Analysing your IQ
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People make better decisions when they bear the consequences of those decisions.
Mental models are thinking tools. Skin in the Game is one of the most powerful—used by successful founders, investors, and strategists to cut through complexity.
Be wary of advice from those who don't share your risks. Put yourself on the line.
The power of Skin in the Game comes from its ability to compress complexity. A good mental model acts like a lens—it brings the important features into focus.
A chef who eats their own cooking is more trustworthy than one who doesn't.
Use Skin in the Game when facing complex decisions with multiple variables. It's especially powerful when conventional wisdom seems wrong or when you're operating in unfamiliar territory.
Over-applying: Not every problem benefits from this model. Match the tool to the situation.
Under-applying: People learn the model but don't practice it. Application takes repetition.
Misunderstanding the principle: Surface-level understanding leads to poor execution. Study the examples.
Ignoring context: The same model works differently in different domains. Adapt accordingly.
Identify a current decision you're facing. Write down the assumptions you're making. Challenge each one.
Look at a past failure. Apply Skin in the Game retroactively—would it have changed the outcome?
Teach the model to someone else. If you can't explain it simply, you don't understand it well enough.
Set a reminder to apply this model once per week for the next month. Track the results.
Skin in the Game often pairs well with other Decision Making models. Combining frameworks multiplies their power.
Mental models require specific cognitive traits to execute. Do you have the Discipline for this?
People make better decisions when they bear the consequences of those decisions.
Be wary of advice from those who don't share your risks. Put yourself on the line.
A chef who eats their own cooking is more trustworthy than one who doesn't.
Use Skin in the Game when facing complex decisions in the decision making domain, when conventional approaches aren't working, or when you need a structured framework for analysis.
Skin in the Game is used by strategic thinkers, business leaders, and anyone who needs to make high-stakes decisions under uncertainty. It's particularly popular in investing, startups, and engineering.
Yes. Mental models are learnable skills, not innate talents. The key is deliberate practice—actively applying the model to real decisions, not just reading about it.