Elon Musk’s “3-Step” First Principles Thinking: How to Think and Solve Difficult Problems Like a Genius

By Mayo Oshin

During a one on one interview with TED Curator, Chris Anderson, Musk reveals this missing link which he attributes to his genius level creativity and success. It’s called reasoning from “First Principles.” [1]

Musk: Well, I do think there’s a good framework for thinking. It is physics. You know, the sort of first principles reasoning. Generally I think there are — what I mean by that is, boil things down to their fundamental truths and reason up from there, as opposed to reasoning by analogy.

Through most of our life, we get through life by reasoning by analogy, which essentially means copying what other people do with slight variations.

In layman’s terms, first principles thinking is basically the practice of actively questioning every assumption you think you ‘know’ about a given problem or scenario—and then creating new knowledge and solutions from scratch. Almost like a newborn baby.

On the flip side, reasoning by analogy is building knowledge and solving problems based on prior assumptions, beliefs and widely held ‘best practices’ approved by majority of people.

First principles Thinking: Reasoning by analogy

Essentially, first principles thinking will help you develop a unique worldview to innovate and solve difficult problems in a way that nobody else can even fathom.

Here’s how you can quickly use this in 3 simple steps recommended by Elon Musk himself.

STEP 1: Identify and define your current assumptions

“If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.”
– Albert Einstein

Here are some examples from everyday life in business, health and craft.

“Growing my business will cost a lot of money.”

“I have to struggle and starve to become a successful artist.”

“I just can’t find enough time to workout and reach my weight loss goals.”

When next you’re faced with a familiar problem or challenge, simply write down your current assumptions about them. (Note: You can stop here and write these down now)

STEP 2: Breakdown the problem into its fundamental principles.

“It is important to view knowledge as sort of semantic tree. Make sure you understand the fundamental principles, ie the trunk and big branches, before you get into the leaves/details or there is nothing for them to hang on to.” [2]

– Elon Musk

These fundamental principles are basically the most basic truths or elements of anything. 

The best way to uncover these truths is to ask powerful questions that uncover these ingenious gems.

Here’s a quick example from Elon Musk during an interview with Kevin Rose on how this works. [3]

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.” 

This is classic first principles thinking in action.

Instead of following the socially accepted beliefs that battery packs were expensive, Musk challenges these beliefs by asking powerful questions that uncover the basic truths or elements i.e. carbon, nickel, aluminium.Then, he creates ingenious innovative solutions literally from scratch. 

STEP 3: Create new solutions from scratch

“The person who says he knows what he thinks but cannot express it usually does not know what he thinks.”
— Mortimer Adler

Once you’ve identified and broken down your problems or assumptions into their most basic truths, you can begin to create new insightful solutions from scratch. [4]

Here a three simple everyday examples of how this works (Step 1 to Step 3).

Assumption: “Growing my business will cost too much money”

First principles thinking: What do you need to grow a profitable business? I need to sell products or services to more customers. Does it have to cost a lot of money to sell to new customers? Not necessarily, but i’ll probably need access to these new customers inexpensively.

Who has this access and how you can create a win-win deal? I guess I could partner with other businesses that serve the same customer and split the profits 50:50. Interesting.