First Principle Reasoning: How Physics Became Elon Musk’s Secret Weapon

Elon Musk is one of the most talked-about people of our time. He is known for his companies that have changed the world, like SpaceX and Tesla. Most of the time, people talk about his projects or his public image, but the secret to his success may be how he thinks.

Musk says that his education in physics, not business school, gave him a strong mental framework that he uses in his work. He uses first principle reasoning, which is a way of thinking that helps him come up with new ideas in fields that other people think are impossible.

The “Unusual Combination” That Shaped a Visionary

Before he started SpaceX or Tesla, Elon Musk was a college student at the University of Pennsylvania. He was working on a double major in business and physics. He thought about that choice decades later.

Musk told Physics World in 2007, “It was an unusual combination, and I liked the physics better.” If I could do it all over again, I’m not sure I would study business again.

He said that business classes teach people how to “reason by analogy,” which we will talk about later. Physics, on the other hand, gave him something much more useful: a way to solve problems from the ground up.

He went on to say, “I think physics gives you a mental framework for problem-solving.” “It also teaches you to be okay with being wrong.”

What is First Principle Reasoning?

So, what is this physics-based framework? Musk has explained it many times. At its core, first principle reasoning is the practice of actively questioning every assumption you think you know about a problem.

It’s about breaking down a complex issue into its most fundamental, undeniable truths—the “first principles”—and then building your solution up from there.

This method stands in direct opposition to how most people think, which Musk calls “reasoning by analogy.”

• Reasoning by Analogy (The Common Way): This is like copying someone else’s homework. You look at what others are doing and essentially say, “This is what everyone else is doing, so I will do that with a few small changes.” This leads to slight variations, not true innovation.
• Reasoning by First Principles (The Physics Way): This is like figuring out the answer from scratch. You ignore what “everyone” says and instead ask: “What are the most fundamental truths or facts of this situation?”

Musk explained the framework best himself:

“I do think there is a good way to think. It’s physics, which is the kind of reasoning that starts with the basics… What I mean is to break things down to their most basic truths and then build on that, instead of using analogies to figure things out.

We use reasoning by analogy for most of our lives, which means doing what other people do with small changes… But if you want to try something new, you have to use the physics method.”

First Principles in Action: The Birth of SpaceX

The creation of SpaceX is a perfect, real-world example of this framework.

When Musk first considered the idea of sending a rocket to Mars, he investigated buying refurbished rockets. He quickly found the cost was astronomically high—tens of millions of dollars per launch.

• Reasoning by Analogy: An analogical thinker would have concluded, “Rockets are just extremely expensive, so it’s impossible for a small company to compete.” They would have accepted the high price as a given.
• Reasoning by First Principles: Musk, instead, asked a series of “first principle” questions:
  1. What is a rocket made of? He found it was aluminum alloys, titanium, copper, and carbon fiber.
  2. What is the cost of those raw materials in the market? He discovered that the cost of the raw materials was only about 2% of the typical “market price” of a rocket.
  3. Why is there such a massive difference? He concluded the difference was not in the materials, but in the inefficient manufacturing, labor, and—most importantly—the fact that rockets were built to be used only once.

From those fundamental truths, he built a new solution: Create a company (SpaceX) that builds rockets in-house and, crucially, makes them reusable.

He didn’t try to make a slightly cheaper version of existing rockets. He reasoned from the ground up to change the entire game.

A Framework for True Innovation

Musk’s background in physics taught him more than just the universe; it taught him how to think. He learned to tell the difference between what “everyone knows” and what the laws of physics say is possible.

He said that physics “trains leaders to understand problems in their most basic parts and then figure things out from there, often with a lot of new ideas to follow.”

This framework also needs you to be honest with yourself and look for the truth, even if it’s not what you want to hear. This is why Musk is known for saying, “Really pay attention to negative feedback and ask for it, especially from friends.”

It sounds like a simple piece of advice, but as he says, “hardly anyone does that, and it’s very helpful.