First Principles Thinking

First-principles thinking is one of the best ways to reverse-engineer complicated problems and unleash creative possibility. Sometimes called “reasoning from first principles,” the idea is to break down complicated problems into basic elements and then reassemble them from the ground up. It’s one of the best ways to learn to think for yourself, unlock your creative potential, and move from linear to non-linear results. This approach was used by the philosopher Aristotle and is used now by Elon Musk and Charlie Munger. It allows them to cut through the fog of shoddy reasoning and inadequate analogies to see opportunities that others miss.

First Principles Frameworks
Here are three frameworks that will help you to start practicing thinking from First Principles.

1. Socratic Questioning

• Clarifying your thinking and explaining the origins of your ideas. Why do I think this? What exactly do I think?
• Challenging assumptions. How do I know this is true? What if I thought the opposite?
• Look for evidence. Why do I think this is true? What are the sources?
• Consider alternative perspectives. What might others think? How do I know I am correct?
• Examine the consequences and implications. What if I am wrong? What are the consequences if I am?
• Question the original questions. Why did I think that? Was I correct? What conclusions can I draw from the reasoning process?

It helps to figure out several important things. First, find the origins of your idea. Is it based on your assumptions? Can you find data to prove its viability? Second, consider symmetrically different perspectives to understand possible consequences. Lastly, conclude and move up from there.

2. Elon Musk's First Principle Reasoning Framework Elon Musk was one of the first to popularize reasoning from first principles. This approach led him to discover opportunities for his new companies SpaceX and Tesla, which made him the richest person in the world in 2021. It was not until Elon started up SpaceX when the whole aerospace industry shifted. Before, every company took an approach of incremental change and improvement before his intervention. The existing technologies have been improved and tinkered with since the mid of the 20th century. To gain insight, he asked the following questions.

• What are the problems?
• Why is it expensive?
• What can I do differently?
• What do we know is true?
• What are the obstacles?

Nobody assumed to reduce the cost of rocket production and launches. First principles reasoning led him to discover that production cost can be significantly reduced. He deconstructed the problem into its foundational principles and built his solution from the bottom up. Elon Musk's 3-step framework

• Identify current assumptions.
• Break down the problem into its fundamental principles.
• Create new solutions from the discovered truth.

This framework provides a solid structure to deconstruct a problem and test different solutions. If you have an idea, try to apply Elon's framework to gain insight and find secrets that thinking by analogy would not allow.

3. Five Whys Framework Children naturally think in first principles. They ask questions until they get to the bottom of it and understand the foundations. It is essential to align the knowledge of the world with reality as closely as possible. Wrong assumptions could threaten the chances of survival in the past. Unfortunately, most of the parents get annoyed by constant questioning. They either do not know the proper answer or think that a child can not understand the complexity of the world. Therefore, the most popular answer among parents is "Because I said so".

Every question peels a layer off until you find out an episode in the childhood where that reaction was born. It is a powerful way of thinking. Once you make it a habit, you will learn to apply it in other areas of your life.

First Principle in Business
First principles thinking can be easy to describe, but quite difficult to practice. One of the primary obstacles to first principles thinking is our tendency to optimize form rather than function. The story of the suitcase provides a perfect example.

In ancient Rome, soldiers used leather messenger bags and satchels to carry food while riding across the countryside. At the same time, the Romans had many vehicles with wheels like chariots, carriages, and wagons. And yet, for thousands of years, nobody thought to combine the bag and the wheel. The first rolling suitcase wasn’t invented until 1970 when Bernard Sadow was hauling his luggage through an airport and saw a worker rolling a heavy machine on a wheeled skid.

Throughout the 1800s and 1900s, leather bags were specialized for particular uses—backpacks for school, rucksacks for hiking, suitcases for travel. Zippers were added to bags in 1938. Nylon backpacks were first sold in 1967. Despite these improvements, the form of the bag remained largely the same. Innovators spent all of their time making slight iterations on the same theme.

What looks like innovation is often an iteration of previous forms rather than an improvement of the core function. While everyone else was focused on how to build a better bag (form), Sadow considered how to store and move things more efficiently (function).