Library skill · Thinkers' principles
Musk-style first-principles cost teardown
Rebuilds the cost of a product or service from its basic inputs, built on the first-principles approach Musk described: price the inputs, compare that floor with today's price, and explain the gap. Use it when A price is accepted because the industry has always charged it.
Not affiliated with or endorsed by Elon Musk or their companies. About these principles: Elon Musk's ideas, explained.
AI skill
Have your AI rebuild your costs from the ground up
14 days free · No card needed
Works in Claude, ChatGPT, and coding agents. On Team and Business, this library skill in your pod updates itself when we improve it.
When to use it
- A price is accepted because the industry has always charged it
- A quote or bill of materials looks high and you want a should-cost estimate
What you give it
- The product, part or cost line
- Today's price and quantity
- What it is made of
- Market rates for the inputs, with sources
What you get
An inputs table with a cost floor and its share of today's price, the layers of the gap marked evidence or hypothesis, tests to run, and the floor's limits.
How it works
- State the analogy
- List the fundamental inputs
- Price each input
- Add the floor up
- Explain the gap
- Pick what to test
- Ask for criticism
Example
What you give it
We run a small coffee roastery. Our printed retail bag with a one-way valve costs us 0.92 per bag at 5,000 bags from our packaging agency. Everyone in the trade says that's normal. The bag is kraft paper laminated to a PE film, about 18 g, plus a valve. Our printer friend says film-and-paper laminate runs around 4.00 per kg and valves around 0.06 each when bought by the thousand.
What you get back (the start of it)
These are principles Elon Musk has described publicly. Not affiliated with or endorsed by Elon Musk or their companies.
Fundamental inputs
| Input | Quantity per unit | Market rate | Source | Cost per unit |
|---|---|---|---|---|
| Kraft/PE laminate | 18 g | 4.00 per kg | Printer friend | 0.072 |
| One-way valve | 1 | 0.06 each | Printer friend | 0.06 |
| Ink and printing | [check: printer's rate per bag at 5,000] | [check] | ||
| Floor (materials only) | 0.132 + printing |
Floor as share of price: about 14% before printing
Where the gap goes
| Layer | What it pays for | Evidence or hypothesis | Could it shrink? |
|---|---|---|---|
| Bag converting | Cutting, sealing, fitting the valve | Hypothesis | Ask a converter directly |
| Agency margin | The agency resells a converter's bags | Hypothesis: the invoice names no factory | Yes, if we buy direct |
| Short-run setup | Plates and setup spread over 5,000 bags | [check: setup fee on the quote] | A larger, less frequent order |
The rest of this output, the full steps and the checks the AI runs before it answers are in your pod once you add the skill.
Use this skill in your AIShare it with your team
Add it to an AI Skill Pod and everyone on the team, contractors included, uses the same version from their own AI. Read the best ways to share AI skills with a team
Changelog
- v1.0.1 · · Example output now opens with the attribution and not-affiliated lines, as the skill's own checks require.
- v1.0.0 · · First release.
Sources
- The mind behind Tesla, SpaceX, SolarCity ... - TED interview transcript, 2013 (read 2026-11-04)
- Elon Musk's Mission to Mars - Wired interview, 2012 (read 2026-11-04)