Thinking from First Principles. Pt 1
How to start thinking creatively
You were born with the greatest weapon in all of nature - the rational, conscious mind - Robert Greene
P.S After spending 2 days writing this, it became so long, that I’ve decided to split the article into two.
What important truth do few people agree with you on?
Peter Thiel opens his amazing book “Zero to One” with this contrarian question, which seems simple but is very hard to answer. It’s both intellectually and psychologically hard to answer because, first, you must go beyond common knowledge and ‘everyone’ agrees on. Secondly, you must choose an unpopular position. That takes deep thinking and courage.
Peter says he asks this question every time he conducts a job interview, and for over a year, I’ve wondered what my answer would be. The right answer to this question will take the form of “Everybody thinks X, but the truth is actually Y.” Not a very easy question to answer, is it?
I’ve always been fascinated with the power of the human mind, and I’m always in awe at what we can unleash when we think. Over the past few weeks, I’ve been studying a concept called “Thinking from first principles,” and I’d like to share some of my thoughts on it.
First-principles thinking - What is it?
First-principles thinking also called reasoning from first principles, is one of the most effective strategies to break down complex problems and generate original solutions. The idea is to break down any complicated problem into the most basic elements and reassemble them from the ground up.
It’s a mental model that will transform you into a creative genius. This approach has been used by some of humanity’s greatest thinkers, from the ancient philosopher Aristotle to the great Thomas Edison, and now, the world’s richest man, Elon Musk.
What are first principles?
A first principle is a basic assumption that cannot be reduced any further. Aristotle defined it as “the first basis from which a thing is known.” Thinking from first principles removes assumptions, common opinion, and conventional thinking, leaving the essential truths.
To think from first principles, you have to ask, just like a scientist would, What am I absolutely sure is true, and disregard anything that is not evidently and obviously true. Rene Descartes, a French philosopher, and scientist used this method by “systematically doubt everything he possibly doubts until all that was left is purely indubitable truths.”
First-principles thinking vs. Reasoning by analogy
One of the best embodiments of first principles thinking is the entrepreneur, and world’s richest man, Elon Musk. In an interview, he attributes his genius-level creativity and success to first principles thinking.
Musk: Well, I do think there’s a good framework for thinking. It is physics. You know, the sort of first principles reasoning. What I mean by that is, boil things down to their fundamental truths and reason up from there, as opposed to reasoning by analogy.
Through most of our life, we get through life by reasoning by analogy, which essentially means copying what other people do with slight variations.
First-principles thinking might sound simple in theory, but in practice, very hard to do. Most times, we reason by analogy, which means copying what people do with slight variations.
In Zero to One, Peter describes this as the difference in going from 0 to 1 and going from 1 to n, where n is any number. It’s easy to go from 1 to n by simply making simple changes to what already exists - a thinking model that sticks to what everyone believes is possible and simply trying to change a few things.
Adding a carriage to the back of a horse, rather than riding the horse itself, is going from 1 to n, but eliminating the horse and creating a car is going from 0 to 1. Before Uber, solving the transportation problem was limited to getting taxi companies to buy more vehicles and employ more drivers. Until Uber, nobody thought about putting power in riders' hands and connecting them with independent drivers.
Can you identify some other forms of first principles thinking vs. reasoning from analogy?
Examples of First Principles Thinking
When Elon Musk began his quest to send a rocket to Mars in 2002, he ran into a major problem - purchasing a rocket was expensive as hell, costing up to $65 million. There was no way to be commercially viable with that price. While most people would take for granted that rockets were expensive and attempt to figure out how to work with that, Musk began rethinking the problem.
He started by saying, “What are rockets made of?” The answer was Aerospace-grade aluminum alloys, titanium, copper, and copper fiber. Next, he asked, “what do these materials cost on the commodities market? It turns out it cost only 2% of the market price. So, rather than buying a finished rocket for tens of millions of dollars, Musk founded SpaceX, cut the price of making a rocket by 10x while still making a profit.
He used this exact same reasoning for his car company, Tesla, when figuring out how to reduce the price of batteries for his electric vehicles. Here’s how he explained it in an interview:
Musk: Somebody could say, “Battery packs are really expensive and that’s just the way they will always be… Historically, it has cost $600 per kilowatt hour. It’s not going to be much better than that in the future.”
With first principles, you say, “What are the material constituents of the batteries? What is the stock market value of the material constituents?”
It’s got cobalt, nickel, aluminum, carbon, some polymers for separation and a seal can. Break that down on a material basis and say, “If we bought that on the London Metal Exchange what would each of those things cost?”It’s like $80 per kilowatt hour. So clearly you just need to think of clever ways to take those materials and combine them into the shape of a battery cell and you can have batteries that are much, much cheaper than anyone realizes.”
The result? In just a few years, Tesla has become the largest car manufacturer in the world by far, worth more than all its closest competitors - combined!
So, seeing how powerful first principles thinking can be, how can you incorporate it into your life?
If you learned something from this article, share it with me. I think this concept is extremely fascinating, and I’m curious to see what you make of it.
Share this with your friend that’s a weird thinker, or is trying to build something creative.
Watch out for part 2 in your mail sometime next week. Subscribe to get it directly in your mail!
This concept is powerful. I think it shifts our reasoning from following the status quo (this is how it's always been)
I learnt real solution or innovation doesn't come from just adding to an already finished product. It comes from asking basic questions and breaking down problems to their simplest form, then you start building from there
It's really interesting. What I picked out of this is that if you have a problem, you need to learn to break it down to its most basic points, and then figure out a solution for each point. As you solve each part, when you bring them together, you come up with a complete solution, and sometimes that solution could be much better than the already existing solution, all because you thought about it simply.