diff --git a/README.md b/README.md
index 60ab97f..af51552 100644
--- a/README.md
+++ b/README.md
@@ -10,7 +10,7 @@ pairing with smart people at Hashrocket.
 
 For a steady stream of TILs, [sign up for my newsletter](https://tinyletter.com/jbranchaud).
 
-_1140 TILs and counting..._
+_1141 TILs and counting..._
 
 ---
 
@@ -1336,6 +1336,7 @@ _1140 TILs and counting..._
 
 - [Define Event That Does Internal Self Transition](xstate/define-event-that-does-internal-self-transition.md)
 - [Inline Actions vs Actions In Machine Options](xstate/inline-actions-vs-actions-in-machine-options.md)
+- [Simple States And Composite States](xstate/simple-states-and-composite-states.md)
 - [Use An XState Machine With React](xstate/use-an-xstate-machine-with-react.md)
 
 ### YAML
diff --git a/xstate/simple-states-and-composite-states.md b/xstate/simple-states-and-composite-states.md
new file mode 100644
index 0000000..4d3d890
--- /dev/null
+++ b/xstate/simple-states-and-composite-states.md
@@ -0,0 +1,52 @@
+# Simple States And Composite States
+
+XState allows you to build [hierarchical state
+machines](https://xstate.js.org/docs/guides/hierarchical.html). A hierarchical
+state machine is one where there are substates nested under states.
+
+States with nothing nested under them are _simple states_. States that have
+substates are _composite states_.
+
+```javascript
+const machine = createMachine({
+  // Starting State
+  initial: "active",
+  // Starting Context
+  context: { count: 0 },
+  // States
+  states: {
+    inactive: {
+      always: { target: "active" },
+    },
+    active: {
+      on: {
+        SWITCH_COUNT_DIRECTION: {
+          actions: ["logSwitch", "consoleLogSwitch"],
+        },
+        COUNT: {
+          actions: "changeCount",
+        },
+      },
+      initial: "increment",
+      states: {
+        increment: {
+          on: {
+            SWITCH_COUNT_DIRECTION: "decrement",
+          },
+        },
+        decrement: {
+          on: {
+            SWITCH_COUNT_DIRECTION: "increment",
+          },
+        },
+      },
+    },
+  },
+});
+```
+
+- The `inactive` state is a _simple state_. There is nothing nested under it.
+- The `active` state is a _composite state_. There are two substates
+  (`increment` and `decrement`) nested under it.
+- The `increment` and `decrement` states are both _simple states_. Nothing is
+  nested under them.