First Principles

Manifesto

NOTE: This was originally a five-part email series over five days (November 2nd - 6th 2020), which I sent to all my email subscribers. This published version has been lightly edited for the web.

Part II focuses on my flagship programme, The Story Inception Method and coincided with the Fall 2020 enrolment for this training
 
(Oct 26 - 30, 2020).

If you would like to get access to Part II (it’s free), you can join the list here

This manifesto dives into first principles

It was originally a 5 day email series which I have edited and merged into one document.

I am going to unpack why first principles are so important to the success of your Long Term Business and why conventional thinking is holding you back.

As always, I value your attention and will work to make this incredibly valuable for you.

I’m going to cover a lot of ground so let’s get started.

A first principle is a foundational proposition that stands alone. 

We cannot deduce first principles from any other proposition or assumption. 

Aristotle, writing on first principles, said: ... 

Reasoning by first principles removes the impurity of assumptions and conventions.” 

First principles thinking is one of the best ways to reverse engineer complicated problems & unleash creative possibility. 

Sometimes called “reasoning from first principles,” the idea is to break down complicated problems into basic elements and then reassemble them from the ground up. 

It’s one of the best ways to learn to think for yourself, unlock your creative potential, and move from linear to non-linear results.

This approach is used now by Elon Musk and Charlie Munger. It allows them to cut through the fog of shoddy reasoning and inadequate analogies to see opportunities that others miss.

So how do you teach yourself to do that?

Children instinctively think in first principles. 

Just like us, they want to understand what’s happening in the world. To do so, they intuitively break through the fog with a game some parents have come to hate.

“Why?”

“Why?”

“Why?”

It can be annoying but it really expresses a wish to find out more about the world and how it works.

You may have a stock answer like “Because I said so..

A better one would be to ask the questioner to go find the answer him or herself. Google can provide any answer you want, you just have to learn how to ask the right question.

And that’s the point.

To learn how to come up with the first principle, you have to learn to think differently. Challenge assumptions. Look for evidence. Be prepared to  think things through NOT look for quick answers.

The best modern day example of a man who thinks differently is Elon Musk. The most interesting thing about him is not what he thinks but HOW he thinks.

I think people’s thinking process is too bound by convention or analogy to prior experiences. It’s rare that people try to think of something on a first principles basis. 
They’ll say, “We’ll do that because it’s always been done that way.” Or they’ll not do it because “Well, nobody’s ever done that, so it must not be good. But that’s just a ridiculous way to think. 
You have to build up the reasoning from the ground up—“from the first principles” is the phrase that’s used in physics. 
You look at the fundamentals and construct your reasoning from that, and then you see if you have a conclusion that works or doesn’t work, and it may or may not be different from what people have done in the past

He starts with what is  true not with intuition.

He starts with his ultimate goal… to send people to Mars. To do that, you need cheaper rockets. Rockets are expensive so the next question was… what are rockets made of? And how much does that material cost? 

Turns out that they add up to about 2% of the cost of a traditional rocket.

So why are rockets so expensive? 

The answer is because the people making them were stuck in their way of thinking. When Musk proposed reusable rockets, no one believed it possible.

He, of course, proved them wrong and now the cost of a SpaceX rocket launch is $62m. whereas an Ariane 5 launch costs $165m.  

That’s an exponential improvement.

In a briefing earlier this year, SpaceX director of vehicle integration Christopher Couluris said the company can “bring launches down to below $30 million per launch”.

And has relaunched one rocket 5 times out of a possible 100!

Asking and then answering difficult questions is what Elon Musk is all about. 

Conventional thinking is not his thing. 

Which is why I challenge you to question the conventional marketing speak, you see everywhere on social media and go back to first principles.

Such as…

The most important asset in your business is your audience.

Marketing is not about tools and tactics. It’s about knowing your people better than anyone else then communicating with them effectively.

And how do you do that?

Stories have been around since the dawn of time.

Why?

Because they attract, engage, motivate and inspire people to achieve things they never dreamed were possible.

Which is how Elon Musk put a team of engineers and scientists together at SpaceX who believed in the same goal as he did… to build cheaper rockets and eventually land people on Mars.

That’s fact.

Stories change the chemistry of our bodies.

The Significant Object Study proved beyond doubt that stories increase the perceived value of simple thrift stores objects. 200 objects bought for $129 were sold on ebay each with stories attached for sold for close to $8000.

We’ve covered the basics now, so let’s dive deeper…

First principles. To think critically. To go back to the source. To not accept the conventional way of doing things without question.

It is hard work. 

If you are not prepared to make your own dent in the world, it’s not for you.

It is for people wishing to create a Long Term Business based on sound ideas. Ideas that align with their own values.

People who choose to not follow the crowd and listen to accepted wisdom without first questioning it and testing to be true.

There’s an old joke about a corporal in the trenches in World War 1 who is ordered to deliver a message across dangerous country to the commanding officer.

The message is… “Send reinforcements, we are going to advance

Dodging bullets and howitzer shells, the corporal faces an arduous mission fraught with danger.

He finally arrives at his destination caked in mud and badly shaken. He reports to the commanding officer and waits to deliver his message which he has done his best to remember.

The officer orders him to deliver his report…

Send three and fourpence” The corporal stammers “We are going to a dance”.

I tell you this because the messages and tactics you come across have passed through many hands. Each time, they have been through many iterations. 

The original logic may have been altered in the telling just like that message delivered by the unfortunate corporal. Hence the need to go back to first principles and understand the basics.

For you are on a journey and the person who devised the strategy or tactic you are considering is also, but he or she is further down the road facing a different set of circumstances.

What works in one place may not in another.

The devil is in the detail.

You therefore must be prepared to make your own decisions based on your own circumstances and not blindly follow others, in the hope what they are doing will work for you too.

The first principle being that you have to make your own decisions based on where you are on your journey and the results you are currently getting.

Let’s go on.

  • What are your core values?

  • Why are you in business?

  • What is your unique unfair advantage?

  • How do you want people to feel when they think of you?

  • What is your ultimate outcome?

These are the questions I asked in the Branding Manifesto, to ask yourself to determine what your brand stands for.

They are equally applicable here.

When you have answered them, you will be that much closer to deciding the core principles that guide every business decision you make going forward.

Building a Long Term Business requires first and foremost that you deliver what you promised to your customers on time and on budget. 

Your customer’s  satisfaction comes first. Every other metric in your business is subservient to this primary metric.

Your opt in rate on your landing page is a trophy metric which means little in this new context. Decide what is important to you then devise business systems and processes that help you to reach that goal.

Social media has passed its prime.

It is no longer a thrusting and dynamic new place where you can deliver your message to your people.

Facebook is an established behemoth which is about to be the subject of legislation that regulates it in ways that we can only guess at.

Conventional thinking tells us that we must have a presence on social media.

Will that still be ‘true’ in four years time?

How else could you deliver your message to your audience.

Google, Youtube, Linkedin and other platforms will also be caught in the net. 

Established businesses build massive infrastructures and grow slow to react. They are held in a vice like grip by the world they have created for themselves.

Whatever you decide, make sure you have two sources of traffic. 

Facebook is notorious for shutting down Ad accounts for no apparent reason. They shoot first and answer questions later.

You cannot afford to put your business at their mercy. 

You must retain control.

Lose one source of leads in two and you can survive. Lose 100% and you will struggle.

So to bring those first principles together:

#1: Identify the values that will guide your business

#2: Decide your number one business metric (happy customers)

#3: Social media is ephemeral and is about to change forever. 

#4: Never become dependent on one platform.

Moving on…

It is important to realise that your Long term Business is a system that takes time to build and refine. 

Conventional thinking says that that system is linear. 

Meaning, that, for instance…

If you optimise your landing page for conversions and increase the number of subscribers, you will automatically improve  results downstream… net result you will turn more leads into paying customers.

Whereas the theory of constraints tells us that is not the case because the most important limiting factor (i.e. constraint) may be elsewhere in the system. 

The bottleneck may be your inability to show up on a sales call and guide your lead to a point where they are ready to buy from you.

This is closer to the truth…

The first principle, however, is that the most important piece of your LTB system is the 6 inches of space between your ears.

If you are self-sabotaging sales calls, it’s odds on that there are other instances of the same behaviour.

To take that a step further, if you optimise your ability to show up as you truly are in your business then every part of the system will be affected.

Which means that your business system is not linear but circular. 

Let me explain…

Say you wanted to build the best car you possibly could.

Logic would say that the best way of doing that would be to go out and find the best engine, the best drivetrain, the best braking system and so on until you had the best of everything waiting to be assembled.

Only then would you discover that none of these parts were made to fit together.

You would have the best of everything yet still have nothing.

The first principle is your Long Term Business system is circular and a unit in and of itself of which you yourself are a major source of constraint.

Change your approach to your business and you change everything.

Earlier, we discussed... 

The core principles that guide every business decision you make going forward.

These were functionalYour ultimate outcome? EmotionalHow you want people to feel when they think of you. And PhilosophicalWhy you are in business.

To which we have added the first principle that your Long Term Business system is circular.

Now, we need to agree that optimising your business to produce is happy customers must also be a first principle.

Why?

By its very nature a Long Term Business is an empathy driven, story based business that views its customers (whether there has been an exchange of money or not) as its most important asset.

If you care about your customers and they know it, they are more likely to care about you.

If you focus on producing happy customers, you will create a Referral Engine at the same time. That is a network of people who are happy to point their friends in your directions as often as they can.

Added to which they will be happy to buy from you over and over again as well as help you identify and then create the new products and services your business needs to grow and prosper.

This twofold effect has a much more prosaic outcome. 

The most expensive thing you will ever do is acquire a new customer. 

The fact that these customers are happy to buy from you multiple times increases their Lifetime value (LTV) to your LTB.

And maximises your return on Ad spend (ROAS).

All of which means you can afford to spend more on acquiring a new customer than your competitors… 

The business able to outspend competitors in this way is able to acquire the lion’s share of quality customers.

That is the longer term  prosaic reason why optimising your business to produce happy customers is a first principle.

A subsidiary being that the more happy customers you have out there, the more they speak about you, the more others will listen to what you have to say.

The less it costs you to acquire new customers.

So… Lowest cost of acquisition coupled with maximum Lifetime Value of each customer is truly a virtuous circle.

And all because you optimised your business for happy customers.

Which takes back to where we started…

#1: Deciding on the first principles that govern your Long Term Business is going to have a profound impact on its success. 

#2: Your business is a circular system of which the most important constraint is the 6 inches between your ears. 

You are an integral part.

The inevitable conclusion is that we should not only optimise our external strategy and processes but also our internal ones too.

There is a lot more to this than changing our mindset.

It is about shining a light into the dark corners of the ‘attic’ and coming to terms with ideas and events that we have been trying to push away or ignore.

It is only when we can see the whole space and make friends with all the pieces that make up the whole ‘me’ that we are be able to show up as we truly are.

Authentic.
Real.
Me.

To work on our core being so we can show up as the real 'me' is a first principle for our LTB.

Then the road blocks we have put in the way of our progress can be identified and removed.

Part of this process is to identify our values.

These are a set of first principles for our own personal internal OS.

Immutable.
Unchangeable.

When you take each of your values and make it the moral of a story it acts like a magnet pushing away the people who do not feel aligned with it and attracting the people who do.

This is the way you make sure you only do business with the people you want to do business with.

I spoke of values last week in relation to branding.
They are what your brand stands for.
They are what you stand for.

Combine your values with the #1 outcome you want your LTB to produce and you have the necessary rails on which your business will run.

These principles are the filter that every one of your decisions will be passed through.

For me, another first principle is storytelling.

There are two things that set homo sapiens apart from other sentient beings on planet earth.

The first is our ability to imagine something that does not exist. To conceptualise. To create a vision of a better future.

The second is our ability to tell stories.

We developed the skill back at the dawn of time, when we started to band together to form bands, then tribes and finally nations.

Telling and listening to stories was the way we decided who was reliable. Who was honest. Who should be in our band. 

The natural leader was able to tell stories to inspire his followers to meet challenges they never dreamt they could.

It enabled that leader to grow his or her tribe beyond the critical number of around 100 and begin to exponentially build a nation of people who all believed in the same ideals.

Story matters.

It is a first principle.

When you look at the great leaders throughout history, they have all been great storytellers.

We sat around campfires listening to stories of derring do. Learning from our elders. Now we sit round our digital campfires reading stories and deciding who to learn from and who to ignore.

Storytelling is a first principle.

All we have to do is develop the skill to use stories in a strategic way in our branding and in our marketing.

Story inception is that strategic way.

So 

To work on your core being so you can show up as the real you is a first principle for your LTB.

To make your values the morals of your stories is a first principle for attracting customers who you want to work with.

And 

To inspire these potential customers, we need to tell stories which are a first principle when it comes to our branding and marketing strategy.

Let's round up what we’ve covered.

First we looked at the basics...

Getting back to ‘First Principles’ is about asking and then answering difficult questions. Conventional thinking doesn’t cut it. 

Which is why I challenge you to question the conventional marketing speak, you see everywhere on social media and go back to ‘first principles’.

Such as…

The most important asset in your business is your audience.

Marketing is not about tools and tactics. It’s about knowing your people better than anyone else then communicating with them effectively.

And how do you do that?

Stories have been around since the dawn of time.

Why?

Because they attract, engage, motivate and inspire people to achieve things they never dreamed were possible.

Which is how Elon Musk put a team of engineers and scientists together at SpaceX who believed in the same goal as he did… to build cheaper rockets and eventually land people on Mars.

That's a fact.

Stories change the chemistry of our bodies.

The Significant Object Study proved beyond doubt that stories increase the perceived value of simple thrift stores objects. 200 objects bought for $129 were sold on ebay each with stories attached for sold for close to $8000.

Next, we decided that you must be prepared to make your own decisions based on your own circumstances and not blindly follow others, in the hope what they are doing will work for you too.

The ‘first principle’ being that you have to make these decisions based on where you are on your journey...

And

#1: Identify the values that guide your business.

#2: Decide your number one business metric (happy customers).

#3: Agree that social media is about to change forever. 

#4: Never become over dependent on one platform.

Following on from this, we discussed the theory of constraints, and how that makes our Long Term Business a circular system.

The ‘first principle’ being that the most important piece of your system is the 6 inches of space between your ears.

If you are self-sabotaging sales calls, it’s odds on that there are other instances of the same behaviour.

To take that a step further, if you optimise your ability to show up as you truly are in your business then every part of the system will be affected.

There is a lot more to this than changing our mindset.

It is about shining a light into the dark corners of the ‘attic’ and coming to terms with ideas and events that we have been trying to push away or ignore.

Showing up as who you truly are involves discovering your core power.

Doing this is a ‘first principle’ for the success of our LTB.

Then the road blocks we have put in the way of our progress can be identified and removed.

Part of this process is to identify our values.

These are a set of first principles for our own personal internal OS.

Immutable.
Unchangeable.

When you take each of your values and make it the moral of a story it acts like a magnet pushing away the people who do not feel aligned with it and attracting the people who do.

This is the way you make sure you only do business with the people you want to do business with.

I spoke of values last week in relation to branding.

They are what your brand stands for.

They are what you stand for.

Combine your values with the #1 outcome you want your LTB to produce and you have the necessary rails on which your business will run.

These principles are the filter that every one of your decisions will be passed through.

So how do you communicate your ‘first principles’ to your audience?

First and foremost by being open and transparent in everything you do and say and by telling stories that illustrate the point you wish to make in an engaging way.

Story matters.

It is a ‘first principle’.

All we have to do is develop the skill to use stories in a strategic way in our branding and in our marketing.

Story inception is that strategic way.

So here are the ‘first principles’ we have discussed..

First Principles’ is about asking and then answering difficult questions. Conventional thinking doesn’t cut it. 

The most important asset your Long Term Business possesses is your audience which is why you should treat everyone like customers even before money changes hands.

We must be prepared to make your own decisions based on your own circumstances and not blindly follow others because no one else is operating the exact same environment.

Story Matters… A memorable story has the power to inspire people to achieve something they never dreamt was possible.

To make your values the morals of your stories is a first principle for attracting customers who you want to work with.

To work on your core being so you can show up as the real you is a first principle for your LTB.

I will be back with another with another article focusing on the first principles you should implement in your Long Term Business soon. 

In the meantime, check out these...

The Long Term Business Manifesto

The Story Inception Manifesto

The Story Inception Q&A

The Branding Manifesto

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