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Principles for Success from Ray Dalio www.youtube.com


Life has three phases: First, you're dependent upon others. Second, you're working and others become dependent on you for their success. Finally, you're free of obligations.


To progress through these phases, you need to continuously articulate your principles and then share them with others. This process will help you identify and strengthen the most effective principles.


Principles are basically recipes for things than happen over and over again. They're like the gems you collect as you try to solve problems. Whether you succeed or fail, you'll have some gems. Write those down so you don't lose them.


Ray's approach is:


  1. Have audacious goals
  2. Fail
  3. Learn principles
  4. Improve your approach
  5. Set more audacious goals

Pain + reflection = progress. This mindset will help you with step 2.


Diagnosis is the process of identifying root causes. This is often you. Self-awareness, reflection, critical thinking, humility all help convert your pain into principles.


To improve your approach, you have to design better solutions. Design is something you exercise, like a muscle. If you're weak in one of these areas, try to work with people who can compensate for your weaknesses.


One of the greatest risks is believing that you're right when you're wrong. This can be avoided if you stress-test your ideas by sharing them with other ambitious, independent thinkers who disagree with you through thoughtful, constructive exchange.


Ray talks a lot about the concept of an idea meritocracy. If you want the best ideas to win, you have to do three things:


  1. Put your honest thoughts on the table for everyone to see and look at. Most people don't want to be honest because people don't like disagreement.
  2. Engage with thoughtful disagreement. If there's disagreement, someone is wrong in some way. How do you know it isn't you? You can uncover the truth with thoughtful, unemotional exploration.
  3. Abide by agreed-upon ways of getting past disagreement. These are protocols that keep your team moving forward and collecting principles.

For this to work, you have to know everyone's strengths and weaknesses. You have to know what everyone around you is like. And you also need tools to facilitate the emergence of good ideas.


One of those tools is something that allows everyone to vote on everyone else's attributes (like synthesizing through time, being balanced between assertiveness and open-mindedness, visualization, experience, high-level thinking, common sense, communication, etc) to surface strengths and weaknesses.  When someone thinks something about another person's thinking, it's easy for them to convey that assessment: they select the attribute and then provide a rating from 1-10.


A tool like this enables anyone to provide feedback on anyone's critical thinking while also separating people from their opinions.


These strengths and weaknesses can then be used to thoughtfully build teams - for example, by pairing a creative and unreliable person with someone reliable. Knowing what people are like helps us decide what jobs to give them, and to weigh our decisions based on people's merits - or believability. You can then use an algorithm to facilitate decision weighting:



This lets anyone offer constructive criticism to anyone else in a completely non-hierarchical manner. It allows us to hold each other to high standards and help each other improve with tough love.


Ray's goal has been to build a culture of meaningful work (we're all in this together) and meaningful relationships (with radical truth and radical transparency). This kind of culture can be difficult because your weaknesses will be exposed. It also makes it difficult to enter other organizations because of the lack of sincerity, hidden agendas, and politics.


Do you want these things, and to what degree do you want them?


  • Idea Meritocratic Decision Making
  • Knowing What People Are Really Like
  • Radical Truthfulness and Radical Transparency
  • Algorithmic Decision Making

~~


Nuggets from the Q&A:


  • Where are you in your life arc, and where do you want to go?
  • Ray Dalio: "Capitalism is not working for the majority of people."
  • Dalio: We should declare a national emergency to address the wealth+opportunity gaps and then define metrics for quality of life before allocating resources to improving quality of life.
  • 22% of students are disconnected or disengaged in CT - one of the wealthiest states in the union
  • Death rates are rising, drug abuse, suicides
  • Another long-term risk is China's emerging power.
  • Instead of wondering how to make the best decision, try to design decision-making criteria and systems that help you arrive at the most probably answer with algorithms and data. Discuss the criteria, not the conclusions.
  • Your criteria and principles should be timeless and universal.
  • How you deal with the unknown is more important than how you leverage your knowledge.
  • In any relationships, you'll have to define how you're going to be with each other.
  • When you receive feedback that you suspect is wrong, you have to decide whether or not it's wrong in an evidence-based, data-driven way as much as you can.
  • Equal opportunity requires equal education.
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