The title says business owners, but in reality, anyone can implement them.
Most of us don’t struggle with effort. We struggle with clarity. Especially with the amount of digital noise coming at us from every direction. Every week brings more decisions. Product or hiring? Feature A or B? Stay the course or pivot? The right answer rarely comes from copying what worked for someone else. It comes from how we think. Mental models are decision tools for your tool belt. They are not tactics. They are not trends. They are structured ways of thinking that help you see clearly, focus on what matters, and make decisions that hold up under pressure. The right model won’t give you the answer, but it will help you stop asking the wrong question.
These five have shaped how I try to operate. One in particular shows up everywhere.
The 80/20 Rule
Focus where the force is.
This is my favorite model. The whole world runs on it.
The 80/20 Rule, or Pareto Principle, says that 80 percent of outcomes come from 20 percent of inputs. Most of what we do doesn’t move the needle. A small set of actions creates nearly all the value.
We wear 20 percent of our clothes 80 percent of the time.
We use 20 percent of our vocabulary 80 percent of the time.
We spend 80 percent of our time with 20 percent of the people in our lives.
Business works the same way:
- A few customers generate most of your revenue
- A few features drive most of your retention
- A few channels drive most of your growth
- A few people on your team create most of the progress
This model is simple, brutal, and incredibly useful. It forces you to stop treating every input as equal. It gives you permission to ignore the noise and double down where it counts.
A great book to pick up is The 80/20 Principle by Richard Koch if you want to go deeper.
First Principles Thinking
Strip it down. Build it back up.
This is the second model I rely on most and keep practicing.
First Principles Thinking means breaking problems down to their fundamental truths, then reasoning up from there. It stops you from accepting default thinking or inherited assumptions.
Instead of asking, “What are other companies doing?” ask, “What do we know is true?”
Instead of assuming, “We need to hire someone,” ask, “What outcome are we trying to create?”
Elon Musk used this approach to reimagine the cost structure of rockets. You can use it to rethink pricing, hiring, onboarding, or distribution.
This model requires deep thought and quiet space. But it helps you stop guessing and start designing from first-order logic. It gives you clarity no spreadsheet can.
Second-Order Thinking
What happens next? And after that?
Most decisions create more than one result. First-order thinking sees the obvious outcome. Second-order thinking follows the chain reaction.
You discount to boost sales. What happens to brand perception?
You scale fast. What happens to product quality?
You simplify onboarding. What happens to activation quality?
Second-order thinking helps you avoid solving one problem by creating another. It gives your strategy depth. It lets you see beyond the next step and anticipate the system impact of every decision.
Opportunity Cost
Every yes costs something better.
You can only build one thing at a time. You can only fund one campaign. You can only focus on one strategic bet. That means every decision comes at the expense of the next best alternative.
Opportunity Cost is the most honest model there is.
If your roadmap is full of small features, what major leap is being delayed?
If your team is chasing short-term revenue, what long-term value is being ignored?
If you’re spending your time in the weeds, what leverage are you leaving on the table?
Strategy isn’t just about choosing what to do. It’s about admitting what you are giving up.
Inversion
Want to succeed? First, avoid failure.
Inversion flips the question. Instead of asking how to succeed, ask what would guarantee failure.
If you want to retain customers, ask what would drive them away.
If you want to scale, ask what would cause the system to break.
If you want to build trust, ask what would destroy it.
Inversion is about protecting downside before chasing upside. It helps you identify risks early and strip out the obvious mistakes before they show up in your numbers.
This model is especially useful when you are stuck or overwhelmed. Instead of planning the perfect path forward, remove the paths that lead to collapse. What’s left is often enough.
From Thinking to Action: Use RICE to Decide
Clear thinking is only the first step. You still have to decide what happens next. That’s where the RICE Framework comes in for me.
RICE was developed by the product team at Intercom. Designed to help structure a way to prioritize features and initiatives without relying on gut feel or the loudest opinion in the room.
It stands for:
- Reach — How many people this will affect over a given time period
- Impact — How much it will move a core business goal if it works
- Confidence — How sure you are about those estimates
- Effort — How much time and work it will take to implement
The formula is straightforward:
(Reach × Impact × Confidence) ÷ Effort
RICE forces you to balance ambition and feasibility. A high-impact idea with low confidence might not beat a smaller idea with strong reach and a quick path to execution. The model creates a neutral ground for prioritization, especially when everything feels important. It also allows you to bring the team together so everyone can have a say and be on board.
The one thing I found that matters most before using the RICE Framework: have a clear goal. What outcome are you trying to achieve, and what ideas do you have that could get you there? If the goal is undefined, this becomes an exercise in mental gymnastics. Not helpful.
If you want to grab a copy of a template, you can click HERE.
Final Thought
The quality of your decisions compounds over time. The more clarity you bring to each choice, the more momentum you create in the long run.
Use the 80/20 Rule to find what matters.
Use First Principles to understand it deeply.
Use Second-Order Thinking to play it forward.
Use Opportunity Cost to make the tradeoff visible.
Use Inversion to prevent collapse before it starts.
Then use RICE to prioritize and move.
Don’t just work harder. Think better.
