When you hit a hard problem, break it down by asking why repeatedly until you reach the root cause. Elon Musk cut Tesla battery costs by identifying that expensive raw materials and fragmented supply chains were the real problem, then vertically integrated production to control the whole process.
Chapters
How do you talk to yourself when there's like a massive problem you've never dealt with and it's a bit of pressure? Like, how do you actually speak to yourself? Mm, that's a very good question. So I use first principle thinking a lot, which is the act of thinking about a problem from the fundamentals of it. What is the problem? Why does this problem exist? Go deeper into what is that and what causes that? Why does that cause that? Where does that problem get caused? And so you get super deep into the problem. Like Elon Musk uses first principle thinking as well. So for Tesla, the problem with electric cars was the batteries were too expensive. That's why they weren't feasible. Right? And so Elon Musk used first principle thinking, and he said, why are the batteries expensive? Oh, because we need to mine them from whatever place, and then we need a bunch of intermediary companies to do that, whatever. And then he did the math and was like, what if I vertically integrate? And vertical integration means just you owning the whole supply chain. And then he figured out how to decrease the price of batteries for cars, and then he made electric cars possible.