First Principles, Probabilities, and Scale: Shattering 'Business as Usual' With Billionaire Thinking
In the early days of his career, Peter Diamandis sat across from investors, pitching space missions that sounded wild even to seasoned pros. But he borrowed a page from Elon Musk, who dissected battery technology into carbon, nickel, and steel, ignoring tradition and focusing on raw fundamentals. Musk’s habit—reasoning from first principles, not comparing to established products—let him build electric cars when others said it was unaffordable.
Diamandis, inspired, began reframing risk in probabilities, not absolutes. 'If there’s only a 20 percent chance I’ll open a private space company but the impact would change the world, I have to try,' he told friends. During hard times, he tracked assumptions, successes, and failures, learning that conventional wisdom, expert routines, and previous best practices often hid massive opportunities or pitfalls.
Reflecting, he saw that each big win—XPRIZE, Planetary Resources, Singularity University—came after stripping problems down to their essence, weighing real odds, and doggedly tracking the 'why' behind each step. Deciding at scale became a science, not an instinct.
Think through your next tough problem by dissecting it into its simplest parts, setting aside how others have done it. Ask yourself what the real probabilities are for both success and failure, and how much your results matter if you pull it off. Weigh the numbers in your favor—even a risky approach can be right if the payoff is huge. After each cycle, check your process, not just your outcome, to build better decisions in every round. Next time you face a choice that feels big, challenge your assumptions and dare to think like a founder.
What You'll Achieve
You'll shed inherited limitations, make sharper decisions on risky or novel projects, and maximize your opportunity to achieve outsized, positive impact by making bets that matter.
Adopt First-Principles and Probabilistic Decision-Making
Break complex problems into their fundamental elements.
List each component and look up the raw costs, physical laws, or base requirements. Ask why each assumption must be true.
Estimate the likelihood of success, not just the expected result.
Instead of asking 'Will this work?' reframe as 'What’s the probability it works, and with what payoff?'
Calculate whether the impact justifies the risk.
Multiply your probability of success by the size of the outcome—if it’s important enough, a low chance can still be worth the attempt.
Document and review decisions, learning from both wins and losses.
After each decision cycle, check if you reasoned from assumptions or just copied others. Note missteps and update your process.
Reflection Questions
- Do I start with assumptions or fundamentals when making decisions?
- Am I copying a method just because it’s common?
- Have I considered the true probability and importance of success?
- Am I learning from outcomes or just repeating history?
Personalization Tips
- A high school club considering a fundraiser questions why candy sales are the default, and chooses an online drive based on core costs and rewards.
- An entrepreneur maps the elements of launching a local service, then calculates odds and payoff, deciding to attempt a smaller pilot first.
Bold: How to Go Big, Create Wealth and Impact the World (Exponential Technology Series)
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