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Getting Back to First Principles

Everybody has a plan until they get punched in the mouth.

-Mike Tyson

Banking isn't rocket science, but as it turns out, rocket science is a great analogy for the future state of banking. Putting men on the moon is, to date, perhaps the greatest endeavour mankind has committed to. It inspired generations and, until we successfully put boots on the surface of Mars, will likely remain the single most significant technological and scientific achievement of the last 100 years. Getting men to the moon required massive expenditure, incredible advances in engineering, a fair bit of good old fashion luck and the "right stuff".

Before the US could get Neil Armstrong all the way up to the moon, they needed the right stuff in a different area-in figuring out the science.

At the end of World War II there was a very serious plan that would set the foundation for the entire Space Race and Cold War. It was the race for the best German scientists, engineers and technicians of the disintegrating Nazi regime. The predecessor to the CIA, the United States' OSS (Office of Strategic Services), were instrumental in bringing more than 1,500 German scientists and engineers back to America at the conclusion of World War II. The highly secretive operation responsible for this mass defection was codenamed "Overcast" (later to be renamed Operation "Paperclip"). The primary purpose of this operation was denying access to the best and brightest Nazi scientists to both the Russians and the British, who were both allies of the US at this time. "Paperclip" was based on a highly secretive document known within OSS circles as "The Black List", and there was one single name that was right at the top of that list: Wernher von Braun.

In the final stages of World War II, von Braun could see that the Germans were ultimately going to lose the war, and so in 1945 he assembled his key staff and asked them the question: who should they surrender to? The Russians, well known for their cruelty to German prisoners of war, were too much of a risk-they could just as easily kill von Braun's team as utilise them. Safely surrendering to the US became the focus for von Braun's own covert planning in the closing days of World War II. The question he faced was how to surrender without the remnants of the Nazi regime getting tipped off and putting an end to his scheme.

For this von Braun had to, twice, manipulate his superiors, forge paperwork, travel incognito and disguise himself as an SS officer to create a very small window of opportunity for surrender. Convincing his superior that he and his team needed to divert from Berlin to Austria, so that the V-2 rocket team was not at risk by invading Soviet forces, von Braun engineered an opportunity to surrender himself and his brother to the Americans. In the end, Magnus von Braun just walked up to an American private from the 44th Infantry Division on the streets of Austria and presented himself as the brother of the head of Germany's most elite secret weapons program1.

Suddenly a young German came to members of Anti-Tank Company, 324th Infantry and announced that the inventor of the deadly V-2 rocket bomb was a few hundred yards away-and wanted to come through the lines and surrender. The young German's name was Magnus von Braun, and he claimed that his brother Wernher was the inventor of the V-2 bomb. Pfc Fred Schneikert, Sheboygan, Wis., an interpreter, listened to the tale and said just what the rest of the infantrymen were thinking: "I think you're nuts," he told von Braun, "but we'll investigate."

-The Battle History of the 44th Infantry Division:
"Mission Accomplished"

Private First Class Fred Schneikert likely presided over the single greatest intelligence coup of World War II, save maybe for the capture of U-570 and its Enigma cipher machine.

To understand von Braun and his willingness to work on a WWII weapon of mass destruction like the V-2 rocket (which is estimated to have killed 2,754 civilians in London, with another 6,523 injured2), it needs to be understood that he simply saw the Nazi ballistic missile program as a means to an end. In von Braun's mind, the V2 was simply a prototype of rockets that would one day carry men into space-that was his end game.

The images and engineering principles of spacecraft we have from the 1950s we owe largely to von Braun's designs. The three-stage design of modern rockets, the chosen propellants and fuel, the recovery ship system for returning capsules, the initial NASA designs for space stations and Mars programs, all came from von Braun's early musings and engineering drawings. Sixteen years after von Braun's surrender to Allied forces, President John F. Kennedy Jr announced that by the end of the decade the US would put a man on the moon. It would be in a rocket built by Wernher von Braun.

The Saturn V was an astounding piece of engineering. Today, it remains the largest and most complex vehicle ever built. A total of 13 Saturn Vs were launched between 1967 and 1973 carrying the Apollo and Skylab missions. The Saturn V first stage carried 203,400 gallons (770,000 litres) of kerosene fuel and 318,000 gallons (1.2 million litres) of liquid oxygen needed for combustion. At lift-off, the stage's five F-1 rocket engines produced an incredible 7.5 million pounds of thrust, or about 25 times that of an Airbus A380's four engines at take-off. In today's money, each Apollo launch and flight cost around $1.2 billion.

However, despite the incredible advances of von Braun's program in the 1950s and 1960s, manned spaceflight hasn't progressed significantly since. In fact, one could argue that the US' capabilities in this area have been declining ever since Apollo. On 20 July 1969, the Americans landed Neil Armstrong and Buzz Aldrin on the lunar surface, but after December 1972 no further manned missions were launched. In the 1980s the US had the Space Shuttle and could get to low-earth orbit, but today they are renting seats on Russian Soyuz vehicles to get NASA astronauts to the International Space Station.

First principles design thinking

While the cost of launching commercial payloads into space has decreased by some 50-60 percent since the Apollo days, the core technology behind the space industry has simply gone through multiple derivative iterations of von Braun's initial V-2 work. The rocket design, production process, and mechanics all are essentially based on the work of NASA in the Apollo era, which itself was based on the V-2 design. This process of iterative design, or engineering, is known to engineers as "design by analogy"3.

Design by analogy works on the philosophy that as engineering capabilities and knowledge improve, engineers find better ways to iterate on a base design, perhaps finding technical solutions to previous limitations. But design by analogy creates limitations in engineering thinking, because you're starting with a template-the work is derivative. To create something truly revolutionary you have to be prepared to start from scratch.

Enter Elon Musk. Like von Braun, Musk has an unyielding vision for space travel. Musk isn't interested in just returning to the Moon though, he has his sights set on Mars. For Musk, this is about nothing short of the survival of humanity. In discussing his obsession with Mars, Musk refers to the fact that on at least five occasions the Earth has faced an extinction level event, and that we're due for another one at any moment. We've had dinosaur-killer scale asteroids sail past Earth on near collision courses on multiple occasions in recent years, too. Thus, Musk argues, we must build the "insurance policy" of off-world colonies.

After his successful exit from PayPal, Musk created three major new businesses: Tesla, SpaceX and Solar City4. Instrumental in Musk's approach to each of these businesses was his belief in the engineering and design concept called first principles. Unlike design-by-analogy or derivative design, first principles take problems back to the constituent components, right back to the physics of the design-what the design was intended to do. A great example of first principles design is the motor vehicle. At the time that Carl Benz invented the first two-seater lightweight gasoline car in 1885, everyone else was trying to optimise carriage design for use with horses. Benz took the fundamentals of transport and applied the capabilities of the combustion engine to create something new.

I think it's important to reason from first principles rather than by analogy. The normal way we conduct our lives is we reason by analogy. [With analogy] we are doing this because it's like something else that was done, or it is like what other people are doing. [With first principles] you boil things down to the most fundamental truths.and then reason up from there.

-Elon Musk, YouTube video, First Principles5

To get to Mars, Musk has reckoned that we need to reduce the cost to orbit by a factor of 10. A tall order for NASA, a seemingly impossible task for a software engineer who had never built a rocket before. As noted in Musk's recent biography (Vance, 2015), Musk has the unique ability to learn new...