Elon Musk disrupted the financial sector with PayPal. With SpaceX, he took on the giants of space travel. With Tesla, Musk aims to revise entrenched auto and energy interests around the world. So how does he do it? CNBC’s Tom Popomaronis tries to uncover three steps to help everyone think like Elon Musk.
First principles thinking allows you to “boil things down to their basic truths and argue from there … as opposed to analogous reasoning,” Musk said in a 2013 TED talk. In an interview with Digg founder In 2012, Kevin Rose introduced Musk to the first principles of thought using the cost of electric vehicle batteries as an example.
1. IDENTIFY THE PROBLEM AND COMMON ASSUMPTIONS
“Someone might say, ‘Batteries are really expensive, and they always will be. Historically, it has cost $ 600 per kilowatt-hour,” Musk said, referring to this “common belief” about electric vehicle batteries.
As a result, most people just give up and accept that “the future won’t be much better”. However, there is a better way to analyze the problem and dig deeper using thinking of the first principles.
2. INTERRUPT THE PROBLEM FOR BASIC TRUTHS
The key is to ask the right questions and challenge common assumptions. Keep digging until you are left with basic truths.
“With the first principles you say, ‘What are the main components of the batteries? What is the market value of the essential components? ‘ It contains cobalt, nickel, aluminum, carbon, some polymers for separation, and a sealed can, “Musk explained.
Then, he continued, “would you break this down by material basis and say, ‘If we bought this on the London Metal Exchange, what would each of these things cost?’ That’s $ 80 per kilowatt hour. “
3. USE BASIC TRUTH TO PLAN A NEW PATH
According to Popomaronis, basic truths are like building blocks. Once you’ve gathered them, you can use these building blocks to create a completely new, innovative solution.
With EV batteries, “all you have to do is come up with clever ways to take these materials and combine them into a battery cell,” said Musk. “Then you can have batteries that are much, much cheaper than everyone thinks.”
“I think it’s important to think of knowledge as a kind of semantic tree,” Musk wrote in a 2015 Reddit AMA deal with the leaves / details or there is nothing to hold onto. “
Above: Elon Musk explains his approach to problem solving using a “first principles” framework (source: innomind)
In addition, during a 2014 opening speech at USC, Musk stated, “Don’t just follow the trend. It’s good to think in terms of the physical approach – the first principles, ”he said. “It’s a great way to find out if something really makes sense or if it’s just what everyone else is doing.”
He added, “It’s very difficult to do. You can’t think of everything that way. It takes a lot of effort, but when you’re trying to do something new, it’s the best way to think. It really is a powerful, powerful mindset. “