Five Mental Models to Improve Your Product Sense and Decision-Making

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Product Coalition

10 min readJun 2, 2021

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This is part 1 in a series about mental models for Product Managers. If you enjoy this, check out part 2 — Leverage for Product Managers.

Have you ever found yourself sweating bullets staring down a product decision? Executives are pushing urgency. The data is inconclusive. Your support team is asking for more time. Are you being data-driven? What about your product intuition?

These types of feelings are not uncommon for PMs. Decision-making is a core part of our daily job responsibilities — and that can be draining. Over my career, I’ve always wondered if there was some secret sauce to accurate and fast decision-making. Unfortunately, there isn’t a silver bullet. But there is a secret weapon — mental models.

Shane Parish, author of The Great Mental Models Vol 1 and Vol 21, thinks so.

In life and business, the person with the fewest blind spots wins. Removing blind spots means we see, interact with, and move closer to understanding reality. We think better. And thinking better is about finding simple processes that help us work through problems from multiple dimensions and perspectives, allowing us to better choose solutions that fit what matters to us. When you start to understand the world better, when the whys seem less mysterious, you gain confidence in how you navigate it. The successes will accrue. And more success means more time, less stress, and ultimately a more meaningful life.

Mental models can indeed have a wide-ranging impact on your life. But more clearer thinking also means more time for the most meaningful parts of the product, less stress about making decisions, and ultimately more meaningful product outcomes.

Mental models are vast, and even Shane’s collection is too big to summarize here. But below are five mental models to help you make better decisions and hone your product sense.

The Map is Not the Territory

When you’re visiting a national park, the crinkled map in your pocket does not fully represent the majesty in front of you. The map is not an accurate 1:1 representation of the territory, but it is invaluable as you try to find your way back to camp. If that’s too meta for you, think of the financial statements for your company. These statements distill thousands of data points into something much more straightforward and valuable for your leadership team.

That’s what maps are — a helpful summary to simplify reality. And remembering that is what this mental model is all about. We have to acknowledge maps aren’t comprehensive and that they can be snapshots in time.

Maps exist all around us. This blog post maps mental models (now there’s meta for you). But what about in Product? What are common Product Management Maps? Here are a few:

The core assumptions about what we should build.
Dashboards of user behavior summarizing trends.
Feedback from internal teams like Sales or Support.
Your executive team’s desired roadmap. Or better yet, all roadmaps. It’s literally in the damn name!

So how do we use maps responsibly and avoid the pitfall of mistaking maps as the territory? Parish gives us three tactics to consider, and I’ll give you three hypotheticals to apply them as a PM.

1. Reality is the ultimate update. We can and should update maps based on our own experiences in the territory. That’s how good maps are built: feedback loops created by explorers.

Imagine your support team discovered a bug with the recent release. Their map consists of a bug ticket with how to reproduce and the expected impact on customers. It insists this is an all-hands-on-deck situation. But we discover customers aren’t hitting the issue often. And the few that are have found workarounds. Our map needs updating to reflect this new reality — we need to fix the problem, but the priority is minor.

2. Consider the cartographer. Maps are not purely objective creations. They reflect the values, standards, and limitations of their creators.

VP Craig brings you a list of features we have to build next quarter. His last performance review was all about this roadmap. But those features and problems aren’t showing up in our research. We cannot take this map at face value. It’s a reflection of Cartographer Craig’s desire to deliver an easy win at the next board meeting. As Product folk, we have to be constantly aware of the cartographer’s impact on the maps around us.

3. Maps can influence territories — a cautionary tale of what can happen when we try to fit complexity into the simplification.

Usage dashboards are maps that influence what we measure but also how we iterate. We want to build sticky products that keep customers returning to core actions that correlate with business outcomes. But measuring the right indicators can sometimes feel a bit like rocket science. If we measure the wrong things, our maps are no longer useful in leading to the treasure (the business outcome). We’ve all seen the over-excited PM with his vanity metrics dashboard. If we measure behavior X, but it has no impact on desired outcome Y — our reality will worsen for our customers and our business.

First Principles Thinking

First principles are the boundaries we have to work within situations in life. They do not provide a checklist of things that will always be true; our knowledge of first principles changes as we understand more. But they are the foundation on which we can build.

First principle thinking is all about being able to reverse complicated situations and unlock the creative outcomes underneath. It’s about separating underlying ideas and facts from the assumptions based on them.

The better understanding of first principles, the more freedom we have to navigate the situation. The scientist with a deep knowledge of thermodynamics who happens to be a car hobbyist will have more effective and creative solutions for rebuilding an engine than an amateur reading a manual.

But what about first principles in product thinking? We’re not exactly talking about the rules of the universe here. This model applied to our world looks like product principles. These can and will vary based on the company, market segment, and product. But at their best, they are guiding truths about the market and your customers.

Let’s look at Netflix. I’m sure they have many product principles, but let’s pretend one is: We delight the Most. In all-out streaming wars, the Red N believes that having the best user experience is key to their victory. They have metrics that help them know if they’re moving toward that principle being true or not. With their principle in place and the metrics to guide them, the product team is set free to explore while staying within the bounds of what matters. To delight the most, they might experiment with:

Custom playback speeds
8k resolution
Collaborative watch parties
Plenty of other potential features

Whatever the solution, it has to drive towards the first principle. Using this mental model effectively can help us establish the guiding lights for our teams while ensuring they’re genuinely empowered.

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Second-Order Thinking

Thinking farther ahead and thinking holistically requires us to not only consider our actions and their immediate consequences but the subsequent effects of those actions. Failing to consider the second-and third-order effects can unleash disaster

We’ve all seen the scary headlines about how bacteria are becoming resistant to our medicine. This alarming problem comes from the food and medical industry not heeding the subsequent effects of overprescribing and overusing. Over-optimizing for short-term gains and bandaids has led to a much bigger problem and risk to profits.

This type of thinking can be a Product Manager’s superpower — and it’s good for business. It also makes you more effective in persuasion. If you can demonstrate you’ve gamed out the scenario, you’ll rightly inspire more confidence in your pitch.

Build loyalty and trust. Happy customers and employees are the lifeblood of software companies, especially in the SaaS space. There is an endless supply of stories about companies deciding to move their bottom line but ultimately reversing it because of an uproar. You can optimize for profits this quarter, but if it tanks your ARR later — it’s not worth it.

It doesn’t have to be a feature decision. Basecamp’s recent company policy change is a perfect example. Did their founders game out the second-and-third-order impact? Would they have made the same decision if they knew it’d cost them half their employees and alienate a good portion of their customer base?

Optimize for long-term product outcomes. Second-order thinking also helps us optimize for the right time horizons. Is this quarter’s easy win worth moving us further away from our target market? Are the COGS associated with this new feature sustainable for our business model? Master this thinking to help you and your team avoid short-term performance theater and focus on what matters most.

Avoid the siren’s call of analysis paralysis. Nobody can Dr. Strange it and run through the endless outcomes before putting a plan in place.

If we were to only rely on this mental model when making product decisions, we’d move too slow. We need complementary models, just like we need counter metrics. Leveraging second-order thinking alongside first-principle thinking can be powerful. First principles help us build product intuition and speed, while second-order thinking gives us careful examination. Together, they help us move fast AND smart.

Inversion

Inversion is a powerful tool to improve your thinking because it helps you identify and remove obstacles to success. The root of inversion is “invert,” which means to upend or turn upside down. As a thinking tool, it means approaching a situation from the opposite end of the natural starting point.

It’s natural for humans to approach problems from the starting line. Where are we at today, and how do we get to where we want to go? Inversion allows us to flip it and reverse it. This model encourages us to look at a problem from all angles.

Start at your desired end state. In Product, we have plans and goals for our business and customer. If you want to achieve a particular outcome, think about what else would have to be true if you already reached it. Let’s think about what YouTube wants most — folks watching videos on their platform.

Their desired end state might be an average session one hour long. If a user spent an hour on YouTube, what else has to be true? They would have to tolerate ads enough not to close the video while waiting for their content. Most content is super long-form, so they would also have to watch multiple videos each time they visit. In this simplified hypothetical, YouTube can now work backward and build better ad-targeting and video recommendations.

Inverse to avoid disaster. Another way to approach the mental model is by considering worst-case scenarios. The pre-mortem is a staple here. We want to retain our customers. Use inversion to understand what would have to be true if they left for a competitor. For example, what would cause an exodus of users from Twitch? Here’s one — a majority of the top streamers signing an exclusive deal with some a competitor. Twitch could use this inversion to implement a strategy around creator partnerships.

Your Circle of Competence

Our last mental model is all about understanding your bounds and continually improving. A circle of competence is mastery of a particular area. It can take to build. We cannot fake actual knowledge of a complex territory.

How do you know when you have a circle of competence? Within our circles of competence, we know exactly what we don’t know. We are able to make decisions quickly and relatively accurately. We possess detailed knowledge of additional information we might need to make a decision with full understanding, or even what information is unobtainable. We know what is knowable and what is unknowable and can distinguish between the two.

It’s not enough to learn the great mental models and apply them occasionally. To truly get the value out of these logic nuggets, you need to measure your performance. A decision journal is a great way to do this. Did you use the correct mental model? What were the results? What did it say about your product sense? Tell the truth. Evaluate yourself and your thinking. Learn, iterate, and improve.

You wouldn’t launch a new product without a cohesive set of logs and dashboards to measure success. In the same way, you shouldn’t employ new ways of thinking without measuring its impact.

We just went through five mental models to make you a better PM. It was a ton of info, and it barely scratched the surface of the great mental models. I’d love to hear from you. What’d I miss here? What models are your favorite tools? Which apply the most to our daily lives as Product Managers? Let me know in the comments.