• Modified: Feb 17, 2025 • Read in: 7 mins
— By Dr. Sandip Roy.You’ve been focusing on a problem for hours. You’ve mentally rehearsed all the past solutions, and concluded that none of them will work this time.
There needs to be a new solution, but your mind is crowded with what has worked so far.
Enter First Principles Thinking.
It’s a futuristic way to solve and innovate that elite decision-makers use. Elon Musk has regularly uses first principles to learn new subjects, like, err…, rocket science!
Basics of First Principles Thinking
First principles thinking is about breaking problems down to their fundamental truths. Then, rebuilding solutions from the ground up.
It’s the opposite of defaulting to best practices and established procedures. Instead of replicating what worked before, you ask, “What’s the last layer of truth in this situation?”
You rock the boat with the intention to look beyond the convention.
It’s less like following a recipe and more like decoding the chemistry of cooking. Say, did you know what oil in cooking actually does? Oil lets the heat spread evenly, so the food cooks evenly. That’s the basic function of oil in cooking.
“First principles thinking is defined as a method of reasoning or a thought process in which you try and understand the fundamental truth regarding different aspects of the existence of a thing or problem by breaking it down into its most basic elements and building your argument up from there. These fundamental truths can be called the first principles or first causes.” — Ajitesh Shukla
How Elon Musk Used First Principles To Win Space
Elon Musk, when working on his reusable rocket project SpaceX, used first principles to ask:
- “What is the actual cost of the materials used to build a rocket?”
- “How does this compare to the final cost of the rocket?”
He found that the raw materials of a rocket made up just 2-3% of the total cost. Most expenses went into labor, engineering, and manufacturing processes.
Musk shifted his focus from raw materials to optimizing internal processes. This led to around 85% of the entire Falcon/Dragon vehicle being produced in-house. SpaceX could cut launch price by a factor of ten and still enjoyed a 70% gross margin.
His first question, what percent is the cost of materials compared to the final cost of a rocket, rewrote the rule book for the entire rocketry industry.
7 Steps of “First Principles Thinking”
Follow this sequence of steps to start your first principles thinking process:
1. Question the Unquestionable
Question established strategies and procedures. Even question your own beliefs, asking why you believe what you believe.
Instead of accepting “that’s just how it’s done,” first principles thinkers ask “Why is it done this way?” and “What am I assuming that may not be true?”
Research shows over 90% of business practices persist due to tradition rather than proven effectiveness. Start with three core questions for any established process:
- What direct evidence supports this approach?
- What would happen if we removed this step?
- What problem was this originally solving?
Example: SpaceX questioned the $65 million rocket component price tag. Breaking down materials and manufacturing costs revealed the potential for 10x cost reduction.
2. Break Free From Your Mental Anchors
“You will never understand bureaucracies until you understand that for bureaucrats, procedure is everything and outcomes are nothing.” — Thomas Sowell
We have similar bureaucrats in our minds. These are “mental anchors” that form when we solve a problem the same way a few times. Anchors make us think in a certain way, blocking out alternatives.
Price anchoring studies show the first number people see influences subsequent judgments by up to 50%.
First principles thinking requires you to break free from your anchors. This can feel uncomfortable, since you are asking your brain to abandon its time-tested shortcuts.
To identify your anchors, write down your initial solutions to the issue at hand. Wait 24 hours. Generate three new solutions without referencing your first idea.
Example: Henry Ford broke from the “faster horse” anchor of transportation. He mapped the core need: “efficient movement” of people and goods.
3. Practice Strategic Ignorance
Many famous people pursued hobbies outside their field:
- Albert Einstein, the genius of physics, was an avid violinist.
- Thomas Jefferson, the third President of the United States, was deep into architecture.
- Richard Feynman, Nobel-winning physicist, played the bongos at a strip club in Pasadena.
- Hedy Lamarr, the ravishingly beautiful actress of the 1930s and 40s, co-invented an early version of frequency-hopping spread spectrum tech, which led to today’s Bluetooth and Wi-Fi.
Expert knowledge is sometimes the greatest obstacle to breakthrough thinking. To break free, temporarily forget what you know. Deliberate “unknowing” creates space for fresh perspectives.
Set a 5-minute timer and describe your problem to someone (even an imaginary person) from an unrelated field. As the GenZ says, “ELI5” (explain like I’m 5 years old).
Write insights that emerge from explaining the process without technical jargon.
Example: The Wright brothers were not anchored by formal engineering. They approached flight through bicycle mechanics. Their first flight was in 1903, and humans landed on the Moon just 70 years later.
4. Map The Core Elements
Identify 4-5 fundamental elements when analyzing a challenge. What are its basic, undeniable truths? What elements are genuinely essential?
Create a physical map:
- Draw a circle for your challenge
- Add branches for each component
- Label each as “essential” or “traditional”
- Remove all “traditional” add-ons and branches
- You’re left with only the essentials — raw material for the next stage
Example: Amazon stripped its retail business to three unchanging customer needs: lower prices, faster delivery, wider selection.
5. Challenge Your Dependencies
Dependencies are often comfortable habits dressed as necessities. Studies show 60% of business “requirements” don’t impact core outcomes.
Ask for each assumed requirement: Is it truly necessary, or just comfortable?
- List the specific consequence of its removal
- Measure its direct impact on outcomes
- Calculate its resource cost
- Keep only those with proven necessity
Example: Netflix challenged video rental’s dependency on physical locations. They mapped actual customer needs: content access and convenience.
6. Build From Verified Truths, Not Tradition
Once you’ve identified core elements and removed unnecessary dependencies, construct new solutions using only these truths.
- Measure the measurable facts
- Test new belief frames from raw data
- Track each decision’s evidence and success rate
Building only from verified fundamentals can often lead to simpler, more elegant solutions than complex, assumption-laden defaults.
Example: Tesla built from the truth that electric motors are 90% efficient versus 35% for combustion engines. This fundamental advantage shaped their entire strategy around electric cars.
7. Test Against First Principles
Testing prevents unconscious reversion to conventional thinking.
Create a First Principles Checklist:
- Does this align with proven core truths?
- What assumptions am I adding?
- Can I measure each component’s impact?
- Is complexity serving purpose or tradition?
Start small. Apply this to one meeting or task. Record results. Scale what works. Remember: Up to 70% of innovation comes from questioning established practices rather than new technology.
Implementation Framework:
- Pick one process to examine
- Document every step and assumption
- Test each against direct evidence
- Remove unsupported elements
- Rebuild using only proven components
- Measure outcomes against original process
Final Words
First principles thinking is a mental reset that gets rid of old beliefs, biases, and assumptions. The reward? A new capacity to imagine the future.
It’s four fundamental steps are:
- Define the Problem: Identify the problem in precise terms.
- Break It Down: Break the problem into its core components (first principles).
- Analyze the Components: Examine the function/relevance of each component.
- Rebuild Solutions: Use the insights to create new solutions from the ground up.
Peace and success!
√ Also Read: Identity-Based Habits To Hasten Your Success Routine
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