Musk becomes the world's richest man, is the secret the "first principles"?

Musk is the richest man in the world, and he owns many famous companies such as Tesla, SpaceX, and Twitter. His success is closely related to his good use of "first principles". Influenced by this, we often see many people claiming that they also use the first principles, but in fact there is no lack of misuse of the first principles.

What is the first principle?

The first principles come from physics. It is to use the most basic physical equations of a system to calculate all the phenomena that may occur in it, so it is also called ab initio. In contrast, it does not explore the most basic physical laws of a system, but summarizes some laws at the phenomenon level to do some special and fast calculations, which is ad hoc in Latin.

First principles are widely used in physics and related fields. For relatively simple systems, first principles are usually used to calculate accurate results, such as calculating the structure of atoms or small molecules. The underlying physics is quantum mechanics, which can be directly calculated using quantum mechanics. For relatively large molecules, the task of using quantum mechanics to do first principles becomes arduous. This field is called quantum chemistry, because the combination and decomposition of molecules are chemical reactions, which are essentially kinetic processes dominated by quantum mechanics. The first principles calculations of quantum chemistry require the power of computers and special software. Due to the advancement of computer hardware and software, the first principles have also been extended from quantum chemistry to material structure calculations and even biological macromolecule calculations.

The computational difficulty of first principles will increase significantly as the system becomes more complex, and many approximate models need to be achieved in the process, such as DFT, which is density functional theory, and Monte Carlo molecular simulation, etc. For increasingly complex systems, it is increasingly difficult for first principles to give accurate quantitative results, but at least qualitative results can be given, that is, to grasp the main contradictions.

How Musk Uses First Principles

Musk used the idea of ​​first principles to guide his entrepreneurship. As a physics major, he extended the first principles. Everything in the world must conform to the laws of physics, so in terms of technology, the laws of physics are essentially insurmountable red lines. If a technology challenges the laws of physics, such as a perpetual motion machine challenging the conservation of energy, it is impossible to achieve. But if a technology completely follows the known laws of physics, then it must be feasible. Reusable rockets and long-range electric vehicles are both physically feasible.

But Musk does not only use physics as the first principle. In business, he is also good at using the basic principles of human society as the first principle, that is, economics. However, many technological innovations actually ignore the first principle of economics. The principle of economics requires that a new technology must improve productivity by reducing costs and increasing efficiency before it can be widely used. Cost reduction and efficiency improvement are two independent dimensions. New technologies that the market can accept are the following three situations: (1) Keeping efficiency unchanged or sacrificing a little efficiency while significantly reducing costs; (2) Keeping costs unchanged or increasing costs a little while significantly improving efficiency; (3) Significantly reducing costs and improving efficiency at the same time. This kind of "chosen one" technology is very rare.

The picture comes from Tuchong.com

If the fourth situation occurs, that is, greatly improving efficiency while greatly increasing costs, it will face very difficult market promotion, and even no matter how good the policies at the national level are, it will not be able to industrialize it. Many emerging technologies improve efficiency while ignoring costs, resulting in them being unable to leave the laboratory or only serving the wealthy as luxury goods. Therefore, the first principle of reducing costs and increasing efficiency determines that the technology industry must serve the working people.

Musk has reduced the cost of satellite launches by an order of magnitude through rocket recovery technology, and won an order from NASA with a price quote that was one-tenth of that of Boeing and Lockheed Martin. Tesla electric cars also use electric energy to reduce costs and increase efficiency compared to fossil energy. Although there is a large amount of investment in the early stage, it will bring advantages in the long run from multiple perspectives such as energy conservation and emission reduction, and industrial structure.

Use first principles with caution

Using the first principles of economics, it is easy to understand why semiconductors must continue to advance advanced processes. The same size of integrated circuits, that is, the number of transistors on the chip must be increasing. Because chips are aimed at the market needs of ordinary people, they must take the path of reducing costs and increasing efficiency. Because the cost of wafers remains unchanged, and the smaller the transistors, the more transistors can be manufactured per unit area, the lower the cost of a single transistor will be, and the higher the working efficiency of a single chip with a fixed area will be.

On the contrary, many technological innovations in high-precision weapons are not aimed at the market demand of ordinary people and the quantity is relatively small. Therefore, they are not subject to the constraints of the first principles of economics and can be manufactured regardless of cost. However, this means that they are destined to not reach the scale of the science and technology industry.

Therefore, in the science and technology industry, both the principles of physics and economics are the first principles that determine whether a technology can be industrialized, and neither is dispensable. Matt Ridley gave a very comprehensive understanding and analysis of the evolution of technology in his book "The Origins of Innovation", and put forward a famous saying: "People always overestimate the short-term benefits of a new technology, but underestimate its long-term impact."

When a new technology only conforms to the first principles of physics but not the first principles of economics, people overestimate its short-term benefits. When this new technology reduces costs and increases efficiency, people underestimate its long-term impact.

This article is a work supported by Science Popularization China Starry Sky Project

Author: Zhang Wenzhuo

Reviewer: Luo Huiqian (Researcher, Institute of Physics, Chinese Academy of Sciences)

Produced by: China Association for Science and Technology Department of Science Popularization

Producer: China Science and Technology Press Co., Ltd., Beijing Zhongke Xinghe Culture Media Co., Ltd.