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Sayre’s law, named after political scientist Wallace Sayre, offers that in any dispute the intensity of feeling is inversely proportional to the value of the issues at stake.
Parkinson’s law of triviality, named after naval historian Cyril Parkinson, which states that organizations tend to give disproportionate weight to trivial issues.
example of a budget committee considering an atomic reactor and a bike shed, offering that “the time spent on any item of the agenda will be in inverse proportion to the sum involved.”
This phenomenon has become known as bike-shedding.
For a real-life example, consider the recurring prominent debates about small items in the national budget each year in the United States. In the name of balancing the budget, politicians perennially suggest cutting national arts funding, science funding, and foreign aid. No matter what you personally think of these programs, cutting them substantially will not significantly reduce the budget, as they respectively amount only to approximately 0.01 percent, 0.2 percent, and 1.3 percent of the total budget.
By putting potential activities in the context of this overall goal, using quantitative measures as much as possible, you can more clearly determine their relative importance.
Luckily, there is an extremely powerful mental model from economics to guide you: opportunity cost.
Of course, it may feel good to pay low prices or get a discount, but not when you need to spend a considerable amount of your limited time to do so. Time is money!
Complications arise when you realize that you can’t have it all.
For our boys, there are only four to five hours from the time they get off the school bus until lights out at bedtime.
“Give me a place to stand and I shall move the Earth.” The mechanical advantage gained by a lever, also known as leverage, serves as the basis of a mental model applicable across a wide variety of situations.
In negotiation, leverage refers to the power one side has over another.
spending time or money on these high-leverage activities will produce the greatest effects.
Which job will give you the best opportunity to advance your career? Which home renovations might most increase the value of your home in an upcoming sale or most increase its livability? Which activities will most help your kids in the future, or bring them the most joy? To which causes or charities would your cash contributions make the most difference (a mental model itself called effective altruism)? How much and what type of exercise do you need to do to get the most benefits in the least amount of time?
Thinking about leverage helps you factor opportunity cost into your decision making.
The Pareto principle can help you find high-leverage activities. It states that in many situations, 80 percent of the results come from a...
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For example, if you want to improve the effectiveness of a web page, focus on the headline and leading image, often referred to as the “hero section.”
Incidentally, these are also the class of features that should go into an MVP (see Chapter 1).
After you determine the 80/20 and address the low-hanging fruit, each additional hour of work will unfortunately produce less and less impactful results.
law of diminishing returns. It is the tendency for continued effort to diminish in effectiveness after a certain l...
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There is a similar concept called the law of diminishing utility,
Consider the difference between the enjoyment you receive from eating one donut versus eating a second or third donut.
When continuing beyond a point like this can actually make things worse, you move from diminishing returns to negative returns.
all-nighter.
If you can identify another activity that can produce greater results for the same amount of effort, then you should jump to
Otherwise, you should keep at your current activity, since you’re still making progress (even if it is slower progress) and you don’t have anything better to do.
you should not assume there isn’t anything better to do. You must periodically brainstorm and seek alternatives, making sure there aren’t other high-leverage projects, with their own 80/20s, just out of view.
KEy takeaway
While Lauren was not an expert procrastinator, she typically finished Friday’s problem sets sometime late Thursday night. Gabriel was the only person Lauren knew at MIT who finished his weekly work by Tuesday; in fact, he procrastinated so little that he finished MIT in three years.
present bias,
the tendency to overvalue near-term rewards in the present over making incremental progress on long-term goals (...
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From a purely financial point of view, if you could guarantee investing at a rate greater than the discount rate, then you would be better off getting the lump-sum payment and investing it.
which is called hyperbolic discounting. In other words, people really, really value instant gratification over delayed gratification, and this preference plays a central role in procrastination, along with other areas of life where people struggle with self-control, such as dieting, addiction, etc.
When you’re on a diet, it’s hard to avoid the pull of that donut in the office. That’s because you get the short-term donut payoff right now, whereas the long-term dieting payoff, being so far in the future, is discounted in your mind close to zero (like company earnings fifty years in the future).
A mental model that can help you further combat your present bias is commitment, where you actively commit in some way to your desired future.
showcase the default effect, the effect stemming from the fact that many people just accept default options.
Second, if the penalty isn’t large, as in many social contracts or calendar commitments, you may decide it is worth it just to break it, defeating its purpose.
there are many ways to formulate an ineffective commitment, including making it unrealistic (“I will work out at the gym every day”), not specifying a clear timeline (“I will go to the gym more often”), and being too vague (“I will try to exercise more”).
Hofstadter’s law: It always takes longer than you expect, even when you take into account Hofstadter’s Law.
In other words, things take longer than you expect, even when you consider that they take longer than you expect!
Both concepts highlight the fact that you’re generally bad at estimating when things will get done, because, unless you put a lot of effort into continuous project planning, you don’t realize all the little things that need to be completed to really button up a project.
A less-than-perfect solution is often good enough to keep optimally moving forward.
The best time to call something done is much earlier than it usually happens. Of course,
Another often-overlooked option is to abandon the project altogether before it is done. Sometimes you need to acknowledge that you are just not on the path to success.
and loss aversion is the model that explains why.
When you allow these irrecoverable costs to cloud your decision making, you are falling victim to the sunk-cost fallacy.
An instance where sunk costs lead to an escalation of commitment is sometimes called the Concorde fallacy,
Am I throwing good money after bad when it is better to just walk away?
Remaining data-driven can help you avoid this mistake. The “power of positive thinking” can only get you so far.
Some economists argue that considering sunk costs is okay when taking a loss may damage your reputation.
Sometimes, though, you can indeed right the ship. In these situations, admitting you are not on the right track is the best way to save a project.
