Stocks & Flows

A Primer on Systems Thinking
Stocks are accumulations - things you can measure at a point in time. Flows are rates of change - they increase or decrease stocks over time. Think of a bathtub: the water level is the stock, the faucet and drain are flows.
INFLOW
(Faucet)
STOCK →
(Water Level)
OUTFLOW
(Drain)
Inertia is the insight
Stocks create inertia in systems - they change slowly because flows take time to fill or drain them. This explains why climate change is hard to reverse, getting fit takes months, housing shortages persist, and technical debt accumulates. You can't fix a leaky bucket by just pouring faster.
Tech & Product Examples
User Growth
Stock Total active users
Inflows New signups
Outflows Churn, inactive users
Why It Matters You can't fix a leaky bucket by just pouring faster. If churn is high, acquisition spending just masks the problem. The stock barely moves.
Technical Debt
Stock Code quality, system maintainability
Inflows Refactoring, documentation
Outflows New features adding complexity, shortcuts
Why It Matters Velocity decreases over time if outflow exceeds inflow. Teams that never refactor eventually grind to a halt.
Knowledge Base
Stock Team knowledge, documentation, runbooks
Inflows Learning, writing docs, training
Outflows People leaving, forgetting, docs becoming stale
Why It Matters High turnover organizations struggle when outflows exceed inflows. "We'll document it later" never works.
Infrastructure Capacity
Stock Available compute, storage, connections
Inflows Provisioning new resources
Outflows Usage growth, decommissioning
Why It Matters Stocks have delays. You can't instantly spin up a data center. Traffic spikes hit your stock before you can increase it.
Trust & Reputation
Stock Brand trust, user confidence
Inflows Good experiences, reliability, transparency
Outflows Bugs, outages, security breaches
Why It Matters Builds slowly, drains fast. One security breach can tank years of trust-building. Extreme asymmetry in flow rates.
Personal Development Examples
Skills & Expertise
Stock What you actually know how to do
Inflows Deliberate practice, doing the work
Outflows Forgetting, skill obsolescence
Why It Matters You can't cram expertise. The stock fills slowly through consistent flow. Reading about something is not inflow, doing it is.
Energy & Burnout
Stock Your capacity to do hard things
Inflows Rest, recovery, joy, accomplishment
Outflows Stress, overwork, context switching
Why It Matters Most people run deficits for months because the stock drains slowly, until suddenly they're empty. Can't sprint out of burnout.
Relationships & Network
Stock Depth of connections, social capital
Inflows Investing time in people, helping others
Outflows Neglect, moving, changing contexts
Why It Matters Strong relationships are high-stock, built through consistent small inflows over years. Transactional networking is trying to harvest a stock you never built.
Attention & Focus
Stock Your ability to concentrate deeply
Inflows Deep work practice, single-tasking
Outflows Distraction, context switching, notifications
Why It Matters The stock is getting drained by modern work environments faster than most people can refill it. Deep work ability atrophies.
Financial Runway
Stock Savings, investments, assets
Inflows Income, returns, windfalls
Outflows Expenses, taxes, lifestyle inflation
Why It Matters Six months of runway means your stock can sustain current outflows for six months. Want more runway? Increase inflows or decrease outflows.
Positive Feedback Loops
When Stocks Increase Flow Rates
The real power emerges when the stock itself increases the inflow rate. This creates compounding growth.
Network Effects
More Users
→
More Value
→
More Signups
Once you hit critical mass, each new user makes the product more valuable, which increases signup flow rate. The stock amplifies the inflow.
Skill Compounding
More Knowledge
→
Faster Learning
→
More Knowledge
The more you know about a domain, the faster you learn adjacent skills. Your skill stock makes learning related skills easier, increasing inflow rate.
Good Architecture
Clean Code
→
Faster Features
→
More Clean Code
Good architecture makes adding features faster. When features are easy to add, you're less likely to take shortcuts, which maintains code quality and keeps the positive loop going.
Documentation Quality
Better Docs
→
Easier Onboarding
→
More Contributors
Better docs make onboarding faster, which means more people can contribute to docs. The documentation stock grows, which further improves onboarding speed—a self-reinforcing loop.
Key Takeaways
Delayed Feedback
You don't feel the stock draining immediately. You can run a deficit on sleep, relationships, code quality, or trust for a long time before the stock hits zero and everything breaks.
Sustainable Pace
You're optimizing for the long-term stock level, not the instantaneous flow rate. This is why "sustainable pace" matters more than heroic sprints.
Building vs. Hustling
Most people optimize individual flows (work harder) instead of building stocks that increase flow rates (work smarter). The real leverage comes from one-time stock investments that permanently increase flow rates.
Stacking Loops
The real magic happens when multiple positive feedback loops reinforce each other:
  • Financial runway → take career risks → build better skills → earn more → more runway
  • Deep work practice → ship better features → reputation grows → interesting opportunities → more motivation → more deep work
  • Good docs → faster onboarding → more contributors → better docs → even faster onboarding
  • Energy management → better focus → more accomplishment → more energy → better focus
Framework Origin
This mental model comes from Donella Meadows' work on system dynamics. It's become popular in tech and product circles because it's a useful way to think about business metrics, personal development, and why some problems are stubbornly persistent despite interventions.