How to Solve Tough Problems with First Principles Thinking in 3?Steps

Have you ever been taught how to think? How to solve a problem systematically? It wasn’t part of my school curriculum.

Why do some people seem to “get it” faster? Why do some come up with more innovative solutions than other equally smart people? How do some people continuously display creative genius and rapid success?

What school taught me is that it’s only a combination of intellect and work ethic. And certainly, they are important. Elon Musk stated that he works 100 hours a week. And that he has been doing so consistently for 15 years.

But is that it? Just work day and night?

You guessed it: No. There is another missing link. Aristotle, Euclid, Thomas Edison, Nikola Tesla, and Feynman applied this missing link. And so do Elon Musk and Netflix CEO Reed Hastings.

It’s the way these people approach a problem. A way of thinking. A methodology for breaking a problem down into its atomic constituents and recombining them in a new more sensible way. It is called First Principles Thinking.

It is known to spark creative and innovative solutions that lead to exponential improvements when compared to conventional approaches, i.e. reasoning by analogy.

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. — Elon?Musk

First Principle Thinking is also used for example in methodological problem solving by many consulting firms as explained in Cracked It.

Here is how I apply it in 3 steps:

1) I critically question my assumptions

Whenever I catch myself assuming a problem I question it. For example:?

“It will take at least 3 years to get that promotion”. — Well, how can I be so certain?

Or “I cannot grow my online business anymore”. — How do I know??

Or “I will never be able to afford this house” — Has that been proven to be true??

I write these assumptions down.

2) I break down the?problem:?

Now I take the assumption that I have identified and analyze it profoundly by asking the right questions: What is the exact problem? And what is it composed of? For example:

Assumption: “I cannot grow my online business anymore”

Firstly, I have to be precise: What does “grow my online business” mean? Let’s assume what I mean here is making more profit.

Here is what the breakdown of this problem could look like, also known as a logic tree:

Now, what are the constituents of this problem? There are 2 main components: Revenue and cost.?

Revenue is the number of people that buy my product multiplied by the price. How can I get more people to buy it??

The right questions to ask would be: How can I increase traffic? And how can I increase the conversion rate? And so on.

I can also go down the other path: How can I reduce cost? What are the different types of costs of my business and can I reduce any of them?

Again, it helps me to visualize this breakdown to keep an overview.?

3) I develop a new solution from?scratch

Now that I have a clear picture of all the levers that I have on my profit I can jump to the creative part. I Choose 1 or more of these fundamental components. Then I brainstorm a creative solution to improve it.

For example: How can I increase value per sale?

Maybe I can add extra resources to each sale? Maybe I can partner with a compatible business and add an extra service? Maybe I can upsell after the sale? Maybe I can break down the product into different parts and charge per component? Maybe I can personalize my product? Interesting...

Here it is important to let ideas flow. Just like in design thinking. In this brainstorming phase, I don’t worry about feasibility knowing that I will prioritize ideas later.

In summary, I found First Principles Thinking to be a powerful method to organize knowledge and understand a problem profoundly. This seems to be the only way for me to come up with new, innovative solutions. Understanding the problem and its constituents let’s me apply creative methods in a more meaningful way.?

I would especially highlight the power of combining it with other methodologies such as Design Thinking and System Thinking. Design Thinking to ensure I approach the right problem and to help with creative solutions. System Thinking to ensure I take into consideration all potential impacts and the right scope. It’s powerful. The more I practice it the more natural it becomes.