I’ve been thinking about first principles thinking for startups means breaking down complex problems to their basics, challenging assumptions, and creating innovative, tailored solutions. Naval Ravikant is someone I read a fair amount of, as well of the late Charlie Munger.
Here’s how I’d be going about “first principles thinking”
Deconstruct the Problem
Suppose your startup focuses on providing project management software for small businesses. Instead of a generic breakdown, pinpoint specific pain points like inefficient task allocation, lack of collaboration, and difficulty in tracking progress. Understanding these nuances can lead to features like automated task assignments, real-time collaboration tools, and detailed progress tracking.
Challenge Assumptions Thoughtfully
Say you assume that all your potential clients prefer a subscription-based pricing model.
Just by asking, you might discover that some are open to a pay-as-you-go model or even a free tier with limited features but pay for advanced functionalities. Tailoring your pricing based on these insights can set you apart.
Build from Scratch
Begin building your product or service based on the fundamental principles you’ve identified. For instance, if you’ve discovered that user experience is a critical factor, design your software with a user-first approach.*
Iterate based on fact (hardest one tbh)
Suppose your startup is a language-learning app. Instead of making random changes, analyse user data. If you notice that users drop off after a certain lesson, investigate why. It might be that the content is too challenging or not engaging enough. Precise iteration could involve adjusting the difficulty curve or adding interactive elements to keep users motivated.
*this is a point of contention and can bump up against or negate other principles.