First Principles Thinking: Concepts & Examples

Can innovation be taught and learned in a methodical manner? Can there be an innovation playbook using which, given a need to create a thing, product, or solve a complex problem, a set of well-defined steps be followed? How has Elon Musk been super successful time and again to create game-changing innovative products that created tremendous value for end-users and society at large? The answers to these questions can be found with a reasoning technique called first principles thinking.

The first principles thinking is often associated with Elon Musk, who uses this approach to come up with his business ideas, create innovative product designs, and build winning products that are creating a positive impact on society at large. Through this approach, he has been able to build Tesla, SpaceX, and other innovative and successful companies. As a result, first principles thinking has seen a widespread resurgence in popularity, as more and more people are realizing its potential for innovation in relation to problem-solving, product development, etc. However, different people provide references to first principles in different contexts and there is a need to really understand what exactly is first principle thinking. How and when can someone apply first principles thinking for problem-solving? 

First principles thinking can be applied to solving complex engineering, science, business, or product-related problems in addition to the problems we face in our everyday life. It helps us to view everything in this world in the form of cause and effect relationships and demystify the causes further to understand the most fundamental reasons why a thing or a problem exists and how can they be innovated further. Recognizing that there are fundamental causes of reality (the world of effects) is the first step in first principles thinking. First principles thinking is a way of understanding or knowing problems or things based on acquiring true knowledge about the existence of the things by first identifying what you think is true (subjective reality) and then moving on to acquire knowledge about what is true by nature (objective reality). Different questioning techniques such as the five whys, the Cartesian method of doubt, Socrates’ reasoning, etc act as great tools for arriving at the fundamental truths when reasoning from first principles. First principles can be better understood if you get a good understanding of Aristotle’s Metaphysics concepts about the first causes of any effect including things/products or problems.

In this post, you will learn about the concepts of First Principles thinking with the help of a few examples. Further details with different examples are available in the book titled “First principles thinking – Building winning products using first principles thinking“. This book is aimed to make it easy for everyone to adopt and adapt to first principles thinking for problem-solving and building innovative products. This book can be most suitable for business analysts, product managers, and entrepreneurs who work to innovate and launch new or enhanced products. However, one can also learn the reasoning by first principles for solving complex problems with innovative solutions. Here are the chapters that are covered in the book:

• Chapter 1: The cause-and-effect relationship
• Chapter 2: Introduction to first principles thinking
• Chapter 3: Use cases and examples
• Chapter 4: Knowing first principles & questioning techniques
• Chapter 5: Product innovation using first principles thinking 

Why reason from first principles?

To understand a thing or a problem in the real world and make impactful decisions, different kinds of reasoning can be used. The most popular ones are as follows: 

• Reasoning by analogy (also called analogical reasoning)
• Reasoning by first principles (also called first principle thinking)

One of the most popular ways of reasoning is to reason by analogy which is fundamental to the human thought process. Simply speaking, reasoning by analogy can be defined as understanding one thing in terms of another similar thing. It is a powerful tool that can help us understand complex concepts by relating them to things we are familiar with. Perceived similarities about two or more things are used as a basis in inferring some further similarity that hasn’t yet been observed. For example, let’s say a product A and B are having similar properties such as x, y, and z. If product A is observed to have another property such as w, then product B might also have the property w. In other words, if product A and B are similar in several ways, an analogical argument might use product A to explain product B, or to reason about what’s likely true about product B based upon what’s known about product A. While reasoning by analogy has been around for centuries, it is not one of the best methods when it comes to creating innovation. This is because, with the reasoning of analogy, you will most likely end up creating similar products with some changes which may not be considered an innovation or breakthrough. This is where reasoning by first principles comes into the picture. 

The following is how Elon Musk shared his views on reasoning by analogy vs first principles at a TED conference in 2013:

“We get through life by reasoning by analogy, which essentially means copying what other people do with slight variations. And you have to do that. Otherwise, mentally, you wouldn’t be able to get through the day. But when you want to do something new, you have to apply the [first principles]approach.”

Simply speaking, reasoning by first principles requires you to understand fundamental truths about a thing and then build up your argument from there. This is why reasoning by first principles is more difficult than reasoning by analogy and requires much more mental energy to think through. It is considered to be very suitable for creating innovative products or coming up with creative solutions for complex problems. In the next sections, you will learn a lot of detail about reasoning by first principles also called first principle thinking.

What is first principles thinking?

First principles thinking can be defined as a framework for thinking or a method of reasoning or a thought process in which we try and get to the fundamental truth about the existence of a thing or a problem by breaking it down into different causes including the most fundamental or basic causes. This technique can then be used to innovate new things or solutions by building the argument up from these basic causes. The core objective of this reasoning technique is to understand how things or problems came into existence by arriving at the most basic elements or elementary particles (when viewing from a Physics perspective). In other words, the idea is to understand what all went into creating the things or problems. For example, when thinking about a food item such as Pizza, the first principles thinking will result in knowing about how Pizza came into existence in terms of what all went into creating Pizza such as raw materials, cooking method, expertise, tools, etc.

The process of inquiry or asking questions is the most important aspect of acquiring knowledge about anything. What kind of questions we ask would help us know a thing in a detailed manner. The following are the four different types of questions we can get started with and continue to ask until we arrive at the fundamental truths in relation to the existence of the thing:

All of the four questions listed above can be related to four different causes discussed later in this blog. As part of analyzing all the causes, we need to look out for answers to the above questions at every level of deconstructing the things. When we arrive at the most basic causes, these causes can be referred to as the first causes or the first principles. These first causes or first principles can be thought of as the fundamental truths related to the thing. When deconstructing the things or problems into causes based on the cause-and-effect chain, we can ask ourselves whether these causes are the original starting point for the thing or the problem we are dealing with. If not, then continue deconstructing further until we have arrived at the first causes or first principles. This is where the cause-and-effect relationship analysis would help.

Knowing the thing or the problem based on the first principles will help innovate and create new things or solutions to the problem. If you are a product manager, reasoning from the first principles will help a great deal in coming up with innovative products or solutions in a sustained manner.

The foundation of first principles is based on the concepts taken from Aristotle’s Metaphysics and Nyaya/Vaisheshika philosophy (Indian Philosophy). This type of thinking was championed by the ancient Greek philosopher Aristotle, who believed in understanding things at their most basic level to gain a clear understanding of why and how a thing exists. One of the first accounts of the methodical use of first principles as a problem-solving technique dates back to ancient Greece when it was proposed by Aristotle in Metaphysics. In Aristotle’s Metaphysics, the first principles are defined as “the first causes from which a thing is known”. They are the most fundamental building blocks of anything in this world and can be termed as “first sources, or, origin“ of the thing. As per Aristotle’s Metaphysics, the first causes or first principles are of four different types namely final, formal, material, and efficient causes. The three of these causes (formal, material & efficient) have also been referred to in Nyaya & Vaisheshika Philosophy in the Indian Philosophy. The picture below represents the first causes.

A thing, a problem, or a product can be seen as an effect that will have different causes due to which the effect comes into play. The causes can be traced to the most basic causes which are called the first causes or first principles. The first causes can be classified into four different categories:

• Final cause: The causes that represent the purpose that the thing serves; The causes that represent the outcome related to a thing or a product. The primary reason why the thing exists in the world.
• Formal cause: The causes that represent the form or the idea or the nature of the thing/product or a problem/solution. Anything or any effect in this world including a problem has a form. The form of the thing can be considered as the definition of the thing based on which a thing can be recognized. Coming up with the true definition of the thing which can include all the instances of that thing in nature (no false positives or false negatives) can be considered the fundamental truth related to the form of the thing. The Socratic questioning method can be very useful in arriving at the most appropriate definition or form of the thing. In order to start innovating the thing, it is very crucial to arrive at the truth about the definition of the thing. For example, in order to innovate with the car shown in the picture below, it is very important to come up with the right definition of a car to identify the true form of the car. Ask yourself the question – What is a car? As per the Oxford dictionary, a car can be defined as a four-wheeled road vehicle that is powered by an engine and is able to carry a small number of people. If we accept a truth thereby understanding the car as a four-wheeled road vehicle, it will avoid us to think about a new form of the car beyond the four-wheeled vehicle. See the picture below. The definition may not include all forms of cars, especially, cars which don’t have four wheels. Thus, for innovation purposes, it is of utmost importance to come up with a correct definition of a thing to be accepted as truth about the thing.
• Material causes: The causes that represent the matter, material, or substances of which the thing is made up. The goal is to arrive at the most basic raw materials from which things are made.
• Efficient cause: The causes that represent the entities including person, process, tools, etc which are used to create forms (formal causes) from the matters (material causes).

Let’s understand the definitions of first causes with the help of an example given below in relation to cars. Note that the basic form of the car has been innovated to serve the different needs of the end-users (same basic form but different final causes). The picture shows a small car, a Tesla autopilot car, a flying car, a racing car, a sports car, convertibles, an aircar, etc. The cars serving different needs or purposes (final causes) require different raw materials (material causes) and entities (efficient causes) to create them.

The following is the definition of different types of first causes or first principles explained with the help of the cars shown above.

• The final cause is the purpose served by each of the cars shown above. Note that based on the different final causes, the same car requires different materials to be built along with different entities (tools & technologies & expertise).
• The basic form of the car (formal cause) remained the same. This is why all of them are called cars. That said, each of them has specific forms which originated from the basic form. When deconstructing the formal causes of each of the cars into basic elements, we will arrive at the same basic form for each of the cars.
• The material causes for the cars can be referred to as the materials required to build the car. Note that the materials required for building a racing car will be different than that of a normal car and the same would hold good for other cars as well including flying cars, air cars, etc.
• The efficient causes of the cars will differ in terms of the following:
• Different expertise will require in relation to different cars shown above
• Different manufacturing set up may be required
• Different tools & technologies would be required

In the process of breaking down a problem or a thing (effect) into its first causes to know fundamental truths, the following concepts need to be understood well:

• Everything in this world can be thought of as an effect that exists because of different causes.
• Everything or every effect in this world can be explained in terms of the first principles such as forms, matter (materials), and the entities that create the effect by combining the matter with the forms.
• Everything in this world can be perceived as the composition of one or more things. Some of these things form the basic materials of which the thing is made of (also called as substance), while other things can just be part of the thing in the form of qualities and actions.
• Everything in the world can be represented in terms of evolution or change from the matter or material or substance it is made up of to the form it is. And, the change continues to happen until the final purpose or cause is served. In the process of change, the matter continues to acquire new qualities while becoming the form.
• When breaking down a thing into its first causes to acquire knowledge about the thing, we should move from what is clearer and more knowable to us (subjective reality), to what is more knowable and clearer by nature (objective reality) because what is clearer and more knowable to us can just be our perception and not the reality.

• First principles thinking must start with questioning all assumptions, opinions, and beliefs in a thing, product, or system until you are left with the fundamental truths or components (first principles). The objective is to understand the problem or thing (effect) and its first causes. The questioning techniques play a very important role in arriving at the first causes of a problem or a thing. Different questioning techniques such as the 5-whys, Cartesian method of doubt, the Socratic method, etc can prove to be very handy in understanding different first causes. The 5-why technique helps us arrive at the root causes which can then be traced back to the first causes. The Cartesian method of doubt can help us move from subjective reality to objective reality and know things in a clear and distinct manner. The Socrates method can help us in defining things in a precise, clear and distinct manner. In the following diagram, you may note that the questioning techniques can help us arrive at the root causes related to the problem (undesirable effect). Reasoning by first principles, the root causes can then be categorized in one of the first causes or first principles which then results in an impact on other causes. Implementing the changes across different causes can result in the creation of innovative solutions to the problem thereby creating a new and desirable effect.

Break down the problem or a thing into first principles

Now that you have learned about first principles thinking, let’s understand the process you can follow to arrive at the first principles or causes of a thing. This is covered in greater detail in the next chapter. Once the first causes are known, different things of the same type can be innovated by making appropriate changes to any kind of cause. The following figure represents an approach based on which you can break down a problem or a thing into its first causes or first principles.

In this figure, note some of the following aspects:

• Things can be understood as an effect that manifests in form of products (hardware or software) and solutions solving one or more problems, political beings, financial beings, social beings, etc.
• The thing can be broken down into different first causes. Each of these causes can be further split until we arrive at the most basic elements or first causes. Let’s understand the approach with the smartphone example. The following process steps can be followed:
• Start with learning about the final and formal causes. Recall that the final causes represent the purpose served by the thing and the formal cause represents the idea of the thing. When thinking about smartphones, the final cause is calling and internet browsing. One of the formal causes is the most basic nature or the idea of the smartphone such as the touch capability.
• Learn about various sub-forms and associated final causes. When thinking about smartphones, sub-forms include the idea of capturing photos, audio capability for listening to songs, audio-video capability to watch videos. 
• Learn about different materials which can be used to combine with forms and make up the thing. When thinking about smartphones, materials include both external and internal materials. 
• Learn about different entities which can be used to build the thing based on the materials and forms while ensuring that final causes are satisfied. When thinking about smartphones, efficient causes represent the vendors/suppliers, staff members, and their expertise, machines, and processes based on which smartphones got created.

You may want to watch this interview of Elon Musk on First principles thinking. 

Examples of first principles thinking

Let’s try and understand how first principles thinking can be used to solve different problems. We will take some of the following examples:

• First principles thinking & Lego blocks
• Musicians and painters are first principles thinkers
• Chefs apply first principles thinking

First principles thinking & Lego Blocks

First principle thinking is very useful in building innovative products. Let’s understand this aspect with the help of lego blocks. The first principles can be simply understood as the lego blocks which one can arrive at by dismantling the structures made with lego blocks (for example, a house built with lego blocks). Once you have arrived at the fundamental lego blocks (first sources or causes), you can build new and unique structures with the same lego blocks. The following picture can be used as the representation for the first principles.

The above lego blocks can be used to build different types of houses such as the following. When applicable to real-world scenarios, you can see one of the houses as a thing (or a product/solution), you are trying to work with. The core idea is to arrive at the individual lego blocks by breaking the house (a thing) into its basic parts (first principles) and then build new things (innovate) from the same lego blocks by combining them in different manners. Look at the following picture to get this understanding of how one can innovate using first principles thinking.

Musicians and painters are the first principles thinkers

Did you ever wonder about the process that musicians and painters/artists follow for creating some great pieces of music and paintings? They do reasoning by first principles. 

In the case of western music, all the melodies and harmony are typically built from the basic 12 notes. Great musicians know how to mix these notes innovatively to come up with beautiful music. Musical notes represent the potentiality of notes. When it gets combined with the nature or design of music, it takes the shape of musical melodies. The musical notes get actualized. When reasoning from first principles, you work to break down this music in the 12 basic notes. You could then make changes to one or more of these notes in an innovative manner to come up with unique-sounding music. Here are the first principles for music:

• Final cause: Music for different occasions
• Formal cause: Nature of music
• Material cause: Basic notes and basic beats
• Efficient cause: One or more instruments along with musicians who would play the music

Chefs apply the first principles thinking

Like musicians and painters, great chefs can also be considered first principles thinkers. When they taste a food item, they apply the first principle thinking to identify ingredients and the process of cooking the food item. Here the material causes represent the basic ingredients and the efficient causes represent the entities that are involved in cooking the food items. Once they get an understanding of the first principles or the first causes, they innovate the same food item by introducing new ideas across different causes. 

For coming up with altogether a new dish, they apply first principles thinking to decide on the overall nature or form of the dish, ingredients, and process of cooking the food item.