Use 1st principle thinking!
Take a product you want to offer. Look at the current offering in the market.
Then break down the material costs and from there you will probably see that the actual costs of materials are probably a fraction of the existing finished product.
Once you have this, work out a clever way of putting these together at an affordable rate. You will probably find that you can compete at a fraction of the current market rate and build a better competitive product, cheaper and more profitable.
Want an example? I’ll give you two:
Tesla and Space X – yip both Elon’s businesses were based on the first principle thinking.
He couldn’t afford to buy a rocket but looking at the actual cost of the raw materials managed to build rockets for 10x less than the market price.
Tesla was based on the desire of reducing the costs of batteries.
Together these companies are worth a Trillion Dollars!
This can be applied to services and general strategy too – break down the end goal or deliverable into its basic components and then rework them to make a better and more efficient version.
First principle thinking is a strategy I have deployed over the years when working with clients in product development and strategic planning.
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