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The Incentives Lab
Learning path · 6 terms

The First-Principles Toolkit

Mental models for thinking from scratch

When the playbook stops working, you don't need a better playbook. You need the moves underneath it. These are the six that get used most often by people who reset entire industries.

  1. 01
    Mental Models · Reasoning

    First Principles

    Strip the problem to irreducible truths and rebuild.

    Break a problem down to irreducible truths and rebuild from there.

    Try it · 30 seconds
    Live · Catch first principles

    You're asked to cut battery cost. Pick the reasoning style.

    Open the full definition →
  2. 02
    Mental Models · Reasoning

    Inversion

    Solve forward by asking how to fail.

    Solve forward by asking how to fail.

    Try it · 30 seconds
    Live · Catch inversion

    You're trying to build a 10x team. Pick the more useful question.

    Open the full definition →
  3. 03
    Mental Models · Reasoning

    Occam's Razor

    Prefer the simplest explanation that fits the evidence.

    Prefer the simplest explanation consistent with the evidence.

    Try it · 30 seconds
    Live example · Apply Occam's Razor

    Use the model. Pick the move.

    Prefer the simplest explanation consistent with the evidence. You've just seen this: Sales are down because demand is down. Which lever does the model recommend?

    ● Live

    Pick a lever. There are no neutral ones — every incentive funds a behavior somewhere.

    Open the full definition →
  4. 04
    Mental Models · Decision

    Second-Order Thinking

    Ask 'and then what?' — twice.

    Ask 'and then what?' — twice.

    Try it · 30 seconds
    Live example · Apply Second-Order Thinking

    Use the model. Pick the move.

    Ask 'and then what?' — twice. You've just seen this: Quarterly bonuses make this quarter great and erode the next five. Which lever does the model recommend?

    ● Live

    Pick a lever. There are no neutral ones — every incentive funds a behavior somewhere.

    Open the full definition →
  5. 05
    Mental Models · Reasoning

    Map vs. Territory

    The deck is not the strategy.

    Models are simplifications — never the thing itself.

    Try it · 30 seconds
    Live example · Apply Map vs. Territory

    Use the model. Pick the move.

    Models are simplifications — never the thing itself. You've just seen this: GPS is useful until you drive into a river. Which lever does the model recommend?

    ● Live

    Pick a lever. There are no neutral ones — every incentive funds a behavior somewhere.

    Open the full definition →
  6. 06
    Mental Models · Reasoning

    Circle of Competence

    Know the perimeter of what you actually know.

    Know the perimeter of what you actually know.

    Try it · 30 seconds
    Live · Catch circle of competence

    You're an excellent operator in B2B SaaS. A friend pitches you a biotech investment. The deck is compelling.

    Open the full definition →
Closing thought

Memorize the names. Internalize the moves. Use them in real meetings, not just essays.

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