But when it comes to creating new ideas and innovations Elon Musk say’s there is a better way.
‘I think it’s also important to reason from first principles, rather than by analogy.’ Says Elon Musk. ‘The normal way we conduct our lives is we reason by analogy. We’re doing this because it’s like something else that was done. Or, it’s like what other people are doing.’
Musk talks about using first principles – a framework from physics – to boil things down to their fundamental truths.
He starts by understanding what is true and then reasoning up from there. Musk uses the example of reasoning by analogy by saying that ‘Battery packs are really expensive and that’s just the way they will always be. Because that’s the way they’ve been in the past. Historically, it has cost $600 per kilowatt hour. It’s not going to be much better than that in the future.’
With first principles, Musk looks at this problem and asks, ‘What are the material constituents of the batteries? What is the stock market value of the material constituents?’
He notes that the batteries have ‘cobalt, nickel, aluminum, carbon, some polymers for separation and a seal can.’ He goes on to say. ‘break that down on a material basis and say, ‘If we bought that on the London Metal Exchange what would each of those things cost?’
‘It’s like $80 per kilowatt hour.’
By reasoning from first principles, Musk acknowledges that ‘clearly you just need to think of clever ways to take those materials and combine them into the shape of a battery cell and, you can have batteries that are much, much cheaper than anyone realises.’
This framework forces you to develop your own perspective about the fundamental facts of a situation to create new innovations and ideas.
Reasoning from first principles allows you to solve problems uniquely and at their core, it helps you to create leaps in innovation instead of iterations and encourages you to seek new paths and not to follow existing ideas.
At Gallantway the first place we start is with our strategic planning. Rather than following traditional planning methodologies, we boil down our understanding of what is true about your business, your challenges, your audience and what we understand about the way different digital channels work.
Kevin Rose interview with Elon Musk