Now that we know what assumptions are, we’re going to take ‘learning how to think for yourself’ to the next level. That’s with principles and 1st principles thinking.

What are principles?

An assumption is a thought that is either true or not, but has no proof. In contrast, a principal is a fundamental truth, natural rule or standard. A principle can also be a fundamental assumption, that’s an assumption at the most basic level.
For example, let’s say your school teachers follow a number of principles (rules) when preparing your school report. One of these principles is that they need to provide all the necessary information so that parents can get a better idea of how you went in school this year. This is a principle of full disclosure. Let’s say your parents then read your school report and as you received all As, your parents think that all is well at school.
What are the assumptions? What is the principle?
* Your parents assuming that an academic school report consisting of A grades means that you’re performing well at school.
* Your parents assuming that your teacher prepared the school report based on the principle of full disclosure.

See how at the basic level, what is received at the end starts with a principle to be followed?

Watch the video to find out what happens, if:

• if the principle is intentionally not followed…
• if the principle is followed, but there is imperfect information.

It’s these gaps in information that we also need to be aware of if we are to have robust thinking and conclusions.

Now that we know what principles are, let’s look at first principles thinking - one of the best ways to think through complicated problems and find creative possibility.

1st principles thinking

The idea behind first principles thinking is that problems are broken down to their basic parts and you say “are we sure this is true?” and then you reassembled your findings from the ground up. It actually takes up a lot of brain power which is why people don’t do it.

Elon Musk did first principles thinking when he wanted to send rockets into space at lower prices and here’s a summary of that thinking process:

• Batteries, used in rockets are expensive – it costs $600 per kilowatt hour (an assumption).

Now… break it down to the basic principles.

• What are the materials used in these batteries? Cobalt, Nickel, Aluminium, Carbon.
• What is the price I can get these materials at? On the London Metal Exchange, where you can buy and sell materials, these materials cost only $80 per kilowatt hour.
• Okay, so that’s cheap. So…what’s the expensive part so far – it’s in combining the materials into the shape of a battery cell.
• So that’s what we need to do. A clever way of combining these materials so that the overall price is cheaper.

There you go, a cheaper way to get a battery which then flows onto space travel.

Elon Musk did also mention that most times, people think via analogy but that doesn’t produce new offerings. For example, a long time ago, people used horse and cart to travel and when you reason through analogy, you’d say, we already have transport (analogy), the horse and cart works well and so you wouldn’t produce anything new or innovative.

Want to come up with creative possibility? Use reason from first principles.

Let’s do 1st principles thinking

So, how do you do reasoning from first principles? Unlike mathematics, as thinking is very context specific, the guidance is around general approach. The hard part is in coming up with the questions and answering them (the thinking!).

Here’s a 3-step approach:

Step 1: Identify and define your assumptions.
Step 2: Break down the problem into its fundamental principles.
Step 3: Create solutions from scratch.

We’re going to do this now for the following 2 example questions.

Example Question/s

Watch video for explanation of the following question/s:

• I can’t go to school because of coronavirus lockdown restrictions.
• I don’t have enough time to do my homework.

Key Rules to remember

• Principles are fundamental assumptions, rules or standards. They guide and are generally accepted as basic truths. But that doesn’t mean they’re without weakness.
• First principles thinking is about breaking down the problem into fundamental principles and then building solutions from scratch.

Practice time!

Now, it's your turn to practice.

Here’s a thought experiment #3.

Remember, there is no formal answer and this experiment is provided to help stimulate your creativity and critical thinking (a ‘thought experiment’ is provided at the end of every checkpoint except checkpoint 18).

Thought experiment 3:

When must you return something that you have found? For example, 20 cents on the beach? An envelope with 20 dollars? A bag with $100,000? Are there principles to follow for returning something, even if there is no ‘owner’?

Take your time to work through this thought experiment as it is not assessed and provided to help develop your deeper thinking skills. Think about various components of the question. What questions will you ask yourself and how do you answer your questions?

Now, let’s turn to the checkpoint questions.

Click on the button below and start your practice questions. We recommend doing untimed mode first, and then, when you're ready, do timed mode.

Every question has two solutions videos after you complete the question. The first is a quick 60 second video that shows you how our expert answers the question quickly. The second video is a more in-depth 5-steps or less explainer video that shows you the steps to take to answer the question. It's really important that you review the second video because that's where you'll learn additional tips and tricks.

Once you're done with the practice questions, move on to the next checkpoint.

Now, let’s get started on your practice questions.

---