Strip a problem back to what must be true, then rebuild — instead of copying what exists.
Use when Use it when an industry's costs or practices have been stable for a long time without obvious justification, when you are entering a field as an outsider and lack the incumbents' assumptions, or when repeated incremental attempts have all failed and the problem may be framed wrongly.
Avoid when Avoid it for routine decisions — it is slow, effortful, and analogy is right most of the time. It is also a common vehicle for arrogance: reasoning from first principles while lacking domain knowledge tends to rediscover why the convention exists, expensively. If experts cannot explain why a practice exists, that is worth investigating; if they can, listen.
Ask how this fails, not how it succeeds — the failure list is shorter and more honest.
Use when Use it before committing to a plan that is expensive to reverse, when a team has become uniformly enthusiastic and you suspect the optimism is social rather than evidential, and in any decision where avoiding a catastrophic downside matters more than optimising the upside.
Avoid when Avoid it as a general operating posture — a culture that only inverts becomes paralysed and treats every idea as a hazard. It is weaker in genuinely novel territory where the failure modes are unknown rather than unspoken. And it will not generate a strategy: it removes ways to lose, which is not the same as finding a way to win.