First principles thinking, from the operator’s seat

Almost every bad decision I’ve made in business started with a sentence that included “because that’s how it’s done here.”

That’s the sentence first principles thinking is supposed to kill. And yet years into running four companies, I still catch myself accepting premises I haven’t examined, especially ones that arrive wrapped in regional convention. Because this is the Bahamas. Because the market’s too small for that. Because nobody has done it that way here. Each of those is a closed door, and each of them has been wrong at least once in my career.

This post is how I actually use first principles, not as a Silicon Valley recitation of Musk and Feynman, but as a working discipline for operators in small markets where received wisdom is especially dense.

The method, briefly

First principles thinking is old. Aristotle described it as reasoning from the “first basis from which a thing is known.” Feynman taught it as the habit of refusing to take a claim on authority. Musk popularized it in our lifetime as the practice of stripping a problem down to its physics and rebuilding.

The method is simple enough to fit in one sentence: separate what is actually true from what you’ve been told is true, and rebuild your reasoning from the first group only.

The method is simple. The practice is uncomfortable.

Where most people stop

Most people stop at the point where the discomfort starts.

First principles, applied honestly, will at some point put you at odds with a roomful of experienced professionals who have already agreed on the answer. Their experience is real. Their agreement is real. The consensus is real. The question is whether the consensus is derived from first principles or inherited from repetition.

Usually it is inherited. Which means your job, if you actually commit to this, is to be the person in the room asking a question that feels obvious and naive. Why do we do it this way? And to keep asking until someone produces a reason that is grounded in something true, not in something customary.

I have been that person. It does not feel clever. It feels exposed.

Three premises I had to question to build the ventures I run

Bahamas Outdoor Media Ltd. The received wisdom when I started building was that OOH was a legacy channel in decline. That the future of advertising was digital. That a small market like the Bahamas didn’t justify OOH investment at scale. First principles, what actually happens when a Bahamian adult opens their eyes between waking and sleeping?, produced a different answer. They spend most of the day in physical space, and that space is under served by every other channel at a reasonable cost. The premise that OOH was dying was imported from larger markets where the economics are different. It did not survive examination here.

Scentpression. The received wisdom was that scent marketing was a niche global category that didn’t translate to regional hospitality. First principles, what does a guest’s brain actually do when they walk into a space?, pointed the other way. The neuroanatomy of olfactory memory doesn’t change by geography. The availability of signature scent programs to regional properties does. That gap was the opportunity, not the disqualification.

Vanbert Aviation Group. The received wisdom was that private aviation required ownership or fractional programs to be worth the investment. First principles on the economics of aircraft repositioning, if a jet has to fly empty to its next booking, that flight has a near zero marginal cost to the operator and a massive surplus relative to commercial alternatives for the right passenger, produced empty leg economics as a real, not gimmick, category.

One Investment Group. The received wisdom was that Bahamian capital operates within single sector verticals, real estate people do real estate, finance people do finance. First principles on what capital actually rewards, structural advantage, underpriced assets, operator discipline, said nothing about sectors. Sectors are how other people categorize their expertise. Capital doesn’t care.

In each case the premise was not wrong because the people holding it were stupid. They were smart people who had inherited a premise, worked on top of it, and never re examined the foundation.

How I actually do this, day to day

Four questions I try to bring into any new decision.

What do I actually know here, without checking? Not what do I believe. Not what is the industry consensus. What do I know from direct experience or from things I can verify in a page of reading.

What am I assuming because someone else said so? This is the line I’m trying to find. Everything on the other side of it is suspect until examined.

If the assumption were false, what would that imply? Sometimes the assumption collapses and the decision flips. Sometimes it survives and I move on with more confidence. Either way I know more than I did.

What would I do if I were entering this market today with no history? This question cuts through the sunk cost of existing operations and forces a clean read. Often the answer is close to what you’re already doing, which is reassuring. Sometimes the answer is different, which is valuable.

The quiet cost

First principles thinking asks you to do something expensive: disagree with people who are paid to know, in markets where being agreeable is currency. It makes meetings longer. It makes relationships more awkward. It makes the first quarter of any new effort slower than it would be if you just accepted the consensus and executed.

The reason to pay that cost is that over a career, consensus drift is the most expensive tax a small market operator pays. The premise that was right ten years ago is wrong now. The habit of not checking is where companies quietly become unable to see the change that is already happening to them.

That’s the working case for first principles, from where I sit. If you want the companion piece, how I structure what I actually learn deeply versus what I skim, semantic tree learning is the frame I use for that side of the practice.

Further reading: Semantic tree learning · Contrarian thinking from the Caribbean