First Principles
What is it:
First principles thinking is a problem-solving and decision-making approach that involves breaking complex issues or concepts down to their fundamental, foundational elements.
Instead of relying on assumptions, question everything and reason from first principles - basic facts that cannot be reduced further.
It encourages examining a problem from its most basic components to gain a deeper understanding and arrive at innovative solutions.
In 2002, Elon Musk founded SpaceX with a grand vision to make space exploration more accessible and affordable.
He ran into a major challenge right off the bat. After visiting a number of aerospace manufacturers around the world, Musk discovered the cost of purchasing a rocket was astronomical—up to $65 million. Given the high price, he began to rethink the problem.
“I tend to approach things from a physics framework,” Musk said in an interview. “Physics teaches you to reason from first principles rather than by analogy. So I said, okay, let’s look at the first principles. What is a rocket made of? Aerospace-grade aluminum alloys, plus some titanium, copper, and carbon fiber. Then I asked, what is the value of those materials on the commodity market? It turned out that the materials cost of a rocket was around two percent of the typical price.”
Instead of buying a finished rocket for tens of millions, Musk decided to create his own company, purchase the raw materials for cheap, and build the rockets himself. SpaceX was born.
Within a few years, SpaceX had cut the price of launching a rocket by nearly 10x while still making a profit. Musk used first principles thinking to break the situation down to the fundamentals, bypass the high prices of the aerospace industry, and create a more effective solution.
Applying first principles thinking to a new problem involves a systematic approach to break down the problem into its fundamental components and build a fresh understanding from the ground up.
Here's how to go about it:
Define the Problem Clearly:
Start by articulating the problem or challenge you want to address. Ensure you have a precise and well-defined understanding of what you're trying to solve.
Identify Assumptions:
List any assumptions, beliefs, or preconceived notions related to the problem. Recognize that some assumptions may need to be challenged.
Deconstruct the Problem:
Break the problem down into its fundamental components. Ask yourself, "What are the most basic, undeniable facts or principles related to this issue?"
Separate Information from Interpretation:
Distinguish between objective information and interpretations. Often, our understanding of a problem is clouded by our interpretations and judgments.
Question Everything:
Challenge each component of the problem. Ask "why" repeatedly to get to the root causes and fundamental principles. For example, if you're dealing with a business problem, ask why certain processes are in place, why certain products or services are offered, and so on.
Seek Analogies:
Consider whether there are similar problems in other domains or industries that have been solved using first principles thinking. Analogies can provide insights.
Leverage Existing Knowledge:
Draw from your existing knowledge and expertise in relevant areas, but make sure you're not relying solely on existing solutions or assumptions.
Rebuild from the Ground Up:
Once you've broken down the problem and questioned its components, start rebuilding your understanding and potential solutions from the fundamental principles you've identified.
First principles thinking is a powerful way to approach complex problems with fresh eyes and uncover innovative solutions that might not be apparent when relying solely on conventional thinking.
Prompts for application:
What assumptions am I making, and are they really true?
If I had to rebuild this idea from scratch, how would I do it?
What are the fundamental facts behind this problem?
What would this look like if there were no constraints?
Sources:
First Principles: The Building Blocks of True Knowledge
First Principles: Elon Musk on the Power of Thinking for Yourself
Behind Elon Musk’s Management Philosophy: First Principles
