Stripping It Down: How First Principles Unlock Innovation
Every industry has its “rules.” The way things have always been done. The “best practices” everyone swears by.
And yet, industries evolve. Markets shift. What worked yesterday might be completely useless tomorrow. So why do we keep playing by the same old rules?
The answer: Most people don’t stop to question them.
Enter first principles thinking—a mental model that helps you break free from conventional wisdom and build solutions from the ground up. Not by tweaking what exists, but by stripping everything down to its core truths and starting fresh.
A "first principle" is a foundational assumption or proposition - it is foundational in that it cannot be deduced from other assumptions or propositions.
Think of a first principle like an element. It cannot be broken down further. It is pure.
It’s how Elon Musk redefined space travel. How Apple changed how we interact with technology. How Stripe made payments seamless.
And if you’re in product, strategy, or business, it’s how you stop getting stuck in incremental improvements and start driving real innovation.
What is First Principles Thinking, Really?
First principles thinking is problem-solving at its purest form. It forces you to remove assumptions, question legacy ideas, and rebuild based on foundational truths.
It’s different from reasoning by analogy, where you assume things must be a certain way because they’ve always been done that way.
Instead, it’s about asking:
What do we know to be absolutely true?
What assumptions are we making that might be wrong?
If we started from scratch, how would we solve this?
Farnam Street explains it like this:
"Reasoning by first principles removes the impurity of assumptions and conventions. It’s a way of thinking that allows you to generate original solutions rather than simply following paths that already exist."
This is why first principles thinking is so powerful in product management, business strategy, and innovation.
Step 1: Deconstruct the Problem
The first step in first principles thinking is identifying absolute truths—things that don’t change no matter what industry you’re in.
Some examples:
Buyers don’t care about your product. They care about their problems.
Knowledge doesn’t equal skill. Just because someone knows something doesn’t mean they can do it.
More features don’t mean a better product. A cluttered product is just a graveyard of ideas.
These are truths. They don’t change. They don’t rely on trends. They are the foundation upon which everything else should be built.
Yet, most companies ignore them. Instead, they make incremental improvements to broken systems.
Step 2: Challenge Assumptions
Once you’ve established the fundamental truths, the next step is to question the assumptions that have built up around them.
For example:
Making rockets is expensive. Is it? Or is that just how the aerospace industry operates?
More training leads to better performance. Or does it just lead to more content consumption?
More money means better outcomes. Or do inefficient processes eat up most of that investment?
These assumptions often come from years—sometimes decades—of doing things a certain way. But that doesn’t mean they’re true.
First principles thinking forces us to ask: What if we started from scratch?
Step 3: Rebuild from Scratch
This is where real innovation happens. Instead of iterating on broken models, you build new ones from the fundamental truths you’ve identified.
Examples:
SpaceX: Everyone thought rockets had to be insanely expensive. Musk broke it down—rockets are made of aluminum, titanium, and carbon fiber. The raw materials cost far less than the final product. The real expense was inefficient supply chains and manufacturing. Solution? Build rockets in-house, reuse them, and slash costs.
Stripe: Payments were slow, painful, and bureaucratic. The assumption? That businesses had to go through banks and clunky legacy systems. Stripe asked: “Why?” and built a seamless, developer-first API that changed the game.
Apple: Before 2007, phones had physical keyboards. Everyone assumed that’s just how phones worked. Apple stripped it down to first principles. What’s a phone for? Communication, access to the internet, apps. Do you need buttons for that? No. The iPhone was born.
These aren’t just product innovations. They’re mental shifts that redefined industries.
What Does a First Principles Product Strategy Look Like?
Most product roadmaps look like this:
Competitor X is doing this, so we should too.
Customers asked for this feature, let’s add it.
Leadership wants this because it’s part of the strategy deck.
None of these are first principles approaches. They’re reactive. They stack ideas on top of existing ones instead of questioning if the foundation is even solid.
A first principles approach starts differently:
What is the user actually trying to do?
What frustrates them the most?
What workarounds do they use?
For example, consider sales reps. A product team might assume, “Sales reps need better training materials.”
But a first principles approach would ask:
Do sellers really want to train more? No. They want to win more deals.
Do sellers want to be top of their class? No. They want to show off the deal they just closed.
Do sellers want content? Not really. They want real-world tactics that help them win.
The Mindset Shift
First principles thinking isn’t just about better products. It’s about breaking out of old habits and seeing problems for what they really are.
It forces you to:
Ignore industry norms because they’re often based on outdated assumptions.
Stop looking sideways at competitors because copying them means you’ll always be one step behind.
Start solving problems from the ground up because that’s how you build something truly different.
So, What’s the One Truth in Your Industry That’s Actually an Outdated Assumption?
Every industry is built on assumptions that were true once—but may not be true anymore.
What if you challenged them?
Because playing by old rules is how you get old results. Rewriting the rules? That’s where real innovation happens.