First Principles Thinking

Problem solving 6 questions

First Principles Thinking

Break down complex problems into first principles and create innovative solutions from there. Advocated by Elon Musk.


Humans have a natural tendency to choose imitation over innovation.

This is purely due to the body’s attempt to minimize its use of energy. Our brains consume a significant portion of our energy supply. Thinking about everything from the ground up takes a lot of mental power, so our brains create shortcuts.

From the evolutionary standpoint, this was critical for our survival. If you stopped every time you saw a lion and examine its teeth to determine if it’s capable of harming, you wouldn’t get far. Instead, you did what every other human does – run away or hide. 

Reasoning from analogy – imitating – was a good strategy for survival, but for innovation, it falls short. If we never take things apart to test our assumptions and beliefs, we end up doing things the way they have always been done, thus failing to innovate. 

Break away from the herd mentality and come up with original solutions.

Reasoning from first principles allows us to step outside of the status quo and conventional wisdom to see what’s possible. It’s one of the best ways to solve hard problems and complex situations with many interconnected parts. 

First principles thinking is about breaking problems down into core elements and building up from there. A first principle is an assumption that cannot be reduced any further. Everything that is not a law of nature is just a shared belief.

By knowing the first principles of something, you can build from scratch and create something new. Without a solid understanding of the basics, there is little chance of mastering the details that make the difference at elite levels of competition.

The secret to innovating like Elon Musk.

Elon Musk has built three revolutionary multibillion dollar companies. What makes it even more incredible is that they are in entirely different fields — Paypal (Financial Services), Tesla Motors (Automotive), and SpaceX (Aerospace).

When asked about how he managed to do this, he said the following: I do think there is a good framework for thinking. It is physics – you know the sort of first principles reasoning … What I mean by that is boil things down to their fundamental truths and reason up from there as opposed to reasoning by analogy. Though most of our life we get through it by reasoning through analogy, which essentially means copying what other people do with slight variations. And you have to do that, otherwise mentally you wouldn’t be able to get through the day. But when you want to do something new you have to apply the physics approach. Physics has really figured out how to discover new things that are counter-intuitive, like quantum mechanics … so I think that’s an important thing to do. This may sound like simple advice but hardly anyone does that and it’s incredibly helpful.”

Just like Musk, some of the most brilliant minds of all time — Aristotle, Euclid, Thomas Edison, Feynman, and Nikola Tesla — use this model to accelerate learning, solve difficult problems, and create outstanding work.

It’s not about how hard you think; it’s about how you think.

By looking for ways to improve existing constructs, you create incremental improvements. Reasoning from first principles opens you up for the possibility of creating a paradigm shift. 

The best way to think from first principles is to ask powerful questions that structure your thinking so you can see things from a new perspective.

6 steps to reason from first principles

  • Define the goal & problem
  • Define the system
  • Find the first principles
  • Question efficiency of the system
  • Find root causes that are blocking your way
  • Re-build a solution from first principles

How to think with First Principles Thinking

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  2. Answer the questions. Consider them as prompts that make you think. Each question comes with examples.
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Define the goal & problem

What is the goal you want to achieve? What is the problem/symptom? The more specific, the better.

  • Example 1: Elon Musk wants to make life multi-planetary (goal), so he needs rockets. After visiting a number of aerospace manufacturers worldwide, Musk discovered the cost of purchasing a rocket was astronomical—up to $65 million. (problem) 
  • Example 2: Elon Musk wants to make electric cars go mainstream (goal). When researching battery packs, people said that they are, and will always be, really expensive. They said that historically, it had cost $600 per kilowatt-hour, and it’s not going to be much better than that in the future. Batteries are too expensive to make cheap long-range electric vehicles (problem).

Define the system

What is the underlying system? What is the goal of that system?

  • Example 1: The system is a space rocket, and the goal of this system is to get things into space.
  • Example 2: The system is a battery, and the goal of this system is to store chemical energy and make it available in an electrical form.

Find the first principles

What are the foundational parts of the system? What makes up the system? What does it consist of? How do the parts fit together?

  • Example 1: Elon: “Physics teaches you to reason from first principles rather than by analogy. So I said, okay, let’s look at the first principles. What is a rocket made of? A rocket consists of aerospace-grade aluminum alloys, plus some titanium, copper, and carbon fiber.”
  • Example 2: What are the material constituents of the batteries? Batteries are made of cobalt, nickel, aluminum, carbon, some polymers for separation, and a seal can.

Question efficiency

Is the system already the most efficient it can be at delivering its goal?

  • Example 1: Elon: “What is the value of those materials on the commodity market?” It turns out the materials cost of a rocket is around two percent of the typical price, so the system is not efficient.
  • Example 2: Elon: “What is the stock market value of the material constituents? Break that down on a material basis and say, If we bought that on the London Metal Exchange what would each of those things cost?” The cost was $80 per kilowatt-hour.

Find root causes that are blocking your way

What is making the current solution not efficient? What is the main obstacle? Break each assumption down by questioning it. Think of questions starting with: Why? What? How?

  • Example 1/2: Whatever specifics SpaceX and Tesla found out about building the rockets and batteries. 

Re-build a solution from first principles

What do the underlying first principles reveal to be the most cost-efficient and power-efficient way to build this system? What is the most efficient way to solve those problems if you started from scratch? What can you do different?

  • Example 1: “Instead of buying a finished rocket for tens of millions, Musk decided to create his own company, purchase the raw materials for cheap, and build the rockets himself. SpaceX was born. Within a few years, SpaceX had cut the price of launching a rocket by nearly 10x while still making a profit. Musk used first principles thinking to break the situation down to the fundamentals, bypass the high prices of the aerospace industry, and create a more effective solution.”
  • Example 2: Elon: “So clearly, you just need to think of clever ways to take those materials and combine them into the shape of a battery cell, and you can have batteries that are much, much cheaper than anyone realizes.” The solution is a Tesla battery.

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“The problem is most people don't know what the problem is. Wherever that's the case, the solution isn't going to work.”

— Jack Bucher