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Making Decisions: A Mental Models Cookbook

By Juan Carlos

The Setup

Making a decision is fraught with biases that occur consciously and unconsciously. Any solid thinker’s job is to cite and label those tendencies in their mind and environment, so they make the best decision consistently. You can consider the most critical data and make the right choice by giving yourself a wide enough angle on a situation or problem.

The Approach

  • Check your bias: negative or positive feelings about stakeholders can affect your choice without reason. You see them in a new light by weighing whether your preconceived notions incorrectly attribute an action to their personality.
  • Consider the forces in your organization’s sphere, such as established rivals and new entrants.
  • Discover your initiative’s or product’s opportunity cost and hone your connection to potential customers.
  • Remember that the simplest explanation is probably correct. Complexity is often a recipe for muddling a straightforward answer.

​The Latticework

  • Fundamental Attribution Error undoes innate biases in how you perceive others’ actions versus your own.
  • Porter’s Five Forces looks to the influences surrounding an organization or situation and use those findings as a springboard for decision-making.
  • Comparative Advantage is a way to review the opportunity cost of a product or initiative and choose the quality or price that exceeds expectations in that category.
  • Occam’s Razor helps you choose between competing solutions — it’s often the simplest.

​The Deep Dive

Fundamental Attribution Error
Regardless of external forces, people think that actions mirror an individual’s personality. Also known as the over-attribution effect or correspondence bias, the overarching theme is that folks tend to be more lenient with their actions than others, holding individuals fully accountable for their behaviors without considering other factors. People judge other individuals more severely than they do themselves, often forgiving and rationalizing one’s behavior when taking similar actions. Unfairly assuming the worst and blaming dispositional factors can affect the moment and future interactions with that individual who now wears that label on their person rather than on the circumstance.

Porter’s Five Forces
The five forces that influence a company’s ability to serve its customers and profit are the threat of substitute products or services, the threat of established rivals, the threat of new entrants, the suppliers’ bargaining power, and the customers’ bargaining power. Any change in those forces often demands a business to reassess its position in its industry’s landscape. It’s a valuable tool to assess how each force affects the industry you’re in and utilize that information to determine how strong a company’s position is, short and long-term. As a result, you’ll have a solid understanding of businesses with good and bad economics.

Comparative Advantage
An entity’s capacity to deliver a service or product at a lower opportunity cost than other people, organizations, or nations. As a result, the entity can sell a good or service for less than its competition. Whenever you consider a good or service, each has advantages and disadvantages. The opportunity cost reveals the potential benefits an entity misses out on when picking one option over another. The principle informs choosing the best option while contemplating trade-offs. The option with the best overall value is the one with the comparative advantage. Determining the opportunity cost of goods or services will inform decision-making and, ultimately, free you to choose the best route forward each time.

Occam’s Razor
For every accurate explanation of something, there is an infinite number of more complex and incorrect possibilities. When confronted with competing solutions for the same thing, the simplest is likely the correct one. Identify a possible solution by stripping away false ones, and have more confidence in its validity.

Hi, I’m
Juan Carlos

I’m a creator at heart, a filmmaker by instinct, and a polymath who thrives on diversity. My life’s work is about framing: capturing, exploring, and sometimes breaking conventional boundaries to uncover deeper truths.

My Story

From directing award-winning films to leading product innovation at startups, my career spans the creative and the analytical. I’ve authored children’s books under desert skies, each designed to spark curiosity and independent thought in young minds. Whether through technology that simplifies complex issues or through mental models that enhance clarity, I constantly strive to reimagine how we perceive and interact with the world.

In my personal life, I’m a father fascinated by nature and humanity’s marvels. I share this wonder with my children as we explore the world’s beauty together. Every day offers a new frame, reminding us that what we focus on defines our lives’ story.