building blocks

Building Blocks Planning
This is an outline of a simple tool for planning innovative technology businesses which helps consider sequences and consequences.
Powered by:  Mick Liubinskas

Product Focus for tech companies in San Francisco

This method uses the metaphor of building blocks to plan the major steps from now to your big goal. The principle is that each block builds on the block under it and must be a logical extension forward. It stops ‘hope’ as a strategy or ‘dreams’ without structure. It gets you to ask the question, what foundation am I building and, when it is finished and strong, what can I build on that base to grow towards my vision.
It’s useful for the management of tech businesses who are trying to plan when there are complex interactions between parts and many paths to take.
Planning is significantly harder with innovations because there are a number of large unknowns or, at best, hypotheses, including;
Who are we building this for?
What problem are we solving?
What is it we are building?
How should we build it?
What resources will it take to build?
How long will it take to build?
How much will it cost?
Will the customers want/like/use it?
Will the customers pay for it and how much?

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Mental Models

“To the man with a hammer, everything looks like a nail.”

The Best Way to Make Intelligent Decisions

Charlie Munger summed up the approach to practical wisdom through understanding mental models by saying:

“Well, the first rule is that you can’t really know anything if you just remember isolated facts and try and bang ’em back. If the facts don’t hang together on a latticework of theory, you don’t have them in a usable form. You’ve got to have models in your head. And you’ve got to array your experience both vicarious and direct on this latticework of models. You may have noticed students who just try to remember and pound back what is remembered. Well, they fail in school and in life. You’ve got to hang experience on a latticework of models in your head.”

THE LIST

if you know all the concepts and principles listed below (only 109…), you will know how to interpret most of things that will happen to you during your life…


General Thinking Concepts

1. The Map is not the Territory

2. Circle of Competence

3. First Principles Thinking

4. Thought Experiment

5. Second-Order Thinking

6. Probabilistic Thinking

7. Inversion

8. Occam’s Razor

9. Hanlon’s Razor


Numeracy

1. Permutations and Combinations

2. Algebraic Equivalence

3. Randomness

4. Stochastic Processes (Poisson, Markov, Random Walk)

5. Compounding

6. Multiplying by Zero

7. Churn

8. Law of Large Numbers

9. Bell Curve/Normal Distribution

10. Power Laws

11. Regression to the Mean

12. Order of Magnitude


Systems

1. Scale

2. Law of Diminishing Returns

3. Pareto Principle

4. Feedback Loops (and Homeostasis)

5. Chaos Dynamics (Butterfly Effect)/ (Sensitivity to Initial Conditions)

6. Preferential Attachment (Cumulative Advantage)

7. Emergence

8. Irreducibility 

9. Tragedy of the Commons

10. Gresham’s Law

11. Algorithms

12. Fragility – Robustness – Antifragility

13. Backup Systems/Redundancy

14. Margin of Safety

15. Criticality

16. Network Effects

17. Via Negativa – Omission/Removal/Avoidance of Harm

18. The Lindy Effect

19. Renormalization Group

20. Spring-loading

21. Complex Adaptive Systems


Physical World

1. Laws of Thermodynamics

2. Reciprocity

3. Velocity

4. Relativity

5. Activation Energy

6. Catalysts

7. Leverage

8. Inertia

9. Alloying

10. Viscosity


The Biological World

1. Incentives

2. Cooperation (Including Symbiosis and Prisoner’s Dilemma)

3. Tendency to Minimize Energy Output (Mental & Physical)

4. Adaptation

5. Evolution by Natural Selection

6. The Red Queen Effect (Co-evolutionary Arms Race)

7. Replication

8. Hierarchical and Other Organizing Instincts

9. Self-Preservation Instincts

10. Simple Physiological Reward-Seeking

11. Exaptation

12. Ecosystems

13. Niches

14. Dunbar’s Number


Human Nature & Judgment

1. Trust

2. Bias from Incentives

3. Pavlovian Association

4. Tendency to Feel Envy & Jealousy

5. Tendency to Distort Due to Liking/Loving or Disliking/Hating

6. Denial 

7. Availability Heuristic

8. Representativeness Heuristic

a. Failure to Account for Base Rates

b. Tendency to Stereotype 

c. Failure to See False Conjunctions

9. Social Proof (Safety in Numbers)

10. Narrative Instinct

11. Curiosity Instinct

12. Language Instinct

13. First-Conclusion Bias

14. Tendency to Overgeneralize from Small Samples

15. Relative Satisfaction/Misery Tendencies

16. Commitment & Consistency Bias

17. Hindsight Bias

18. Sensitivity to Fairness

19. Tendency to Overestimate Consistency of Behavior (Fundamental Attribution Error)

20. Influence of Stress (Including Breaking Points)

21. Survivorship Bias

22. Tendency to Want to Do Something (Fight/Flight, Intervention, Demonstration of Value, etc.)

23. Falsification / Confirmation Bias


Microeconomics & Strategy

1. Opportunity Costs

2. Creative Destruction

3. Comparative Advantage

4. Specialization (Pin Factory)

5. Seizing the Middle

6. Trademarks, Patents, and Copyrights

7. Double-Entry Bookkeeping

8. Utility (Marginal, Diminishing, Increasing)

9. Bottlenecks

10. Bribery

11. Arbitrage

12. Supply and Demand

13. Scarcity

14. Mr. Market


Military & War

1. Seeing the Front

2. Asymmetric Warfare

3. Two-Front War

4. Counterinsurgency

5. Mutually Assured Destruction