How to Maintain Strategic Resilience Through First Principles Amidst Macroeconomic Uncertainty?

This is an interesting question, and it's not as mysterious as it sounds. Let's talk about it differently, without all the complex jargon.

For example, imagine you're a captain, leading your crew through a treacherous sea where the weather forecast predicts continuous storms for years to come. This is "macroeconomic uncertainty." Your goal is not just to survive, but to eventually reach Treasure Island. This is "maintaining strategic resilience."

At this point, you have two choices:

1. Watch how others sail: You see other ships heading east, so you follow suit; other ships lower half their sails, so you do the same. This is "analogical thinking." It might work fine when the sailing is smooth, but once you encounter an unprecedented storm, if other ships capsize, you'll likely capsize too, because you don't even know why you were heading east in the first place.

2. Sail with "first principles": You lock yourself in the captain's cabin, ignoring other ships. Instead, you pull out the most basic nautical charts and physics manuals and start thinking about a few fundamental questions:

   • What is the most fundamental principle for a ship to float? It's the law of buoyancy. Therefore, I must constantly ensure the ship's ballast, structure, and load are reasonable, never overloading, and regularly checking the hull for leaks.
   • What is the most fundamental power source for a ship to move at sea? Either wind or an engine. Wind is free but unreliable; an engine is reliable but consumes fuel. So, my strategy must be: "Use sails when the wind is strong, and start the engine when the wind dies or is against us, but fuel reserves must be sufficient to reach the next resupply point."
   • What are the most basic needs for the crew to survive? Fresh water, food, and good health. So, no matter how rough the weather outside, I must ensure a strict rationing plan for food and water on board, and have a doctor and medicine to prevent widespread illness.

You see, when you formulate strategies based on these most fundamental, unshakeable axioms like "buoyancy," "power," and "survival," your decisions become exceptionally solid. You are no longer imitating others, but responding to the unknown based on the essence of things.

Now, let's translate this analogy back to the business world:

• The ship's buoyancy principle -> The company's core value: What is that most fundamental, painful problem your product/service solves for customers? In good economic times, you might add many fancy features. When the economy becomes uncertain, you must cut all unnecessary embellishments and dedicate all resources to that core value. For example, if you run a restaurant, the core value is "delicious, clean, and filling." At such times, don't spend a lot of money on lavish decor; making the dishes well and ensuring kitchen hygiene is paramount. When customers have less money, they'll cut entertainment, but they won't stop eating.

• The ship's power system -> The company's cash flow: Wind is market dividends, and the engine is your core business. In good market times, venture capital, loans, and customers chase after you, like sailing with full sails. When the economy is uncertain, the wind dies, or even turns against you. At this point, the only thing that can keep you alive is your "engine" – healthy cash flow. First principles will tell you that no matter how high the revenue or how large the profit, if cash flow breaks, the company dies. Therefore, all decisions must revolve around "can it generate positive cash flow?" Collecting receivables, reducing unnecessary expenses, and avoiding loss-making ventures for show are all decisions based on the first principle of cash flow.

• The crew's survival needs -> The company's organizational capability: Who is your core team? What do they need most? In uncertain economic times, people are anxious. At this point, the most fundamental thing is to stabilize the core team. Giving them unrealistic promises is useless; thinking based on first principles is: core employees need a "sense of security" and "clear goals." So, you need to communicate the company's current situation honestly, tell everyone that our primary goal now is to survive, what our plan is, and what everyone's tasks are. Concentrate resources (salaries, options) on these core employees who create the most value.

In summary, what is meant by maintaining resilience through first principles in uncertainty is simply:

Stop constantly watching the external winds and mimicking others. Calm down and ask yourself a few fundamental, unshakeable questions about your business, like "1+1=2":

1. What is that one critical thing your customers absolutely cannot live without you for?
2. Where does the lifeblood (cash) that sustains my company come from, and where does it go?
3. What are the most fundamental needs of the core team driving all of this?

Clearly figure out the answers to these questions, and then stake all your resources and energy on them. This way, no matter how the external environment changes, your core remains stable. Like a tree, a storm can strip its leaves, even break some branches, but as long as its roots are deeply embedded in the soil, it will always sprout anew when spring comes. That "root" is the answer you find using first principles.