principles for success an ultra mini-series adventure in 30 minutes and in eight episodes episode 1 the call to adventure before we begin let me just establish the fact that I don’t know much relative to what I need to know whatever success I’ve had in life has more to do with my knowing how to deal with my not knowing than anything I know that I should be telling other people what to do sounds kind of presumptuous to me but I’m going to do it because I believe that the principles that have made me successful could help others achieve their own goals I’m now at a stage in my own life in which it is much more important to me to pass along what I’ve learned about how to be successful than to seek more success for myself what you choose to do with these principles is up to you you have to be an independent thinker because only you can develop your own principles based on your own values this brings me to my first and most fundamental principle which is that you need to think for yourself about what is true so let’s get started early on I discovered I needed principles principles are smart ways for handling things that happen over and over again in similar situations there are principles for everything from skiing to parenting to cooking and so on I’m going to share some of my most important overarching life principles that influence how we approach everything I didn’t start out with principles I acquired them over a lifetime of experiences mostly from making mistakes and reflecting on them my life principles are simple but they’re not complete I still struggle to make the best decisions and I still make mistakes and learn new principles all the time this is the reality at the beginning I needed to escape the conventions that surrounded me which meant that I needed to think for myself unless you want to have a life that is directed by others you need to decide for yourself what to do and you need to have the courage to do it but I didn’t know that at first I only learned that from going on my adventure looking back on my own journey I now see the time is like a river that carries us forward into encounters with reality that require us to make decisions we can’t stop our movement down this river and we can’t avoid the encounters we can only approach them in the best possible way in your lifetime you will face millions of decisions the quality of your decisions will determine the quality of your life over the course of my lifetime the most valuable things I’ve learned were the results of mistakes I reflected on to help form principles so I wouldn’t make the same mistakes again these principles took me from being a very ordinary middle-class kid from Long Island to becoming very successful as judged by conventional measures they also gave me the meaningful work and meaningful relationships that I value even more than these conventional successes people often ask me how I did it I can assure you it wasn’t because of my uniqueness as a person it was the result of a unique approach to life I believe almost anybody can adopt it starts with embracing reality and dealing with it the path you take in life is your most important decision in my case I wanted my life to be great and I feared boredom and mediocrity more than I feared failure since I didn’t start out with money and I didn’t need much more than a bed to sleep in and food to eat I could skew my decisions to pursue my adventures so ever since I was a kid I ran after the things I wanted crashed got up and ran again and crashed again and each time I crashed I learned something got better and crashed less by doing that over and over again I learned to love this process even the crashing part of it through it I encountered reality and I learned how to deal with it which inspired another one of my most fundamental principles which is that truth is the essential foundation for producing good outcomes by truth I don’t mean anything more than the way the world works I believe that we were given the laws of reality by nature humans didn’t create them but we can use them to foster our own evolution and achieve our goals realizing that made me a hyperrealist by which I mean I became someone who has discovered the great rewards of deeply understanding accepting and working with reality as it is and not as I wish it would be what I say I’m a hyperrealist people sometimes think I’m saying that dreams can’t come true that’s absolutely not true without pursuing dreams life is mundane what I mean is that to me hyper realism is the best way to choose one’s dreams and then achieve them having big dreams plus embracing reality plus having lots of determination will bring you a successful life I believe this formula is true for everyone but what does a successful life look like we each have to decide for ourselves what success is I don’t care whether you want to be a master of the universe or to live under a palm tree or anything else I really don’t each of us chooses goals based on our values and decides on the best path to achieve them but we all need approaches to making decisions that work well especially when facing problems mistakes and weaknesses that stand in our way to succeed we must embrace all our realities especially the harsh realities that we wish weren’t true at first looking at these harsh realities caused me a lot of pain but I learned that this pain was just psychological and that my seeing things differently made all the difference I came to view problems like puzzles that would reward me if I could solve them they would help me deal with the problem at hand and they would give me principles for dealing with similar problems in the future I learned to treat pain as a cue that a great learning opportunity is at hand which led me to realize that pain plus reflection equals progress meditation has been invaluable in helping me see things that way I found that when I calmed myself down and embraced my realities and dealt with them the rewards brought me pleasure and the pain faded each of us has the unique capability to think logically to reflect on ourselves and our circumstances and to direct our own personal evolution doing this well is just a matter of following a simple five-step process we’ve discussed how important it is to reflect carefully after experiencing pain when I did this I was usually able to discover principles that would prevent me from repeating the same mistakes in the future and I could see that being successful simply consisted of five steps step one is to know your goals and run after them what is best for you depends on your nature so you need to really understand yourself and know what you want to achieve in life step two is to encounter the problems that stand in the way of getting to your goals these problems are typically painful if handled badly some of them can lead to your ruin but to evolve you need to identify those problems and not tolerate them step three is to diagnose these problems to get at their root causes don’t jump too quickly to solutions take a step back and reflect in order to really distinguish the symptoms from the disease step four is to design a plan to eliminate the problems this is where you will determine what you need to do to get around them and Step five is to execute those designs pushing yourself to do what’s needed to progress toward your goal a successful life essentially consists of doing these five steps over and over again this is your personal evolution and you see this process everywhere it’s just a law of nature think of any product any organization or any person you know and you will see that this is true for them evolution is simply a process of either adapting or dying conceptually it looks just like the five-step process I’ve described as you push through this often painful process you’ll naturally ascend to higher and higher levels of success I found that when I did it better my struggling never became easier because the more capable I became the greater the challenges I would take on because different people are strong and weak at different things most people can’t do all five steps well not facing this reality means you could stretch further than you should and as the heights get greater your Falls could also be great sometimes terrible things happen to all of us in life they can ruin us or they can profoundly improve us depending on how we handle them something like this happened to me in 1982 we progress forward until we encounter setbacks whether or not we get out of them and continue forward or spiral downward depends on whether or not we’re willing to face the failure objectively and make the right decisions to turn the loop upward again something terrible happened to me in 1982 when I bet everything on a depression that never came the period between 1979 and 1982 was one of extreme turbulence for the global economy and markets and for me and I believe that the US economy with the world economy tied to it was headed toward a catastrophe this view was extremely controversial I wanted the great upside and very publicly took a big risk and was wrong dead woman after a delay the stock market began a big bull market that lasted 18 years and the US economy enjoyed the greatest growth period in its history this experience was like a blow to my head with a baseball bat I had to cut my losses so that my company Bridgewater was left with one employee me I was so broke I had to borrow $4,000 from my dad to pay my bills but even worse was having to let go the people I cared so much about I wondered whether I should give up my dream of working for myself and play it safe by working for someone else in a job that would require me to put on a tie and commute every day though I knew that for me taking less risk would mean having a less great life being so wrong and especially being so publicly wrong was painfully humbling I am still shocked and embarrassed by how arrogant I was in being totally confident in a totally incorrect view though I’d been write much more than I’d been wrong I had let one bad bet erase all my good ones I thought very hard about the relationship between risk and reward and how to manage them but I couldn’t see a path forward that would give me the rewards I wanted without unacceptable risk this kind of experience happens to everyone it will happen to you you will lose something or someone you think you can’t live without or you will suffer a terrible illness or injury or your career will fall apart before your eyes you might think that your life is ruined and that there is no way to go forward but it will pass I assure you that there is always a best path forward and you probably just don’t see it yet you just have to reflect well to find it you have to embrace your reality sometimes things happen that are hard to understand life often feels so difficult and complicated it’s too much to take in all at once my deep pain led me to reflect deeply on my circumstances it also led me to reflect on nature because it provides a guide for what’s true so I thought a lot about how things work which helped to put me and my own circumstances in perspective I saw that at the Big Bang all the laws and forces of the universe were created and propelled forward interacting with each other as a perpetual motion machine in which all the bits and pieces coalesce into machines that work for a while fall apart and then coalesce into new machines this goes on into eternity I saw that everything is a machine the structure and evolution of galaxies the formation of our own solar system the makeup of Earth’s geography and ecosystems our economies and markets and each of us we individually are machines made up of different machines our circulatory system our nervous system that produce our thoughts our dreams our emotions and all the other aspects of our distinct characters all of these different machines evolved together through time to produce the realities we encounter every day and I realized that I was just one tiny bit in one nano second deciding what I should do while that perspective might sound very philosophical I found that it was very practical because it showed me how I could deal with my own realities in a better way for example I observed that most everything happens over and over again in slightly different ways some in obvious short-term cycles that are easy to recognize so we know how to deal with them like the 24-hour day some so infrequently that they haven’t occurred in our lifetimes and we’re shocked when they do like the once in a hundred year storm and some we know exist but our encountering for the first time like the birth of our first child most people mistakenly treat these situations as being unique and deal with them without having proper perspective or principles to help them get through them I found that if instead of dealing with these events as one-offs I could see each as just another one of those and approach them in the same way a biologist might approach an animal first identifying its species then drawing on principles for dealing with it appropriately because I could see these events transpire in pretty much the same ways over and over I could more clearly see the cause-effect relationships that govern their behaviors which allowed me to develop better principles that I could express in both words and algorithms I learned that while most everyone expects the future to be a slightly modified version of the present it is typically very different that’s because people are biased by recent history and overlooked events that haven’t happened in a long time perhaps not even in their lifetime but they will happen again with that perspective I realized that what I missed when I mistakenly called for a Great Depression was hidden in the patterns of history and I could use my newfound knowledge of these patterns to make better decisions in the future and when I thought about my challenge balancing risk and reward I realized that risk and reward naturally together I could see that to get the most out of life one has to take more risk and that knowing how to appropriately balance risk and reward is essential to having the best life possible imagine you are faced with the choice of having a safe boring life if you stay where you are or having a fabulous one if you take the risk of successfully crossing a dangerous jungle that is essentially the choice we all face for me the choice was clear but that doesn’t mean the path forward was without challenges I still needed to face two big barriers that we all must face I can’t tell you which path in life is best for you because I don’t know how important it is for you to achieve big goals relative to how important it is for you to avoid the pains required to get them this is the courage I spoke of earlier and we each have to feel these things out for ourselves after my big mistake in calling for a depression I had come to one of life’s Forks in the road as we all do if I made the choice to take a normal job and play it safe I would have ended up with a very different life than the one I had but as long as I could pay the rent put food on the table and educate my kids the only choice for me was to risk crossing the jungle in pursuit of the best life possible my big mistake in vetting on a depression gave me a healthy fear of being wrong in other words it gave me deep humility which was exactly what I needed at the same time it didn’t stop me from aggressively going after the things I wanted to succeed I needed to see more than I alone could see but standing in my way of doing that were the two biggest barriers everyone faces our ego and blind spot barriers these barriers exist because of how our brains work first let’s explore the ego barrier when I refer to your Eagle barrier I’m talking about the parts of your brain that prevent you from acknowledging your weaknesses objectively so that you can figure out how to deal with them your deepest seeded needs and fears reside in areas of your brain that control your emotions and are not accessible to your higher-level conscious awareness and because our need to be right can be more important than our need to find out what’s true we like to believe our own opinions without properly stress-testing them we especially don’t like to look at our mistakes and weaknesses we are instinctively prone to react to explorations of them as though their attacks we get angry even though it would be more logical for us to be open to feedback from others this leads to our making inferior decisions learning less and falling short of our potentials the second is the blind spot barrier everyone has blind spots the blind spot barriers when a person believes he or she can see everything but it’s a simple fact that no one alone can see a complete picture of reality naturally people can’t appreciate what they can’t see just as we all have different ranges for singing hearing pitch and seeing colors we have different ranges for seeing and understanding things for example while some people are better at seeing the big picture others excel at seeing details some are linear thinkers and others are more lateral while some are creative but not reliable others are reliable but not creative and so on because of how our brains are wired differently everyone perceives the world around them differently by doing what comes naturally to us we fail to account for our weaknesses and we crash either we keep doing that or we change Aristotle defined tragedy as a terrible outcome arising from a person’s fatal flaw a flaw that had it been fixed would have instead led to a wonderful outcome in my opinion these two barriers of the main impediments that get in the way of good decision-making taking risks and occasionally being ruined wasn’t acceptable and neither was not taking risks and not having exceptional results I needed an approach that would give me the exceptional upside without also giving me the exceptional downside when I discovered it it turned out to be my Holy Grail to get it I needed to replace the joy of being proven right with the joy of learning what’s true this need prompted me to seek out the most thoughtful people I could find who disagreed with me I didn’t care about their conclusions I just wanted to see things through their eyes and to have them see things through my eyes so that together we could hash things out to discover what’s true in other words what I wanted most from them was thoughtful disagreement going from seeing things through just my eyes to seeing things through the eyes of these thoughtful people was like going from seeing things in black and white to seeing them in color the world lit up that’s what I realized that the best way to go through the jungle of life is with insightful people who see things differently from me think about the five-step process I described earlier as I said because we are wired so differently not everyone can do all the five steps well but you don’t have to do them all alone you can get help from others who are good at what you’re not who are wired to perceive things you can’t all you need to do is let go of your attachment to having the right answers yourself and use your fear of being wrong to become open minded to these other views in this way you could point out the risks and opportunities that you would individually miss I found that taking this radically open-minded approach and believability weighting people’s thinking significantly increased my probabilities of making the best decisions possible this enabled me to ascend to greater heights and greater challenges in the past I would have always wanted to do what I myself thought was best but now I sort out the strongest independent thinkers I could find I still do there is nothing better to be on a shared mission with extraordinary people who can be radically truthful and radically transparent with each other this approach led me to create a company with the unique idea meritocracy operating in a unique way that produced unique successes in an idea meritocracy you get the best of everybody everyone thinks independently then we work through our disagreements to get at what’s best however not every opinion is equally valuable and we had to learn to distinguish between good ideas and bad ones to get the best decisions in other words we need it to believability way to people’s thinking but that’s another story I will explain in my work principles right now there are many wonderful opportunities and dangerous risks surrounding you that you don’t see if you saw them free of the distortions produced by your ego or your blind spots you would be able to deal with them more effectively if you could acquire this ability and with practice you can you will radically improve your life [Music] so far I described how I learned to confront my own realities my problems my mistakes and weaknesses and how I surrounded myself with others who could do things better than I could this was the most effective way I discovered from making great decisions this is not the normal way of being but through this approach I became very successful and being successful enabled me to meet extraordinarily successful people and see how they think I’ve discovered that their journeys were similar to mine you might not know it but they all struggle and they all have weaknesses that they all get around by working with people who see risks and opportunities that they would miss over time I learned that by nature most people’s greatest strengths are also connected to their most significant weaknesses and striving hard for big things is bound to lead you to painful Falls it’s just part of the process such setbacks will test you they sort people some think hard about what caused their setbacks learn lessons and continue progressing toward their goals while others decide that this game is not for them and get off the field I’ve come to realize that success is not a matter of attaining ones goals I found that when I reached each new higher level of success I really remain satisfied the things we are striving for are just the bait struggling to get them forces us to evolve and it is this struggle toward personal evolution with others that is the reward I no longer wanted to get across the jungle but instead wanted to find greater and greater challenges to go after surrounded by great people working together on a shared journey eventually the success of the mission and the well-being of the people alongside me became more important than my own success I also started to see beyond myself and wanted others to be successful when no longer here I realize that if I fail to do that I will be a failure I struggle with this now we all struggle with different things at different times until we either choose to give up or until we die and become part of the larger evolutionary story this is how all machines work and are recycled through time when a machine breaks down its parts go back into the system to become parts of new machines that also evolves through time sometimes this makes us sad because we’ve become very attached to our machines but if you look at it from the higher level it’s really beautiful to observe how the machine of evolution works now you must decide for yourself how you will evolve forget about where these principles came from just assess whether or not they are useful to you and evolve them to suit your own needs as with all of life’s decisions what you do with them is ultimately up to you my only hope for you is that you have the courage to struggle and evolve well to make your life as great as it can be thank you and goodbye [Music] you