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What is First Principles Thinking?

According to Wikipedia:

“A first principle is a basic, unconditional, self-evident proposition or assumption that cannot be deduced from any other proposition or assumption.” {1}

The first principle is the basic assumption or basic known truth or law that cannot be deduced any further. In other words, It stands alone as a fundamental principle. According to Aristotle, ‘it is the first basis from which a thing is known.’ {2}

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Example of First Principles Thinking

Let’s take a look at the innovation of an airplane. The followings are the basic assumption or basic laws that enables an airplane to fly in the air:

Newton’s 3 Laws of Physics

The Bernoulli Principle/ Principle of aerodynamics.(lift, weight, drag, and thrust)

These fundamental assumptions/laws/principles, also known as the Physics of Flight{3}, are the First Principles behind how and why an airplane flies.

We can further analyze the physical elements that make up an airplane.The elements could be nickle, cobalt, tungsten, aluminum, titanium, or stainless steel etc. However, the Newtonian and Bernoulli concepts of physics and aerodynamics would be the guiding principle to evaluate the elements.

Now, let’s suppose we want to transport people by air, and that’s our goal. In other words, we need to find a new but better solution to the problem of air transportation.

According to the First Principles approach we will not consider any analogy (i.e the existing Airplane), rather we will start from the basic laws of physics and principles of aerodynamics as mentioned above.

We will have to think from the fundamental truths/principles/laws and work our way up to invent a new solution to the problem of air transportation.

Following the First Principles thinking method,If successful, we will be able to innovate a new way of flying. Only if we are successful.

Hey, do let me know about your feedback.

Elon Musk About First Principles Thinking

I’m going to paraphrase what Elon Musk has said in one of his interviews.

First Principles Thinking approach encourages thinking at the basic level of truth known about any situation/problem. It does not encourage you to take any existing examples, and it also does not allow you to make any comparison. This approach of thinking is, essentially, at the heart of all hardcore innovations.

If we have to subvert the existing paradigm with an extreme innovation, we have to get to the core i.e the guiding principles.

We can conclude that using the First Principles thinking method, we have to start from the known laws either from the hardcore sciences or social sciences.

For example, there are basic laws of gravity in physics or physics of flight.

There are theories/assumptions or models in mathematics, in the natural sciences, and in the social sciences which are universally accepted as true.

All the current products or services in the market are based on these fundamental principles. The products or services are the analogies, and we need to ignore them to keep the process of thinking as original as possible.

In other words, we are going back to the very basic i.e the atomic level of things. I think, I can loosely term this as the essence of all things.

How to apply First Principles Thinking in Business

How can we use the First Principles Thinking approach to find the best business idea?

In this article, I will explain the four most critical questions that any entrepreneur must answer when creating a startup or a business.

The idea is to answer the most critical questions using the first principles thinking method. You can also apply the concept to revamp the existing processes of a business as well.

If you are researching this concept, then you might have also read or heard about Elon Musk. Mr. Musk is a great admirer of first principles thinking and he is also applying the concept in his startups.

OK, People often associate First Principles Thinking with Elon Musk. But he didn’t invent the concept. He probably made it a bit more popular by talking about it in one of his interviews.

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Creative Thinking: To Copy or not to Copy

When creating a start-up, an entrepreneur is confronted with the most fundamental problem: to copy or not to copy.

Most people would opt for copying others or can make the existing idea better. Copying others is not necessarily a bad thing. It is sometimes necessary and more realistic.

We rarely get an extremely creative idea. Mostly, we paraphrase things by adding a personal angel. However, how we say and do things make it interesting. Perhaps, it becomes somewhat unique & likable in a personal way even if it’s not entirely original.

For example, I am writing this article on the First Principles thinking Method just sharing how I see the concept from an entrepreneurial marketing or startup perspective. I’m just trying to add a tiny bit, a slight variation of the presentation and applications of the main idea here.

OK, don’t underestimate the power of this article. I’m sure it can put your imaginations on fire if you are a serious thinker.

Yes. It can.

Finish reading this article to see if it was a bluff.

Why are we mostly content with average results in life

Most of us have an average life or career. Therefore, copying or following others is a normal or a safe thing to do.

Again, not a bad thing at all because it works for most people. Probably, a civilization is mostly made of contribution from the average people. I guess, we can debate this endlessly. Not this time though.

Now, let’s discuss how First Principles are relevant to a new startup.

Great Startups don’t copy others

Great startups mostly do not copy others or settle for average results (or impact). At least, this is how the crazy entrepreneurial mindset should work. I think, that The Lord has ordained some entrepreneurs to be so. They tend to be pure and original in their thinking. As a result, some of them have achieved legendary success in life.

It feels great when you read exciting stories about successful entrepreneurs and their start-ups. But, it isn’t much fun to create and build a great startup. It is even worse to be original. Critical thinking can ruin you as it might make you stand out like a soar thumb.

Similarly, doing something original in business is hard. It is not easy to break down a business problem to the fundamental principles(First Principles) and work your way up from there. It really demands a lot of commitment in focus and it also involves a lot of risk.

Moreover, getting an original idea is not enough. Raising a startup or small business requires long-hours work. It takes your personal/social life away. The worst thing of all, it puts you in a room with people who you, otherwise, would not even let near yourself. These are just a few of the problems from a long list that comes to mind.

In short, It is really hard if you want to innovate and create a startup based on the First Principles Thinking method.

I have included the most basic questions in the next question that confront the entrepreneur during the process of creating a start up. This is the essence of innovative marketing practices at the entrepreneurial stage of a business.

I hope you are doing good so far with this article 🙂

Most Critical Question for an Entrepreneur or a small business

Who is my customer? (target market/segment)

What does my business do for my customer? (solution)

Why does my business exist? (purpose)

What is my business strategy? ( How can I solve the problem better and differently)

These critical questions are generally understood by business executives, entrepreneurs or founders. As they often try to answer them at the earlier stage of business planning while working at a startup. The questions are also helpful to conduct a review of the existing market orientation of a firm.

The secret is not knowing the question or the concepts behind them but it is how you can answer them differently. I’ll try to explain this now.

Ideally, if your business cannot answer these questions differently in the target market, then you are simply another boring addition on the street.

It simply means an average performance or bloody losses for your startup! You can even go out of the business.

Answering the above questions via the first principles thinking would lead to a groundbreaking innovation. I mean,at least, this is what we should expect after believing in the method.

Yeah, I get it. It is a cool idea.

But tell me how many times you get that innovative to subvert the paradigm?

OK, let’s be less skeptical here.

See, Even if it is not groundbreaking, still you would end up in a better place of the market. You might get a better or improved solution because you used the First Principles Thinking method. You somewhat challenged yourself and tried to force originality on yourself.

Using First Principles Method to solve business problem is not easy.

These, simple but extremely difficult, questions listed above are enough to drive entrepreneurs out of their beds for countless nights.

If you ask those who want to make a difference and have been through this process, they would tell you how hard it is to keep your sanity intact, especially if you are working your way up using the “first principles” rules.

“First Principles thinking” is a pretty normal approach among the hardcore scientists. But can it be applied to a business, is a million dollar question? By the way, the natural science guys also fail at it mostly, don’t they? Perhaps, that’s the reason behind little innovation.

The Crazy Entrepreneur and the First Principles Thinking

Let’s return to the idea of flying, one last time. Think about a crazy entrepreneur who rejects all the accumulated wisdom of the airplane manufacturing and decides to build something from the scratch that will help us fly.

Heck, we can’t even call that an airplane then, right?

Hopefully, you can now understand that the First Principles Thinking(FPT) is not a light matter. let’s create an acronym for it : FPTM (first principles Thinking Method).

However, such extreme innovation is rare that is why we need to go easy on ourselves. For example, if a product is slightly improvement or modified, it is called a new product.

My Personal Experience using the First Principles thinking approach

Honestly, I tried First Principles Thinking Method in a business situation and I had to quit it. It would explain why I am not an inventor now. Ah!

FPTM takes a lot of time because layers upon layers of ideas emerge that turn into a massive cloud of confusion. The process frequently stalls the very thinking that it is supposed to lift.

You are cursed by a constant overlapping and competition of alternatives as a result of using the First Principles thinking model. It is really taxing on the brain and one can easily be overwhelmed. For more utilitarian perspective on thinking clearly, you can read Dobelli’s book.

On the other hand, the fear of risk in real life can make things really worse. For example, when you can see that you are likely to go broke or bust the tension must go up exponentially.

I can’t say if you need to be a gifted person or not, to make use of First Principles Thinking. However, I can say this for sure that it is going to be really hard for the normal people like myself.

Too bad, I’m out 🙂

The problem is that most of us do not train our mind to focus better and think original. Instead, a bad focus and following others is the norm. We develop such habits during the course of our lives.

Such habits would put you at a distinct disadvantage in the First Principles Thinking process.

Examples of First Principles Thinking in Marketing

Don’t push yourself too hard because you have to live with analogies in the market. There is no escaping from it. Most businesses are done that way i.e they are copycats of each others.

However, the First Principles Thinking method would definitely introduce a level of intellectual rigor. Hopefully, they should result in creating a better business or startup.

I will share a few examples.

1. For example, in our business(or startup) we are challenged by the first principles when we think about questions like ‘what does the customer want?’, What’s the customer’s problem’.

We need to spend time answering these questions while avoiding any analogy (i.e existing solutions) as much as possible. If you are lucky, you might end up with a better idea (i.e solution) than others have in the market.

You see by using the First Principles you already are trying to be ahead of the game. One just hopes that it works all the time 🙂

2. Let’s try another example. Let’s say that people go to a cinema to have a great experience. They normally look for this experience through a good movie.

All right, we assume that a desire for a great experience’ is the fundamental truth in this scenario. In order to keep things simple, we are not entering the realm of psychology of people(consumers) .

OK, currently cinemas are offer movies as a solution to meet the people’s need for a ‘great experience’. This is the analogy part that you need to avoid. Movies is the existing product, idea or service.

Remember, we discussed that the analogy is the existing service, product, method or idea and we cannot copy it. So what can you offer that is not a movie but delivers a great experience?

OK, it just came to me while writing this paragraph that why we accept the First Principles i.e. the basic assumptions. Can’t they be wrong. What if Newton, Bernoulli, and other scientists also got it wrong.

What if the first principles behind things are wrong.

I can never be as intelligent as some of these scientists. The scientists can rightly take the credit for these machines and innovations. But You know, I have thought about the existing machines and products. There is something deeply wrong with most of these innovations and technologies.

For example, most of machines pollute the environment. They are mostly inefficient and have various dangerous side effects.

I think the problem seems to be at two levels:

First, it is possible that the first principles/laws/theories discovered or postulated by scientist are entirely or partially wrong. I mean if they had got it all right, then the end product would be in a perfect harmony with the nature.

Think about it.

A bird also flies following the same principles of physics, but they don’t pollute or create ecological problems,do they?

Second, let’s say the scientist or the human race did a pretty good job at discovering the first principles or fundamental truth/assumptions. There is nothing wrong with the first principles as scientist tell us. In most cases, they are tested and proven by science as the laws governing the universe etc.

Does it mean that someone got it wrong when they applied the principles in the production plant? Horrible machines or flawed products came into existence that somewhat mimic the performance postulated(claimed) by the first principles but failed to achieve the optimum level.

Once a friend was going on and on as to how the human race had come a long way. I said whatever you call progress is mostly a distorted or disfigured version of nature.

Seriously. Think about it.

Like I said, Birds fly too, and it is such a beautiful thing to watch and they are in a perfect harmony with nature. Then comes the airplane that also flies, but it is an ugly, and a noisy thing. It pollutes the air.

First, humans would ride on animals to go from one place to other. In the water, they would sit on a piece of wood (boats) to get across. Then arrives the engine. It roars and pollutes like anything.

Please, explain to me where the problem is. Did we not get the first principles wrong? Or we got the application of the principles wrong? Or we got it completely wrong in the deconstruction of things?

I think all of us, including the arrogant scientists, have got just a fraction of the truth. It is just a mere tiny scratch on the surface of the Truth hidden in the universe.

OK, this was the idealist me.

We should go easy on the human race as they are imperfect themselves. How come they produce something perfect to compete with Nature. At least, the first principles enable us to break things right to the last atomic pieces and we have a better chance to think better.

Think. Think. Think. ‘ And go round and round’.

When I return to this in future, I will add more real business examples.

How often do we use “first principles Thinking” as a problem-solving approach in our life?

Reference List:

{1|: Wikipedia first principle

{2}: Aristotle, Metaphysics 1013a14-15

{3}: Flight of physic

{4}: The First Principles Method Explained by Elon Muk (Youtube)

Please, do suggest readings from the natural sciences on First Principles Thinking.