First Principles Thinking is the practice of actively questioning every assumption you think you know about a given problem, and then creating new knowledge and solutions from scratch.

Elon Musk famously used this when building SpaceX. People told him building rockets was too expensive. Instead of accepting that, he asked: "What is a rocket made of? Aerospace-grade aluminum alloys, plus some titanium, copper, and carbon fiber. What is the value of those materials on the commodity market?" It turned out the materials cost around 2% of the typical price of a rocket.

By boiling the problem down to its fundamental truths—its first principles—he realized he could build his own rockets much cheaper if he just figured out how to assemble the raw materials efficiently.

Most of us reason by analogy, meaning we build knowledge and solve problems based on prior assumptions, beliefs, and widely held "best practices." First Principles Thinking breaks us out of that mold.