If this is your first time reading, please check out the overview for Poor Ash’s Almanack, a free, vertically-integrated resource including a latticework of mental models, reviews/notes/analysis on books, guided learning journeys, and more.
(Marginal) Utility Mental Model: Executive Summary
If you only have three minutes, this introductory section will get you up to speed on the utility mental model.
The utility mental model in one sentence: “utility” in economics roughly equates to the value you derive from experiences and possessions; I use a somewhat broader definition: “utility” refers to how useful something is in a given context.
Four brief examples of the utility mental model:
No, I don’t want to pay eight dollars for a pretzel and sixty dollars for Wi-Fi! If you’re like most people (or my parents), you spend way too much time sitting in airports. Jordan Ellenberg invokes utility and opportunity coststo prove his theorem on this topic – with (napkin) math – in “How Not To Be Wrong” (HNW review + notes).
Keep your eyes wide open before… and half-shut afterwards. Why is the divorce rate in the U.S. 50%? Research demonstrates that a poor understanding of utility plays a meaningful role, as I explore in the hyperbolic discounting mental model.
Congratulations! You spent 4 years and $140,000 learning nothing useful. The aforementioned Ellenberg – a professional mathematician, by the way – notes in the introduction to his book that when math teachers tell you “you’ll use this someday,” usually, “it’s a lie.” (I still have never once needed to dilate a polygon and reflect it across a Y-axis. Rotations, at least, are useful in Tetris.)
his view is common among successful professionals, many of whom tend to be autodidacts. For example, PAA house favorite Till Roenneberg – chronobiologist extraordinaire – makes a similar point in “Internal Time” (IntTm review + notes):
“the drawback of traditional learning has always been the dissociation between the theory and its application.
‘Why do we have to learn this?’ is probably one of the most frequent and justified questions teachers hear.’”
The difference between the mental models approach and much of formal education is that mental models learners focus on utility: information that can make us more successful professionally, or more content and happy in our personal lives.
We’re not trying to be “well-read,” and we skip supposedly important but profoundly useless nonsense like Jane Austen’s “Pride and Prejudice” (unless we enjoy reading such books, which is a utility in and of itself.)
We’ll go all the way back into your childhood, if necessary. Why is cognitive behavioral therapy(CBT) such a successful approach to treating many challenges, ranging from depression / anxiety to insomnia to “performance” problems, in sharp contrast to murky effectiveness of many other unscientific forms of therapy like psychoanalysis?
In addition to its scientific approach, it’s very utility-focused, as Dr. Judith Beck explores in “ Cognitive Behavior Therapy” ( CBT review + notes). CBT is a time-constrained (often no more than 16 weeks) approach that, as Dr. Beck explains, has a:
“strong focus on current problems and on specific situations that are distressing.”
This parsimonious application of the 80/20 principle (which we’ll discuss) is in sharp contrast to the traditional therapy business model, which psychologist Shawn Achor – author of “The Happiness Advantage” (THA review + notes) – jokingly notes in his famous TED Talk, works like this:
“If you fall below the average, then psychologists get thrilled, because that means you’re either depressed, or you have a disorder, or hopefully both.
We’re hoping for both because our business model is if you come into a therapy session with one problem, we want you to leave knowing you have ten, so you’ll keep coming back over and over again!”
If this sounds interesting/applicable in your life, keep reading for unexpected applications and a deeper understanding of how this interacts with other mental models in the latticework.
However, if this doesn’t sound like something you need to learn right now, no worries! There’s plenty of other content on Poor Ash’s Almanack that might suit your needs. Instead, consider checking out our learning journeys, our discussion of the inversion, Bayesian reasoning, or sleep mental models, or our reviews of great books like “Other Minds” (OthM review + notes), The Landscape of History (LandH review + notes), or “Onward” (O review + notes).
Utility Mental Model: A Deeper Look
It’s really important if […] you get an inch of rain rather than ten inches of snow.
That’s a huge [distinction] for the average consumer, but scientists just aren’t interested in that.”
That quote illustrates utility in a nutshell (as well as precision vs. accuracy, a model that utility interacts with). As we’ll explore, various phenomena underlie the tendency of even really smart people to go down rabbit holes that aren’t useful.
“when you know all the names of that bird in every language, you know nothing about the bird… names don’t constitute knowledge.”
Indeed, the sort of memorization-driven learning of names and dates in school tends to impede, rather than advance, learning. It’s not important what day a specific event in history occurred on, or exactly who was present. It’s important how it happened, and why, and what we can learn from that.
Many readers are likely aware that the name of this site, “Poor Ash’s Almanack,” is a riff on “ Poor Charlie’s Almanack” (PCA review + notes), the wonderful book by Charlie Munger that explores the concept of mental models. Munger’s book, in turn, was based on the famous “Poor Richard’s Almanack” published by Benjamin Franklin – see “The Autobiography of Benjamin Franklin” (ABF review + notes)..
Munger much admired Franklin, and I do too. Unfortunately, the main biography I’ve read – Walter Isaacson’s “Benjamin Franklin: An American Life” (BFAAL review + notes) is pretty terrible and not worth your time to read.
In spite of this, a few lines do stand out: what was it that made Franklin special? A focus on utility. Isaacson observes:
“one aspect of Franklin’s genius was the variety of his interests… approached from a very practical rather than theoretical angle. […]
Franklin’s focus was on traits that could help him succeed in this world, instead of ones that would exalt his soul for the hereafter.”
Here’s the way I’d put it:Ask two questions about everything. A - is this useful? B - does this make me happy? If NO to both, why do it? Much human activity is fundamentally pointless and driven by social proof or status quo bias - not utility. Click To Tweet
In the interest of intellectual humility, I try not to be overconfident about the scope of my abilities, but I’ll make a rare exception: utility is something I think I do really well. I simply don’t spend time on activities that are non-value-adding. Many of these persist for reasons explored in the culture /status quo bias mental model – simply because everyone else does them and we’ve always done them and we think we need to keep doing them.
I think the concept of utility at its most basic is pretty straightforward, so I won’t belabor it: if you want a more formal introductory discussion, you can’t do better than Ellenberg’s aforementioned “How Not To Be Wrong” (HNW review + notes) or my favorite book of all time, Richard Thaler’s “Misbehaving” (M review + notes).
Second, how does utility interact with product vs. packaging, and why can “supposedly irrelevant factors” lead us to make bad purchase decisions as consumers… or bad financial decisions as investors?
Third and finally, how does utility interact with local vs. global optimization and create a challenge in figuring out what we need to be doing and learning?
Utility x Dose-Dependency ( Nonlinearity): Marginal Utility, 80/20 (Pareto) Principle
“One Jelly Donut is a yummy mid-afternoon energy boost.
Three Jelly Donuts may induce a tummyache.
Twelve Jelly Donuts is fraternity pledge hazing.”
As a value investor, I couldn’t possibly care less about monetary policy, but I’ve always loved that quote from famous investor David Einhorn in his 2012 op-ed on the dose-dependency of additional quantitative easing.
As I discuss in the nonlinearity model – with an assist from Jordan Ellenberg’s wonderful, previously-referenced “How Not To Be Wrong” (HNW review + notes) – more is not always better. Take two extra-strength Tylenol, and your headache will go away. Take ten, and there’s a greater-than-zero chance you’ll die of catastrophic, irreversible liver damage.
This pops up all over the place. More data helps us make better decisions, right? Yes and no: Nate Silver’s “The Signal and the Noise” (SigN review + notes) does a great job of exploring how the overwhelming amount of data we face can make it similar to pick out the signal; an n-order impact
Similarly, Dr. Jerome Groopman’s “How Doctors Think” (HDT review + notes) – a severely under-the-radar book I’m really fond of referencing – touches on this point as well. A main theme of HDT is cognition vs. intuition: Groopman’s explores the peril of doctors rushing to snap judgments often overly influenced by cognitive biases like recency or incentives, positing that:
“cogent medical judgments meld first impressions – gestalt – with deliberate analysis.”
Yet there is such a thing as overthinking: if you’re starting at zero, more thought is good, but at some point more may not be better, and may even be worse, For example, Groopman notes that after thirty-eight seconds of reviewing an X-ray,
“many radiologists begin to see things that are not there.”
This type of dose-response tendency shows up everywhere: in “The Up Side of Down” (UpD review + notes), Megan McArdle explores the counterintuitive dose-dependency of prison as a crime deterrent. If prison is rare and shameful enough that few people you know are in there, a prison sentence is a big deterrent.
Counterintuitively, if it’s so prevalent that half of your community is or has been in the clink, prison seems pretty normal and not-scary: just part of life – and no longer a deterrent.
Marginal utility also shows up in our favorite topic: reading and learning. One of the mistakes I see beginning investors make all the time, for example, is reading too many books about finance and investing. Here’s the truth: if you’ve read 3-4 books about value investing, reading any more is a complete and utter waste of time… maybe you’ll pick up one or two more nuggets of information, but the vast majority of the lessons will have been contained in the other books you read.
On the other hand, if you’ve read zero books about psychology, biology, or some other important discipline, then the marginal utility of doing so will be high.
The key takeaway? A book’s value is not absolute – it depends on how much of its material you’re already likely to be familiar with, which is one of the reasons PAA’s book reviews try to help readers figure out which books are likely to have high utility for them at any given time.
Or, in another context: how much is a bottle of water worth? If you’re in the middle of the Sahara Desert and you’re dehydrated, it’s worth its weight in platinum. If you’re in the middle of an Ozarka bottling facility, you wouldn’t trade one for a song.
Marginal utility interacts with personality traits as well: successful investors and entrepreneurs usually have a high “need for cognition,” but more is not always better. If you’re too interested in solving hard problems, you’ll start solving problems for the sake of solving hard problems without worrying about the practical utility – which shows up in contemporary math/science and has been noted by observers like Thomas Kuhn in his famous “The Structure of Scientific Revolutions” (Kuhn review + notes). As Buffett/Munger like to say, there’s no need to jump a twenty-foot hurdle if there’s a two-foot one nearby: no points for difficulty.
This idea of “some is good, more is not always better” is so incredibly prevalent across all domains that I could keep cataloging examples for another twelve pages if I wanted to. But I don’t want to do that (and I know you don’t want me to, either!)
So let’s just look at two of the really important take-homes, and you can find the rest of the applications elsewhere on the site.
The Pareto Principle (80/20)
The Pareto Principle shows up in a lot of areas: operations management and so on. While it’s more of a directionally-useful truism than a mathematical law, the idea is that 20% of our actions drive 80% of the results.
Think about it: of all the hundreds of people you’ve ever met and interacted with, probably a small number (outside of your family) have had the biggest impact on your personal development / career / etc. Of all the skills you’ve ever learned, a handful are probably the most important.
Similarly, while some people love running ultramarathons, most of us don’t have the time (or interest) for that level of investment in athletic activity. Thankfully, scientific research demonstrates that most of the health benefits of exercise can be derived from 2-3 moderate-intensity exercise sessions per week – so simply making an effort a few times a week to go to the gym, or even just for a walk, can have a big impact on our health.
This is a well-understood phenomenon you can read about elsewhere and there’s no use in me wasting words on it: I won’t do a better job. The takeaway is that you should invest more in actions and relationships that drive real value. Areas like bottlenecks can be particularly profitable.
Money and Happiness
More money only drives more happiness to a point. The reasons for this are obvious but unintuitive. Say you’re broke and can only afford an old beater car that doesn’t have working A/C, doesn’t have power steering, and threatens to break down or not start every few weeks. Obviously, this is a high-stress situation and your life would be much improved if you owned a reliable, economical used car.
And new cars have nice features! It probably still drives a lot of incremental utility for most people to move up from a 10-year-old used Toyota to, say, a new (or near-new) one – perhaps one with a bigger engine and a better sound system, too.
Is there a difference between that and a performance/luxury car? Yes – but those kinds of cars cost 2-3x the new Toyota, and probably don’t bring you 2-3x the utility.
And by the time you’re talking about a Koenigsegg or a Bugatti Veyron, well, it’s difficult to plausibly argue that you’re a hundred times better off with one of those.
Graphically, that looks like this: see how the curve flattens out pretty quickly?
Of course, if you want to spend a lot of money on your car and you have the budget, go for it – if it’ll bring you more happiness than the other potential uses of the money it costs. (In other words, the opportunity cost.)
Few people explicitly consider marginal utility and opportunity costs when they make decisions, but it’s well-validated by research that we’re better off when we do: it’s generally found, for example, that there’s a positive correlation between happiness and income up to the high five figures, but it levels off after that.
(At the extreme, the marginal utility of having $10 billion vs. $1 billion is… not very much. I guess you could buy more sports teams? But there’s little you can practically do, as an individual, with $10 billion that you cannot do with $1 billion.)
Those studies are merely an average and many of us would like higher levels of income – myself included – which is totally fine. I’d argue that many of us, in fact, need higher incomes than that given Americans’ propensity to undersave (see Sunstein and Thaler’s Nudge (Ndge review + notes), for example) – but the point remains that rather than blindly assuming “more is better,” we should be focusing on what really drives value for each of us and pursuing the highest marginal-utility options.
So is pursuing money and money alone the right life path? Probably not. What is? We’ll get into that in the third section on local vs. global optimization.
Application / impact: more isn’t always better. Stop eating when you’re full, solve the problems that have the biggest impacts, and don’t assume that spending more money will make you happier.
Utility x Product vs. Packaging = Transactional Utility
AUNT BEE: Now don’t bring up that freezer again.
ANDY: I wasn’t going to. But since you did… it’s just been sitting out there fillin’ up the back porch.
AUNT BEE: But you forget what I paid for it. I saved almost a hundred dollars!
ANDY: Only thing that’s ever been kept in that freezer’s a dead mouse, and he climbed in there to get warm! Hundred dollar mouse trap, you got to grab a bargain like that!
Clearly, the human desire to find a bargain is not confined to our generation… The Andy Griffith Show had a whole episode in Season Four, Bargain Day, devoted to the perils of focusing more on the discount to list price (contrast bias) than the utility of what you’re actually getting.
I view this as an example of the product vs. packaging mental model – i.e., the fact that even though we only get to eat/use/enjoy the product, we can be disproportionately influenced by the packaging (which will be thrown away anyway).
In the context of consumer behavior, this phenomenon is obviously pervasive: we’ve all bought something on sale that we never ended up using. (I used to be a dedicated clearance-rack shopper, even if it meant purchasing ill-fitting clothes I ended up not wearing.)
It even shows up in investing: one of the great intellectual contributions of the aforementioned Charlie Munger to his business partner Warren Buffett at Berkshire Hathaway was the realization that sometimes it’s better to pay a higher price for a better asset than it is to buy a mediocre one “on sale” – as Aunt Bee discovers when her antiquated freezer conks out with a whole 150-pound side of beef in it – an amount she bought, by the way, to get a bulk-purchase discount. (Hilarity ensues.)
Nor is the behavior limited to consumers: even business purchasers, eager to get bulk discounts, can forget to be mindful of the n-order impacts on inventory management and other aspects of the business. While dated, Eli Goldratt’s classic business novel “The Goal” (Goal review + notes) provides a stellar example of this sort of behavior, and also drives home the 80/20 principle discussed in the previous section.
Yet despite its existence, economics as a profession historically failed to recognize its existence as part of the utility model. PAA house favorite Richard Thaler did, though, and he explains this concept to great impact in “Misbehaving” (M review + notes) – my favorite book of all time.
On pages 59 – 63, Thaler notes that he eventually decided that standard utility theory only explained “acquisition utility” – the surplus between utility and price paid. Consumers also have “transaction utility” – the quality of the “deal” relative to the “reference price.
The interesting experiment here is that people’s enjoyment of a cold beverage on a beach, given a certain price, is dependent upon where they were told the beer was bought, and what they think it should have sold for at the type of establishment (bodega vs. fancy hotel).
Of course, our focus on transaction utility can be bad both in making us buy things we shouldn’t, as well as in making us not buy things we should. Thaler examines how too much focus on transaction utility can
“prevent our consuming special experiences that will provide a lifetime of happy memories.”
Thaler advises (rationally) to behave like an econ, not a human and focus solely on value paid vs. utility gained. “Misbehaving” (M review + notes) later touches on the idea of narrow framing, and here’s a quick example: a lot of people make purchases based on contrast bias and narrow framing.
So, for example, I rarely buy a four-dollar box of raspberries because four dollars seems like an exorbitant price to pay for 6 – 8 oz of fruit. Yet raspberries are my favorite fruit, I enjoy them greatly, and I’m usually totally willing to go to a coffeeshop and spend $4 on a coffee that I probably enjoy less.
Why not just buy the raspberries as an occasional treat? That’s what I should be doing, but – even as a highly analytical person who’s thought about this a lot – it’s hard to overcome the powerful force of transactional utility.
This is something to be mindful of if you’re running a business. For retailers, doing away with transaction utility is a massively bad business strategy… as J.C. Penney found out when it tried to do away with sales and move to everyday low pricing. Bargain-addicted customers went bonkers.
As with all mental models, the human phenomenon of “transaction utility” is neither universally good nor bad: it simply is, and we have to acknowledge, accept, and respond to it.
Thaler, in the book’s interlude, actually provides a practical example of how businesses can utilize this phenomenon: they can provide consumers with more transaction utility at low or no cost without necessarily giving them more acquisition utility.
Thaler overviews, for example, how he encouraged a local ski resort to create additional “transaction utility” by offering “ten packs” of tickets (in advance) for the price of six full tickets – this helped to bring in cash notwithstanding how much or little it snowed (reducing risk in the business).
Few people actually skied 10x/year, so the resort didn’t even really give up much in the way of economics (and although Thaler didn’t specify, variable costs were probably pretty low even if people did come). Yet it helped the resort financially, and made consumers happier.
Application / impact: as a consumer, focus on the utility of the item being purchased relative to what you’re paying for it, not the quality of the deal. As an investor or business manager, however, be mindful that consumers do focus quite strongly on transaction utility, so improving the perceived quality of the deal – even if the actual utility does not change whatsoever – can make consumers happier, and you more successful.
Utility x Local vs. Global Optimization = Probabilistic Thinking, Discrete vs. Recurring Payoffs
“when you are in the thick of things, you can get confused by small stuff. I knew when I was eighty that I would never, for example, think about why I walked away from my 1994 Wall Street bonus right in the middle of the year at the worst possible time.
That kind of thing just isn’t something you worry about when you’re eighty years old. At the same time, I knew that I might sincerely regret not having participated in this thing called the Internet that I thought was going to be a revolutionizing event.
When I thought about it that way… it was incredibly easy to make the decision.”
That quote from Jeff Bezos, in Brad Stone’s elucidating “The Everything Store” (TES review + notes) highlights, among other mental models, utility, opportunity costs, and local vs. global optimization. Leaving behind a large bonus and his lucrative job at DESCO to fiddle around with an online bookstore obviously looked like a strange decision at the time.
But so did Howard Schultz’s very similar decision to leave his lucrative job to fiddle around with a theretofore unknown espresso concept in Seattle called “Starbucks” or something like that (I forget; the name is kinda hard to remember.)
Schultz describes this local vs. global optimization phenomenon in the Starbucks origin story – “Pour Your Heart Into It” (PYH review + notes) – as well as in his follow-up, “Onward” (O review + notes, about the company’s struggles in the late 2000s.
I won’t delve too deeply into the product vs. packaging angle here since I cover that in the product vs. packaging mental model. For now, let’s just focus on the utility angle: one challenge of trying to evaluate what’s “useful” is that the answer depends on another variable: “over what time period?”
For example, let’s take this to the reductio ad absurdum extreme. Let’s say that I’m (reasonably) optimizing for happiness, and for some reason, the only period of time I care about is the next ten seconds. What’s the best decision I can make? The answer is probably “hard drugs” – something strong, like heroin or fentanyl, that would cause a massive release of dopamine.
Of course, if I care whatsoever little bit about any of my life beyond the next ten seconds, that’s perhaps the worst decision I could possibly make. Less extremely, managers face these kinds of challenges every quarter: should we curtail investment to meet our numbers now, and potentially lose market share later? Should I skip the gym tonight so I can finish off this project I’m working on?
As with many mental models, the framing is easy and the execution is hard. While it’s popular to paint disrupted businesses as obsolete dodos, the truth is that many of them were making what seemed like perfectly reasonable decisions at the time, as books like Clayton Christensen’s “The Innovator’s Dilemma” (InD review + notes) do a good job of summarizing.
So, it turns out to be a devilishly tricky question to investigate: how do I maximize for global utility with an uncertain future? It is, of course, a critical question for all of us to answer.
By inversion, let’s narrow it down. To start with, one obvious answer is to be mindful of hyperbolic discounting – I discuss the marriage problem in that mental model – and look past the present moment. As Stephen Covey observes sagely in his landmark “The 7 Habits of Highly Effective People” (7H review + notes) – one of the most impactful books on my own personal development:To begin with the end in mind means to start with a clear understanding of your destination… to know where you’re going… so that the steps you take are always in the right direction. – Stephen Covey Click To Tweet
We can also safely eliminate the sort of nonsensical proposition that Ian Leslie advances in the mostly-good “Curious” (C review + notes) toward the end, where he seems to argue (via a discussion of the “Boring conference,” covering such irrelevant minutiae as the sounds made by vending machines) that all knowledge is equally useful. That’s obviously dumb and stupid and we shouldn’t waste any of our time on that sort of nonsense.
On the flip side, it pays to avoid overconfidence and to think probabilistically. The aforementioned Ben Franklin – the king of practicality – made a number of thought-provoking observations on the topic of the utility of scientific exploration. Again from Walter Isaacson’s “Benjamin Franklin: An American Life” (BFAAL review + notes – these are about the only useful parts!):
“what is the use of a newborn baby? … “It does not seem to me a good reason to decline prosecuting a new experiment which apparently increases the power of man over matter until we can see to what use that power may be applied.
When we have learned to manage it, we may hope some time or other to find uses for it, as men have done for magnetism or electricity, of which the first experiments were mere matters of amusement.”
Talking about balloons, for example, Franklin saw no immediate purpose but believed investigating them might:
“pave the way to some discoveries in natural philosophy of which at present we have no conception… important consequences that no one can foresee.”
Well, no doubt, much of it is.
But much of it isn’t, and more to the point, it is very often difficult to perceive in the moment the potential impact of some piece of seemingly arcane research.
Much of our entire technologically driven society and extraordinary quality of life that many of us are privileged to enjoy is the result of such research.”
At this point, we may just be going in circles and not getting anywhere in terms of a formal categorization of what sort of knowledge is likely to be useful. I’ve tried and failed to find a hard categorization that doesn’t amount to “I know it when I see it.” I bring this up for two reasons: first, it’s an important question I’m thinking about; second, I’d love if anyone who has a better answer wants to share it.
Personally, I probably lean pretty far into the category of optimizing for things that are obvious, with the risk that I’m not paying attention to skills that might become useful in the future but are currently non-obvious.
With apologies to West and Franklin, I don’t have a lot of interest in knowing stuff that I can’t apply somewhere or somehow. For example, I don’t find quarks particularly interesting, for reasons I explain in the disaggregation mental model.
Here, let’s talk about one framework that I do think is very helpful:
Discrete vs. Recurring Payoffs
One underlooked mental model that even a lot of smart investors I know don’t always apply is the idea of simply focusing on the lifespan of the utility of something you’re working on.
There are forms of knowledge that have a short expiration date: for example, a weather forecast or traffic report on any given day in Dallas will help you know what clothes to wear and what time to leave to make it to the football game, but neither of them will help you figure out if you want to live in Dallas.
On the other hand, long-term, base rate type data on traffic and weather conditions in Dallas will be more instructive in helping you determine if it’s the sort of place you want to live.
Given how difficult it can be to determine exactly what lines of inquiry will prove profitable (for the reasons discussed above), one easy filter that’s probabilistically likely to improve our likelihood of encountering useful information is to heavily focus on information with a longer lifespan of utility.
Shawn Achor presents a stunningly insightful analysis of this topic in “Before Happiness” (BH review + notes), specifically from pages 156 – 158. I won’t spoil the discussion, but if you want to visualize it, take a look at the following for my interpretation of the “time” angle:
Generally speaking, lifespan and length correlate with utility. Snapchats – designed to self-destruct in a matter of seconds – are the epitome of no-utility, completely-useless information with no lifespan that we should all strive to eliminate from our lives.
Similarly, short-cycle news, unless it has a direct impact on your life/business, is here today and forgotten tomorrow. These are discrete / one-time payoffs: you get whatever utility out of them you get, but there’s no more coming, ever.
On the other hand, “evergreen” skills or concepts – things like empathy, or an understanding of trait adaptivity – are very permanent in nature. The value of knowing a specific coding language may fade over time if that language is no longer used; similarly, insights about competitive dynamics in a specific industry may no longer be useful if circumstances in that industry change dramatically.
Conversely, chances are that being able to understand and empathize with human beings will never not be a useful skill, nor will understanding how the world selects for and against traits.
These, by nature, are recurring payoffs: once you learn them, you get to reap the rewards over, and over, and over again, in an almost guaranteed manner. Cal Newport touches on this topic in “Deep Work” (DpWk review + notes) as well, incidentally, although I prefer Achor’s version.
This shows up in business models, too: many of the most powerful businesses are those in which you don’t have to start from scratch again every January 1. Companies with “recurring revenue” – whether software licenses, or membership fees – generally tend to do pretty well because they have a high return on investment in creating a new customer if they stick around for a while.Too much focus on (long-term productive capacity) is like a person who runs four hours a day, bragging about the extra ten years of life it creates, unaware he’s spending them running. - Stephen Covey Click To Tweet
Stephan Pastis had an angle on this one too in a hilarious Pearls Before Swine comic:
Application / impact: be mindful that focusing too much on either short-term or long-term utility can have detriments on the other; it’s important to balance the two and not be overconfident about our ability to know exactly what’s going to be useful and what won’t be. At the same time, throwing up our hands and not trying at all is unlikely to get us anywhere, and careful thought generally yields results.
The best books to read on utility all have different flavors, depending on what angle you want.