Ray Dalio, the founder and former CEO of Bridgewater Capital, is perhaps the biggest of my all-time heroes. I have been following his philosophy for living and working since he first released the Principles used at Bridgewater online, and with his recently published book on the subject, I was able to gain invaluable insight into the background for how those Principles came to be.
I believe strongly in the ethos of Radical Transparency and The Radical Search for Truth, which is the foundational principle of In Formation, my holding company. At In Formation, we have a formal process for proposing, ratifying, amending, and disaffirming the principles by which we make every decision in our business, and we spend a lot of time doing that, because we feel that by establishing a firm foundation of principles for operation, we are investing in the construction of machines that can be run without us (which should be the ultimate goal of any entrepreneur).
That formal process is outside of the scope of this story, but I’d like to speak more generally about my background with Bridgewater, what I’ve learned from Ray Dalio’s book, how we think about principles in general at In Formation, and what we’re trying to build to formalize the process even further.
I first came into knowing about Ray Dalio when we began hiring at In Formation to build out Anastasia VR. We were recruiting in Wellington, but I wanted to learn the best way to conduct interviews, so I started replying to the daily deluge of cold emails from recruiters, and came back to the states for a couple weeks to take as many interviews as I could.
At my peak, I was scheduling 2–3 interviews per day, but Bridgewater’s interview for their elite Research Tech Division was a full-day event. It was perhaps the single best interviewing experience I’ve ever had the pleasure to go through. Most of my go-to interview questions, both technical and non-technical, were inspired by questions asked during this interview.
Throughout this brief time, and with some followup afterwards, including a breakfast with some team members, I came to learn the about the ethos of their company, and I was enamored. Unlike all of my other interviews, I actually felt like I might be missing out on an opportunity by ultimately rejecting their offer.
They challenged me in a way that is not common for interviews. When I said something dubious, they called it out. When I told a story of how I had used sarcasm in an attempt to handle a facilities dispute at a previous job, they informed me with radical precision how they felt what I had done was not effective, and how something like that should be handled at Bridgewater. When I made statements outside my zone of believability, they informed me.
Despite the fact that the total number of hours I spent in contact with members of the Bridgewater team was probably less than 12, I learned more in that time about how to manage a team than I had in my entire life up to that point. It was profound.
In an attempt to start establishing my own set of principles, I began with Ray’s. I read through his published Life Principles, and read them with a fine-toothed comb. I printed them out on physical paper, double-spaced, and annotated them with notes on every single sentence.
As Ray would have recommended, I did not take them at face-value. I disagreed with numerous of his principles. In particular, I found his understanding of evolution, which is the focus of some of his principles, to be rather pedestrian and naive.
That said, the framework made sense, and there was a lot of great insight in there, even if his justification wasn’t always spot-on.
So I adopted a subset of the principles, perhaps 1/3 of them overall, and started a Google Doc of my own principles. This project would go on to drive much of my decision making to this very day.
As Ray points out in his book, there are far more situations than there are types of situations, and whenever we encounter a situation, we may already have a prototypical situation from our history that we can learn from. So I started recording the situations I encountered.
Some situations were totally novel, things I had never encountered in the past, but most were just “another one of those,” as Ray puts it. As I continued to record situations, I began to be able to organize them into prototypes, or common situations I was encountering again and again.
With prototypes, I began to be able to see the patterns in the principles that I applied to those situations, and I began to be able to see patterns in how those principles led to different types of outcomes. I was building my own set of unique principles.
Further, I realized that the patterns I was applying to how I was looking at situations in my life, and how I was developing this set of principles, and began forming those into their own meta-principles. I was onto something.
It was an unexpected treat when Ray Dalio’s book was published. I preordered it on Amazon as soon as I could, and read the entire thing cover-to-cover in a few nights.
Seeing the ways in which Ray encountered failure and learned from his mistakes to develop his principles mirrored a lot of what I had already been doing in the formation of my own principles, and so I felt reassured that I was on the right track.
Ray has a particular background. He came up from nothing to be one of the world’s 100 richest people. I also came up from nothing, and though I am proud of what I have accomplished so far, I am a far-cry from what he has built. I aspire to just a small fraction of what he’s been able to do.
His focus is on a space wildly different than my own. The space of economics and finance are broadly encompassing the force of capitalism across all verticals. He leverages technology to make his decisions, but I wouldn’t describe him as a technologist per se.
However, as technology continues to penetrate into a greater number of facets of a greater number of lives, technology is becoming one of those overarching guiding forces. It will be the technologists of tomorrow that rule the world, rather than the bankers, and we will be the ones holding the keys.
The humility that Ray expresses is something we can all learn from. It’s not the false humility that some people express to build themselves up as a paragon of wisdom, his track record does that on its own. It’s a true humility that goes beyond expression to others, but digs deep down into his own self. It is a humility in his own mind that drives him to continuously iterate and improve on the ways he handles life.
His principles came from a number of a specific mistakes, and while the book covered a few of the larger ones in detail, it’s certain there were hundreds more along the way. Each one gave him an opportunity to learn and grow, and develop new rules as pieces of his own person machine, and the machine of his business, to run smoothly.
More importantly than anything else, perhaps, was the idea that the Principles be a living document. While it may be snapshotted at any given time, it must always be developing and subject to criticism and revision.
It’s easy to look at Ray’s principles as something which was given down from heaven, but it was not so. It was developed over time, and became what it was through constant development.
This gave me reassurance that, despite the relative small size and early development of my own principles, they are heading in the right direction. It might take one year, or it might take ten to get the level of stabilization and maturation of Ray’s Principles, but even then, it won’t be “complete.”
As reality changes, as our understanding of reality changes, we must constantly be ready to accept the new truth, and handle it with humility and acceptance. Ray taught me this.
At In Formation, we are internally developing a tool we call PrincipleHub, which we may or may not one day turn into a product. The basic idea behind PrincipleHub is that we need to be recording the situations we encounter in running our lives and our businesses, and learn from them.
It is essentially the formalization of what we have traditionally been doing in Google Docs. Since we’ve established a set of rules internally for how we organize and make changes to these documents, we already have a blueprint for how it should work. We also have a pretty substantial database to seed this with.
We are attempting to build programs for living life and operating businesses, in much the same way that Github collects programs for running computers. We hope to one day open-source or otherwise release this software, but first, we need to run it internally and with a small group of open-minded individuals, so that we can learn what works and doesn’t, the meta-principles of PrincipleHub.
Bridgewater has a number of systems in place for doing this as well, and ours approach the problem from a slightly different, more focused direction, with the intent of building something that has a broad applicability.
Sound off in the comments if you have any interest in joining a pilot program!
Create your free account to unlock your custom reading experience.