First Principles Thinking: How Elon Musk Built SpaceX (PDF Worksheet Included)
Application Strategies and Printable Worksheet Included
In this issue:
What is First Principles Thinking?
Elon Musk And The Birth Of SpaceX
How First Principles Thinking Works (The Mechanics)
How You (as a Manager) Can Apply First Principles Thinking
Download Your First Principles Thinking Worksheet!
References
Try This Simple Exercise
A few years ago, I found myself managing a project that was in chaos. We had a big feature in our software that was slated to be released to millions of customers, but the feature stopped working days before the release date.
Every passing day added pressure (and frustration) for me and my team. My team members (which included brilliant software engineers) did everything they could to identify the issue in the feature we were about to release, but nothing came out of it. It was a dead end.
That is when I decided to take a step back and go back to the drawing board. We drew out the architecture of not just the feature, but the entire system, drew out all the components and services, and listed out all our assumptions.
After hours of brainstorming at the whiteboard, it turned out it was not an issue with the feature at all. It was a problem in the code that had not been touched for years. I didn’t know then, but this was nothing by First Principles Thinking in action.
What is First Principles Thinking?
First Principles Thinking is a problem-solving approach that focuses on breaking down complex issues into their most basic, foundational elements. Instead of relying on assumptions, experience, or traditional methods, First Principles Thinking pushes you to ask: What are the undeniable truths of this situation?
Once you get to the foundation, you rebuild your solution from the ground up. It’s about thinking like a scientist—stripping away the noise and getting to the core.
The concept isn't new. It’s been used by philosophers like Aristotle and business leaders like Elon Musk. Musk often talks about using First Principles Thinking to reduce the cost of building rockets by questioning every assumption in aerospace manufacturing. But it’s not just for engineers or scientists—managers can use it to solve team problems, optimize operations, and innovate in business.
Elon Musk And The Birth Of SpaceX
In 2002, Musk began his quest to send the first rocket to Mars—an idea that would eventually become the aerospace company SpaceX.
Right off the bat, he ran into a major challenge. After visiting several aerospace manufacturers around the world, Musk discovered the cost of purchasing a rocket was astronomical—up to $65 million. Given the high price, he began to rethink the problem.
“I tend to approach things from a physics framework,” Musk said in an interview. “Physics teaches you to reason from first principles rather than by analogy. So I said, okay, let’s look at the first principles. What is a rocket made of? Aerospace-grade aluminum alloys, plus some titanium, copper, and carbon fiber. Then I asked, what is the value of those materials on the commodity market? It turned out that the materials cost of a rocket was around two percent of the typical price.”
Instead of buying a finished rocket for tens of millions, Musk decided to create his own company, purchase the raw materials for cheap, and build the rockets himself.
SpaceX was born.
Within a few years, SpaceX had cut the price of launching a rocket by nearly 10x while still making a profit. Musk used first principles thinking to break the situation down to the fundamentals, bypass the high prices of the aerospace industry, and create a more effective solution.
Source: JamesClear.com
How First Principles Thinking Works (The Mechanics)
The process of First Principles Thinking is simple but requires discipline. Here’s how it works:
Identify the Problem and Strip Away Assumptions: Start with a clear understanding of what you’re trying to solve. This is key. If you can’t define the problem, you can’t fix it.
Every problem comes with a set of assumptions—things we believe to be true but may not be. Ask yourself, “What assumptions am I making about this problem?” For example, if you’re facing budget cuts, are you assuming certain costs are fixed? Are you assuming more hours mean better results? Question everything.
Get to the Foundational Truths: Once you’ve removed assumptions, find the basic truths that remain. These are the things that you know to be undeniably true. What’s the actual goal? What’s the simplest version of this problem?
Rebuild from the Ground Up: Now that you have the foundational truths, rebuild your solution. This is where innovation happens. By building from the basics, you often find new, more efficient ways to solve the problem that wouldn’t have been obvious before.
How You (as a Manager) Can Apply First Principles Thinking
Here’s how you, as a manager, can apply First Principles Thinking in your day-to-day work:
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