// description
The mental model that everyone has an area of genuine expertise (their "circle") and that most mistakes come from acting outside that circle without knowing you've left it. The key is not the size of your circle — it's knowing exactly where the edge is.
// history
Warren Buffett articulated the Circle of Competence concept in Berkshire Hathaway's 1996 annual report, explaining why he avoided technology stocks in the 1990s: he didn't understand them well enough to predict their future. Charlie Munger expanded on the concept in his famous 1994 "Psychology of Human Misjudgment" speech at Harvard. The concept has been widely adopted in investing and business decision-making as a check against overconfidence and scope creep.
// example
A creator's circle of competence might be: Midjourney art generation, KDP low-content books, email marketing, Canva design. Outside the circle: Amazon ads (haven't studied them), video editing (not skilled), dropshipping (unfamiliar model). When opportunities arise in areas outside the circle, the question isn't "can I figure it out?" but "is this worth expanding my circle, or should I stay where I'm genuinely skilled?"
// katharyne's take
Knowing the edges of your competence is a superpower, especially online where everyone performs expertise. I have a very clear sense of what I genuinely know versus what I'm just familiar with. I will teach Midjourney and KDP all day — I have the experience, the results, the depth. I won't confidently advise on Amazon ads because I don't run them myself. Staying in your circle isn't limiting — it's honest, and honesty builds the trust that grows a real audience.
// creative uses
- Use your Circle of Competence as a course topic filter: only build courses on subjects where you have documented results, not just familiarity. If you haven't done the thing yourself, you're teaching from outside your circle — students will feel it.
- Apply it when evaluating new platforms or tools: if someone in a Facebook group swears by Amazon PPC, check whether they're inside their circle before taking the advice. Ask for their actual data, not just their enthusiasm.
- Draw a literal circle in Notion or on paper: inside the circle, write every topic you can teach confidently with real results. Outside the circle, write what you're learning. Use it as your content strategy filter — publish from inside, research from outside.
// quick actions
- Write a list of every topic you've published content about or sold a course on. For each one, mark whether you have personal documented results (inside the circle) or are relaying information from others (edge or outside). Adjust how you present edge-of-circle content accordingly.
- The next time you feel tempted to chase a new business model you've heard is working for others — POD, drop-shipping, newsletter monetization — write down what you actually know about it versus what you've just heard. That gap is your learning roadmap, not your launch checklist.
- Identify one area currently outside your circle that you want to move inside over the next 90 days. Define the specific experience or results that would signal genuine competence. Build toward that, not toward performing confidence you don't yet have.
// prompt ideas
Help me map my circle of competence as a creator. Here's what I do: [describe your work, platforms, products]. Ask me a series of questions to help distinguish what I genuinely know from direct experience versus what I'm relaying from others — then help me write a clear one-paragraph statement of where my circle sits.
I'm considering creating a course or product on [topic]. Challenge me on whether this sits inside or outside my circle of competence. Ask me: have I personally done this? What specific results have I achieved? Would I be willing to publish my track record publicly? Help me decide if I'm ready to teach this yet.
I want to expand my circle of competence into [new area — e.g. Amazon ads, video editing, email marketing]. Design a 90-day competence-building plan that takes me from familiarity to genuine expertise, with specific milestones that would signal I've moved this inside my circle.