Image: Visual Capitalist

The infographic comes from best-selling author and entrepreneur Michael Simmons, who has collected over 650 mental models through his work. The image synthesizes mental models down to the most useful and universal mental models that people should learn to master first.

Concepts such as the 80/20 rule (Pareto’s principle), compound interest, and network effects are summarized in the visualization, and their major components are broken down further within the circle.

The 80/20 rule (Pareto’s principle) is named after Italian economist Vilfredo Pareto, who was likely the first person to note the 80/20 connection in an 1896 paper.

In short, it shows that 20% of inputs (work, time, effort) often leads to 80% of outputs (performance, sales, revenue, etc.), creating an extremely vivid mental framework for making prioritization decisions.

The 80/20 rule represents a power law distribution that has been empirically shown to exist throughout nature, and it also has huge implications on business.

Credit: Visual Capitalist