# First Principles

> Core value: Break through conventional thinking, discover innovation opportunities

---

## Definition

First Principles is a **back-to-basics** way of thinking:

1. Decompose: Break the problem down to its most fundamental facts and assumptions
2. Reconstruct: Starting from fundamental facts, reason from scratch

Distinction from analogical thinking:
- Analogical thinking: Do what others do (or improve slightly)
- First Principles: Return to fundamentals, reason from zero

---

## When to Use

**Typical application scenarios**:
- Disruptive innovation
- Complex problem breakthroughs
- Escaping analogical thinking
- Fundamental insights

**Usage principles**:
- Return to basic principles and facts
- Question existing assumptions
- Re-derive from the ground up

**Usage flow**:
1. Identify assumptions (what is "taken for granted")
2. Ask why (5 Whys method)
3. Find basic principles (irreducible facts)
4. Re-derive (reason from first principles)

---

## Why It Matters

| Thinking Mode | Characteristics | Outcome |
|--------------|-----------------|---------|
| Analogical thinking | Reference existing solutions | Incremental improvement |
| First Principles | Reason from fundamentals | Breakthrough innovation |

Example:
- Analogical thinking: EV batteries are too expensive, so EVs aren't economical
- First Principles: What are batteries made of? Raw material costs are only 1/10 of the retail price. If manufacturing processes improve, costs can drop dramatically → Tesla was founded

---

## Trigger Conditions

Output as an independent chapter when **1 or more** of the following are met:

| Condition | Judgment Criteria |
|-----------|-------------------|
| Research type | This is "business opportunity discovery" or "business model analysis" |
| User need | User explicitly requests "finding innovation opportunities" |
| User feedback | After Stage 5 Insight Synthesis, user is unsatisfied with conventional recommendations |

---

## Operating Steps

### Step 1: Identify "Assumptions Treated as Common Knowledge"

List all "taken for granted" judgments in the current analysis.

Ask: Is this a **fact**, or "what everyone assumes"?

Example:
```
"This industry requires heavy-asset operations" — Fact or consensus?
"Users won't pay for this" — Fact or consensus?
"The competitor's success is due to subsidies" — Fact or consensus?
```

### Step 2: Question Down to the Irreducible Level

For each assumption, keep asking: **Why is this true?**

Until reaching:
- Laws of physics (cannot be changed)
- Human nature (extremely difficult to change)
- Regulatory constraints (unchangeable in the short term)

Example:
```
"This industry requires heavy-asset operations"
+-- Why? Because physical stores are needed
    +-- Why are physical stores needed? Because users need to experience the product
        +-- Why do users need to experience it? Because the product is complex, decision cost is high
            +-- Reaches human nature level: Users need trust-building when decision costs are high
```

### Step 3: Examine Whether Each Layer of Assumption Still Holds

Ask: Does this assumption still hold in the current environment?

Has it been broken by:
- Technological change
- Policy change
- Changes in user habits

Example:
```
"Users need in-store experience to build trust" — Still true today?

New technologies/models:
- Livestream commerce
- AR experiences
- KOL endorsements
- 7-day no-questions-asked returns
- User review systems

Conclusion: Trust-building doesn't necessarily require physical stores; new methods can substitute
```

### Step 4: Re-derive from Remaining Fundamental Facts

Keep only **the fundamental facts that still hold**, and re-derive possibilities from there.

Example:
```
Fundamental fact: Users need trust-building when decision costs are high (still holds)
Old assumption: Physical stores required (broken)

New reasoning:
- Livestream + KOL can build trust
- After-sales guarantees can reduce decision risk
- User reviews can provide social proof

Conclusion: Heavy-asset operations may not be necessary; asset-light models are viable
```

### Step 5: Compare "Conventional Solution" vs "First Principles Solution"

Output a comparison of both versions:

| Dimension | Conventional Solution | First Principles Solution |
|-----------|----------------------|--------------------------|
| Assumption base | Industry conventions | Fundamental facts |
| Resource requirements | Heavy-asset | Asset-light |
| Risk | Proven, fierce competition | Unproven, may fail |
| Potential return | Industry average | Could break industry ceiling |

---

## Position in the Report

First Principles is output as an **independent chapter**, without affecting the conventional analysis.

```markdown
Report structure:

Chapter 1: Market Overview (conventional analysis)
Chapter 2: Competitive Analysis (conventional analysis)
Chapter 3: User Demand Analysis (conventional analysis)
Chapter 4: Opportunities & Recommendations (conventional analysis)

Chapter 5: Through the Lens of First Principles — Breakthrough Opportunity Exploration
    5.1 Assumptions Treated as Common Knowledge
    5.2 Assumption Decomposition & Examination
    5.3 Re-derived Possibilities
    5.4 Conventional Solution vs First Principles Solution Comparison
```

---

## Output Format

```markdown
## Through the Lens of First Principles: Breakthrough Opportunity Exploration

### I. Assumptions Treated as Common Knowledge

List the "common knowledge" in the current analysis:
1. [Assumption 1]
2. [Assumption 2]
3. [Assumption 3]

### II. Assumption Decomposition & Examination

#### Assumption: [Assumption 1]
- Decomposition process: [Question chain]
- Fundamental fact: [Irreducible level]
- Still holds: [Yes/No]
- Breaking factor: [Technology/policy/habit change]

#### Assumption: [Assumption 2]
...

### III. Re-derived Possibilities

Based on fundamental facts that still hold, re-derive:

[New reasoning process]

[New conclusion]

### IV. Solution Comparison

| Dimension | Conventional Solution | First Principles Solution |
|-----------|----------------------|--------------------------|
| Assumption base | ... | ... |
| Resource requirements | ... | ... |
| Risk | ... | ... |
| Potential return | ... | ... |

### V. Recommendations

- Conservative choice: Conventional solution
- Aggressive choice: First Principles solution
- Balanced approach: [Combining both]
```

---

## Common Mistakes

### Mistake 1: Ignoring Industry Context

❌ Using only First Principles without looking at competitors and the industry
✅ First Principles is an independent chapter; conventional analysis must still be done

### Mistake 2: Not Decomposing Deep Enough

❌ Stopping at the "industry convention" level
✅ Question down to the "human nature/laws of physics" level

### Mistake 3: Ignoring Constraints

❌ Proposals that don't consider resources and capabilities
✅ Solution comparison must address risks and feasibility

### Mistake 4: No Comparison

❌ Only outputting the First Principles solution
✅ Compare with the conventional solution, letting the user choose

---

## Application in This Skill

### Stage 5-6 Trigger

1. When trigger conditions are met, output as an independent chapter
2. Does not affect conventional analysis content
3. Output to Chapter 5 (or the last chapter) of the report

---

## Relationship with Other Methodologies

- **Hypothesis-driven method**: First Principles helps identify and challenge implicit assumptions
- **Pre-mortem**: First Principles discovers innovation opportunities; Pre-mortem discovers risks
- **Anti-patterns**: First Principles avoids the "correct platitude" anti-pattern
