing it over, but it doesn’t fall. He attempts all kinds of different ways to get at the water, but no success.

Then an idea pops into his head. He collects stones nearby and stacks them next to the pitcher.

Picking them up with his beak, he starts dropping these stones into the pitcher, one by one. Slowly, but surely the water level starts rising and gets a little higher with each stone thrown in.

Finally, he puts in the last few stones, and the water level in the pitcher rises high enough for him to put his beak into it and drink.

There are several moral lessons to be learned from this little story. Hard work, persistence and ingenuity are all things that ancient commentators saw as the things you were supposed to take out of it.

The little crow failed several times, but got back up and tried in a different way, persisting where others would have given up. He was also smart in noticing how the world works around him and applying that to solve the problem. The crow had a goal and didn’t stop until he achieved it.

One moral stands above the rest though: necessity is the mother of invention.

Old ways of doing things didn’t work any more. The crow tried all the traditional ways of getting at the water, but not one of them worked.

In order to survive, he needed to start thinking outside the box.

As a result of that little incident, the crow experienced an internal paradigm shift. However this was not only a change in how he views the world, but a change in how he works in the world.

He realized that he didn’t need to rely only on his own body to do things, but that he could use other objects lying around to help him perform different jobs better.

The crow became a tool user.

The story is not far from the truth, in fact modern crows have been studied and have exhibited similar problem-solving and tool-using techniques.

Once you learn that you don’t need to rely on what nature gave you in order to do your daily activities, but instead can pick up different objects in your vicinity and use them to help you, it’s a huge revelation and it completely changes the way you live.

You expend less energy, and need less resources to do daily things. You can also do new things, things you have never been able to do before.

It opens up a world of possibilities. Possibilities that had been closed to you before.

Chimpanzees and other primates have also been seen using tools in the wild. Different groups use different tools and techniques, which means that it is not an instinctual behavior, but instead a learned one.

It has been observed how when one individual discovers a new technique to do a certain activity, the technique spreads to many of the other individuals in the community. This new way of doing things completely changes their lives.

They experience a paradigm shift.

Technological Revolutions and Paradigm Shifts

When our ancestors picked up tools for the first time, they also experienced the first technological revolution.
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