7 min read · Apr 29, 2017
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When you use First Principles thinking, you are able to discover unconventional insights based on fundamental truths. This in turn can lead to game-changing innovation — the kind of “10x thinking” that creates breakthrough product ideas.
Here is what four incredible thought leaders have had to say about First Principles. These leaders may not all call their approach “First Principles,” but that is in essence what they are talking about. The four leaders are Elon Musk (CEO of Tesla and SpaceX), Jeff Bezos (CEO of Amazon), Peter Thiel (ex-CEO of PayPal), and Richard Feynman (Nobel Prize winning physicist).
Elon Musk: “Boil things down to fundamental truths… and then reason up from there.”
The Tesla and SpaceX CEO is a big proponent of First Principles Thinking, which he summarizes in this video below:
As Musk says in the video:
“First principles is kind of a physics way of looking at the world. You boil things down to the most fundamental truths and say, ‘What are we sure is true?’ … and then reason up from there.”
He contrasts First Principles Thinking with thinking by analogy:
“I think it is important to reason from first principles rather than by analogy. The normal way we conduct our lives is we reason by analogy. We are doing this because it’s like something else that was done or it is like what other people are doing… it’s like slight iterations on a theme.”
Jeff Bezos: “Resist proxies”
In his 2016 annual shareholder letter, the Amazon CEO urges his readers to “resist proxies.” Proxies are, essentially, reasoning by analogy. Proxies are “like something else that was done.” They can take the form of processes that employees mindlessly follow, or of market research that employees unquestioningly accept as fact. Rather than boiling things down to fundamental truths (outcomes, real customer needs) and reasoning up from there, people tend to rely on proxies (processes, surveys) and reason by analogy.
As Bezos writes in the letter:
“As companies get larger and more complex, there’s a tendency to manage to proxies. This comes in many shapes and sizes, and it’s dangerous, subtle, and very Day 2.
“A common example is process as proxy. Good process serves you so you can serve customers. But if you’re not watchful, the process can become the thing. This can happen very easily in large organizations. The process becomes the proxy for the result you want. You stop looking at outcomes and just make sure you’re doing the process right. Gulp. It’s not that rare to hear a junior leader defend a bad outcome with something like, ‘Well, we followed the process…’
“Another example: market research and customer surveys can become proxies for customers — something that’s especially dangerous when you’re inventing and designing products. ‘Fifty-five percent of beta testers report being satisfied with this feature. That is up from 47% in the first survey.’ That’s hard to interpret and could unintentionally mislead.
“Good inventors and designers deeply understand their customer. They spend tremendous energy developing that intuition. They study and understand many anecdotes rather than only the averages you’ll find on surveys. They live with the design.”
Peter Thiel: “Find value in unexpected places… by thinking about business from first principles instead of formulas.”
The former co-founder and CEO of PayPal (and early Facebook investor) wrote a book a few years ago called Zero to One. He writes about what it takes to create true innovation and achieve breakthrough business success. This type of innovation is called “vertical progress:” going from 0 to 1, doing something that nobody has ever done before. Vertical progress is much harder to do than “horizontal progress:” going from 1 to n, copying things that already work.
In order to go from 0 to 1 and achieve vertical progress, you have to discover an important truth that very few people agree with you on — a “secret,” an idea that was once unknown and unsuspected. All breakthrough business opportunities are based on a secret.
You can only discover a secret, and therefore achieve vertical progress, if you use First Principles Thinking. Reasoning by analogy, or using proxies, will enable you to achieve horizontal progress — copying things that already work to go from 1 to n. First Principles Thinking — boiling things down to a fundamental truth, and then reasoning up from there — can lead to vertical progress. If that fundamental truth is an important truth that very few people agree with you on, then you have discovered a secret that could lead to a breakthrough business opportunity.
As Thiel writes:
“Every moment in business happens only once. The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won’t make a search engine. And the next Mark Zuckerberg won’t create a social network. If you are copying these guys, you aren’t learning from them…
“Because every innovation is new and unique, no authority can prescribe in concrete terms how to be innovative. Indeed, the single most powerful pattern I have noticed is that successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas.”
Richard Feynman: “Never pay attention to anything by the ‘experts.’”
We began this post with Elon Musk describing First Principles Thinking as a “physics way of looking at the world.” One of the greatest models of First Principles Thinking was Richard Feynman, a Nobel-prize winning physicist and Caltech professor.
In his book Surely You’re Joking, Mr. Feynman, we learn that Feynman relished solving problems entirely on his own, from scratch — not relying on previous work from so-called experts. Feynman was intensely curious and wanted to truly understand problems before attempting to solve them. This means that he would often break a problem down to fundamental truths that he could prove, and then build up theories and solutions from there. He would also question assumptions and data.
One example that Feynman recounted was when he determined the laws of beta decay. (You don’t need to understand the details of beta decay to benefit from Feynman’s story below. I certainly don’t either! But I’m including details like “T” and “V” here so that Feynman’s quote below makes sense. Take a deep breath with me and let’s do a superficial dive into beta decay.)
Feynman was at a conference in Rochester, NY, where he heard a talk by some researchers about beta decay, and largely believed their findings. A few years later, Feynman was reviewing the same problem and realized that they had made a mistake. The prevailing view on beta decay at the time was that the neutron-proton coupling was T — however, Feynman discovered that it’s actually V. There was no fundamental experimental data to support that the coupling was T — it was an assumption that someone had made, and then others built on top of that assumption until it became the prevailing view.
Feynman realized afterwards that he relied too much on the reasoning of others (“reasoning by analogy”). From that point on, he never relied on the reasoning of experts. He approached problems from a First Principles standpoint — what do you know to be fundamentally true, and then reason up from there. In the case of beta decay, there was no experimental data to support that T was fundamentally true. Feynman’s insight was that V was fundamentally true, which enabled him to correctly solve the problem of beta decay.
As Feynman wrote:
“And when I became interested in beta decay, directly, I read all these reports by the ‘beta-decay experts,’ which said it’s T. I never looked at the original data; I only read those reports, like a dope. Had I been a good physicist, when I thought of the original idea back at the Rochester conference I would have immediately looked up, ‘How strong do we know it’s T?’ — that would have been the sensible thing to do. I would have recognized right away that I had noticed that it wasn’t satisfactorily proved.
“Since then I never pay attention to anything by the ‘experts.’ I calculate everything myself. When people said the quark theory was pretty good, I got two PhDs… to go through the whole works with me, just so I could check that the thing was giving results that fit fairly well, and that it was a significantly good theory. I’ll never make that mistake again, reading the experts’ opinions.”
What did we learn?
We have heard from four thought leaders — Elon Musk, Jeff Bezos, Peter Thiel, and Richard Feynman — about how and why they use First Principles thinking.
- Elon Musk: Boil things down to fundamental truths, and then reason up from there. Don’t rely on reasoning by analogy.
- Jeff Bezos: Resist proxies. Don’t mindlessly follow processes, or unquestioningly accept survey data. That is reasoning by analogy. Go out and discover fundamental truths — focus on outcomes, and real customer feedback.
- Peter Thiel: True innovation comes from discovering an important, fundamental truth that few people agree with you on — a secret. First principles thinking helps you discover secrets to achieve vertical progress (0 to 1). Formulas, proxies and reasoning by analogy only enable horizontal progress (1 to n).
- Richard Feynman: Do your own homework. To truly use first principles, don’t rely on experts or previous work. Approach new problems with the mindset of a novice. Truly understand the fundamental data, assumptions and reasoning yourself. Be curious.
By incorporating these lessons, we will be able to discover unconventional insights — secrets, fundamental truths that very few people agree with us about — that lead to breakthrough business and product opportunities.
