How to Integrate First Principles into Long-Term Strategic Planning?

No problem, this is quite an interesting topic to discuss.

You can think of this like learning to cook.

Most people learn to cook using "analogical thinking," which means following recipes: a pinch of green onion, ginger, and garlic, one spoon of salt, two spoons of soy sauce... If you follow the recipe well, you're a good cook. But if the recipe is gone, or you want to create a new dish, you're stumped. Many companies' strategic planning is like this: they see what the industry leader does, and they do the same. If the leader starts live streaming, they do too; if the leader lowers prices, they do too. This is "copying the recipe."

"First principles thinking," on the other hand, is a different approach. It doesn't care about recipes; it cares about the essence of food. It would investigate: the role of salt (sodium chloride) is dehydration and providing saltiness; sugar (sucrose) caramelizes at high temperatures, creating unique flavors; how proteins denature at different temperatures... By mastering these fundamental principles, you can create new dishes without relying on any recipe. For example, you might discover that using honey instead of sugar can create a richer texture and flavor in certain meats. This is thinking from the ground up.

Applying this mindset to a company's long-term strategic planning can generally be divided into three steps:

Step One: Break Down the 'Walls' in Your Mind – Identify and Question Fundamental Assumptions

Don't immediately think, "We need to grow by 30% next year," and don't constantly stare at "how much funding Old Wang's company next door just raised." First, sit down, find a whiteboard, and write down everything that everyone in your industry considers "self-evident" or "given."

• For instance, if you run a hotel, fundamental assumptions might be: "Guests need a fixed room to stay overnight," "Hotels must be built in city centers," "Check-in and check-out must be handled at the front desk."
• If you're in education, fundamental assumptions might be: "Students must attend classes at school," "One teacher teaches dozens of students," "Courses must be divided by semester."

List all these "common sense" notions, then, like a three-year-old child, ask for each one: "Why?" "Does it really have to be this way?"

Step Two: Find the Hardest 'Building Blocks' – Decompose to the Most Basic Facts

Following the previous step, keep digging deeper.

• "Do guests really need a fixed room?" -> No, what they need is a "safe, comfortable place to sleep and shower." Does this place have to be "my hotel"? Not necessarily. Does this place have to be "a room"? Not necessarily. See, this is where Airbnb's idea emerged: it deconstructed the concept of a "room" into "a space for rest," which could be a sofa or an entire house.
• "Why are rockets so expensive?" -> This was a question Elon Musk asked. Most people would think, "Well, obviously, it's high-tech." Musk didn't think that way. He disassembled a rocket and studied its raw materials: aluminum alloy, titanium, copper, carbon fiber... He found that the cost of these raw materials combined accounted for only 2% of the rocket's total cost. So what was the remaining 98%? It was the cost of manufacturing, assembly, and "using it like disposable chopsticks."

Through this continuous decomposition, you break down a complex problem into a pile of the most basic "facts" or "elements" that can no longer be further broken down. These are your "building blocks."

Step Three: Build a 'New World' with Your 'Building Blocks' – Recombine from Scratch

Now that you have a pile of the most basic "building blocks" in your hands (the customer's essential needs, technological limits, cost structures, etc.), forget what the original "house" (i.e., the existing industry model) looked like.

Ask yourself a brand new question: "If I only had these building blocks, what would be the best, most efficient, and lowest-cost way to fulfill the user's core need (e.g., 'a comfortable night's sleep' or 'sending things into space')?"

• For Musk, the answer was: since the materials aren't expensive, the biggest cost is "disposability." I need to make rockets reusable. Thus, SpaceX's entire long-term strategy was built around the core goal of "reusable rockets," rather than competing with others on "how to reduce the cost of disposable rockets by another 5%."
• For Airbnb, the answer was: since users need "space" rather than "hotel rooms," and there's a large amount of idle "space" in society, why not build a platform to connect them? Thus, a brand new accommodation business model was born.

In summary:

Integrating first principles into long-term strategy is essentially a shift in mindset. It requires you to:

1. Stop copying homework (analogy), and dare to challenge established industry rules.
2. Act like a detective (decomposition), peeling back the layers of a problem's surface to find its core essence.
3. Act like an architect (reconstruction), using the most basic materials to design a brand new, superior solution from the ground up.

This process can be painful because it forces you out of your comfort zone to think about questions others wouldn't even dare to consider. But once you figure it out, you won't be planning a path that follows others, but a brand new trajectory, one that could even change the entire industry.