First Principles: What Would a New CEO Appointed by the Board Do?

First Principles: Return to the Fundamentals Intel’s legendary CEO Andy Grove was torn between the DRAM business that had built Intel and that it had once dominated, and moving into the CPU market. Grove posed a question that became a classic in business management. He asked Gordon Moore: “If we were thrown out today and the board brought in a new CEO, what would that person do?” Moore replied, “Get Intel out of DRAM.” Grove responded, “Then why don’t we do it ourselves?” On one side was a DRAM market that Japanese manufacturers had turned into a fiercely competitive battleground. On the other was a CPU market that was still small but growing rapidly. Grove realized that if they started afresh, as computers spread beyond researchers, engineers, and developers to the public, smaller, lower-cost computers such as IBM’s PCs could better serve ordinary users’ core needs for work and entertainment. Designing and manufacturing CPUs for PCs was clearly a direction worth a major bet. This is a classic example of returning to first principles when business owners or entrepreneurs struggle with a major decision. What would a new CEO appointed by the board do? Jeff Bezos’s emphasis on Day One likewise reminds entrepreneurs to approach the business as if it were their first day, unburdened by today’s baggage. It offers much the same lesson as imagining a new CEO: maintaining that Day One mindset enables deeper first-principles thinking and decisions. First principles are the underlying essence of the growth approach described in Jijian Zengzhang. Its logic starts with core customers and core needs; that may sound ordinary, but it embodies first-principles reasoning. First principles also give entrepreneurs a way to make decisions when they face difficult strategic choices or their teams struggle to reach agreement. #極簡增長 —Verification and attribution note— The post’s tag identifies the source as Peng Zhiqiang’s Jijian Zengzhang (極簡增長). The Grove–Moore dialogue appears in Andy Grove’s Only the Paranoid Survive.