Psychology & Behavior
Section 1
Core Idea
Mental Simulation is the cognitive process of imagining how events will unfold — running scenarios in your mind before they happen. It's how founders envision product launches, how negotiators rehearse conversations, and how strategists anticipate competitive responses. The power of mental simulation is that it allows you to test ideas cheaply before committing resources. The danger is that simulations inherit all the biases of the simulator. People tend to run optimistic simulations that overweight the steps they can control and underweight the steps that depend on others, chance, or complex systems. A founder mentally simulating a product launch imagines the product working, customers delighting, and growth compounding — while glossing over supply chain failures, competitor reactions, and the thousand small things that can go wrong. Mental simulation is a powerful planning tool, but only when you deliberately run pessimistic scenarios alongside optimistic ones.
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Section 2
How to See It
Planning
You're seeing it when a team builds a project timeline by imagining each step going well and adding up the durations — producing a best-case estimate that ignores dependencies, delays, and surprises. The simulation was optimistic because the simulator was.
Negotiation
You're seeing it when a negotiator rehearses a conversation in their head where the other party responds exactly as expected. The simulation feels like preparation, but it's really a script for a play where only one actor has been cast.
Section 3
How to Use It
Run multiple simulations, not just one. After imagining how a plan succeeds, deliberately simulate how it fails. Identify the three most likely failure modes and the one catastrophic scenario you don't want to think about. Pre-mortem analysis formalises this — imagine the project has failed and work backwards to identify why. The goal isn't to predict the future but to expand the range of futures your mind has rehearsed.
Decision filter
"Have I only simulated the version where things go well — or have I also run the simulation where key assumptions break?"
As a founder
Before any major initiative, run three explicit mental simulations: the optimistic case, the realistic case, and the failure case. Write down the key assumptions in each. The gap between your optimistic and failure simulations reveals the variables you're most uncertain about — and those are the ones that deserve the most attention in your actual plan.
Section 5
Founders & Leaders
Ed CatmullCo-founder of Pixar
Catmull institutionalised mental simulation at Pixar through the "Braintrust" process. Rather than relying on any individual's mental simulation of how a film would land with audiences, Pixar assembled diverse groups to simulate audience reactions collectively — stress-testing story beats, character arcs, and emotional moments from multiple perspectives. Catmull understood that individual mental simulation is biased by the simulator's blind spots, while collective simulation exposes assumptions that no single person would catch. For founders, Catmull's approach shows that the value of mental simulation multiplies when you diversify the simulators rather than relying on your own imagination alone.
Section 7
Connected Models
Reinforces
Planning Fallacy
Planning Fallacy produces overly optimistic timelines and budgets. Mental Simulation is the mechanism — when people simulate a project, they imagine the best-case sequence and treat it as the expected case, systematically underestimating time and cost.
Pairs-with
Optimism Bias
Optimism Bias skews all forward-looking assessments toward positive outcomes. Mental Simulation is the canvas on which Optimism Bias paints — the simulation runs rosier than reality because the simulator is constitutionally optimistic.
Counters
Pre-Mortem Analysis
Pre-Mortem Analysis deliberately inverts mental simulation — instead of imagining success, you assume failure and simulate the path that led there. It's the structured antidote to the natural optimism of unguided mental simulation.
Section 8
One Key Quote
— Ed Catmull"If you give a good idea to a mediocre team, they will screw it up. If you give a mediocre idea to a brilliant team, they will either fix it or throw it away and come up with something better."
Section 11
Summary & Further Reading
Mental Simulation is the process of imagining how events will unfold before committing resources. It's a powerful planning tool but inherits the biases of the simulator — particularly optimism. Counter the bias by running multiple simulations including failure cases, using pre-mortem analysis, and diversifying the people involved in the simulation process.