Elon Musk Uses This Critical Thinking Strategy to Guide Him in Business (and You Should, Too)
It’s the opposite of what most people do.
PHOTO CREDIT: Getty Images
What are the best lessons you've learned as a serial entrepreneur? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.
As we age we are constantly developing mental models of how things work. These models are the culmination of our experiences, education, nature, and nurture. The best lesson I've learned as an entrepreneur is one that has fundamentally shaped this mental model and that has allowed me to take my unique points of view and unleash them into something productive. To see what others do not, and to take a novel approach to a problem (even problems believed to have been solved).
This lesson is the importance of training yourself to reason using first principles. In other words, taking the time to really figure things out for yourself, and to consider a problem all the way down to its fundamental truths. This is as opposed to the normal way humans reason, which is often by analogy. When reasoning by analogy, you are reasoning based upon what has already been done, or what other people are doing -- which isn't terribly conducive to finding novel solutions to problems, which is at the very essence of being an entrepreneur.
There are a number of notable entrepreneurs that have trained themselves to think in this way, with Elon Musk perhaps being among the more notable of our time. And it was a story about the founding of Tesla that really opened my eyes to this. It was said when Tesla was founded that batteries were really expensive, and that electric cars simply weren't feasible as a result. Historically batteries cost $600 per kilowatt hour, and no one saw that improving significantly in the future (note: this is a form of thinking by analogy!).
Instead of accepting this as a fundamental truth, Elon asked "What are the material constituents of batteries? What is the price of these constituents in the market? It's got cobalt, nickel, aluminum, carbon, some polymers for separation and a seal can. Break that down on a material basis, and ask, if we bought these down the street on the London metal exchange, what would each of these things cost?" It turned out that it was only $80 kilowatt hour, so all Elon really had to do was think of clever ways to take those materials, combine them into the shape of a battery cell, and now you have batteries that are much, much cheaper than anyone realized.
Put another way, forcing yourself to look at the fundamental facts of a situation can help you develop your own perspective on how to solve problems rather than defaulting to way the rest of the world thinks.
As my co-founder, John Hering, and I set out to build Coalition (and, full disclosure, it helps that one of our investors is on the board of Tesla and SpaceX), we took every problem and tore it down to first principles. How do you protect a the value of a business from cyber risk? It probably won't shock you that our answers didn't include antivirus software or firewalls. Rather, we saw very different solutions emerge. And here we are today.
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