HOW THE FIRST PRINCIPLE DROVE ELON’S SUCCESS

Just to be clear we aren’t talking about his school principal. That guy was no help.

Unmasking Musk

Elon Musk. You may have heard of him. He went on SNL that one time, does that ring a bell?

He also happens to be the founder of Tesla, SpaceX, Neuralink, and The Boring Company and acquired Twitter and changed the name to his favorite letter.

Cars, rockets, brain chips, and underground tunnels. Quite an ambitious man.

No matter what your opinions of him are, there’s no doubt that he has been and continues to do some wild things.

But what happens in a mind like Musk’s?

To go from a troubled childhood to the creative, innovative, memer man he is today?

Introducing… A Concept

Oh yes indeed. Elon is able to do this, with a concept. And it has a cool name too:

First principles thinking.

Before we understand this concept though, let’s take a look at how the rest of the world doesn’t use this, so we can understand the importance of it.

Most people reason by analogy.

We do something because it’s like something else that was done, it’s always been done that way, and we take it and put a little iteration on this. It makes sense at first glance.

It’s a lot easier to take something that already works and do it for yourself. It’s orders of magnitude harder, however, to be able to create something new that other people are not seeing.

To ignore whatever it is you want to copy and use first principles thinking to make something from scratch.

So now that we understand how most of the world does things, let’s find out how Elon does things.

To do that though, we need a physics lesson.

Welcome Back…To School

Don’t worry, it’s only for a paragraph or two.

There are no bells. There are no tests. You can have your phone out since that could be where you’re reading this newsletter. Use crayons and draw if you would like, since there is no scope of what grade you are in right now.

Definition:

First principles thinking is boiling things down to their most fundamental truths, and reasoning up from there.

Elon takes this principle straight from physics. He straight-up plagiarized it and turned it into his own superpower.

But what does he mean that it’s “like physics?”

Get out your notebooks. Or don’t. As I said, this isn’t exactly like school.

In physics, there is a practice of reducing complex phenomena to their most basic components (first principles).

Since we’re talking physics, that would be gravity, electromagnetism, and so on, which explain how the universe works at the most fundamental level. Because physicists understand these basic laws, they can predict and explain things such as the motion of planets, the behavior of subatomic particles, and a lot more.

So using first principles outside of physics, you can understand, predict, and influence complex situations.

Okay, you put your crayons back in the box now. I’m not even sure what you would have colored from that complicated physics explanation. School’s out.

A New Way of Thinking

So we know what most people think. We know how Elon thinks.

But can we see it in action? What is an example of the two playing out?

That is a good question that I asked myself in hopes you would ask it too. So let’s answer it.

But to do that we have to travel back in time.

It’s the 19th century. The world is amidst the throes of the Industrial Revolution. The landscape of the city and countryside alike is changing dramatically as steam-powered factories spring up, belching smoke into the sky, while new railroad lines crisscross the land, a steel and iron network connecting places and people like never before.

Horse-drawn carriages are a common sight. Your buddy Carl, who is an absolute buffoon who thinks by analogy, says,

“We need to breed faster and stronger horses, or maybe design better carriages.”

Carl is only thinking in terms of what already exists. Horses and carriages. But you’re different.

You know about first principles thinking. So you take the principle and boil it down to its fundamental truth.

What is the goal of transportation, you think?

To get from Point A to Point B. This means horses and carriages don’t have to be in the picture, as long as you get from A to B faster than by horse and carriage.

You then start to think up entirely different ideas. While your buffoon friend Carl is thinking about making horses faster somehow, you are thinking about cars and planes, which never would have happened if you didn’t use this new way of thinking.

So Musk Uses This?

Not only is he a big advocate of it, but he actually practices what he preaches.

In SpaceX, the mission was to make space travel more accessible. The issue was, the common assumption is that rockets have always been expensive to make because they always have been.

Elon didn’t accept this, and used FPT (it sounds a lot cooler when you make it an acronym). He broke it down to:

"What are the physical materials required to build a rocket and what is their cost?"

By researching this, he found that the raw materials for building a rocket composed only about 2% of the typical price. That means the rest of the cost came from inefficiencies in the manufacturing, assembling, and other processes.

He saw that there wasn't a fundamental reason that rockets had to be expensive. The high price wasn't a law of nature, like gravity, but a result of human choices and processes that could be changed.

With Tesla, the mission was to combat climate change by accelerating the world's transition to sustainable energy.

The barrier to this was the high cost of electric vehicles. This hefty price tag was mainly from the lithium-ion batteries used in the cars. But instead of accepting defeat before he had even started, Elon used (you guessed it) FTP.

He examined the base constituents of the batteries and found out that the raw materials cost much less than the industry sold them for.

So, Tesla began to manufacture its own batteries at his Gigafactory, significantly reducing the cost and helping make EVs more affordable.

Let The Idea Generation Begin

I’m sure you can see how powerful this is.

Not just because Elon uses it, but for the principle itself. Whether you realize it or not, almost every single idea you’ve had comes from how things have been done before.

This leads to less original ideas than we may want.

You can still take things that work and iterate on them. But play around with this idea in your own mind for a bit.

Look at business or whatever it may be, get to their fundamental truths, and see if there is a new way to think about it.

Don’t be your buffoon, 19th-century friend Carl. Be the version of yourself that thinks out all the possibilities with free thought, and not analogy.

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And yeah, maybe Elon will call you baby too.

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