2. 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.
“
”Charlie Munger, Elementary Worldly Wisdom
13. Example: Thermostat
Observe What Temperature Is It?
Orient
Where is the Temperature relative to
the Set Point?
Decide
Would Turning on the Furnace get me
closer to the Set Point?
Act
14. Example: Thermostat
Observe What Temperature Is It?
Orient
Where is the Temperature relative to
the Set Point?
Decide
Would Turning on the Furnace get me
closer to the Set Point?
Act Turn on the Furnace.
25. Example: Product Development
Observe
What is Currently in the Market/What
Problems are Customers Having?
Orient
What Products Could Meet Unmet
Needs, What are our Capabilities,
What can be Marketed/Sold?
Decide
Act
26. Example: Product Development
Observe
What is Currently in the Market/What
Problems are Customers Having?
Orient
What Products Could Meet Unmet
Needs, What are our Capabilities,
What can be Marketed/Sold?
Decide
What can we build that generates the
most value with the least cost?
Act
27. Example: Product Development
Observe
What is Currently in the Market/What
Problems are Customers Having?
Orient
What Products Could Meet Unmet
Needs, What are our Capabilities,
What can be Marketed/Sold?
Decide
What can we build that generates the
most value with the least cost?
Act
Build the Product, Release it into the
Market
33. Faster Slower
Ability to Make a Quick
Change/Prototype
Low Ability to Make a
Quick Change/Prototype
!
34. Faster Slower
Ability to Make a Quick
Change/Prototype
Low Ability to Make a
Quick Change/Prototype
Good Customer
Understanding
Poor Customer
Understanding
35. Faster Slower
Ability to Make a Quick
Change/Prototype
Low Ability to Make a
Quick Change/Prototype
Good Customer
Understanding
Poor Customer
Understanding
More Derivative, Clear
Improvements
Less Derivitave, Have to
Make Bigger Conceptual
Jumps