In my last post I examined how first principles thinking fails. This post is going to be about a single, concrete example — about an argument that s

The Games People Play With Cash Flow

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2022-05-12 10:00:10

In my last post I examined how first principles thinking fails. This post is going to be about a single, concrete example — about an argument that started me down this path in the first place.

A couple of months ago, a friend sent me a blog post titled Startups Shouldn’t Raise Money, over at a website called ensorial.com. I thought that the post was tightly argued and reasonably put together, with each proposition leading logically and coherently to the next. I also noticed that the author had taken the time to construct their argument from first principles … which meant it was difficult to refute any individual clause in their chain of reasoning.

“Well …” I began. And then I stopped. I realised I didn’t have a good argument for why it was wrong. Every axiom and intermediate proposition were ideas that I agreed with. And it wasn’t so simple as the conclusion being flat out mistaken — you could probably run a small, successful internet business using the ideas laid out in the posts’s argument (internet-based businesses tend to be simpler to manage, and there are many niches you can occupy).

It’s easy to think that arguments have just three terminal truth values: right, maybe, and wrong. In practice, arguments (and in particular, the sort of argument that we use to justify actions) have many possible truth values. These include things like ‘got the details wrong, but is by-and-large correct’, or ‘is correct but for a different level of abstraction; doesn’t apply here’, or ‘is partially correct, but isn’t as useful compared to a different framing of things.’ The ensorial.com piece is interesting because I think it is an instance of that last one. It was what pushed me to start thinking about all the various ways first principles thinking could go wrong.

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