It's fun to run a business with first principles
Updated on: 32-0-0 0:0:0

I've been talking to a lot of business owners lately (helping them with operational planning), and I've been mentioning one word over and over again – regression. I am fortunate to have been doing 15 years of operation, business model, product research and development, operation mode, equity design, it is time to see everything, and everything that should be done has been done. For me, it's time for operations to get back.

Nowadays, there are endless ways of operating and more channels, but there are always companies struggling with how to operate. I've been in charge of projects where I can't make sure that every single one is profitable, but what I can do is make the business understand how it should be run. When I was organizing all my projects, I found that my operational thinking was always following first principles.

The first principle I apply in my operations is to return to the origin of operations. As I mentioned before, from the perspective of the underlying logic of operations, it is necessary to do more as operationsResearch user needs and find the right way to get users to accept the product.This is the underlying logic, but it is not the origin of the operation.

At present, most operations still focus on the way of operation (channels, prices, discounts, brands), after all, this can quickly see the results (good and bad). Then review and optimize the way of operation, and so on. I can't say that this is wrong, I can only say that I put the cart before the horse.

Operational thinking under first principles

Many business owners ask me to do project operations, and I will also introduce the previous operations. Normally, I only listen to the general situation. If the business owner is not willing to cooperate, I basically just quickly determine what the problem is, and then give some optimization suggestions, collect some consulting fees, and finish the matter.

Enterprises that have really worked with me know that before I do operational planning, I will repeatedly ask a question: where are the needs of users, or who will need the product. I often say that the core of operations is users, but the second half of this sentence is that the premise of all operational work assumptions is thatWhy do users need this product?

More precisely, whether this product meets the needs of users and solves their problems. When operations can't control the product, what can be done is to find users who need it. The effect of thinking in this way is obvious, according to the underlying logic of the operation, the probability of users who have needs to accept the product will be greatly increased, and the operation mode is not very important.

When the operation knows which users are in demand, the next thing that needs to be done is to analyze the users. In a nutshell, it includes where the user is, what characteristics they have, and what the general behavior patterns look like. Generally speaking, user attributes are basically equal to channel attributes, characteristics determine content, and behavior patterns can determine the promotion time.

Therefore, the operational thinking under first principles is to let the operation return its attention to the user.From the perspective of user needs, determine the direction of the product (operation mode and iteration direction).When the operation starts from the demand, in the process of derivation, you will find that everything you were worried about is now logical.

Secondary application of first principles

Of course, the work of operation is not only to focus on user needs, but more importantly, to be suitable. The right product, in the right way, to the right user, to meet the right needs. There is another very important component of the suitability mentioned here, and that is the market environment. The market environment is different, and the needs of users will change.

The secondary application of first principles allows the operation to return to the market environment and evaluate the possible changes in user behavior in the market environment. Generally speakingOperations evaluate changes in user behavior in both market environments.One is a large market environment, and the other is a small market environment. The size is not the size of the range, but the size in the macro sense.

Let's talk about the big market environment first, most of which is related to the economy. In the current economy, there are signs of changes in user behavior. Let me give you an example, now there are affordable snack shops downstairs in many communities, and the business exceeds that of convenience stores. If I, as an operator, have the same type of product positioning, it means that my price strategy is on the low side.

Let's talk about the small market environment. One is geographically based and the other is industry-based. If it's based on geography, focus on the needs of users within the geographic range. If it is industry-based, focus on the common needs of industry users. The geographical scope solves the different needs of the same kind of users, and the industry solves the same needs of the same kind of users.

The secondary application of first principles isBased on the essence of the market, return to the present.It should be emphasized here that in the same market environment, return to the operation thinking under the first principles, and try not to imitate or analogy in the operation work. If that's the case, the role of first principles disappears.

First-principles optimization

A few days ago, I watched the related video of "Luo Zhenyu Dialogue with Laifen Ye Hongxin". One of the points I deeply felt was that when Laifen made an electric toothbrush, Ye Hongxin used first principles to think about a question: "how to make the cleaning function of an electric toothbrush better", which actually returned to the essence of product function.

The same is true for operational work, where first principles can be optimized in two directions. One direction is to think from the perspective of the product, which users can still meet the needs of the product. The other direction is to think about how to make the product more acceptable to users from an operational perspective.

The ultimate goal of operations is:Convert users to pay.However, the origin of all this only needs to solve two problems, one is that more users buy, and the other is that users buy faster. So, when we think with first principles, we can find that we have a lot of room for optimization.

There is a clear difference compared to just focusing on how you operate. The optimization of the operation mode is that the content is not good, to optimize the content, the activity effect is not good, so change the activity, the overall optimization space is very small, and it is laborious and laborious. First Principles can help us optimize products, channels, services, costs, and so on.

For users, on the premise that the product is relatively fixed, they:The essence pursued is better and more affordable.According to the conventional mode of operation, the only thing that can be optimized is to fight a price war under the same quality situation. Derived from first principles, I can reduce the overall cost and increase the value of the product through product innovation, channel precision delivery, service improvement, and experience.

conclusion

I've been talking about the return of operations because the current operations are too focused on the situation and form. Always like to watch others have it, I'm greedy, and then I'm going to have it too. The result of this is that the public domain is not doing well, and the private domain is not doing well. At a time when most operations are lost and businesses are figuring out their way; You might as well start from first principles and refocus on the users themselves, and maybe you will find different opportunities and outlets.

This article was originally published by @運營研究院 on Everyone is a Product Manager. Reproduction without permission is prohibited.

The title image is from Unsplash and is licensed under CC0

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