The Plague of Misidentification

Causality Part 10

In today's TPOM, we will take a look at the mental model of critical mass. 

Note that nothing in this essay can be construed in any way whatsoever as being financial advice. We will be dealing with the hypothetical only for the purpose of generating examples of more profound concepts.

Critical Mass

In physics, "critical mass is the minimum amount of a given fissile material necessary to achieve a self-sustaining fission chain reaction under stated conditions. Its size depends on several factors, including the kind of fissile material used, its concentration and purity, and the composition and geometry of the surrounding reaction system." Encyclopedia Britannica.

In the social sciences, critical mass is a sufficient number of adopters of a new idea, technology, or innovation in a social system so that the adoption rate becomes self-sustaining and creates further growth. 

In business, critical mass is the point at which a company has reached the ability to self-sustain and has thereby become economically viable. The company's economic viability states that it has paid back its investors and has hit the place at which its sales now pay for its operations. This is not the same as becoming profitable, which means that the company is past viability and is now making consistent money in the form of profit over sales, which means that the sales have produced enough to generate continual profits given that the critical mass has been reached. 

In general, critical mass is the minimum amount of something required to start or maintain any project or venture. This will get you to the gist of all the usages I have seen. 

What good is critical mass as a mental model? Let's consider the following:

• Understanding where critical mass takes place is essential in building anything you can imagine. 

• Knowing of its importance in having a successful venture can aid you in reaching it more intelligently.

• Knowing when you have hit critical mass will allow you to properly deploy the next critical stage of your business. 

• Understanding the critical mass of your competition is essential. 

• If you cannot assess your competition's critical mass, you will be destroyed by them in most cases, if not by yourself first.

• Assessing for critical mass in social movements is essential, and depending upon where you live on the earth, it can be life-saving or life-threatening. 

• Assessing for critical mass in bi-partisan elections can help you make important life and business decisions.

• If you are involved in social media, your critical mass number will determine whether or not you will ultimately become successful. Knowing that number will also help you set goals to reach it. 

• Understanding critical mass can help you avoid overextending in business. Expanding too soon or too late can be equally destructive. Understanding when you have hit critical mass will allow you to time the expansion properly.

The above list is nowhere near complete. That said, think for a moment about how much you could achieve with the level of awareness this list would produce if you knew the critical mass of every situation it attends. 

Let's examine how critical mass can help you explain many things in life. If we approach this concept through several filters, we will get a good feel for what the knowledge of critical mass can do for us. The filters are as follows:

• Personal Finance

• Law

• Politics

• Global warming

• Global hunger crisis

• Global water crisis

• Global population crisis

Personal Finance

The concept of critical mass regards your finances in the following ways:

• When you have reached critical mass financially, your assets will earn money for you at a level that allows you never to have to work again. 

• Once reached, you would be able to plan your life in ways that are unlikely to be obtainable through other means, though this always remains a possibility. 

• This would open up the financial fluency that would translate into the ability to acquire a more profound and more potent knowledge base that would help you expand and develop every area of your life. 

• You would, via financial fluency, have the ability to pay experts to help you in any area that is needed. 

• Your time would be freed substantially, translating to availability to utilize all of the new knowledge and access you now have. 

• Your time could then be aimed at making you more money and affording yourself more time in a healthy cycle of development instead of having less time and making others rich. 

• Reaching critical mass in personal finance while working a 9 to 5 is nearly impossible. Working for a paycheck is not a wrong thing. It does not mean you are a failure. It does not mean you will have a horrible life. However, it does mean a few things though, and one of those things is that you are not self-sustaining. If one is not self-sustaining in this way, they are highly unlikely to reach critical mass financially. This is regardless of a 9 to 5 or any other work situation, without asset deployment and the types of passive (non-physical) work-based income sufficient to take you past survival, which most salaries will never do. You simply cannot, in the current climate, reach critical mass. 

Let's take each of these bullet points and dive a little deeper into them to gain further knowledge. 

Personal Financial Critical Mass

For example, let's say that you need $58k to cover every yearly budgeted expense. This means that if you make $59k, you could save $1k for that year.  

At the point that you have invested in whatever venture(s) and they are paying you $58k per year without fail and without any active work, meaning your 9-to-5 job, etc., you are at critical mass. Technically, in the first year that happens, you would be at critical mass. 

Now, what does this mean for you? It means you could not get off your couch and still meet your yearly needs. That would, of course, not be wise. What else, then? This is where you would plug in the above data so that you could use your newfound money to excel and not get caught up in destructive money management issues. Hopefully, you will set new goals that require a new critical mass to be reached. If you were thoughtful and took wise counsel during this time, you could launch your future family from a position you never experienced. 

Time

Your next goal, in my opinion, should be to learn to maximize time. Find an expert on this topic and learn all they have to offer. This will cost you money, so you will have to budget for that now, which will raise your yearly needs, but it will pay off because time truly is money. As you are learning about time, you should consider this: what is the critical mass of time usage in my life? In other words, when do I hit the critical mass of time usage? Logically, that would mean that you would use time so well that the time usage itself places you at the place of hitting the minimum amount of time maximization to undertake your intended venture, whether it be learning or whatever else you decide to choose. 

That said, this venture was about time management, so this means we are now managing time at the level that it is no longer working against us regarding our understanding of it and how to maximize it perfectly. This says nothing about levels of success, knowledge acquisition, ethics, or any other concept except what it directly attends in this context. Yes, this skill will yield outstanding results in different contexts, but for now, we must understand what we have done. Time as a concept of optimized spend is now at the level of critical mass. At this level and within this context, it is now working with us instead of for us. There is another level above this one where time works for us, but that discussion is for another time!

New Knowledge

Now, what do we do after we have acquired the ability to maximize time? We cultivate knowledge while using our ability to do so in a time-maximized way. What knowledge should we obtain? The answer to this is solely based upon your needs and goals, and you need knowledge to develop those as well. What then? Are we stuck now? No. We look into what interests us and what we currently think will be the best path forward for our business and personal lives. One way to develop in this regard is to seek experts in portfolio development or become one yourself. I do suggest studying with one no matter what path you choose. 

Once you have gained the knowledge that will better help you with your investments, you will naturally have had to run across many business ideas. The key is to be on the lookout for them as you learn about the markets from your mentor. We can now see that this will pay off either in the investment of further advantageous stocks, bonds, currencies, etc. or through gaining a functional knowledge of the markets and how they work, which will teach you about the mechanics of money. These lessons are essential if you wish to continue maximizing your time, investment, & growth tracks.

Looking carefully, you will see that we hit all of our prior points from the above bullet points list. We had critical mass, time freed up, expert usage for knowledge acquisition, further intelligently informed investment growth, and deepening the capacity to free more time.

The above is one way this can happen. I have seen people get there other ways, some by luck, some by hard work, some by both, and still some by intelligent work, charisma, charm, and delivering on their promises. Whatever way, if you want to develop the skill set required to use the mental model of critical mass properly, it pays to study intelligently and maximize your use of thinking tools in the extreme. Critical mass is so important of a concept that we could write a book about it, and we would still need an encyclopedia set to follow up the book. 

Malcolm Gladwell's book The Tipping Point: How Little Things Can Make a Big Difference deals with the concept of critical mass, in part by referring to tipping points. 

We have spoken about critical mass, what it is, how to look for it, and how to use it on a cursory level, and that is great because we have to start somewhere. That said, we are only at the beginning of this important study. We will be dealing with this concept throughout the entirety of this series of essays, so give it a good “think” and consider all that was written above. Massive concepts take time to unfold, and we don't want to develop a faux understanding, so we should let it take time and move from wisdom. 

The Big Question

Dealing with the big question regarding critical mass and the populace is essential, but knowing that question is even more essential. Here we go: how much of the populace does it take to hit critical mass for any concept, ideology, product, etc.? This certainly is a big one. Let's think a little in bullet form for a bit:

• Do you think a number like that actually exists? 

• How could we possibly know something so vast and seemingly all-encompassing? 

• If we had such a number, how could we use it? 

• If it exists, has it already been used? 

• If it has already been used, what is an example?

• How many ways has it been used?

• Is this a dangerous concept that is being handled with the wrong hands?

• Exactly how powerful is the concept of critical mass?

• Have I unknowingly been part of a campaign to reach critical mass concerning public opinion, social media use, personal relationships, consumerism, music, movies, political views, and the true value of a well-run snake circus? If so, why didn't I see it at the time? If not, prove it. 

The Number

The incredible news is that the number does, in fact, exist. It turns out that scientists from Rensselaer Polytechnic Institute conducted a study, and the conclusions are of critical importance. The following is from a posting on their website at: https://news.rpi.edu/luwakkey/2902.

"Scientists at Rensselaer Polytechnic Institute have found that when just 10 percent of the population holds an unshakable belief, their belief will always be adopted by the majority of the society. The scientists, who are members of the Social Cognitive Networks Academic Research Center (SCNARC) at Rensselaer, used computational and analytical methods to discover the tipping point where a minority belief becomes the majority opinion. The finding has implications for the study and influence of societal interactions ranging from the spread of innovations to the movement of political ideals.

"When the number of committed opinion holders is below 10 percent, there is no visible progress in the spread of ideas. It would literally take the amount of time comparable to the age of the universe for this size group to reach the majority," said SCNARC Director Boleslaw Szymanski, the Claire and Roland Schmitt Distinguished Professor at Rensselaer. "Once that number grows above 10 percent, the idea spreads like flame."

As an example, the ongoing events in Tunisia and Egypt appear to exhibit a similar process, according to Szymanski. "In those countries, dictators who were in power for decades were suddenly overthrown in just a few weeks."

The findings were published in the July 22, 2011, early online edition of the journal Physical Review E in an article titled "Social consensus through the influence of committed minorities."

An important aspect of the finding is that the percent of committed opinion holders required to shift majority opinion does not change significantly regardless of the type of network in which the opinion holders are working. In other words, the percentage of committed opinion holders required to influence a society remains at approximately 10 percent, regardless of how or where that opinion starts and spreads in the society..."

What an extraordinary set of findings they have made. 

In Closing

I want to encourage you to apply the thinking tools to the critical mass mental model and pore over what we have learned about it thus far. It is vital not to assume we understand it all upon the first read. We want to fight against illusory competency and remember that just because you know all the words you have read does not mean you know all of what you have read. This mental model is critical, and it is ubiquitous. There will be much more to come on this topic in future installments of TPOM.

Coming Next

In the next installment of TPOM, we will take a look at the Abilene paradox. I think you will find it informative and fun, but informative for sure.

We will continue. 

B.S.R.