My favourite example of the power of first principles in coming up with breakthrough ideas is an experiment run by Dr. Tina Seelig, at Stanford University. She split her class into fourteen small teams and gave each group five dollars and two hours in which their challenge was to make the highest possible return. They were given a few days to plan out their approach and were encouraged to be as entrepreneurial as possible. Each student team was given three minutes in the next class to present their results.
Some teams did the obvious thing of buying lottery tickets or purchasing cheap goods and reselling on for marginally higher prices. Each of these teams made a few more dollars on top of the five that they had been given. But they were constrained by thinking about how they could leverage the five dollars.
Some teams thought a bit more boldly and made a lot more money, especially those that iterated, learnt and adapted along the way. For example one team set up a stand on campus offering to pump up students’ bicycle tyres for them for one dollar. When students showed that they were really appreciative of the service the team abandoned the dollar fee and simply asked customers for a donation. In two hours they made over two hundred dollars.
Another team cleverly booked a bunch of tables at in-demand restaurants in Palo Alto and then sold them to customers who were in the queue waiting for a table. They learned as they executed this strategy that the women on the team were a lot better at selling the reservations, and that the plan worked particularly well at restaurants that had the buzzers telling you when your reservation was ready. But these teams were still constrained by the two hours that they had been given.
The team that made the most money of all took an approach which completely challenged all the usual assumptions. In Dr Seelig’s words:
‘…they realised that the most valuable thing that they had was not the five dollars, and was not the two hours…the most valuable thing they had was their three minute presentation time in class, which they sold to a company that wanted to recruit those students.’
That company paid $650 for the opportunity to give a three minute pitch to the Stanford students. It’s a genius solution, but one that really shows how first principles can open up your thinking to very different solutions.
As Dr Seelig describes here in this video, the five dollars was actually a distraction, or put another way, a limitation. It framed the problem too tightly. If they looked at the challenge more broadly in the context of the assets and the skills they actually had access to, it could open up a lot more potential.
A first principle is ‘a basic proposition or assumption that cannot be deduced from any other proposition or assumption’. In other words it involves reducing down to the fundamental task at hand, considering it’s core elements, and working back from there.
Rather than thinking in terms of the five dollars or the two hours that they had, the winning team had set out to consider the most valuable asset that they could leverage – and realised that it was the presentation time in front of the Stanford students.
Going back to first principles is an excellent way of breaking out of conventional thinking.
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Photo by Marcel Eberle on Unsplash
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