I’ve really been getting into the mental models Charlie Munger has talked about so much. After you learn a new model, it stays deep in your head and can be applied to many situations in the future.
While others look at a problem or a question in isolation, those with mental models can apply a number of different tools to the situation, offering superior insight.
A great book I read recently was The Innovator’s Dilemma by Clayton Christensen. It’s extremely interesting because it says a business can do everything right by traditional standards like listening to your customers needs and improving your product quality but for those same reasons, see the destruction of your business.
It bridges together why so many great companies seem to simply die off. In a personal example, social media sites have great network effects and are in a great position to continue to be the market leader. However, lets look at the past 15 years of the leading social media sites, it shows a huge amount of change.
A key point described by Christensen is that there are changes called ‘disruptive technologies’ and they are usually discovered by firms who are unburdened by the existing customer requirements. This new product can start at the low end in an unrelated industry but slowly make its way up to the higher value end of the chain hurting incumbents in the traditional market.
Apple Inc. (AAPL) is exploring ways to replace Intel Corp. (INTC) processors in its Mac personal computers with a version of the chip technology it uses in the iPhone and iPad, according to people familiar with the company’s research.
Apple engineers have grown confident that the chip designs used for its mobile devices will one day be powerful enough to run its desktops and laptops…