How to think in First Principles

A beginners guide to first principles & it’s applications

Some of the greatest minds today use this method of thinking and processing like Elon Musk, Jeff Bezos & Warren Buffet to become some of the richest people in the world. It has been used by the top companies like Google and has created some of the best players in certain games like Poker.

This is the most powerful methodology of thinking. Many say they can do this, most cannot.

I want to keep this as beginner friendly as possible, so don’t be intimidated.

I also will show some real world objective applications and effectiveness of this method versus conventional ways of thinking and just how dominant it is over other more conventional methods.

Definition of the concept

First principles approaches is simply taking the concept of the scientific thought process like in physics or chemistry and applying it to logic or argumentation.

The primary method behind first principles is simply do determine the original basis for which we can be sure of something to be true or known as fundamentally as we can, and building our argument or position from that fundamental truth. This is more ideologically orientated.

We do this through primary sense data, and logical deduction, or what’s known as epistemology in philosophy. Where we try and align our perceptions and methods as closely to reality as possible. This will I will cover in another medium as it is it’s own beast.

The second method is reverse engineering from outcomes. So we establish the outcome we desire, and work backwards from that truth and establish a system to achieve the outcome we desire. This process is more business orientated.

Most people confuse this with reasoning from problems. This is not the case. I always give the example, people want a cold drink, they don’t want a fridge. The fridge is the method for cold, cold is the outcome. If you sell fridge’s, you are selling the outcome of cold, not the methodology of fridges.

This fundamental misunderstanding in my experience permeates everywhere, especially in business.

How to spot it

You may have seen a few different names for this methodology. Some call it ‘outcome independence’ or ‘process orientated’, there is a few other niche terms.

But it’s all the same conceptual process. The giveaway for whatever term someone wishes to use, is the underlying concept of either beneficial unintuitive behaviour, or ignoring the superficial or short term for a structural or long term understanding due to a superior methodology.

Where you are working from fundamental principles, rather than immediate perceptions, with the ability to prove from original truths or outcomes your position.

The Problems

This sounds incredibly simple, and it’s simplicity can yield both powerful and unexpected, asymmetric results, however the real problems arise in the emotional volatility that can arise as a result of this process. As this can violate extremely deep held beliefs, sometimes structurally held beliefs of people. Entire sections of the economy, society and relationships that are built around certain premises, truths or methods that might not be correct or ideal.

Remember, most people reason by analogy, if they can reason at all.

People who have emotional attachment to outcomes instead of their methodology will have visceral reactions to structural change. This is because they have intertwined their personal identity or belief structure with the current method, rather than the method itself.

As this method challenges all pre-conceived notions, you will be the object of whatever projection those who hold the prior belief structure will apply to. (Crazy, nasty, evil, stupid etc)

Applications

Paradoxically, one of the hardest things to do in the realm of thought is to objectively prove the validity or superiority of a thought process that preaches independence of outcomes.

While this method preaches independence of outcomes, it’s the outcomes we desire as the reason we follow the process. We wouldn’t subject ourselves to such a methodology without a preferred outcome.

In this way we are not unironically measuring the validity of the idea, but rather ensuring we are correct. As being successful and correct is the measurement of congruency with reality.

I’m going to use Chess and Poker for now as my examples. (I was going to do businesses stuff but I will do more articles later)

Chess

The first application I’m going to use is Chess, and more specifically computer chess. The reason for this is Chess is a complete knowledge game, there is no hidden information or chance. Not only this, it’s limited to 64 squares and 16 pieces per side. From an ideological point of view, it’s an almost perfect laboratory for ideological combat. Not because it’s preferrable to principles, but because the opposite is true, we should be able to brute force calculate every variation. Principles shouldn’t matter when we can know every possible outcome and calculate it in such a controlled environment.

After Garry Kasparov lost in 1997 to Deep Blue, we’ve known computers to be better than humans. However until 2018, the method computers used to play chess was known as ‘alpha-beta’ with pre-installed valuations of pieces. This is known as a ‘brute force’ approach, or calculating billions of possibilities and calculating the best outcome based on the evaluation of them. Stockfish was the best engine by far which used this principle, and was seen as the best method of playing the game.

In 2018 Google developed an AI called ‘AlphaZero’ in which they created a neural net and gave it the principles of chess, and then let it learn from first principles how to play the game by itself.

After 4 hours of learning the AI played Stockfish 8 and won 28-0 in a 100 game match. This result legitimately shocked the entire chess world, it would be the equivalent of a team winning 100-0 in the SuperBowl. Not only did the win/loss tally shock the chess world, but the way in which it played shocked the chess world.

Not only did it completely destroy Stockfish, but the way it processed information was revolutionary. It calculated near 1% of the positions that Stockfish had to, while producing much more dominating results.

Here are some examples from Agadmator – The top chess youtuber going over a few of the games. You can see the sheer dominance of the difference between the two. Here here here

It challenged traditionally pre-conceived notions of how to play the game, to a more principled approach to positions. And recently, Stockfish lost to Leela Chess Zero (basically the opensource continuation of AlphaZero) and now Stockfish has had to incorporate it’s own neural net into it’s systems based on first principles which is now called Stockfish NNUE in order to retain it’s #1 engine status.

It’s almost the perfect example as to the superiority of first principles over any other methodology, as not only were the results better but the processing of the information is exponentially better. This is because when you reason from principles, you are able to discard irrelevant information.

Poker

Poker is one of the most interesting games that feature this concept, as it deals with imperfect information as opposed to chess. Which is also why I enjoy it as a hobby so much. As it is seemingly a high luck based game, but it is actually a high skilled based game. You are given cards at random, and then you can choose to bet, check or fold depending on what you desire to do.

You can play hands that are terrible and win, and you can play great hands and lose. Through folding, or through seemingly unlucky draws. The variance in poker is huge, and can vary greatly depending on your opponent and situation.

However, in Poker, the same people seem to constantly win even in such a high variance and seemingly luck based card game. In poker circles they use the term ‘outcome independence’, but as discussed earlier it’s the same concept.

This is where the idea of principles comes into play. While a newer player may win a few hands due to luck in the short term, the way in which skilled poker players think is over many, many tens of thousands of hands over the long term. They take in probability, position size, hand variance(hands you are likely to be playing depending on how you have played previously), situation variance and other objective factors to build models of exactly how much and when to bet. When to fold, when to play for optimal outcomes.

This approach will lose individual hands that are winnable, but will allow a sustained probability of winning over the long term vs people who do not do this.

I’ll give an example:

Lets say I get the worst hand in poker 7,2o. And I’m first to bet in a table of 9. And I go all in, the chance I win is very low relative to other possible hands, however it’s not zero. If I fold this specific hand, there is a chance the board comes 7,7,7. I’ve folded what would have been a 4 of a kind. However the probability of this happening is lower than the chance of me winning, to the value of the money I’m putting into bet.

Which is the guiding principle which all poker theory is borne out of.

Or lets say I have 7,9o and I have raised before the flop. The flop comes 2,10,Jo. Someone goes all in. The only way I win is if I hit an 8. If an 8 comes, I win all his money. But whats the probability of me hitting that 8, vs waiting for the next hand where I will have a higher probability of me winning without risking all of my money. The correct play is to fold, if you are playing for the long term. However, if you have 1 more hand to play in the day, and it’s not your money. Then the correct play is to go all in too. This is not to devoid yourself from context and only follow correct long term play. But rather a guiding principle when dealing with probabilities.

This is why when you go to the all-time earnings list of poker players, they all universally take this approach, rather than the gamblers mentality. Which is why I use it as an example for first principles when we have imperfect information and probabilities as well.

Summary

In a way, this is an argument from me to attach your identity to the methodology of truth seeking and a principled approach rather than to the outcomes you believe. An introduction essay to how I approach things and my thought process, with some concrete examples of why.

This will be one of a few pieces of content I’ll produce on this subject, but what I wanted to do in this is particular article is give an overview of the concept. A sort of first principles to first principles kind of thing. I will post more resources on this in the future too.

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