Critical thinking is one of the most overlooked elements of human life. Often time people live according to what they hear or told and never get to seek out information for themselves. I always encourage people to conduct their independent research when it comes to virtually anything. In this day and age of misinformation and disinformation, you have to fact-check everything. Anyways, my issue here is that you have to be a critical thinker at all times, in everything. In this article, I want to share with you 2 critical thinking techniques you can use in entrepreneurship.
Law Of First Principles
This is a common one and has been popularized even more by Elon Musk. Elon Musk has said on several occasions that he uses this technique in his thought processes. The fact that he is now the richest person on earth speaks volumes about the efficacy of this technique. I know most people will jump in to say Elon Musk has an unparalleled work ethic – he does have that. However, it all starts from the fact that he is a critical thinker; in fact, that is the key!
Let me quote what Elon Musk once said about this thinking technique. I will quote parts of what he said that accentuates what I am driving at here. “…I do think there is a good framework for thinking, it is PHYSICS. …the sort of first principles of reasoning. …boil things down to their fundamental truths and reason up from there, as opposed to reasoning by analogy. Through most of our life, we get through life by reasoning by ANALOGY, which essentially means COPYING what other people do with slight variations.” That is a loaded quote right there!
Most entrepreneurs reason by analogy, sadly. It is the equivalent of thinking inside the box. By using the law of first principles you are thinking as if there is actually no box. This helps get rid of biases, assumptions, and norms – all pitfalls of reasoning by analogy. If you want to come up with cutting edge businesses or innovative business processes you must desist from reasoning by analogy.
Let me again quote what Elon Musk once said to give a practical example of the law of first principles at work. He was referring to critically thinking on how to make battery packs cheaper. “Historically it costs US$600 per kWh. So the first principles would be – what are the material constituents of the batteries? What is the spot market value of the material constituents? It has got cobalt, nickel, aluminium, carbon, and some polymers for separation, and a steel can. So break that down on a material basis; if we bought that on a London Metal Exchange, what would each of these things cost? Oh jeez, it is US$80 per kWh. So clearly you just need to think of clever ways to take those materials and combine them into the shape of a battery cell, and you can have batteries that are much, much cheaper than anyone realizes…”
I cannot underscore enough how you need to use this critical thinking in business. It can be the secret to you edging past all your competitors. I know the example I cited I somewhat technical but I am sure you got the idea.
Albert Einstein once said, “If had an hour to solve a problem and my life depended on the solution, I would spend the first 55 minutes determining the proper question to ask, for once I know the proper question I could solve the problem in less than 5 minutes.”
When I was still in high school I did not know that Albert Einstein once said that. Interestingly I was using a critical thinking technique based on that quote really. It is a technique I came up with one day with a buddy of mine who was a couple of streams ahead. This technique went on to define my thought process whenever I do anything. Even in my writing I still use this technique and you can too for your business endeavours. It is called CRIDABESSQ.
It is an abbreviation and it stands for CRItical Data Analysis By Effective Self Set Questions. Here is how I would use it in my academic studies. Let us suppose I wanted to learn about a new topic in a particular field. I would start by writing down or thinking of questions I might have about that field. I would do that before reading anything on that topic. After that, I would go through some reading material on the topic. After that, I would go back to my questions from before and try to answer them given my newfound knowledge. If they were not answered I would research more plus in the same process I would also develop more questions. I would repeat this cycle of processes till I was an expert on a topic. This made it possible for me to get full marks on in-class tests lots of times.
Anyways, you can adopt the same critical thinking technique in business. It works when you want to start a new business, launch a new service or product or when you want to tweak something about your business. You find that CRIDABESSQ can sometimes be like first principles or sometimes it can be a variation of it.
As much as these techniques work wonders in your business journey they are universal. You can use them for your academic journey. You can even use them in life in general, I have used them and they definitely work. I did my best to talk about critical thinking in a layman’s terms approach otherwise it is a vast and very complex field. Critical thinking entails aspects such as inference, analysis, and problem-solving, amongst others. You need it to optimally start and operate any business.