Taxonomies

Note to future self…

Lately, I’ve been thinking a lot about the power of taxonomies as low-level mental models. By low-level I mean that taxonomies are the foundation upon which many other mental models are built. The organization of elements in relation to each other can be incredibly powerful.

Taxonomies can be incredibly powerful to figure out you known unknowns. For example, FinTech is a very broad sector but understanding all the subsectors (e.g. payments, lending, banking, infrastructure, trading, etc.) can help you better understand what areas you might need to do more research on.

Taxonomies can also help you be more nuanced in your thinking by helping you make distinctions that you would otherwise overlook. For example, today I saw a taxonomy of enterprise companies categorized by sector. The taxonomy was broadly split into to two large categories: the infrastructure and application layer. This distinction is quite obvious once you think about it but it made reconsider how I think about infrastructure enterprise companies and how they can better serve the layer above.

Takeaways

Taxonomies are a foundational mental model so whenever you have a set of elements that share some common element it might be wise to proactively build a taxonomy around it.

It’s important to note that taxonomies have drawbacks. By placing elements in a taxonomy you risk mislabeling things, which renders the taxonomy not only useless but also potentially dangerous. This brings us to our second takeaway. Make sure that if you do have a taxonomy of something that you’re proactively trying to update your taxonomy to make sure it doesn’t go stale.

Ok that’s it.

Now back to work…