First Principles Thinking

When thinking about a particular topic, always go down to the fundamentals of any idea.
If you are speaking about how fundamentals work, always ask yourself,

Fundamentally, this idea is about …

When you ask yourself “Fundamentally”, you are forcing and encouraging yourself to think about the root of the idea, and not the surface. This will make you think deeper and go beyond the initial point.

We want to lower our prices so more customers will buy our chocolate bar.


Fundamentally, there is a customer at every price level. Lowering our price level will yes encourage more customers to buy our chocolate bar, but it’s only because of the price and not because actually more customers want our chocolate bar. So the only way to get customers really wanted our chocolate bar is to figure out at the same price level, what can we do to make them buy more of our chocolate.

The assumption above is that lowering prices will get more customers buying the chocolate bar. But at the fundamental level, it’s not about prices. Every customer loves chocolate. So it’s clear that if they really wanted the chocolate, they would buy it, provided it’s at an affordable price for that market. Lowering the price just markets the chocolate to the different customer base which is obviously larger, but they were neglecting their original customer base that were willing to pay for that chocolate at the premium price.