When I wrote about the decision to not incorporate social media into the marketing strategy for Beagle & Baobab, I touched a nerve. Talking to friends and Internet folks, most people were pretty skeptical. Trying to build a luxury travel company without setting up an Instagram account and posting weekly content? Absolute madness. But while I’m still not convinced, the truth is that I might turn around in six months and decide that, actually, social media is a good approach. And that’s okay. When building a new business you have to be ready to pivot based on fresh insights.
But until that day comes (if it ever does), I want to explain more of the reasoning process behind my No Social Media decision. Both to better understand it myself, and also because others might learn from what I think is a novel approach to building a new company. A key part of my approach, and the subject of this essay, is to reason from first principles instead of reasoning by analogy1. Call it what you want – a thinking framework, problem-solving method, or decision-making process. At the end of the day, it’s a way of thinking about problems and decisions that I’ve grown quite fond of.
Reasoning by Analogy
Reasoning by analogy is how most of us, most of the time, solve problems and make decisions. When we’re presented with a problem – like how to market a new business – we look at how people have approached similar problems in the past and we try to copy their solutions. Why reinvent the wheel when we can copy solutions that have already proven successful? This kind of reasoning is quick, easy, and it works well enough in most situations. In fact, it’s become so innate to daily life that anyone not using this kind of reasoning is seen as a bit of an eccentric (at best) or a bit dumb (at worst).
Let’s consider Beagle & Baobab. If we were to reason by analogy, the solution to the problem of marketing this new travel company would be pretty straight forward. We would look at what similar companies were doing and copy their approach, allowing for a few tweaks here and there. We’d end up with a familiar strategy: develop a website and unique brand; work on SEO; get on social media and start posting; splash money on Google ads, Facebook ads, or influencer collaborations; use cold outreach; attend big industry events; and maybe even try some content marketing.
Sounds good, right? Of course it sounds good – there’s nothing inherently wrong with this approach. It clearly works as a solution to the specific problem of marketing new companies or the folks deploying it wouldn’t bother. The issue comes in when people assume that just because this particular solution works in most cases it must therefore be the best or only solution, and that any deviation from this is misguided. But when your goal is to innovate, or when you don’t have the resources to successfully deploy the solutions favoured by everyone else2, reasoning by analogy falls flat as a problem-solving method.
Reasoning from First Principles
Reasoning by analogy is a shortcut. Rather than trying to solve a problem from scratch we make the assumption that, because others have faced similar problems in the past, their solutions must be the correct ones. Reasoning from first principles is a fundamentally different approach. When faced with a new problem, we don’t react by outsourcing our thinking. Rather, we start by forgetting everything we think we know or that others have told us (i.e. conventional wisdom), break the problem down into its fundamentals, and rebuild a novel solution from the ground up. Let’s unpack that a bit.
First, put aside conventional wisdom and anything that hints of “this is just the way things are done”. Pretend you’re a complete beginner and that you simply don’t know what all the experts do.3 You’re now forced to start from scratch and think for yourself, either arriving at the same solutions as everyone else (implying they’re actually the right ones) or developing something entirely new. Regardless of the outcome, setting aside conventional wisdom frees you of faulty assumptions and allows you to see things others might have missed or considered unfeasible.
Second, break the problem down to its fundamentals. If you get rid of the assumptions, conventional wisdom, and “this is just how it’s done” nonsense, what are you left with? Conventional wisdom tells us that to market a luxury travel company we need to start by jumping on socials and dropping serious ad money. Get rid of those assumptions, drill down a bit further, and what’s left?
Fact #1 – Wealthy travellers exist in more places than on Instagram or Google’s homepage.
Fact #2 – This type of clientele tends to value exclusivity, trust, and personal referrals over cheap advertising.
Fact #3 – Collaborating with folks already aligned with this clientele (wineries, eateries, or expats) can facilitate direct, exclusive, and trusted access.
By breaking down my problem to its fundamental facts we’ve uncovered the real problem. What we’re trying to do isn’t just to market and grow a luxury travel company – that’s the big picture abstract stuff. The problem we’re trying to solve is how do we meaningfully connect with potential travellers one-on-one, in spaces that align with Beagle & Baobab’s brand and celebrate what we do best: creating authentic experiences with great people in beautiful places.
Third, build a novel solution from the ground up. Once you’ve ditched the assumptions and broken the problem down to its fundamental truths, you’re free to build something new from scratch. Let’s stick to our theme of marketing Beagle & Baobab and building one-on-one access to our market of wealthier, adventurous travellers. What if, instead of trying to reach foodie travellers by splashing photos of Cape Town’s restaurant scene on social media, we organised exclusive supper clubs in key European cities? Jumping on a growing but niche trend, we have the opportunity to collaborate with international chefs and South African wineries to create immersive, story-rich dining experiences that appeal directly to one of our target markets.
The power in this novel approach is that we’d meet our market where they are – in the intimate dining rooms of Amsterdam, Frankfurt, or London – rather than desperately waving to them from the gaping maw of social media. Not only is it a brand building exercise – we’re not just a travel agency, but a curator of authentic experiences – it gives us direct and authentic access to the type of people Beagle & Baobab was built for. This approach also allows us to celebrate Africa’s most beloved destination in a truly unique way. That’s great for us, seeing as it’s the company’s entire reason for existing, and great for our South African partners, whose brands would be placed directly in the hands of their dream clientele.
Use Cases
The first principles approach can be applied to any business problem – not just figuring out how to market a new travel company. And while first principles thinking was made famous by Silicon Valley startups, I’d argue it’s even more powerful when used by scrappy founders trying to break into traditional industries like travel, apparel, and so on. You might not be a programmer or an engineer, but you can sure as hell solve problems like the best of them. To finish off, let’s study the cases of SpaceX and Tesla – two companies which revolutionised their respective industries, in part, through first principles thinking.
On the automotive front, Tesla helped kickstart the current electric vehicle (EV) revolution. At the time, experts argued that EVs would never compete with combustion engine vehicles because of the astronomical costs of battery packs, among other issues. Breaking the problem down, the Tesla team realised that the commodity cost of a battery pack (i.e. the cost of the base materials out of which it is manufactured) was a fraction of the final production cost. With this insight, they realised it may be possible to drastically reduce the production cost of battery packs. By investing in R&D and vertical integration, and manufacturing at massive scale, all other input costs could be reduced – thus bringing the production cost of a finished battery pack closer to its commodity cost. Today, Tesla’s early work stands as the foundation on which our global EV industry rests.
Similarly, the cost of launching satellites and other payloads into Earth orbit was assumed, by definition, to be prohibitively expensive. Rockets capable of reaching orbit safely were expensive and complex to build, and could only be used once. The beautiful minds at SpaceX, by reasoning from first principles, arrived at an insight that today seems obvious: If rockets could somehow be built to be reusable, the cost of launching a payload could be made substantially cheaper as the production cost of the rocket was spread out over multiple launches. Of course, this was easier said than done and most assumed it to be impossible. But over a decade and a few billion dollars later, SpaceX proved that reusable rockets were not only commercially viable but could substantially decrease the cost of launching a payload. Now, the final frontier is a little bit closer.4
Final Notes
When I sat down to write this essay there were two things I hoped to achieve:
First, to explain how I’ve been developing Beagle & Baobab’s marketing strategy using a first principles approach and how this has led to some unintuitive decisions. This was for you, because I think it’s fun to livestream the process of building my first company, and for me, because the process of writing about my ideas helps clarify my own thinking.5 Second, I wanted to explain the difference between reasoning by analogy and reasoning from first principles. If you’re a founder trying to compete in an established traditional industry, I urge you to use first principles reasoning to out-think competitors relying on conventional wisdom.
- If this sounds familiar, it’s probably because it is. The distinction between reasoning from first principles (often called first principles thinking) and reasoning by analogy was popularised by Elon Musk and other tech founders. Every startup bro from San Francisco to Singapore knows this, with many having implemented first principles thinking to great effect. And while I think Mr Musk has morphed into a pretty despicable human being, as evident by his exhaustive attempts to subvert American democracy, his early insights remain valid. ↩︎
- “Necessity is the mother of invention.” When a lack of resources rules out the traditional approaches favoured by larger competitors, necessity demands the underdog explore novel solutions to common problems. ↩︎
- It’s actually helpful if this is true. That is, if you’re a beginner. I’m a big fan of beneficial ignorance, particularly so as we often see young, clever upstarts beating established experts simply because they didn’t have conventional wisdom hampering their ability to innovate. It’s a lot easier to build something new if you don’t have decades of experience telling you the problem’s already been solved, or is impossible to solve, or can only be solved in xyz way. Don’t let being a beginner stand in your way. ↩︎
- See the Falcon 9, SpaceX’s flagship launch vehicle. ↩︎
- Paul Graham has something good to say on this: “If writing down your ideas always makes them more precise and more complete, then no one who hasn’t written about a topic has fully formed ideas about it. And someone who never writes has no fully formed ideas about anything nontrivial.” ↩︎