First Principles Thinking

A reasoning method where you break a problem down to its fundamental truths rather than working from analogy or convention, then rebuild solutions from the ground up.

Most business decisions are made by copying what competitors do or following industry convention. First principles thinking allows founders to find approaches others miss because everyone else starts from the same assumptions.

Elon Musk applied first principles to rocket manufacturing. Rather than accepting that rockets are expensive because they always have been, he asked: what are rockets made of at the elemental level, and what do those materials actually cost? The answer revealed cost could be reduced by 98%. SpaceX was built on that question.