We unintentionally build Frankenstein companies despite our best intentions.
We follow standard playbooks and operate by analogy to copy pricing from SaaS giants, culture from Netflix and growth hacks from social media threads.
Small businesses stall when we blindly copy the practices of later stage organizations. We inherit the overhead without possessing the scale or distribution power to support it.
Richard Feynman and Charlie Munger operated differently. They did not ask what the market was doing. They looked for the fundamental constraints of the situation they faced.
They used first principles thinking.
Here are four ways to apply first principles thinking to our businesses:
“I don’t know what’s the matter with people: they learn by rote. Their knowledge is so fragile!”
— Richard Feynman
The cook follows a recipe. When market conditions shift or capital tightens, they get stuck.
The chef understands the raw ingredients: unit economics, human psychology, and technical feasibility. They adapt during a crisis because they understand how the components interact.
The Shift: Drop the phrase “industry standard” from your vocabulary.
Copying a competitors feature set turns your product into a commodity.
Focus instead on solving foundational friction points like delivery speed, acquisition costs or user friction from scratch.
“Tell me where I’m going to die so I’ll never go there.”
— Charlie Munger
Munger bypassed the pursuit of brilliance to focus on avoiding systemic failure. He inverted problems to identify the points of highest risk. Instead of asking how to scale, he identified what would cause the business to hit zero.
The Shift: Run a pre-mortem with your team this week.
Look past the optimistic growth projections to list three specific factors that could break your operations within six months.
Addressing liabilities like co-founder misalignment or unsustainable customer acquisition costs ensure we can continue.
Accepting a broad explanation for an operational miss prevents real analysis.
When quarterly targets are missed, blaming macroeconomic conditions is usually a convenient shield.
True evaluation requires digging below the surface.
The Shift: Run a deep audit on your next missed KPI.
If revenue fell short, isolate the pipeline bottleneck.
If outbound channels underperformed, review the target audience criteria.
Keep digging until you move past external excuses and uncover the real bottleneck.
“The first principle is that you must not fool yourself and you are the easiest person to fool.”
— Richard Feynman
It is exceptionally difficult to see the systemic flaws from inside the day-to-day operations.
Founders naturally develop conviction to drive things forward but that same conviction can obscure operational vulnerabilities.
The Shift: Build deliberate friction into our planning.
Do not look for advisors who simply validate your current direction.
Work with partners who require you to support your assumptions with real data rather than blind enthusiasm.
If a hypothesis cannot withstand a rigorous one-on-one review it will not withstand market pressure.
What is one piece of conventional industry wisdom you are currently following that might actually be harming your business?
p.s. check out my recent TedX below where I share my perspective on how humans can fight back as AI advances
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