Thread by @therealjohntan

How Ninja Van built a billion dollar business using First Principles Thinking.

A perspective from their first investor and current board member.

The case for getting kids to learn to reason from first principles and how it benefits them today.

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1/ Incumbent logistics players are not set up to deliver e-commerce parcels.

Traditional logistics: Pick up from one warehouse. Resupply 20 stores once a week.

E-commerce logistics: Pick up from multiple merchants. Deliver parcels to 100 addresses every day.

First principle: classic case of disruptive innovation targeting non consumption.

E-commerce merchants are not (well) served by traditional logistics players.

A startup designed to suit the needs of e-commerce merchants can disrupt incumbents.

2/ E-commerce is growing rapidly.

E-commerce wallet share will keep growing at the expense of brick-and-mortar retail.

Volume of e-commerce parcels will keep going up.

First principle: during a gold rush, sell shovels.

Last mile logistics is integral to e-commerce.

Every e-commerce merchant needs a reliable and cost-effective logistics provider to get parcels into the hands of consumers.

3/ A logistics provider with a pan South East Asia footprint can better serve e-commerce merchants selling in multiple countries.

Many e-commerce merchants in South East Asia sell to consumers in multiple countries.

Most logistic providers only have domestic presence.

First principle: a logistics provider with a regional network can offer services a domestic-only logistics provider cannot.

Not only are merchants better served, merchants also prefer to deal with one logistics provider than to have a different provider in every market.

4/ To compete effectively in logistics, cost structure is key.

Merchants are price sensitive. They are not always able to pass on delivery cost to consumers.

To beat the competition, a logistics provider needs to offer reliable service at a competitive price.

First principle: a tech-enabled logistics provider can use software + hardware to cut out inefficiencies, thereby lowering cost per parcel

Out of the 3 founders, 1 is CTO and another is CPO.

Engineering and product first.

5/ Reasoning from first principles is the starting point to finding problems worth solving / building something people want.

The ability to generate new problems to solve is one of Howard Gardner’s definition of intelligence.

https://twitter.com/therealjohntan/status/1476908783649660929?s=21

6/ Without first principles thinking, young people have a hard time with real world problem-solving, much less problem-spotting.

First principles thinking is not just for founders.

It's a skill founders look for in prospective hires.

It’s important irrespective of roles.

7/ First principles thinking is how kids learn, up until school age.

A five year old will keep asking why until they understand.

By age nine, the same child would have been conditioned by school to stop asking questions.

First principles thinking meets school. School wins.

8/ Understanding comes through using first principles thinking.

Breaking down a complex system to understand how it works.

Knowledge without understanding is useless.

With understanding, learning becomes easier.

Kids become more creative.

They get better at problem-solving.

9/ Studying for standardised tests is the antithesis of learning to reason from first principles.

Most kids cannot choose not to take exams.

But they can choose to learn critical skills that are not tested.

10/ Reasoning from first principles is a gift every child has.

But they lose it in elementary school.

Let's help them rediscover the ability to ask questions like a five year old.

First Principles 101 by @SahilBloom is a great starting resource.

https://twitter.com/SahilBloom/status/1329458583537397765?s=20