First Principles Thinking: How Elon Musk Questioned Everything and Saved 90% on Rockets

When SpaceX started, the aerospace industry had a clear answer for almost everything.

How much does a rocket cost? Tens of millions. Why? Because it always has. Can you make it cheaper? No, experts have tried.

Elon Musk did something different. He didn't accept conventional wisdom. Instead, he asked one question that seems obvious in hindsight, but that no one in the industry had dared to ask:

"What does the material of a rocket actually cost?"

The answer changed everything.

The Power of Deconstructing Assumptions

First Principles Thinking isn't a new concept. Aristotle used it. The best scientists practice it. But it's rare to see it applied in the business world with such clarity.

The idea is simple: instead of working from what "has always been done," you deconstruct a problem down to its most basic components and build from there.

While the aerospace industry saw "a rocket" as a single, expensive entity, Musk saw:

Aluminum
Copper
Steel
Electronic components
Fuel

Each with its own market cost.

When he added up these basic costs, he discovered that the material of a rocket represented a small fraction of the total budget. The rest was overhead, profit margins, and inefficient processes inherited from decades of doing things "the way they've always been done."

That simple question—what does it actually cost?—allowed him to reimagine the entire production chain.

Why This Framework Works (And Why Almost No One Uses It)

There's a reason why First Principles Thinking is powerful but rare.

It requires intense mental work. It's easier to accept what experts say. It's safer to follow the beaten path. Your brain wants to conserve energy.

Moreover, when you question basic assumptions, you risk sounding naive. "How didn't they think of this before?" Because experts didn't want to think about it. Because admitting the system is inefficient threatens their incentives.

But here's the opportunity: most industries are full of unquestioned assumptions.

In software, we assume servers must cost X. In startups, we assume you need investment to grow. In education, we assume you need a degree from a recognized university.

Some of these assumptions are valid. Others aren't.

How to Apply First Principles Thinking to Your Work

You don't need to be Elon Musk to use this framework. I've applied it to my own projects and it works.

The process has three steps:

1. Identify the assumption

Ask: "Why do we do this this way?"

The typical answer: "Because we've always done it this way" or "Because that's what everyone does."

That's your signal that there's an unquestioned assumption.

When I was building a SaaS product, I assumed I needed a complex authentication system. It was what "you do." Then I asked: "Do I really need this now?" The answer: no. I spent weeks on something that could wait.

2. Break it down to fundamentals

Don't stop at "we need better marketing." Decompose it:

Who is your customer?
What is their real problem?
How do they solve it now?
Why is your solution different?

Each answer gets you closer to the truth.

3. Rebuild from scratch

Now that you understand the components, ask: "What's the simplest way to solve this?"

Not the most impressive way. Not the way experts recommend. The simplest.

Many developers build complex architectures when they could start with something basic that works. Musk built reusable rockets when the industry thought it was impossible.

The Risk of First Principles Thinking

There's a dangerous side to this: you can be wrong.

Sometimes, the reason something is done a certain way is because other solutions were already tried and failed. Experts aren't always being inefficient out of ignorance.

The difference between innovation and arrogance is often just the outcome.

Musk succeeded because he combined First Principles Thinking with relentless execution. He didn't just question; he also built, iterated, and learned.

When you apply this framework, be humble. Question assumptions, but validate your hypotheses against reality.

Where This Framework Works Best

First Principles Thinking is especially powerful in:

**Stagnant industries** where "we've always done it this way" is the default answer
**New problems** where there's no beaten path
**Bottlenecks** where a small change can unlock massive value
**Investment decisions** where you need to understand what's actually paying for itself

In software, I've seen it work when:

We questioned which framework we really needed (often, none)
We deconstructed user flows to eliminate unnecessary steps
We asked what features actually matter versus what's noise

The Lesson Few People Understand

Elon Musk wasn't smarter than the aerospace engineers who came before him. He had less experience, actually.

What he had was willingness to question what everyone took for granted.

That's the real difference between someone who innovates and someone who just follows orders.

It's not raw intelligence. It's fearless curiosity.

The next time someone tells you "that's how we've always done it," ask: "Why?"

And if the answer is "just because," you might have just found your next rocket.

Takeaway

First Principles Thinking lets you see opportunities others miss because they're too busy following the map. You don't need to be a genius. You just need to ask uncomfortable questions and be willing to rebuild from scratch.

Next time you face a problem that "has always been solved this way," break it down. Ask what the real cost is, the real complexity, the real need.

That's where you'll find your edge.