Behind Elon Musk’s Management Philosophy: First Principles

Linda Yaccarino comprehends the task at hand.

According to her first memo as Twitter CEO, it appears as though she shares the same management philosophy as her boss, Elon Musk. This approach is known as the "first principles" approach, which involves breaking down problems to their core and utilizing a combination of physics and philosophical reasoning to solve them. This method of problem-solving doesn't rely solely on past solutions but instead seeks to innovate and approach issues in a new way.

In her latest blog post, Yaccarino emphasized the need for a significant change to take place. As someone who has spent a considerable amount of time in the advertising industry on television, she is well aware of the importance of transformation. She believes that this change should be a collective effort, with everyone working together towards a common goal. Furthermore, Yaccarino suggests that the best way to achieve this is by examining our current assumptions and creating something entirely new. Rather than building upon what exists, starting from the ground up is the key to success.

Musk recently made the first principles method a publicly acknowledged part of his business empire. This approach has been integrated into Musk's various businesses, especially after his acquisition of Twitter in October.

Throughout his professional life, Musk has frequently advocated for his approach of first principles reasoning. This method is evident not only in his endeavors at his rocket enterprise, his electric-vehicle manufacturer, but also in the education of his offspring.

The history of how SpaceX came to be is based on Musk's rejection of the popular belief that rockets could not be reused and his determined decision to make space travel more cost-effective. He did this by understanding the mathematical principles behind rocket construction and the economic factors affecting the cost of its materials.

When he was working at Tesla, he founded the company with the idea that electric vehicles could be affordable. This idea was contrary to the commonly held belief at the time that batteries for cars were too expensive to be practical.

People who have collaborated with Musk in the past have reported that he frequently employs the first principles approach. This can be frustrating at times when he uses it to justify certain engineering choices, or when he's trying to inspire people to create new innovations. Although this approach can result in significant accomplishments, it can also lead to unnecessary complexity.

During a TED talk in 2013, Musk expressed that when attempting novel endeavors, one must adopt the principles of physics. He elaborated on the fact that physics is fundamental to uncovering unconventional discoveries such as quantum mechanics.

Musk says that the issue at hand is that people tend to rely on their past experiences, customary habits, or what he calls analogies, when it comes to decision-making. These mental shortcuts work well for the most part. However, they can hinder one's ability to explore new possibilities.

He believes in using the first principles approach to achieve great achievements. Musk's explanation of this method is to simplify things to their core truths and then think about how to move forward by starting from that point.

It's apparent that Musk strongly believes in the importance of first principles, as evidenced by his creation of Ad Astra School in 2014, which is based on that mode of thinking. Joshua Dahn, one of the school's co-founders, remarked in an interview that this approach is fundamental to Musk's mindset.

Dahn needed to use first principles thinking throughout every aspect of building the school, which was located at SpaceX headquarters and catered to children between the ages of 8 to 14 years old until the year 2020.

Dahn stated that having a superpower requires comprehending the first principles methodology. If Elon challenges you using this approach, the only way to achieve triumph is by operating in the same manner.

The initial steps for decision-making is to imagine the final outcome of success and being adaptable to any route that will lead you there. Even an established practice in education like accreditation shows how Musk employed this type of logical thinking. He asked basic queries like “What is accreditation?” “Why does it exist?” “What’s its purpose?” “What does it cost?” and “What are the missed opportunities from doing it?”

And we can't just say: Other schools follow the same approach.

According to Dahn, relying on analogies, particularly at the outset, can be detrimental.

The accomplishments of Musk's ventures and his frequent mention of prioritizing fundamental principles have piqued the curiosity of many. Self-help author James Clear has discussed this approach, highlighting that although wise individuals ranging from Aristotle to Johannes Gutenberg have utilized this type of reasoning, Musk exemplifies the philosophy of first principles thinking in the most impactful manner.

After Musk's kids moved out, SpaceX in Hawthorne, Calif. shut down Ad Astra. Dahn subsequently branched out his efforts and created Astra Nova School, an online program that caters to a wider range of students.

However, it is not a simple process. The task of disregarding preconceived notions can be difficult for Musk's team of engineers, particularly when taking the customary route would be more efficient.

In the past few years, he made a choice to opt out of a tested technique of automating windshield wipers during precipitation and prefer utilizing artificial intelligence instead, which is a current instance.

Many years ago, car manufacturers added sensors that can detect rain when it falls on the windshield. Once the sensors detect rainfall, they automatically turn on the wipers. However, Elon Musk had a different idea. He thought that the camera located behind the front window, which is already used for other functions in the car, could also detect rain. If successful, this would mean the company would not need to include an additional sensor.

During a conference in San Francisco back in 2018, Andrej Karpathy, a former executive at Tesla, revealed that Elon Musk had suggested using computer vision to detect raindrops on windshields. However, Karpathy admitted that this solution was not as simple as it seemed and presented challenges in rare situations.

When implementing the new system, the coding team encountered various obstacles that needed to be conquered. Some of these issues were anticipated, like creating an intelligent technology that could differentiate between rain and dust. However, there were also unforeseen hindrances, like the camera being tricked by intense sunlight. The camera was particularly fascinated by tunnels, causing the windshield wipers to go into overdrive when the sun shone inside them.

A recent instance includes Tesla implementing a huge casting device to produce the front and rear thirds of the Model Y SUV in a single piece. This replaced a lot of separate components in the vehicle's structure, thereby simplifying the manufacturing procedure and lowering costs for the company.

During a conference last year, Musk shared that he was inspired by toys and wondered how they were manufactured so inexpensively. This revelation sparked an idea for him.

The solution was not complicated: The production of Diecast toy cars involves melting metal and then pouring it into a mold to obtain the desired shape. However, applying this technique to make a real car wasn't as effortless.

Musk asked his team if it was possible to construct a casting machine of that magnitude. They replied that no one had ever attempted it. He questioned whether it would defy the laws of physics, which they denied. So, they decided to seek advice from experts on the matter.

He claims that out of six companies, only one gave a positive response. Musk stated that five companies refused, but the sixth showed some interest by stating that they might be able to consider it. His response to that was, "I'll consider that as a green light."

Years ago, Musk gave a talk on fundamental principles at his kids' school. He talked about his reasons for creating SpaceX, which included explaining the calculations needed to build a rocket and the financial aspects of its expenses.

Starting off, Musk posed a query to the children present, "Has anyone tried applying first principles analysis before?"