What is "first principles thinking" and how does it work?
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1/ First, a few definitions.
A "first principle" is a foundational assumption or proposition - it is foundational in that it cannot be deduced from other assumptions or propositions.
Think of a first principle like an element. It cannot be broken down further. It is pure.
2/ "First principles thinking" (or "reasoning from first principles") is a problem-solving technique that requires you to break down a complex problem into its most basic, foundational elements.
The idea: to ground yourself in the foundational truths and build up from there.
3/ When we encounter difficult problems, our tendency is to rely on base level assumptions we have been told are true (or believe to be true).
It's quick and easy to do so.
But it also leads to unimaginative, linear solutions that closely resemble all that has been done before.
4/ This is called "reasoning by analogy" - it leads to solutions that are like something else.
It can be a useful heuristic when speed is required and novel solutions are not the goal.
But it falls short when dealing with complex problems in need of imaginative solutions.
5/ Imagine the solution to a problem as a house. The foundation is the assumptions upon which the solution rests.
If the foundation is shoddy, the house will collapse.
If the foundation is sturdy, the house will hold up.
First principles form a sturdy foundation for the house.
6/ To illustrate the flow of first principles thinking, let's look at a classic example.
7/ Musk discovered the cost of buying a rocket was otherworldly (sorry, couldn't resist!).
Buying a rocket for $65 million was not only untenable, it was also grounded in assumptions of how rockets have always been built and what they should cost.
He turned to first principles.
8/ He asked and answered basic, foundational questions.
What is a rocket made of? Aerospace-grade aluminum alloys, titanium, copper, and carbon fiber.
What is the value of those materials on the open market? Just ~2% of the typical rocket price.
So he decided to build his own.
9/ Rather than accepting the "truths" he had been told about the cost of a rocket, Musk grounded his problem solving in first principles.
Today, @SpaceX rockets are safely delivering humans to space and the dreams of a Mars voyage are alive.
Score one for first principles!
10/ There is no set way to establish first principles.
"Socratic questioning" - a technique where you use systematic questioning to drill-down to fundamental truths - is one method.
@FarnamStreet has a great primer on this in their article below.
In short, become an endlessly curious child again! Question anything and everything. Ask why!
13/ Aristotle defined a first principle as, "the first basis from which a thing is known."
The greatest thinkers and problem solvers agree: when solving a complex problem, ground yourself in first principles and build your solution up from there.
I just shared this idea in "How to Build a Personal Monopoly" w/ @david_perell
Here it is again.
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1/ Divergence
Steve Jobs famously said "You can only connect the dots looking backwards."
So your job to begin with, is to collect dots (h/t @traf), or "diverge" — we're pulled our curiosity to create competence: Jobs, projects, experiences, books, people, places, ideas, etc.
2/ Convergence
The stringing together of the things you care about in a unique (and marketable) manner.
For me — design, commerce, philosophy, self-development.
Ironically, what you despise the most will probably do a better job of locating something within you that you can turn into something useful than what you love.
A Circle of Competence is the set of topic areas that align with a person's expertise.
If the entire world of information were to be expressed in a circle, an individual's Circle of Competence is the small sub-circle that represents their expertise.
2/
The idea surfaced in the 1996 BH annual letter.
"You don’t have to be an expert on every company...you only have to be able to evaluate companies within your circle of competence. The size of that circle is not very important; knowing its boundaries, however, is vital."