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Elon Musk and the Importance of First Principle Thinking

Julia Bernert

Published on 21.11.2019

According to a number of very successful people, in order to innovate the best possible products, we should be Making ‘First Principle’ Decisions.

This is because often people are all guilty of not thinking clearly. The commercial pressures and the emotional energy required for innovation can be stressful and challenging and it is easy for all of this to cloud our thinking. But there is a method of thinking that is helpful in boiling things down to simple principles, in fact just one principle.

First Principle Thinking has been made famous by Elon Musk but it is as old as Aristotle and also has a basis in Physics.

Thankfully, it is simple, and as we are in the tech sphere we can apply the following.

Many people think tech first, using what they know then applying a process that they think aligns with a market and which produces value.

What they should be thinking is problem first. Tech second.

So, in essence, applying the following: Select a market, discover a market problem, produce a solution to the market problem, make the solution different from the competition. Then sell it to customers.

Easy right? No, it isn’t, but still, this is the better path, Musk suggests. And he has been super successful with Paypal, Tesla and now SpaceX. And that’s pretty compelling.

It is about solving problems. That’s all that innovation should be.

Problem first, technology second.

Musk councils against thinking analogously. Many of us do analogously and this means we tend to apply past thinking. ‘So we did this before and it was successful, so let’s do it again even though the scenario is entirely different.’

So, when an unforeseen challenge which is presented to us , we need to look at the problem from all sides, because there are ways to deconstruct the problem, then we can construct a solution.

Elon Musk in an interview with Kevin Rose said the following:

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, aluminium, 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.”

This is first principle thinking and you get to the answer not by only using the ‘received wisdom.’ Musk believes that mistakes are made when thinking analogously.

This also has a link to confirmation bias. Humans like to think they are always right (ego) so can warp their thinking to make decisions that then align with their own ‘meta’ beliefs. This is not clear thinking, as the method that worked in the past won’t necessarily work again. Why? Because the idea, it’s elements and the market environments are different. Nothing remains exactly the same, such is the nature of change.

Using old models may make us feel reassured and gives us evidence that we are following due process. But, as in the example above, it can be wrong and can prevent innovation and progress.

So first things first, when you’re thinking of a new idea. Don’t make assumptions, and try to think independently and objectively, and park your ego outside of the room while you are doing it 🙂 It will only get in the way.


Image: National Geographic but downloaded from