Imagine you are faced with the following problem: you are craving sushi for dinner, yet going out to a restaurant is not really in your budget plans. You could choose to go for a more budget-friendly meal, pizza for example, however, that would not satisfy your sushi craving. You decide to look up the necessary ingredients for sushi and figure you will be able to purchase all these at the supermarket within your budget limits. Although it takes more time and energy to make it yourself, you manage to satisfy your wallet and your pallet.

This might seem quite insignificant in the sense of sushi, but what if I told you Elon Musk did this with rockets and created a company far more effective than the standard of the space industry? And what if I told you that Bernard Sadow changed our standard for carrying things in 1970, just by thinking outside the box, combining two inventions that had been around for thousands of years? I want you to think about one question throughout this article; some decades back, people were expecting us to have flying cars by now, so where are they?

First-principles thinking is a strategy of evaluating a problem and finding a solution, in a manner of deconstruction and reconstruction. It is closely related to scientific thinking, where the common procedure for scientists is to ask questions, make observations, and disregard any previous assumptions. First-principles thinking is a method for attacking a certain problem by breaking it down into the foundational elements which make up the problem. As defined by Aristotle some thousands of years ago, the first principle is “the first basis from which a thing is known”. This way of thinking is a powerful tool that can prove to be advantageous in all industries, and, more importantly, it is often acknowledged as the best method for learning how to think for yourself.

In this article, we will look deeper into first-principles thinking, what it is in theory and how it can be applied in practice, looking at how this strategy is a game-changer, and why it is so demanding and challenging to utilize in the real world.

“To understand is to know what to do” – Wittgenstein

In theory vs. in practice

Looking at the theoretical aspect of first-principles thinking, it is, quite simply, the deconstruction of a problem until you are left with the very fundamental parts, the parts that can not be split any further. A method that utilizes this approach is what is known as Cartesian Doubt, from the French philosopher and scientist Rene Descartes, where one systematically doubts everything possible until you are left with what is undoubtable. In physics, this would be the equivalent of the fact that all things can be broken down into atoms, which consist of protons, neutrons, and electrons, which are made up of what is known as quarks, the smallest matter currently known to man (Keating, 2019). In this case, quark is the fundamental matter that can not be further deconstructed, to our knowledge.

In practice, breaking everything down to its “quarks” is not very efficient and necessary, and is in most cases incredibly difficult. However, we do not have to break it down into quarks in order to efficiently use first-principles thinking. Using the analogy of an onion, the outer layer represents the visible problem or situation, then the different layers are previous actions and conclusions leading to the problem we are facing or the situation we are in. The center of the onion is the core problem; the very foundation of the outer problem and the different layers. We can view first-principles thinking as peeling the onion, layer by layer, uncovering the different underlying parts of the problem or situation. The more we peel, the more in-depth knowledge we get regarding the situation, however, just by uncovering some levels, we may be able to make drastic changes and improvements, as in the case of Elon Musk and SpaceX.

SpaceX was facing a crucial problem; the cost of a rocket was enormous, around $65 million dollars, depending on the manufacturers. Such problematically high prices proved to be a problem for the space start-up, and Musk was forced to rethink the situation. Thinking in terms of first principles, Musk asked himself, “what are the materials making up a rocket?” Discovering the different materials, Aerospace-grade aluminum, titanium, copper, and carbon fiber, he proceeded to look into the costs of these materials on the commodity market, which turned out to be around 2% of the actual price of a rocket. To make a long story short, with this discovery and a lot of hard work with the in-house engineering of rockets, SpaceX managed to lower the costs of launching a rocket almost 10-fold. (Clear, n.d).

This is a very known story of thinking from first principles, much because it represents the incredible power of this thousands-of-years-old way of thinking, even in the modern, rapidly moving world. It is important to note that first-principle thinking is not just about deconstructing the problem, but it is also about reconstruction.

When we are deconstructing the problem, we are uncovering the different aspects and gaining knowledge beyond the initially visible problem. The parts uncovered and the gained knowledge is utilized to reconstruct a solution, attacking the problem at a deeper level.

Elon Musk not only deconstructed the problem of the costs of a rocket but also reconstructed a solution that went beyond what had previously been done in the industry. By putting on “industry-blindfolds”, Musk was able to spark life and strong competitiveness in a formerly slow-paced industry.

First principles and innovation

We often see innovations being made in a manner of first-principles thinking. Innovations are, inevitably, solving a problem and bringing improvement. In this sense, first-principle thinking allows you to dig into problems, situations, and even things, to discover the parts that may bring solutions. Often this comes in the matter of cross-innovation, where two seemingly unrelated products may be deconstructed to get a deeper insight into specific aspects, discovering parts that, if combined, could bring something new and extraordinary, changing the world we live in.

Such thinking is what we can see in major innovations such as Johannes Gutenberg’s printing press; combining already existing products and creating a device that would revolutionize how information traveled and its accessibility. The printing press was created by combining easily accessible products, yet, similar to the case of Musk and SpaceX, most people were too narrow-sighted to see the opportunity.

Another aspect of innovation, alteration, and reasoning with first principles relates to the nature of the invention. In terms of improvement, this may occur on the level of the core function or on the level of the form of a product. The latter, which is the most common type of innovation, is aimed at improving a product on the quality and design level, while the purpose and functions remain the same. Meanwhile, improving or altering a product at the level of the core function aims at improving and expanding how it is used. The case of Bernard Sadow is a great example of such improvement.

In Ancient Rome, leather bags and satchels were used to carry food and personal items across the countryside. Meanwhile, The Romans had also developed vehicles with wheels such as carriages and wagons. In other words, both the invention of the bag and the wheel were common in Ancient Roman society. Yet, it wasn’t until 1970, thousands of years later, that Bernard Sadow came up with the idea of combining the two, and hence, the suitcase was born. Even as late as the 1800s and 1900s, leather bags were being specialized and altered for specific use cases. Up until 1970, innovators were paying attention solely to improving the quality and design, the form, of leather bags, rather than improving the functionality, as Sadow did; to effectively store and move personal belongings (Clear, n.d).

How to reason with first principles

First-principles thinking is a fairly simple concept to understand but can be rather difficult to actually utilize in the real world. Looking back at inventions such as the printing press or the rolling suitcase, these inventions may seem quite obvious to us. Some of us, myself included, might have thought back at history, scratching our heads saying, “How come it took people thousands of years to see what was right under their noses?”

The truth is, we humans are, in essence, animals, and even in today’s society we are driven by certain primal instincts, some of which involve relying on each other, certain pack instincts. In almost any case, we are shaped by the people around us and their beliefs and thoughts. Although we do see “orchids”, individuals growing strong in tough environments, there is no denying the importance of our environment, even for these orchids.

This is important to point out, as it provides an explanation for why it is difficult to practice first-principles thinking and to think for yourself in the first place. Even unconsciously, we are so influenced by each other that it is indeed difficult to see what is right underneath our noses from time to time.

That being said, it is of course possible to utilize first-principle thinking, and there are a few important, yet simple methods we will consider. Being aware of the lack of individual thinking in our society and, accordingly, that there is a defined method to counteract this, is a good start. The first step in developing a solution is identifying the problem. By acknowledging the importance of thinking for ourselves, we may adopt such thinking on a conscious level. Although this is a tough process of almost forcing your mind to think for itself and to think differently, it builds on the same principles as habit-building, where, eventually, it becomes an automatic process to attack problems this way. In other words, two simple yet important steps to develop reasoning from first principles involve acknowledging its importance, and a ton of practicing.

Practice makes perfect. It is the same for learning how to reason from first principles.

Although I am no expert on first-principle thinking and I, in fact, feel the need to practice it a lot myself, I will provide you with a simple recommendation on how to practice first-principle thinking and the deconstruction and the reconstruction of a situation.

Select a situation, problem, or opportunity that relates to you, whether it is a personal issue, a business opportunity or obstacle, or any other issue that is evident in your environment and today’s world. In order to practice thinking for yourself, write with pen and paper and allow no external sources to be used. Start by defining the visible problem and then work your way through the deconstruction and reconstruction process, breaking the problem down into individual parts, uncovering underlying issues, and then attempting to piece together what you believe to be the optimal solution for the problem. With no external sources, there might be a lot of information that is unclear, which is why this process is not necessarily about achieving the right results but asking the right questions.

First-principle thinking is not about using external sources or not. However, this practice focuses on developing your own thoughts, and not becoming fixated on what everyone else says and believes; it teaches you to draw your own conclusions. You may fact-check and compare your conclusions with what others conclude, once completed the exercise. Did you miss any aspects? Were some of your conclusions wrong? Maybe, in fact, you uncovered aspects others had missed? Note that, this exercise is, after all, a learning exercise, and the aim is to develop individual thinking, not whether your conclusions are right or not.

Conclusion

Reasoning from first principles is great for innovation, as we have seen throughout this article, and it is often seen in this context as well, as it provides good evidence of its power. That being said, despite the benefits of innovation, first-principles thinking brings knowledge and complex understanding to any field. In terms of strategy and leadership, where we talk about the fact that there is not one uniformly applicable strategy across companies and industries, first-principle thinking can be utilized for establishing a strategy that is tailormade for the firm’s purpose, its resources, and its people. For coaches, the same principle applies; one must manage and direct the team based on its different capabilities. Copy-pasting an already existing playing style can prove detrimental, as often witnessed across sports.

That is the power of first-principles thinking. That it is not a model for innovation or anything else, but a way of thinking that allows you to silence the disruptive noise in the environment, think outside the box, and draw your own conclusions.

Oh, regarding the flying car, it does exist as a matter of fact, we just decided to call it an airplane.