- [Narrator] Principles For Success. An ultra mini-series adventure in 30 minutes, and in eight episodes. Episode one, 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 had 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 that we do. 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 that 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 hyper-realist, 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. When I say I'm a hyper-realist, 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.
(warm music) 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 greater. (wind howling) 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. (crashing)
(birds chirping) The period between 1979 and 1982 was one of extreme turbulence, for the global economy,
the markets, and for me. And I believed 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 wrong. 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. (door slams)
(paper shuffles) 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 everyday. 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 had been right much
more than I had been wrong, I let one bad bet erase all my good ones. (dramatic orchestral music) 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 there's 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 make-up 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
evolve together through time to produce the realities
we encounter every day. And I realized that I
was just one tiny bit in one nanosecond,
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 100 year storm. And some we know exist, but are 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 overlook 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 go 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 were 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. (peaceful music) 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. (door slams)
(paper shuffles) 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 betting 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. (strikes match)
(flame hisses) 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 ego 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 seated 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 they're 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 barrier
is 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 are 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 are the main impediments that get in the way of
good decision-making. (noble orchestral music) 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. (birds chirping) The world lit up. (growling) (wings flapping) That's when 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 sought 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 needed
to believability-weight 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. 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 for 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 struggled, 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 leaned 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 one's goals. I've found that when I reached each new higher level of success, I rarely remained 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 I'm no longer here. I realized 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 evolve through time. Sometimes this makes us sad, because we 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. (warm orchestral music)
