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Through the Re:Mind Newsletter, delivered every other Tuesday, we unleash your full potential and upgrade decision-making. We’ll explore mental models and life design.
Circle of Competence
By Juan Carlos
Definition
Individuals gain knowledge by studying or experiencing the world. Knowing where your competencies are and where they are not is crucial to understanding what problems you can solve and which ones you’ll need to ask for help.
Why Use It
By identifying your areas of expertise, one can determine where they have an advantage.
When to Use It
Working within a circle of competence gives you an unfair advantage with access to more information, which allows you to narrow your options and ultimately make better decisions.
How to Use It
Defining what you know and what you don’t know is the first step. Operating in that circle of competence is the second step. Recognizing your limitations is the third and most important step.
How to Misuse It
Sometimes pride, negligence, or carelessness can cause folks to overstretch their circle of competence — that’s where you’ll usually get into trouble.
Going up against those with more experience can be a losing proposition. Be honest with yourself. Understanding your weaknesses is a strength.
Next Step
Grow your body of knowledge and gain more experience in fields that interest you, but remember that blunders happen when you’re in unfamiliar territory.
Where it Came From
The concept was formed by Warren Buffett and Charlie Munger to explain why someone should limit their financial investments if they don’t have expertise in that area.
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Hi, I’m
Juan Carlos
Fueled by a passion for storytelling and excitement for life design, I find joy in reframing narratives to illuminate paths toward fulfillment. My experience spans high-growth startups, filmmaking, and social impact. Through mentoring and coaching, I guide teams and individuals to discover purpose and cultivate a meaningful life.
My Story
I started in film, directing award-winning features such as ‘Know How’ and ‘Second Skin.’ These cinematic endeavors earned me recognition and allowed me to serve as a spokesperson for Adobe. I founded the White Roof Project, a grassroots climate activism campaign that mitigated the urban heat island effect and spurred community-led social change.
I carried my storytelling skills and passion for societal transformation as I transitioned into the startup ecosystem. Initially, I contributed to social impact apps, converting complex issues into accessible solutions. This early experience laid a foundation for my later work, where I led the development of groundbreaking products within high-growth startups. My work has underscored the potential of technology to innovate and amplify the quality of human life.