The Threshold Effect: High IQ Doesn’t Mean Success

The Threshold Effect: High IQ Doesn’t Mean Success

What is the threshold effect? How does it apply to intelligence and, ultimately, success in life? Geniuses are outliers—they are outside the norm when it comes to intelligence. Higher intelligence certainly can lead to greater success. However, differences in achievement based on intelligence level out at some point. This is the threshold effect. Read more to learn about the threshold effect in relation to intelligence and success.

The 3.5% Rule: The Passionate Few Change the World

The 3.5% Rule: The Passionate Few Change the World

What is the 3.5% rule? Does it really take only 3.5% of the population to challenge the status quo? According to Nassim Taleb, the author of Skin in the Game, the state of the world is largely the result of small groups passionately fighting for what they want rather than a majority’s consensus. Indeed, history shows us that in order for your passionate few to succeed, you only need 3.5% of the population on your side. In this article, we’ll explore how the concept applies to politics, religion, language, and morality. We’ll conclude by explaining how you yourself can be

What Is the Curse of Dimensionality?

What Is the Curse of Dimensionality?

What is the curse of dimensionality? Is it ever possible to predict the behavior of a complex system? The curse of dimensionality is a mathematical principle that states that as a system grows, the rate at which it becomes complex accelerates. In his book Skin in the Game, Nassim Taleb argues that because of the curse of dimensionality, complex systems are impossible to reliably predict—any adjustment made to a large, complex system will cause an avalanche of unintended side effects. Without the true knowledge gained from failure, we would never know enough to navigate the infinitely complex world. In this

The Diffusion of Innovation Model (aka TALC) Explained

The Diffusion of Innovation Model (aka TALC) Explained

What is the Diffusion of Innovation (aka TALC) model? How many categories of customers are there in the TALC framework? The Diffusion of Innovation model (also known as the Technology Adoption Life Cycle) was developed by Beal and Bohlen, two agricultural extension agents working for Iowa State College in the 1950s. They developed the model based on studies of when farmers started using new agricultural innovations, such as fertilizer and hybrid seed corn. Others soon generalized the model to technological innovations outside of agriculture. In this article, we’ll take a look at how the Diffusion of Innovation Model explains the

The White Hat Thinking: The Impartial Hat

The White Hat Thinking: The Impartial Hat

What is white hat thinking from the book Six Thinking Hats? What role does the white hat play? In the classic psychology book Six Thinking Hats, Edward de Bono describes the white hat as the neutral hat. The role of the wearer is to simply gather and present the facts and figures without interpreting any of the data. Continue below to learn how to wear the white hat and what the advantages are.

Probability in the Real World: Beyond Mathematics

Probability in the Real World: Beyond Mathematics

Are you a good judge of probability? Do you take into account probability when making decisions that involve an element of risk? According to former options trader Nassim Taleb, most people have a poor grasp of real-world probability, and as a result, they misunderstand the likelihood of rare events and consequently don’t plan for risk appropriately. In his book Fooled by Randomness, he cites three reasons for our difficulty in understanding how probability plays out in the real world: 1) we don’t properly interpret the past, 2) we can’t predict the future, and 3) we don’t insure against risk properly.

Nassim Taleb: Rare Events Are Not That Rare

Nassim Taleb: Rare Events Are Not That Rare

Can you think of a rare event—that happened either in history or in your personal life? Looking back, how likely is it to it happen again? More generally, do you think people under- or overestimate the likelihood of rare events? Rare events happen infrequently enough that we sometimes are lulled into believing they’re rarer than they actually are so that when they do happen, we are more surprised than we should be. According to Nassim Taleb, the author of Fooled by Randomness, people tend underestimate the likelihood of rare events for these reasons: 1) we don’t properly interpret the past,

Survivorship Bias: What It Is and How to Overcome It

Survivorship Bias: What It Is and How to Overcome It

What is survivorship bias? How does this bias cause us to overestimate the likelihood of success? Survivorship bias is the tendency to mistake the “surviving ” or successful sample as representative of the entire group. This bias causes people to see examples of enormous success as representative of the kind of success any person can expect in that venture or endeavor. For example, people see a fabulously wealthy stockbroker and think, “Trading is very profitable.” Or they see a bestselling author and think, “Writing is a great way to get rich.”  In this article, we’ll look at how survivorship bias

Nassem Taleb: Don’t Underestimate Randomness

Nassem Taleb: Don’t Underestimate Randomness

How much weight do you give to randomness or uncertainty when making decisions? Do you think success is pure luck? According to Nassim Taleb, randomness is a hugely underestimated factor when it comes to decision-making, especially in fields that are greatly affected by randomness (e.g. trading, economics, and politics). He cites three reasons for our difficulty in appreciating the power of randomness: 1) we’re guided by our primitive brain, 2) we don’t understand probability, and 3) we see meaning when there’s none. Keep reading to learn why we have such trouble comprehending randomness, and how our brain’s wiring makes it

How to Track Your Weight Loss With EWMA Formula

How to Track Your Weight Loss With EWMA Formula

What is the EWMA formula? Why shouldn’t you rely on raw, weight loss measurements to track your progress? EWMA stands for the Exponentially Weighted Moving Average. In The Hacker’s Diet, John Walker suggests using this formula for tracking your weight loss progress rather than focusing on the daily weight fluctuations which can be caused by a number of variables. The EWMA formula, on the other hand, tracks the trend of your weight loss. Here is how to use the EWMA formula to track your weight loss.