Thinking in first principles is a way of breaking down complex problems into their fundamental truths and building reasoning up from there. Michael Saylor often uses this approach, particularly in his discussions about Bitcoin, technology, and business strategy. Here are some tips to help you think in first principles like Michael Saylor:
1. Break Problems Down to Their Fundamentals
• Ask “Why?” Repeatedly: Keep questioning assumptions until you reach the core, indisputable truths. For example, Saylor asks why Bitcoin holds value and ultimately reduces it to its scarcity, decentralization, and security.
• Separate Assumptions from Facts: Identify what is opinion or convention and what is a provable fact. Strip away any inherited beliefs or biases.
2. Use Objective, Quantifiable Metrics
• Saylor often emphasizes measurable metrics like energy efficiency, durability, or scarcity. For example, when comparing Bitcoin to gold, he focuses on tangible properties like weight, transferability, and cost of maintenance.
• Apply this logic to your own decisions: ask what measurable criteria truly matter and compare options objectively.
3. Simplify Before Building Complexity
• Start with a basic truth or principle and expand only when necessary. For example, Saylor’s advocacy for Bitcoin is rooted in its fundamental property of being digital property with fixed supply.
• Focus on what cannot be reduced further: truths that are foundational, like physics or math in technology.
4. Leverage Historical and Philosophical Context
• Saylor frequently references history, philosophy, and economics to understand and validate foundational principles. For example, he compares Bitcoin’s rise to historical shifts in monetary systems.
• Use historical examples or philosophical frameworks to gain perspective on why certain principles endure over time.
5. Think in Terms of Energy and Entropy
• Saylor sees the universe in terms of energy systems. For example, he describes Bitcoin as a closed energy system that resists entropy through its protocol.
• Apply this concept to understand systems in your own life: How much energy is required to maintain something, and how can you minimize loss or waste?
6. Focus on Longevity
• Saylor values systems that are robust and built to last, like Bitcoin’s blockchain or hard assets. He dismisses transient trends or “fragile” systems.
• When making decisions, ask yourself: Will this stand the test of time? Is it scalable, sustainable, or universally applicable?
7. Think Exponentially, Not Linearly
• Saylor often discusses the exponential growth of technology and how small advantages compound over time.
• Look for trends or solutions that benefit from network effects, compounding growth, or scalability.
8. Test Your Assumptions Relentlessly
• Challenge your beliefs with data and logic. Saylor’s conviction in Bitcoin, for example, comes from rigorous testing of its properties and comparison to alternatives.
• Always be willing to adapt your thinking when confronted with better evidence or reasoning.
9. Educate Yourself Relentlessly
• Saylor is a lifelong learner, reading extensively on topics like technology, history, and economics. This broad base of knowledge allows him to understand and apply first principles effectively.
• Dedicate time to learning foundational subjects, such as mathematics, physics, history, or computer science, to strengthen your ability to think independently.
10. Ignore Conventional Wisdom
• Saylor’s approach often defies mainstream thinking. For instance, his Bitcoin strategy was counterintuitive when first implemented but built on solid first principles.
• Be prepared to stand apart and make unconventional decisions if they align with your reasoning from first principles.
Example: Applying First Principles Thinking
If you want to evaluate an investment (e.g., Bitcoin like Saylor):
1. Strip Assumptions: Ignore opinions or biases about Bitcoin being a “bubble.”
2. Reduce to Fundamentals: Understand its properties—decentralized, scarce, durable, transferable, and secure.
3. Compare to Alternatives: Analyze how these properties compare to other assets like gold or real estate.
4. Ask, “What Cannot Be Replaced?”: Recognize that Bitcoin’s network effect and energy-efficient transferability make it unique.
Thinking in first principles requires discipline, curiosity, and a willingness to go against the grain. By consistently practicing this mindset, you can build robust reasoning and make high-conviction decisions.