• First principles thinking: actively questioning every assumption you think you know about a given problem or scenario  and then creating new knowledge and solutions from scratch. 
• Reasoning by analogy: building knowledge and solving problems based on prior assumptions, beliefs and widely held ‘best practices’ approved by majority of people.

1. Identify and define your current assumptions;
2. Breakdown the problem into its fundamental principles;
3. Create new solutions from scratch.

"… it's important to reason from first principles rather than by analogy. The normal way we conduct our lives is we reason by analogy. We are doing this because it's like something else that was done, or it is like what other people are doing. But with first principles, you boil things down to the most fundamental truths and then reason up from there."

...is a foundational proposition or assumption that stands alone. We cannot deduce first principles from any other proposition or assumption.

Reasoning by first principles removes the impurity of assumptions and conventions. What remains is the essentials. 

If we never learn to take something apart, test the assumptions, and reconstruct it, we end up trapped in what other people tell us.

We remain trapped in the way things have always been done. When the environment changes, we just continue as if things were the same.

The CEO might re-envision the way his company tackles development, by bringing in other departments that don't normally get to participate in this work, and creating incentives for original thinking from anyone in the company.

On a personal level, you may make yourself more open to other people's perspectives and find value on discussions that you may not have previously had. 

1. Identify the problem you want to solve.
2. List all the reasons you can't solve this problem.
3. List all obvious solutions that apply but don't solve the problem adequately.
4. Ask yourself: "If I could create a solution based on my desires, what would that solution be?"

“Physics teaches you to reason from first principles rather than by analogy. So I said, okay, let’s look at the first principles. What is a rocket made of? Aerospace-grade aluminum alloys, plus some titanium, copper, and carbon fiber. Then I asked, what is the value of those materials on the commodity market? It turned out that the materials cost of a rocket was around two percent of the typical price.”

A first principle is a basic assumption that cannot be deduced any further. 

Outliers are extreme examples of people who are on the outer edge of success or have a radically different life, glorified by the media.

Following Outliers leads normal people to make decisions based on false hope and highly unlikely possibilities.

We need safe, nurturing environments to be our best, to blossom into what we truly are destined for, no matter how big or small, in our unique way.

We are provided with unnecessary pain and suffering by the constant comparison with people who are born radically different from us and are having different circumstances. 

There are four factors how innovators build up their innovation capital: Who you are, who you know, what you have done, your ability to draw attention to your ideas. Most notably, innovation capital is something accumulated over time through thoughtful action.

The Cybertruck is then about getting attention and proving that Tesla is one of the world's most innovative companies, specifically for the purpose of building Tesla's ability to win support from stakeholders.

Elon Musk is a master of building and using innovation capital to win support for his ideas. To gain support:

• He leverages his past success at PayPal and Space X
• He uses "impression amplifiers". He does more than talk about the new idea. He puts it into physical form to convince skeptics.
• He broadcasts the idea through big media launches to generate a buzz.
• He compares or draws a comparison between his innovation and some other successful one to create an impression of technical superiority.

1. Deconstruct and look at the components of what you're working on and question all the assumptions you have about them. Think of different ways the same function can be accomplished.

2. Deconstruct it and mash it up with products or concepts from different contexts to generate new ideas. 

• Allows for a more personal, customized mode of thinking and application.
• A key to doing any sort of systemic inquiry.
• Even though it does take far more mental energy to work in this mode, the results can be quite staggering.
• A new and innovative way of thinking.

Identify the Problem

What is something that I want to change in my life?

Deconstruct the Problem

What are the causes of my problems? How does it affect my life?

Solve the Problem

Start creating your new framework. You could think of multiple ways to achieve your goals easily.

• Right from childhood, Elon Musk preferred books over people, often devouring them at one go.
• He was an introvert and a deep thinker and began to gather deep insights about life and how to shape humanity and the future of mankind.
• Musk eventually developed a practical and efficient approach towards goals and carried the drive to follow through.

Elon Musk shows the world how big, audacious goals can be achieved by dividing them into smaller milestones and embracing failure and negative feedback.

His goals are not something he is doing for the media circus, but something in which he is emotionally committed. Goals work when they are bigger than ourselves, enhancing our commitment and responsibility towards them.