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Thursday, May 12th, 2011

The Top 100 Mental Models Needed To Succeed In Business

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Charlie Munger refers to a “latticework of about 100 mental models” that he and Warren Buffett credit for their successful investing. Munger points out that if you don’t master the “multidisciplinary” approach of such “mental constructs”, you will remain in the “middle ranks” or “shallows” in life.

I’m fascinated by these models, and their application to business (not just investing) and life, and decided to keep a list of ones I run across (some are related to Munger and others I’ve learned about elsewhere (but believe Munger might appreciate)).

Warren Buffett's Right-Hand Man Charlie Munger

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Friday, October 22nd, 2010

3 Simple Steps To Help You Pursue Your Passion

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Steve Jobs told Stanford students that when he wakes up each day he tries asking himself:

“If this were my last day on earth, would I be happy with my to-do list.”

Steve Jobs told Stanford graduates that his to-do list needs to be good enough for his last day on earth

 

And if his answer is “no” for three or four days in a row, he does something about it.

Well, a goal in my life is to help people explore their passions, ideally in a way that helps them make a living.

I thought I’d share three steps that I used to further my own career passions.

Ok, so let’s dig in…

Step 1: Pick a Passion

It starts with picking a passion — your passion may be obvious to you ( politics, sports, medicine, photography religion) and you’re good to go.

If your passions are not obvious to you, ask those closest to you (friends, colleagues, family members) what they think.

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Friday, October 30th, 2009

Pareto’s 80/20 Rule

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The 80/20 Rule is one of the most powerful ideas you can use in most aspects of business.

You’ll find it discussed in my post on The 20 Best Business Books of All Time.

In The Four Hour Work Week, author Tim Ferriss recommends focusing your attention on the 20% of projects that contribute 80% of your income; and firing those 20% of your customers who take up the majority of your time and trouble.

The 80/20 Rule is also featured in the Tipping Point (where author Malcolm Gladwell calls it The Law of the Few).

The 80/20 Rule — also known as the “Pareto Rule,” “Pareto Law” or “Pareto Principle”– is named after Vilfredo Pareto who observed in 1906 that 80% of the land in Italy was owned by 20% of the population.

Pareto and others quickly learned that the 80/20 rule is applicable to numerous situations (business and otherwise).

To find out more about Vilfredo, and the mathematics behind Pareto’s Principle check out Pareto Wiki.

My Personal Examples of Pareto’s 80/20 Principle

Here are some 80/20 examples I’ve personally experienced in life (note: I’m rounding my numbers).

  • 80% of the money I’ve raised for startups came from 20% of investors.
  • 80% of the Web traffic to this blog comes from 20% of the traffic sources.
  • 20% of the advertising campaigns generated 80% of the Web traffic for a business I’m associated with.
  • About one in seven venture capital investments is said to be a major success (that would be 14.2% of investments creating the cast majority (80%+) of investment returns).
  • 80% of my happiness every day typically comes from something I did during a few hours (e.g. 20% of my awake time)
  • 80% of our profit comes from 20% of our products.
  • 95% of sales in one business I ran came from 20% of my sales team (one of five sales people)

You’ll notice that in a couple of my Pareto’s Rule examples the numbers aren’t 80 and 20: The Pareto distribution doesn’t have to be exactly 80% and 20% nor does it have to add up to 100%. It’s just an approximation.

I was amazed to see how many 80/20 and Pareto books are available on Amazon. While I haven’t read any of them, here’s a link to some:  Books on the Pareto 80 20 rule.

Thanks, Vilfredo!

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Wednesday, May 27th, 2009

7 Easy Tips On How To Be A Go-Giver (Not a Go-Getter)

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I first heard about the concept of being a “go-giver” from Bob Burg in a book he wrote called Winning Without Intimidation; he later made the phrase more popular by writing Go-Giver: A Little Story About a Powerful Business Idea.

I used the Go-Giver phrase, which is corny but good, in a speech I made to entrepreneurs a few years back.

source: Túrelio, Wikimedia Commons

source: Túrelio, Wikimedia Commons

From that speech, and others, here are seven tips to being a better networker or go-giver:

1) Giving is Attractive — “No matter what your profession, if you can give increase of life to others and make them sensible [i.e., “aware”] of this gift, they will be attracted to you, and you will get rich.” Wallace D. Wattles from The Science of Getting Rich

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