first principles thinking

Renowned biographer Walter Isaacson ( who has previously covered disruptive visionaries like Steve Jobs, Albert Einstein, Benjamin Franklin and Leonardo Da Vinci) in his latest account where he penned down the journey of tech entrepreneur Elon Musk, highlights a key quality emphasized upon by Elon which in hindsight played a strong role in helping him build and scale the many audacious businesses that he has under his hood - first principles thinking. First principles thinking is a simple but extremely powerful concept when it comes to analyzing the world. It is simply the process of breaking complex structures or issues into its very fundamental components and then trying to rebuild from there in order to solve a problem. However, its effective application in real world situations is often overlooked. People algorithmically end up following ‘commonly accepted practices’ without really questioning their premise and consequently avoid the possibility of discovering a new way that is potentially better.

When Elon Musk undertook the very audacious goal of making humans a multi-planetary species via affordable space travel or making intra-planet mobility more sustainable via electric mobility, the only sustainable way to build and scale the underlying businesses was to take very drastic and unconventional steps in order to significantly reduce costs and make the unit economics work. So, when it came to actually building the products like a rocket or an electric car, a strict rule he imposed was to deeply question every requirement involved in the way these products were conventionally built and figure out if there was a better alternative. Elon’s methodology involved extreme skepticism towards conventionally followed rules adopted by the majority as they turned out be surprisingly inefficient at times and therefore the only rules that ultimately mattered were the very fundamental rules of physics and economics - a deep understanding of these rules can allow us to effectively reconstruct existing systems in a more efficient manner. This methodology proved to be immensely successful in driving the costs down by either eradicating unnecessary components or finding more economically viable alternatives. As we can see today, Tesla and SpaceX have grown to become to very successful businesses.