B-Side: Thinking from first principles
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Thinking from first principles
This week I'm sharing one of our internal memos that's slightly redacted on one of our core principles at ProfitWell: thinking from first principles. A lot of you asked how I'm able to produce frameworks and thoughtful commentary quickly/frequently and a lot of it came from honing this trait. I was lucky in the fact that I went to university on a debate scholarship, so I wrote, spoke, and thought from first principles for 40 hours per week for four years (eight if you count high school).
This concept is hard to teach, so the below pulls from many other authors, going as far back as my main homie Demosthenes. If you find this worthwhile, obviously share. Want to get this superpower in the hands of as many people as possible.
1. First-principles thinking is a method of thought that allows you to break down complicated problems by honing in on their underlying facts, ideas, and assumptions.
As humans, we've been conditioned to think conventionally or just do what we're told.
First-principles thinking allows you to think for yourself, arriving at the ideal solution, instead of just copying and pasting what everyone else is doing.
It's one of the most powerful tools we have in our arsenal and an absolute requirement for us to be successful at ProfitWell.
2. First-principles thinking reduces reasoning by analogy and confirmation bias.
Human beings are beautiful creations. We have many mechanisms embedded within our DNA that help us survive. One of those mechanisms is a path of least resistance to reason by analogy.
If we're in the winter woods and see someone walk across a seemingly frozen pond before falling through the ice, we're not going to question anything about the ice, we're going to reason that if we walk onto the lake, we'll fall through, too.
Reasoning by analogy means we copy what other people do with only slight variations. We use prior assumptions and "best practices" used by those we observe in order to survive.
3. Reasoning by analogy's other problematic cousin is confirmation bias.
We tend to look for and favor evidence that confirms our pre-existing beliefs, while at the same time devaluing information that contradicts those beliefs. We bias ourselves in this manner, because we feel discomfort when we face conflicting ideas or information.
In fact, we physiologically feel attacked when faced with this information. Studies have shown that the part of the brain that lights up when a bear is coming to attack you is the same part of the brain that triggers when we hear something that challenges pre-conceived notions.
4. Reasoning by analogy and confirmation bias are amazing for making sure we don't eat the wrong berries or mushrooms, but they're absolutely terrible for innovative thought and building a business.
If we do the same thing everyone else is doing, we can only expect similar results—at best. At worst, we can actually expect worse results, because oftentimes once someone has done something (especially in marketing) there's a window of effectiveness before everyone else does the same thing. Plus in either scenario, you're assuming your circumstances are similar to the person you're copying, when in reality you very likely are not, and the solution will not work the same, if at all.
At ProfitWell, while understanding what others are doing to solve a problem is a good start, we'll need to truly innovate to get outsized returns on the time and materials we invest. A lot of problems we're trying to solve haven't been tackled before. Thus, copying others won't work.
If we don't innovate we'll become a "me too" company that's uninspiring and inconsequential. We'll fail at our mission to help subscription companies automate the acquisition, monetization, and retention of their customers. We'll also fail as humans, because we'll stop growing career-wise and emotionally.
Challenging our thinking is uncomfortable, but this discomfort begets growth. We need to constantly disprove ourselves, especially when there's disagreement, in order to recognize our potential bias and assumptions at every turn. Only when we do this are we able to validate or create solutions from baseline knowledge.
5. This is where reasoning from first principles comes into play.
At the most basic level, reasoning from first principles begins with breaking down a thought, idea, or direction to the most basic truths and then rebuilding a solution from those basic truths. You can then implement that solution or validate a solution you're already thinking of implementing.
There are several frameworks that've made this easier, including the five whys, socratic questioning, and problem-cause-solution. Let's walk through each.
6. The five whys is a popular technique used to dig deeper into root causes by repeatedly asking "why" questions. Like a good four year old, you can also go far beyond just five of these questions.
Let's imagine you're Elon Musk and your goal is to build cheaper rockets. The first question is "why are rockets expensive?" You may think this is an obvious question, but if you've ever found yourself believing or saying something like "that's just the way it is" you haven't gotten past the first why before—you haven't even asked it.
Rockets are expensive because the components of a rocket are expensive and you have to throw away 90% of the components after launch.
The components are expensive because they're made by different vendors who have many sub-vendors who are all adding margin to the components. Thus, inflating the price of the components. Ninety percent of the components are thrown away because we let them crash into the ocean and they can't be salvaged.
The different vendors have many sub-vendors because no single company can source all of the right materials, or expertise to build the components in house. We let the components crash into the ocean because that's how it's always been done and I imagine it'd be hard.
No one's really tried to have one vendor, or build everything in house because it was worth more money as a business to pick one component and get government contracts or sub-contracts this way. Actually a lot of the vendors have consortiums, almost like cartels that drive up the price. It'd be hard to not let the components crash into the ocean, because we'd have to build a system to steer the rocket back to a launch pad, which I guess we could do, but no one's even tried it before.
Hopefully you're getting the picture and we're not even at five whys before realizing that if we want to cheapen rocket production we could work to cut out the component vendors and produce the components under one roof. We can also think through a solution that lets the rocket fly back to land or maybe even a ship in the ocean.
This is exactly what SpaceX ended up doing based on this line of thinking. Notice how there was no guarantee that retrieving the rockets was possible, but we were able to get past the objections to then think through how that could be done. Whenever you hear "that's how it's always been done" or "this is how it needs to be done" you have a good opportunity to innovate. You may discover the innovation is too expensive or defies the laws of physics, but you can't know that until you check your assumptions.
7. Socratic questioning is another beautiful method to getting to first principles.
Socratic questioning is a method of asking someone questions to get to the core of their assumptions and to dig until you get to the first principles of their thinking. If you've been with ProfitWell for a while, you've certainly heard us talk about Scorates's cousin—first, seek to understand.
Socrates believed that you had the totality of knowledge in your head and you simply needed to be asked the right questions to unlock that knowledge. Similarly you may (or may not) have thought enough about a problem, but questioning allows you to ensure you've gone deep enough in checking your assumptions.
This doesn't have to be done in a group or in pairs, but considering we're all fallible, having at least a partner to talk through things helps immensely.
While hard and fast rules don't exist for socratic questioning, six types of questions help you dig to first principles:
- Clarification questions – What do you mean by... ?"
- Probing assumptions – "What could we assume instead?"
- Probing reasons/evidence – "Why do you think this is true?"
- Implications and consequences – "What effect would that have?"
- Different viewpoints – "What would be an alternative?"
- Questioning the original question – "What was the point of this question?"
An important note here is that socratic questioning and the five whys can often feel contentious. Remember, someone's checking your assumptions and clarifying your biases. That can get uncomfortable and these feelings are unavoidable with topics you feel strongly about. Yet, you need to realize you're on the same team seeking truth. Although you may feel this way sometimes, the other person isn't trying to win, they're trying to help you. This is another reason the most charitable interpretation principle (MCI) is so important.
8. Another common framework discussed at ProfitWell is Problem-Cause-Solution.
The premise here is you can't actually solve a problem. Most problems are actually symptoms of a deeper, underlying cause or collection of causes. Instead, you want to break down all of the possible causes of the problem and then evaluate the gravity of each cause. This allows you to start attacking the cause you believe will mitigate the problem when solved for, or at least determine where you'll have the most leverage in helping mitigate the problem.
Take for example, world hunger. We all can agree that we'd like world hunger not to exist. Yet, we can't just throw solutions at the problem, because they may do more harm than good or be ineffective. Our bias and poor reasoning can easily creep in, which leads to fundraisers that cost more than the actual money they raise and only make you feel better.
For world hunger, there are many causes depending on the region or specific group of people going hungry. These causes range from aid being stolen by corrupt governments, lack of logistic infrastructure, irrigation issues, climate change, women not having agency, sickness preventing innovation cycles to exist, and the list goes on.
We could then think through the causes and determine the biggest cause (likely lack of infrastructure, which has many more causes) or the cause we can most directly impact given our strengths and resources (micro-loans or micro-projects for a region we care about in particular).
9. How in the world do you do this for every thought or decision?
First-principles thinking is not a chore or checkbox, it's a mindset. Using this model of thinking hedges our decisions by checking our biases and making sure we're looking at those decisions in context.
We're not going to constantly rethink everything all the time, because some fires are bigger than others. Yet, if you're new to first-principles thinking, a good place to start is whenever you're looking to propose a direction to take or you're implementing something for the first time.
Let's take the example, choosing a conversational marketing product for our mid-funnel team. I may come into the decision with a sneaking suspicion that Drift would be best. David Cancel's a friend of the company, they do a lot of flashy things we find appealing, they were used at a previous company, and even some companies we respect use them.
All of these are terrible reasons to make the switch. It's not that they don't matter in the wider calculus of a decision—all of these things boost trust in your decision. Yet, none of them get to the core of what we're trying to do and if Drift fulfills those aims.
First I should determine what the ultimate goal is for the product. In this case it's facilitating sales opportunities. I should then think about where sales opportunities come from—speedy contact from specialists, automated sign ups from the site or marketing pages, personalized ABM campaigns, etc. From these thought patterns I've now thought through what a solution should look like in our ideal scenario. Only then should I then evaluate Drift and Intercom.
You want to determine your needs and goals first (your first principles), because oftentimes all the options suck and you don't want to be tricked into choosing one that merely sucks less than the others. Other times you may determine that a solution is overkill for your needs and there are options that maybe won't scale in two years, but we can use for now as we build.
Your thinking likely won't be as linear as the above. You'll end up getting a recommendation or reading some sort of article about how great the solution is for a similar business. Yet, before you rush into poor arguments from analogy or simply confirmation bias, you need to go through a first-principles thought process to make sure you're proposing (or making) the right decision.
Keep in mind that sometimes this isn't a super formal process (although it can be if you struggle with this mindset). Once you practice first-principles thinking enough, you'll use the model rapidly to make decisions. Things like responding to an upset customer or responding to a sales inquiry can all use first-principles thinking and take less than 60 seconds. It's a mindset.
10. Another practical time to use first-principles thinking is in interpersonal conversations where you find yourself disagreeing with someone. Using MCI you should assume the person is smart, well intentioned, and may know something you don't based on their proximity to the problem.
First-principles thinking and questioning then comes into play for the two of you (or the group) to clarify the proposal or position the person is taking and dig deeper on their assumptions. You can then figure out a proper course of action or feedback together.
You may feel attacked going through this process, but remember that is almost certainly an unfortunate side effect of the way in which you're wired for survival. These feelings are often unavoidable (although you should work to try and minimize them over time), but rely on MCI and don't be afraid to openly say, "Hey I'm feeling frustrated or attacked, can we talk more collaboratively?" The conversation should still commence, but saying things like this helps you move on from those feelings and allows your sparring partner to soften their language a bit.
Remember—we're all working together to seek truth in how to build and grow ProfitWell.
11. Anti-patterns, or how we can tell we may have veered off track
First-principles thinking is tough if you haven't trained your brain to think in this manner, so there are a few speed bumps to recognize if you've gone off course.
If you find yourself agreeing too quickly with what feels like consequential assumptions you haven't heard before, you're likely moving too quickly and need to challenge those assumptions.
If you find yourself reticent to ask questions for whatever reason—not wanting to ruffle feathers, not wanting to confront someone, optimizing for feelings—you're likely focusing too much on the HOW, instead of the WHY. These instincts come from a good place, but aren't helping you and the team get better.
If you find yourself thinking lazily—not validating your thoughts and the places where they take you for the most basic biases—you're likely going with the flow too much and need to disagree with yourself a bit. You shouldn't succumb to things like straw man, slippery slope, or circular reasoning arguments.
If you find yourself getting defensive when someone asks you why or thinking "I shouldn't have to explain myself to you," you're letting your DNA and ego take over. It's ok to have these emotions, but make sure you're using MCI. No one at ProfitWell is above explaining themselves. Obviously there's a point where this could become destructive or distracting, but we think we're all adult enough to recognize if we cross that threshold.
12. To recap, first-principles thinking is a method of thought that allows you to break down complicated problems by honing in on their underlying facts, ideas, and assumptions. Using this mental model you're able to step outside of your bias to see what is possible and determine a better course of direction with more confidence.
Thinking in this manner will take some time to develop as instinct, because we're fighting our DNA and convention that's been beaten into us over decades by teachers, bosses, and parents. We think it's easier to just follow what we've been told, rather than breaking things down and thinking for ourselves.
Fortunately you're in a culture that values rigorous thinking and the seeking of truth with plenty of team members to help you through your journey. Our success absolutely depends on more of us thinking from first principles. It's the only way to seek as much leverage as possible and ensure we get outsized returns.
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Today we're talking about first principle, thinking it is a superpower that got me a national championship in debate. But it's also propelled us forward as a bootstrapped company with very little resources to be nice and high growth.
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From profit well, recurring. It's protect the hustle or we explore the truth behind the strategy and tactics of B2B SaaS growth to make you an outstanding operator. On today's episode, or diving deep on thinking from first principles, Patrick take it away.
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Welcome back, everybody, to another episode of Protect the Hustle, The B Side. The voice you're hearing is Patrick Campbell, co-founder of Profit. Well, just a reminder, if you are hearing this, that means that you're not necessarily seeing this. And the email that goes out not only has the entire topic in post inside the email, but also has all of the graphs and things that we end up talking about, You can go to protect the hustle dot com for all of those posts, as well as the ability to sign up to get on the email list.
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Today's article Today's concept today is kind of rambles we're going to be talking about don't require any data or anything like that. And so if you just want to listen, this is one where you can kind of sit back, relax and take notes. And if you get the reference I just made, we can be friends anyways. Reply If you got the reference, I want to know if I have any deep cut fans of certain types of music out there.
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I don't wanna reveal too much anyways. A couple of other housekeeping items. The profile of trading cards went out finally, there was a massive production delay that ended up happening. And so for those of you don't know, we produced trading cards of different subscription executives and founders. There were limited edition. But if you want future drops, you just have to go to all the com slash drop and basically you'll be redirected to the site to get on the list for our drops.
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We've been doing some really fun things with drops in particular, we produce custom hot sauce for acquisition, monetization retention. We produces trading cards and if you like, why in the world is a software company doing drops very similar to Supreme or some of the other folks out there, Feel free to check out the article we wrote on being a media company.
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Second Bullet. We are going remote, sort of, but we're starting to experiment with sales and some engineering remote. If you ever wanted to work with us and learn all of our secrets but couldn't necessarily be in the same place that we were. Feel free to hit me up. All of our other roles. Site sales and engineering are in Boston, Salt Lake City and Rosario, and we have plenty of those.
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I don't think we're anti remote, but we've been, you know, relatively anti remote up until now. And now we're experimenting a little bit just given all the learnings of the past. And then final bullet, I appreciate all the shares and feedback lately. It's been huge. There's a lot of work that goes into this stuff and when there's a lot of work, it's good to see that people are sharing it or people are learning from using it gives you the feeling to keep going and so really appreciate it.
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Keep them coming. Shout out to Joseph, Bill, Jane, Julia, Jean, Carli, Evan, Harry, Nick and Ryan. Whether shared on social or hung out with me in person on my trip. I am back in Salt Lake City now. So if you're in the Salt Lake area, hit me up and I'm starting to travel again. So if you're in any other region, you want to hang out just let me know.
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But with that, let's get into this. We're talking about first principle thinking today. And this is something that's kind of been in vogue here and there. You know, depending on if you write a Business Insider article talking about Elon Musk or, you know, some of their, you know, hey, how to do business thing from first principles. And they say that and they never really go into the how or the why or, you know, what that actually means.
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And so we're going to be varying that up today by doing just that. And this week is it's a modified and slightly redacted internal memo. I only say redacted some of the names that we've used in some examples, but it's one of our core principles of profit, this concept of thinking from first principles. And a lot of you have asked in kind of some more medical sessions like how am able to produce certain frameworks and thoughtful commentary very quickly or very frequently.
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And a lot of it came from basically honing this trait, thinking from first principles. Now, in all fairness, I did have a little bit of an advantage or a head start here. I was lucky enough to go to university on a debate scholarship, so I wrote, spoke and thought and first principles for about 40 hours a week for four years, eight years, if you count high school and this concept, it is hard to teach, mainly because it gets into how you think.
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And whenever you're talking about how you think gets hard to kind of describe. And so in this memo, I'm basically calling for many other authors. I go as far back as my main homie Demosthenes. If you know who Damascus me is, we can also be friends. But if you find it worthwhile, obviously share. I want to get this thinking superpower in the hands of as many people as possible.
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Let's kind of start off, you know, what is first principle thinking. So first principle thinking is a method of thought that allows you to break down, you know, complicated problems or prioritization problems by honing in on the underlying facts, ideas or assumptions that are involved with those things. And as humans, we've been conditioned to think not from first principles, we think conventionally or just do what we're told.
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And this comes from, you know, being in school for a long time and, you know, having parents and all these other things. But what first principles thinking does that allows you to kind of think for yourself? You then arrive at an ideal solution instead of just kind of copying and pasting what everyone else is doing. And it's one of the most powerful tools we have in our arsenal.
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And from personal perspective, it's an absolute requirement for us to be successful. And the reason it is is that first principle thinking reduces reasoning by analogy and confirmation bias. So humans were beautiful creations and we have this mechanism embedded within our DNA that helps us survive. And a lot of these mechanism and one of those mechanisms is this whole concept of kind of path of least resistance to reason by analogy.
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So if we're in the woods and it's winter and we see someone walk across a frozen pond before then falling through the ice, we're not going to question anything about the ice. We're not going to question the why. We're not going to do any of these things. We're going to reason that if we walk onto the lake, we're going to end up falling through the lake as well.
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And this reasoning by analogy means that we're basically copying and pasting what other people are doing with only slight variations. And we use kind of prior assumptions and best practices used by those we observe in order to survive. And this is where just to kind of bring this home a little bit or let me talk about confirmation bias first, actually, and then I'll bring it home a little bit.
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But the other kind of problematic cousin of reasoning by analogy is confirmation bias. We tend to look for and favor evidence that confirms basically our preexisting beliefs, while at the same time we devalue information that contradicts those beliefs. So we have this kind of bias essentially happening where if we feel discomfort over what we know, where we have conflicting ideas or information, we don't like it.
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So if I told you that, oh, he didn't fall through the cracks or the lake, he actually went down an elevator, You would go, Wait a minute, that doesn't make sense. I've been on lakes before. I know Frozen. You know, ponds can sometimes break through what's going on there. Right. And so the idea is, is we actually physiologically feel attacked as well when we're faced with this new information.
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And studies have actually shown that you know, when I give you information that goes against your beliefs or goes against what you think to be true, the same part of the brain that lights up when you have a bear coming after you have a physical attack happening is also triggered until we actually feel attacked when our preconceived notions are challenged.
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So to give you some context here, think of your business right now. And it could be one person. It could be, you know, 5000 people. And no matter what your business size is, what tends to happen is you have people who have come into your business and they're really, really good at their previous business, but then they come into your business and they're just terrible and you think, Oh, maybe I was just really, really bad at hiring them and they weren't actually good at their previous business.
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And that's probably actually not the case. What was the case is, is that they were copying and pasting what they did at the previous business into the current business. And this is actually really, really hard to do when you're looking at kind of director on level hires because a lot of times these hires, they come in, in especially in marketing, they will just copy and paste exactly the same thing that they did or even in sales.
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We've been interviewing sales leadership right now, and we had one candidate who was fantastic, you know, from just a human perspective and also from an intelligence perspective. But he basically pitched us on doing the exact same thing he did at a previous company. And the problem is, is that the inputs, what we go after, our types of deals are completely different.
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So in a vacuum, his idea is fantastic. But when you try to connect the dots to an existing, you know, business or a different type of business, all of a sudden it kind of fell apart. And to kind of get back on track here, you know, reading by analogy and confirmation bias, these are amazing for making sure that we don't eat the wrong berries or mushrooms, but they're absolutely terrible for innovation.
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And I would argue building a business which requires so much innovation because if we do the same thing everyone else is doing, we can only expect similar results at best. At worst, we can actually expect worse results because oftentimes once someone has done something, especially in marketing or sales, as we just talked about, there's a window of effectiveness before everyone else does the same thing.
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So inbound marketing, it's still really effective. But now the new thing is media, right? How do you actually build audience, right? How do you actually do that at scale? Right? Because you're trying to go after the new thing in order to get the best leverage when the old thing is still working, but it doesn't have as much leverage.
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And in either scenario here, you are assuming your circumstances are exactly the same to the person that you're copying. So when I look at something like I read an article, right, this is why, you know, honestly, I write so much in terms of content, in terms of length, because I try to avoid this because what ends up happening is I'll read an article that's like, Hey, we moved our highest priced tier from the right side of the page to the left side of the page, and all of a sudden our pricing was amazing and everything was great, right?
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Well, if I read that, I'm like, Oh, that's what I have to do, right? And then all of a sudden it's like, Oh, that's what I have to do. But then I do it and it doesn't work. And I wasted a bunch of time because if you reason from first principles, there's probably a lot of things that went into why that happened.
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In addition to that, sometimes not really repeatable depending on what's going on. And there might have been other things that were problematic with that company that they fixed that wasn't just related to moving the pricing tier from the right to the left. And so you can't assume the same thing. You can't assume you're in the same circumstance. You have to get down to the foundational pieces when you're reading things, when you're understanding things, and when you're planning things.
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And in reality, you're very likely not going to be in the same position as someone else when you're copying things so profitable, like, well, understanding what others are doing to solve a problem is a really good start. The way that we truly innovate to get outsized returns and some of the things we're doing, especially in terms of time and materials that we invest as we think through and innovate from these first principles and a lot of problems that we're trying to solve, they just haven't been tackled before.
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Thus copying others won't actually work. Now if we don't innovate, you know, just to kind of talk through the implications here, we're going to become a meta company. And that's not only uninspiring, but it's also going to be in any consequential company. We will fail at our mission to basically help subscription companies, you know, automate acquisition, monetization or retention.
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And we'll also just fail as humans because we'll stop growing career wise and also emotional. So challenging. Our thinking is uncomfortable though, and that discomfort is actually what begets growth. And so we need to constantly be disproving ourselves, especially when there's disagreement in order to recognize where our potential bias and assumptions are at every turn. And only when we're able to kind of validate or create solutions from baseline knowledge will we then end up being successful.
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And so the idea here is it's not something that copying and pasting is completely wrong. It's just it's the beginning. It's not the end. You have to look at the copy and paste and think through it before you actually implement. And this is where reading from first principles really comes into play at the most basic level. And we're going to go through a couple of examples to kind of teach this reasoning from first principles begins with breaking down a thought to an idea or direction to the most basic truths, and then rebuilding a solution from those basic truths.
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You can then implement that solution or validate a solution that you're already thinking of implementing. Now there's a lot of frameworks. And so what I would do is if a first starting out is when you're trying to make a medium to large decision, even small decisions, if you can do this quickly, start using some of these frameworks we're going to talk about.
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Because when you start using these types of frameworks, what it then helps you to do is start to kind of naturally start to think from first principles thinking, because again, based on the biological construct of us wanting to survive, it's not necessarily the path of least resistance or a natural way to think, especially because it's uncomfortable. So we're going to walk through a couple of these.
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We're going to walk through the five whys, Socratic questioning, and then something that I've done, a lot of which is a problem cost solution. So first up, the five whys. It's a very popular technique used to dig deeper into root causes by just repeatedly asking y questions. It's basically like being a good four year old. You can always go far beyond just five of these questions, but it works really, really well.
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If you've ever heard this advice, oftentimes it's, hey, before you, you know, give an opinion, ask five whys, right? Because that will help you, you know, understand what the person's talking about. But then also understand like the baseline of what you're talking about. So to give you an example, let's imagine you're Elon Musk. Congrats. That's awesome. And your goal is to build cheaper rockets.
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Right? And this is the example that everyone likes to use when talking about the five whys. You know, the first question is why are rockets so expensive? Now, you may think this is an obvious question, but if you've ever found yourself believing, you know, or saying something like, well, that's just the way it is, you haven't even got past the first way and you haven't even asked the first why now.
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So if we ask the first why, why are rockets expensive? Well, rockets are expensive because the components of a rocket are expensive and you have to throw away 90% of those components after launch. Well, let's ask our second why. Why is that? While the components are expensive, because they're made by different vendors who have many sub vendors who are all adding margin to the components, thus inflating the price of the components.
00;13;35;28 - 00;13;57;19
And 90% of the components are thrown away because we basically let them crash into the ocean and they can't be salvaged. Well, why do we do that? Well, the different vendors have many different sub vendors because no single company can source all of the right materials or expertise to build the components in house. That's super interesting. We just learn something big that we can actually fix, right?
00;13;57;19 - 00;14;19;17
We can bring stuff in-house, or maybe we could become one vendor to rule them all. We let the components crash into the ocean because that's just how it's always been done. And I imagine it'd be hard. Okay, we'll talk another way. Well, no one's really tried to have one vendor or build everything in-house because it was worth more money as a business to pick one component and get government contracts or subcontracts this way.
00;14;20;00 - 00;14;45;08
And actually, a lot of the vendors have consortiums almost like cartels that drive up the price. It'd be hard to not let the components crash into the ocean because we'd have to build a system to steer the rocket back to a launch pad, which I guess we could do, but no one's ever tried it before. And hopefully you're getting the picture here and we're not even at five wise before realizing that if we wanted a cheaper rocket, basically what we would need to do is cut out the component vendors and also produce the components under one roof.
00;14;45;17 - 00;15;01;15
And we can also think through a solution that let us fly that rocket back to land or maybe even a ship in the ocean, which is exactly what SpaceX has done. And they went through this line of thinking and it wasn't, again, that they were geniuses and they just had this idea, but they started asking why? Well, why is it so expensive?
00;15;01;24 - 00;15;21;08
Well, why is that? Why is that? Why is that? And then all of a sudden they got down to a colonel. What could we do this to this violate the law of physics, or is this something we could actually do that violates the laws of physics? There's not much you can do, but if it's something that you can change, like bringing everything in-house or actually building, you know, rockets that can be landed once again, all of a sudden you're in a really, really good place.
00;15;21;08 - 00;15;37;13
And yet also notice how there is no guarantee that, you know, retrieving these rockets was possible, but we were able to kind of get past that objection. So then think through how it could get done. And whenever you hear that's how it's always been done or this is how it needs to be done, you have a really good opportunity to innovate.
00;15;37;14 - 00;16;03;20
And you also may discover that the innovation is too expensive or, like I said, defies the laws of physics. But you can't not know until you check these assumptions and ask the why questions. So another piece here, a Socratic question, and this is one that can kind of get you in trouble a little bit because it is oftentimes not done anymore and you can feel like someone's attacking you, but it's basically a method of asking someone questions to get to the core of their assumptions and dig until you get to the first principles.
00;16;04;01 - 00;16;22;21
So if you've been a prof. A Well, very few of you are based on the size of this list. You've definitely heard basically the cousin of Socratic questioning, which is, you know, first seek to understand. It's one of our other principles. And Socrates believed that, you know, you basically had the totality of knowledge in your head and you simply needed to be, you know, ask the right questions to unlock that knowledge.
00;16;22;21 - 00;16;40;15
And similarly, you may or may not have, you know, thought enough about a problem. But questioning allows you to ensure that you're going to go deep enough to check your assumptions. And this doesn't have to be done in groups or in pairs, but considering we're all fallible, having at least a partner to talk through things helps immensely. Meaning you can do this alone if you want.
00;16;40;15 - 00;16;57;14
But oftentimes having like that tandem partner helps a lot and while hard and fast rules don't really exist for kind of Socratic questioning, you know, there's kind of six types of questions that basically help you dig in clarifying questions. These are things like, what do you mean by probing assumptions? What could we assume instead probing reasons in evidence.
00;16;57;14 - 00;17;15;26
Why do you think this is true? Implications and consequences. What effect would that have? Different viewpoints. What would be an alternative? And then questioning the original question, you know, what was the point of this question and and these types of questions? It's very hard to say who I saw some from because they're all over the place at this point, you know, because this is something that academics have thought about.
00;17;16;05 - 00;17;38;13
But these questions are super powerful and really an important point here. And I said it's already is that Socratic questioning and even the five whys can often feel contentious. But remember the goal of someone checking your assumptions are you doing this for someone is to clarify your biases and that can be uncomfortable. And these feelings are sometimes unavoidable if you feel strongly about something, but you don't need to realize you're on the same.
00;17;38;17 - 00;17;55;01
You know you're against each other. You need to realize you're on the same team trying to seek truth and you know you're going to feel contentious. You're going to feel a little problematic. And this is why we also talk about this whole concept of the most charitable interpretation that proffer well as well. And the third and final framework here is problem cause solution.
00;17;55;01 - 00;18;15;04
And the premise here is you can't actually solve a problem because most problems are actually symptoms of a deeper underlying cause or collection of causes. And instead you want to break down all of those possible causes of the problem and then evaluate the gravity of each cause. This allows you to start attacking the causes that you believe will mitigate the problem that you're actually trying to solve for.
00;18;15;05 - 00;18;31;14
Or at least it'll help you determine where you have the most leverage in helping mitigate the problem. So to kind of bring this to life, let's talk about world hunger for a second. I'm sure we all can agree that world hunger shouldn't exist or we hope it wouldn't exist, but we can't just throw solutions at the problem because, you know, we might end up doing more harm than good or be ineffective.
00;18;31;24 - 00;18;58;04
You know, our bias and poor reasoning can easily creep in, which oftentimes leads to fundraisers that cost more than the actual money that they end up raising. It only really make you feel better, right? So for world hunger, there's probably many causes depending on the region or a specific group of people that are going hungry. But these causes can range from, you know, aid being stolen by corrupt governments, lack of logistics, infrastructure, irrigation issues, climate change, women not having agencies, sickness, preventing innovation cycles to exist.
00;18;58;13 - 00;19;15;21
And the list goes on. But if we look at world hunger, we can then break down like what are all the causes that are leading to people going hungry? And then we can basically almost rank order these causes, right? So what is the biggest cause of this? Meaning if we solved it, it would solve the most hunger. This might be like lack of infrastructure, for instance.
00;19;15;29 - 00;19;35;10
And then we can also look at, you know, what are the causes that are going to most directly impact things given our strengths and our resources. Right? So microloans or micro projects for a reason we care about in particular, we can kind of attack, you know, this larger problem with it. But the big idea with problem cost solution is you don't just kind of throw stuff up against the wall and guess and check.
00;19;35;10 - 00;19;51;23
You actually think through what are the things, the causes of the problems that we have. And then you align your solutions with those and you might be thinking this is a lot that maybe you didn't know about or this is a lot. This is problematic in general. So how in the world do you use this for every thought or decision?
00;19;52;09 - 00;20;09;19
And I think the big thing to think through here is this is not like a chore or a check box. It's very much a mindset. And when you use this model of thinking, it hedges your decisions by checking your biases and making sure that you're looking at the decisions in the right context. And we're not going to constantly rethink everything all the time.
00;20;09;19 - 00;20;37;09
And there are some things that are just been decided, right? There's some things that they've been tried so many times that they truly are like just the way it is, although that's a good time to actually check that. And the reason is because, you know, some fires are bigger than others. But if you're new to first principle, thinking like a good place to start is whenever you're looking to propose a direction to take, you know, in your business or you're implementing something for the first time, let's actually use, you know, that type of thinking because it allows you to make sure that you're checking those biases.
00;20;37;09 - 00;20;54;00
So, for example, let's say you're implementing some sort of conversational marketing products, right? Adrift and intercom, etc.. You know, I may come into this decision with, you know, a sneaking suspicion that drift, for instance, would be best. David cancels a friend of mine. They do a lot of cool stuff in terms of their marketing that I find appealing.
00;20;54;09 - 00;21;16;13
They were used in a previous company, and even some companies we respect end up using them. But all of these are terrible reasons to make the switch absolutely terrible. It's not that they don't matter maybe in the wider calculus of the decision, but all of these things boost trust in your decision. They don't answer the question, though. None of them get to the core of what we're trying to do and if drift fulfills those actual aims.
00;21;17;00 - 00;21;40;27
So first, what I need to do is I need to determine what is the ultimate goal for the product to use. What am I trying to get this conversational marketing product to do? And in this case, it's basically facilitating sales opportunities. Okay, so that's my North Star. I should then think about where sales opportunities come from. Well, they come from speedy contact from bidders, automated signups from the site or marketing pages, personalized ABM campaigns, etc..
00;21;41;02 - 00;22;04;28
Now, from those thought patterns, I've now basically come up with what a solution should look like. In an ideal scenario. So then I can evaluate Drift and their competitors, right? And maybe they fulfill what my needs, maybe they don't. Maybe I find out no one fulfills my needs. So I need to rethink my needs. But it allows you to kind of think through like why I should be using something besides, you know, just thinking, Oh, I like David, you know, let's use it now.
00;22;04;28 - 00;22;23;04
You're thinking is probably not going to be as linear as they just took you through. You know, you're going to end up getting a recommendation or reading some sort of article about how great the solution is for a business. But before you rush into power arguments for analogy or that confirmation bias we talked about, you need to go through a first principles thought process to make sure you're proposing or making the right decision.
00;22;23;18 - 00;22;44;25
Keep in mind that sometimes this just isn't a super formal process and once you practice this, basically you'll start using this a lot more rapidly, whether it's, you know, trying to have a conversation with a salesperson or whether you're trying to, you know, figure out a support ticket, you could do these things in less than 30 seconds. It comes back to that whole idea is that this is very, very, very much a mindset.
00;22;44;25 - 00;23;10;00
It's not something that's a chore or a checklist. Now, another practical time to really use first principles. Thinking is in your interpersonal conversations where you find yourself disagreeing with someone. We talk about MCI most charitable interpretation a lot. Basically, the idea is when you feel yourself, you know, consternation or you feel yourself getting contentious, assume the best that's coming from a person, assume that they're smart, assume they're trying to help, assume that they're not being nefarious.
00;23;10;09 - 00;23;30;15
That helps you kind of like calm down some of that anger, frustration that you might be having in a situation. But the thing to think about is that sometimes that's just really hard based on how we're wired And first principle thinking and kind of questioning can actually help the two of you or the group kind of clarify a proposal or position that the person is taking and dig deeper on their assumptions.
00;23;30;25 - 00;23;44;20
And you can then figure out kind of a proper course of action or feedback to get it right. So instead of assuming, oh, this person's wrong, they're not well intentioned, I can assume, okay, they're smart, they're well-intentioned, maybe they know something I don't know because they're close to the problem. So let me ask a bunch of questions right now.
00;23;44;20 - 00;24;03;03
You may feel attacks going through this process, but remember, that is almost always certainly an unfortunate side effect of the way in which you're wired for survival. So when you have that bad feeling, know that it's your brain potentially, you know, tricking you essentially. And these feelings are often unavoidable, although you obviously should try it, rely on things like MCI.
00;24;03;15 - 00;24;29;15
But don't be afraid to openly say, and I found this to be really helpful myself. Hey, I'm feeling frustrated or attacked here. Can we talk more collaboratively? I think that helps a lot because the person oftentimes isn't intending to be frustrating or be attacking. The conversation obviously should still commence. But, you know, saying these types of things help you kind of move those feelings to a particular place and help someone be a little bit more conscious of their language and, you know, preface Well, we're all seeking together to kind of go after that truth of how to build and how to grow.
00;24;29;15 - 00;24;49;13
And that's what's really powerful. Now, a couple of anti patterns here. So first off, this will help you kind of figure out like, are you going off track here? So first principles thinking is tough. You kind of have it trained your brain. So if you find yourself agreeing too quickly with what feels like you know, some sort of consequential assumptions that you haven't heard before, you're likely going to quickly and you've got to challenge those assumptions.
00;24;49;26 - 00;25;13;09
If you find yourself reticent to ask questions for whatever reason, not wanting to ruffle feathers, not wanting to confront someone, optimizing for your feelings, you're likely focusing too much on the how instead of the why. And these instincts come from a good place, but they're not helping you and your team get better. Also, if you find yourself thinking lazily, you're not validating your thoughts in the places where they kind of take you for the most basic biases, you're likely going with the flow too much and need to disagree with yourself a bit.
00;25;13;18 - 00;25;31;26
Machine to come to, you know, things like strawman attacks, slippery slope arguments, or even circular reasoning. And finally, if you find yourself getting defensive when someone asks you why or thinking, you know, I shouldn't have to explain myself, you are definitely letting your DNA and ego take over. It's okay to have those emotions, but make sure you're using, you know, MCI, make sure you're having the conversations.
00;25;31;26 - 00;25;51;15
Knowing that proffer well, you know, is above explaining themselves. And I don't think anyone should be above explaining themselves either. It's not necessarily a democracy. You're still going to make decisions. It's going to be people making decisions. But it is one of those things that, you know, you want to find yourself useful in, obviously is a point where this, you know, can become disruptive or distracting, but we're all adult enough to kind of recognize when we've crossed that threshold, or at least I would hope so.
00;25;51;20 - 00;26;07;19
So to recap, first principles, thinking is a method of thought that allows you to break down, you know, complicated problems by honing in on the underlying facts, ideas or assumptions using this mental model that we've kind of talked about, you're able to kind of step outside of your bias to see what is possible and determine a better course of direction with more confidence.
00;26;08;04 - 00;26;29;06
It also helps you develop this as an instinct because you know, you're fighting your DNA and convention that's honestly been beaten into you over decades by teachers, bosses and parents. We think it's easier just to follow or do what we're told rather than kind of breaking things down and thinking for ourselves. And fortunately, a profitable we're in a culture that values kind of this rigorous thinking and speaking truth with plenty of team members to kind of help you through your journey.
00;26;29;06 - 00;26;49;04
So our success at profit well, absolutely depends on more of us thinking from first principles. And it's the only way for us to get leverage when we're looking for those outsized returns. So with that, I hope everyone has a fantastic rest of the week, has a good weekend, continues to have a good year. We're now in the throes of Q2, so I hope Q1 got you everything that you wanted.
00;26;49;04 - 00;27;00;05
And if not, I hope Q2 is looking even better. But if you have any questions, I'm just PC at profile dot com you can sign up at protect the hustle dot com and we'll see if you will.
00;27;02;16 - 00;27;49;01
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