No. 30 · Decisions · General Thinking
Circle of Competence
Knowing where your knowledge ends matters more than how far it reaches.
In the Almanac
“Michael Jordan’s baseball season”, 1994 · “Zillow Offers”, 2018–2021
Both stories in full, three ways to use it and where it misleads.
Get the AlmanacQuestions
What is Circle of Competence?
The Circle of Competence is the area where your knowledge is deep enough to judge decisions well. Its size matters less than knowing exactly where its boundary lies, because confidence outside it is dangerous.
How do you use Circle of Competence?
Before a big investment or career move, ask whether you could explain the key risks in plain words. If not, study more, ask an expert or step back. Grow your circle with small, low-cost experiments.
When does Circle of Competence matter?
Circle of Competence is one of the 35 mental models for decisions, the situations where you ask: Which way should I go? Within that, it belongs to “Committing, and when not to”, alongside Burn the Boats, Devil’s Advocate Position and Nuclear Option.
What is an example of Circle of Competence?
Two stories show it at work: Michael Jordan’s baseball season (1994) and Zillow Offers (2018–2021). Both are told in full in The Mental Models Daily Almanac, which has two stories for each of its 365 models.
Which mental models are related to Circle of Competence?
Dunning-Kruger Effect, Maslow’s Hammer and Mutually Assured Destruction. Circle of Competence itself comes from general thinking.