When Musk was estimating the cost of building the first SpaceX rockets, he could have simply used comparable products on the market as a benchmark.
Making decisions using common knowledge is the antithesis of first principles thinking. Instead, his team analyzed the necessary parts of a rocket, then researched the prices of the raw materials of parts firsthand. As a result, the SpaceX team was surprised to learn that they could build a rocket that cost around two percent of the typical price.
