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Elon Musk on First Principles and The Power of Thinking for Yourself, by James Clear


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First Principles Thinking

Elon Musk is perhaps the boldest entrepreneur on the planet right now. After helping revolutionize online payments as the founder of PayPal, Musk now runs three companies: Tesla Motors (electric cars), SpaceX (space exploration and tourism), and Solar City (solar energy). 

In a fantastic interview with Kevin Rose, Musk explains one of the core philosophies that has guided him during his bold entrepreneurial ventures.

“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. [When reasoning by analogy] we are doing this because it’s like something else that was done or it is like what other people are doing — slight iterations on a theme.

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.

Somebody could say, “Battery packs are really expensive and that’s just the way they will always be… Historically, it has cost $600 per kilowatt hour. It’s not going to be much better than that in the future.”

With first principles, you say, “What are the material constituents of the batteries? What is the stock market value of the material constituents?”

It’s got cobalt, nickel, aluminum, carbon, some polymers for separation and a seal can. Break that down on a material basis and say, “If we bought that on the London Metal Exchange what would each of those things cost?”

It’s like $80 per kilowatt hour. So clearly you just need to think of clever ways to take those materials and combine them into the shape of a battery cell and you can have batteries that are much, much cheaper than anyone realizes.”

—Elon Musk

Reasoning by first principles is one of the best ways to develop mental models that are rare and useful. Put another way, forcing yourself to look at the fundamental facts of a situation can help you develop your own perspective on how to solve problems rather than defaulting to way the rest of the world thinks.

"Eating healthy and losing weight is hard work. Plus, I have to give up certain foods.” 

First principles: What are we sure is true about eating healthy and losing weight? To eat healthy, you need to eat more whole foods to get a good balance of macronutrients and micronutrients. To lose weight, you need fewer overall calories each week. Is it possible to achieve those two things without it being “hard work” or requiring you to “give up certain foods?” Yes, you could hire a meal preparation service to deliver finished meals to you each week. 

My favorite feature of that site: "Dinners by the pound." Awesome. 

“You have to be a risk-taker if you want to be a successful entrepreneur.”

First principles: What do you need to be an entrepreneur? You need something to sell and a way to get paid. Ok, you need something to sell. Does it have to be a risky product or service? Not at all. Many people buy “normal” products and services like bow ties and lawn maintenance and car insurance. But what about leaving it all behind and starting your own venture? Isn’t that risky even if you sell something boring? There is no rule that says you have to start as a full-time entrepreneur. In fact, that’s one of the great things about entrepreneurship: there are no rules. Keep your day job and work on nights and weekends. Or, save up a big emergency fund before jumping in.

We often live life by analogy and simply assume that what has been true before must be true in the future. Instead, break your problems down to their first principles and you may see very different solutions emerge.

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