The Musk Method: How First Principles Built SpaceX and Tesla.
In his interview with Kevin Rose, Elon explains his thoughts about reasoning up from first principles.
“Boil things down to the most fundamental truths. Then reason up from there…
Thinking about things in the limit of high and low…
Thinking of things in hypothesis…
The scientific principle essentially.
These things are incredibly important in all arenas…
Most people tend to think by analogy or by comparison of something that already exists…
And that is sort of a mental shortcut.”
“First principles thinking is saying OK what are the most fundamental truths that we know about any situation…
The things that are at a very granular level the building blocks that we are most convinced are true…
And then you reason up from those most fundamental axioms.”
“Cogent thinking would be another way to refer to it as.”
“Do they lead to a conclusion?”
“What is the probability associated with that conclusion?…because reality is really probability. It’s not deterministic; One or the other.”
In an interview with the University of California Television (UCTV) Elon said:
The way I tend to view problems is from a physics standpoint. I think Physics is a good analytical framework and one of the key things in Physics is to reason from first principles.
To reason from first principles is contrary to the way most human reasoning takes place, which is by analogy.
Reasoning from first principles means you figure out what are the fundamental truths, or that people are pretty sure are fundamental truths, and can you build up to a conclusion from that.
And if you come up with some idea and it appears to violate one of those fundamental truths then you’re probably wrong or you should get a really big prize or something like that.
This may seem sort of obvious when it’s explained but it’s actually not what people do.
Reasoning by analogies is helpful because it’s a shortcut, and it’s mostly correct, but it tends to be most incorrect when you’re dealing with new things. Because it’s hard to analogize to something really new.”
To give an example of using first principles thinking at a talk Elon gave at the Oxford Martin School he explained how first principles thinking to rocket building.
The way first principles thinking applies to rocketry and improving the ability to create orbital rockets is to say:
(Rocket Example)
“OK well: What are the materials that go into a rocket? How much does each material constituent weigh? What’s the cost of that raw material? And that’s going to set some floor. As to the cost of the rocket.
And that actually turns out to be a relatively small number, something well under five percent of the cost of a rocket. And in some cases closer to one or two percent.
That’s the magic wand number. So if you have piles of raw material on the floor. And you just wave a magic wand. And rearrange them. Then that would be the best case scenario for a rocket.
So I was able to see well there’s clearly a great deal of room for improvement, even if you consider rockets to be expendable.
So that’s sort of what I mean by thinking about things from first principles standpoint.
If on the other hand I analyzed it by analogy and said ok well what are all other rocket companies, what do their rockets costs. What historically have other rockets cost. And that would be sort of an analogy thing but it does not illustrate what the true potential is.
And so a first principles approach is a good way to understand what new things are possible, so this is a good framework.
That doesn’t mean you will be successful but at least you can determine if success is one of the possibilities that is important I think.
Clearly using first principles thinking is powerful.
Although Elon might not have a “magic wand” he certainly has been able to drastically improve the cost of launching rockets to orbit.
First principles thinking is fundamental to Elon’s success.
And first principles thinking can be fundamental to your thinking too…
So reason up from first principles and strive for a market leadership position by doing so.