Thinking in First Principles

written by JOSH GESSNER | The Curious Competitor

In 2006, Elon Musk cut the price of launching a SpaceX rocket by 10x.

He did this by re-inventing rockets through "first principles" thinking.

When Musk started SpaceX, rockets cost over $65 million.

Instead of paying, he broke the rocket down to its first principles:

• What is it made of?

• How much is the material?

• Can I make my own?

He found he was able to make them at a fraction of its market price.

The point:

First Principles thinking is extremely powerful.

The world's greatest thinkers:

• Elon Musk

• Naval Ravikant

• Chamath Palihapitiya

All use this mental model.

But what is it?

First Principles thinking is when:

We break something down to it's most fundamental level.

Understand the basics, then work up from there.

Elon Musk thinks of it like a tree:

When we think in first principles:

We progress from the most fundamental basics (trunk) and gradually progress to the details (leaves).

We continually question why something is true, until we get to the root of the belief.

I start to think more about this when I reflect on my self identity and beliefs.

What do I believe about myself?

Who do I identify as?

Why?

As a full-time professional baseball player:

I identify as a baseball player.

But I also have have many other interests:

• Writing

• Investing

• Intellectual Curiosities

Why don't I identify as a multi-dimensional person?

It might be because I've lived by analogy:

The alternative to first principles thinking is 'Reasoning by Analogy'.

Reasoning by analogy is when we rely on:

• Assumptions

• Commonly held beliefs

• "How things have always been"

An example with Tesla batteries:

Commonly held belief:

• Battery packs are expensive and will always be that way.

First Principles:

• What is it made of?

• If we bought materials separately how much would that cost?

• Can we assemble it ourselves?

Going back to identity:

Maybe I identify as a baseball player because everyone around me believes that to be true.

I never questioned it from first principles:

I reasoned by analogy and went along with what the majority believed.

It's scary when its framed this way.

How many of your beliefs come from mindlessly following what other people think?

As I reflect on my life, I find that many of my beliefs are reasoned by analogy:

And I rarely stop and think... Why?

How can we incorporate first principles thinking in our lives?

I think the first step is to ask:

Why?

Why does it work this way?

Why do I believe this?

How can I break it down into its basic fundamentals?

As we start to question and think for ourselves, we gain:

• Deeper understanding

• Innovative, creative solutions

• Empowerment over our own beliefs and thoughts

We differentiate, by thinking for ourselves.

And only by thinking for ourselves, can we live up to our potential.

Main Lesson:

Are we thinking for ourselves, or are we mindlessly believing what everyone else believes?

If most of what you believe is reasoned by analogy:

It might be time to think in first principles.

Thinking in First Principles changed my life.

I hope it sparks you to think about yours.