[V+ Perspective] First Principles: A Way for Founders to Cut Through Noise and Find Clarity

People often ask Jensen Huang: “Why has NVIDIA been able to take the lead so quickly?” One of his answers is first principles thinking.

This is also Elon Musk’s favorite secret weapon—through it, he dared to challenge the established rules of aerospace and electric vehicles. Jensen Huang applied the same approach to redefine the GPU, propelling NVIDIA onto the center stage of the AI era.

This approach comes from physics: break problems down to their most fundamental truths, then reason upward from there. It tells us not to blindly follow “industry conventions” or “best practices,” but to constantly ask: Why does this rule exist? What is the underlying assumption?

For founders, this is not just a way of thinking—it is a filter that cuts through noise and returns to the essence. In the entrepreneurial journey, there are rarely ready-made answers. First principles help you stay clear-headed in an ocean of information, and focus on the most critical leverage points.

First Principles: Filtering Noise, Focusing on What Matters

Many founders feel overwhelmed by the constant flood of information: advice from investors, media narratives, competitor moves—new “noise” emerges every day.

If you try to follow everything, you’ll fall into FOMO, losing focus and clarity. The value of first principles is this: it helps you cut a problem back to its fundamental facts, filter out the unnecessary, and focus only on the levers that truly drive growth.

This way of thinking pushes you to ask:

●      If there were no “industry best practices,” how would I solve this problem?

●      If I had only 10% of my resources left, where would I allocate them?

●      Am I doing this just because others are, or because it truly serves my customer’s core need?

When you examine problems this way, you’ll realize much of the outside noise doesn’t actually help you get to the next milestone. The deeper value of first principles isn’t telling you what to do, but helping you break things down to the essence—so you can clearly see what to abandon.

It may sound abstract, so let’s look at three concrete cases that show how first principles can play out in the founder’s journey.

Case 1: What to Do When Revenue Stalls

●      Conventional thinking: Revenue has plateaued → Hire more salespeople.

●      First principles: Revenue = Traffic × Conversion Rate × ARPU. The real issue may not be headcount—it could be a broken pipeline, flawed pricing, or unclear product value.

●      Insight: Instead of blindly adding people, go back to the formula and dissect the problem piece by piece.

Example: In its early days, Dropbox offered 2GB of free storage, which was already enough for most individual users. The result: many stayed free, with low upgrade rates. Later, Dropbox adjusted: they capped free storage at a “just not enough” level and added value in paid tiers (larger capacity, team collaboration, advanced security). The problem wasn’t sales—it was that free and paid weren’t differentiated enough. Once pricing tiers were redesigned, conversion doubled.

Case 2: Investment & Strategic Judgment (Following the Herd vs. Independent Thinking)

●      Conventional thinking: AI is hot—just jump in, you won’t miss out.

●      First principles: AI isn’t about slapping on the “AI” label. It’s about finding applications that deliver lasting value. Whether external product features or internal process optimization, if there’s no unique data, no clear pain point, or no measurable outcome, following the hype quickly loses focus.

●      Insight: Founders should ask:

1.     Does my use of AI directly improve efficiency, user experience, or cost structure?

2.     Can this application build defensibility or differentiation, rather than being just a demo?

3.     Does AI help my team execute faster and better internally?

👉 First principles remind us: AI is not a trend label but a tool. The question isn’t whether to “do AI,” but how to use AI to create value at the most fundamental level.

Case 3: Business Model Choices

●      Conventional thinking: If it’s SaaS, it automatically means high margins and high valuations.

●      First principles: True SaaS means “predictable recurring revenue + strong retention.” If churn is high, it’s not SaaS—it’s “installments.”

●      Insight: Some products look like SaaS but are actually used only for one-off events. In that case, founders must go back to basics:

○      Are we solving a recurring need, or just an event-driven one?

○      Can we extend the product into ongoing value (analytics, longitudinal tracking, integrations)?

○      Does our pricing match the customer’s value experience? Instead of forcing a subscription, maybe usage-based, bundled, or enterprise contracts make more sense.

👉 First principles remind us: real SaaS isn’t about the billing format—it’s about whether the delivered value truly supports long-term, repeatable payments.

Conclusion: Seeing Through Appearances, Focusing on the Essence

The value of first principles is not in prescribing what to do, but in stripping away the noise and uncovering the smallest truths of a problem.

●      When revenue stalls, it reminds you to return to the formula and find the root cause.

●      When facing the AI wave, it reminds you to ask whether you’re truly creating enduring value.

●      When shaping your business model, it reminds you to ensure that value delivery matches long-term retention.

On the entrepreneurial journey, the greatest advantage is not copying others, but starting from the essence—and finding your own path forward.

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VENTURE+ specializes in SaaS and AI investments, offering more than just funding. We provide startups with strategic guidance, corporate partnerships, and capital market planning. We aim to be the "Best Co-Founding Partner" bridging startups, venture capital, and industry leaders in long-term collaboration.