First Principle Thinking

“First principle thinking is the idea that everything you do is underpinned by a foundational belief or first principles. Instead of blindly following directions or sticking to a process, a first principle thinker will constantly ask, “What’s best for the company?” and, “Couldn’t we do it this other way instead?” — Reed Hastings (CEO, Netflix)

Many of us in the tech industry first came across the concept of “first principles” back when Reed Hastings published Netflix’s company culture deck to Slideshare in the early 2000’s. Amazingly, it’s still there.

Hasting’s didn’t invent the idea; The term was coined more than 2,000 years ago by the Greek philosopher Aristotle, who believed we learn more by understanding a subject’s fundamental principles, those “things better known and clearer to us.”

In addition to Aristotle, first principles thinking has been used as an approach to problem solving by many great thinkers including inventor Johannes Gutenberg, military strategist John Boyd, and, perhaps most famously, Elon Musk, inventor, entrepreneur, and founder of Tesla and SpaceX, for whom the approach has been central to his success.

In an interview, Musk said, “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.”

In 2002, when Musk launched SpaceX, an audacious but ultimately successful attempt at commercial space travel, he immediately ran into a myriad of seemingly insurmountable obstacles.

His initial thought was to purchase a rocket, but after visiting several aerospace manufacturers, he discovered that the cost, about $65 million US dollars, would render his entire enterprise economically infeasible. But what distinguishes Musk from most people is that he didn’t give up. Instead he began to rethink the problem from first principles.

“I tend to approach things from a physics framework,” Musk said in an interview. “Physics teaches you to reason from first principles rather than by analogy. So I said, okay, let’s look at the first principles. What is a rocket made of? Aerospace-grade aluminum alloys, plus some titanium, copper, and carbon fiber. Then I asked, what is the value of those materials on the commodity market? It turned out that the materials cost of a rocket was around two percent of the typical price.”

As exemplified by Musk’s approach to the problem and his ultimate success, first principle thinking is really about two things:

• Thinking like a scientist and breaking problems down into their empirical truths
• Bucking the status quo

In Product Management, there are myriad applications of first principle thinking. Here are two of the most impactful:

Innovation

While most of us think through issues based on common knowledge or heuristics, viewing problems through a scientific and technology inspired lens that disregards established thinking tends to lead to breakthrough ideas. Technology inspired thinking is what differentiates products that seek to address unmet user needs (what people say they want you to build) from products that try to address latent user needs (innovations that people don’t know they need).

Decision Making

We are constantly faced with tough tradeoffs. We do what we can to make evidence-based decisions, but often the data simply isn’t there. Falling back to a well-defined set of first principles can be helpful in these situations. One of my first principles is “do what’s best for the user.” When faced with tough product decisions, I ask myself “is this good for the user?” which is a straightforward question to reason through and gives me a quick, confident answer. Let’s say we have a product feature that users will love but may also impact short term revenue. Since the feature is good for the user, we should do it. As far as revenue is concerned, happy users result in repeat users, which means sustainable organic growth and a healthier user acquisition cost to lifetime value ratio.

In addition to their practical application to problems solving, first principle thinking can also be a reflection of one’s core values. I keep two sets of first principles. One focuses on my interactions with people, and the other on how I design and build products:

Leadership First Principles:

• Bias to consensus-driven decision making
• Encourage independent thinking, individual and team empowerment
• Invite open dialogue and debate
• Foster high performing teams by building confidence, demonstrating trust and providing encouragement
• Treat failure as a learning opportunity, not incompetence deserving of punitive consequences
• Operate with integrity and authenticity
• Adopt a player/coach mentality; never ask someone to do something I wouldn’t do myself
• Provide candid and timely one-on-one feedback, but never publicly undermine or reprimand my colleagues
• Provide the vision, support, and guidance for people to do their best work, then get out of their way
• Take accountability for my team’s performance — never throw anyone under the bus
• Take proactive steps to build a diverse and inclusive team

Product First Principles:

• Do what’s best for the user; seek to understand and advocate for user needs
• Value and consider contrary points of view
• Bias to people over process
• Be an owner: take accountability for getting stuff done
• Get excited by challenging problems and focus on driving results
• Balance process and structure with flexibility and agility
• Show a willingness to deviate from established practices to achieve our goals
• Demonstrate a passion for our products and technology
• Show open mindedness, curiosity and a desire to keep learning
• Balance scope and quality with velocity
• Hold strong opinions but be quick to change position based on new information
• Identify as a Product Manager, not as an executive or manager

These are both rooted in my personal values and take positions that have consistently yielded the best results. They are a professional compass and align with what I think is right, allowing me to operate with confident authenticity. There is no difference between my personal and professional personas.

It is important to stress that first principles are highly personal and should not be treated lightly. They are not to be confused with company values you may see on the walls of your office. These principles represent the foundation of who I am and what I believe in. They are non-negotiable. Taking a clear position defends against the ambivalence and even moral misalignment we sometimes face when operating in corporate environments. No one should have to look them-self in the mirror and think, “I have lost sight of my values and I no longer believe in the product I am creating.”