It’s so great to be here Thank You Patti for having me the main reason I want to I’m so excited about being here is because you’re the people that I’m eager to speak with entrepreneurs and tech I’m at a different stage in my life what you’ve done you know you’re beginning what I call the second stage of your.
Life and I’m in the end of my second stage of my life and what I mean is I think that life exists in three stages and the first stage of your life you’re a kid you’re learning you’re dependent on others you get out of school and then you.
Enter the second stage of your life.
And in that second stage you’re working others are dependent on you and you learn a lot you learn a lot and I’m at the second stage of my life the end of my second.
Stage and the reason I’m passing along these principles is I acquired some principles along the way that helped me and I.
Saying for you I think the most important thing is that you have your own principles that work well for.
You but principles are ways of dealing with reality that work so one big tip when we deal with your principles is that I did something that was very invaluable to me and that I’d like to pass along to you and that is every time I would make a decision I would reflect on.
Down the criteria for making those decisions and that’s called principles and then I would take those and I made those into algorithms so principles algorithms entrepreneurship this is what I’m here to talk about and I want to give you just a taste of that so I think we have a slide the slides working oh okay thank you okay so for me like most of you I wanted to go after my audacious goals and.
When I went after those audacious goals I had successes and failures and what I learned is that the failures were most important in other words life is a cycle and you encounter your failures and.
How you deal with your failures is the most important thing because learning comes from those failures so I discovered along the way failures.
That pain plus reflection equals progress that if I could reflect well and learn from those mistakes then I would be able to get principles certain ways of dealing with things because.
Things happen over and over again and I’d learn those principles and I would write those principles now and as I built my.
Company we would discuss those principles about how we are with each other and by learning those principles then we would be in a position.
That we would improve we wouldn’t make the same mistakes again and we would go on to more audacious goals and so life looks to me like this evolutionary process of what we call looping of that going for your goals making mistakes learning from the mistakes and doing that and doing that by encoding them in words and then.
In algorithms so I learned that in order to be successful you only have to do five things if you do these five things well that you will be successful not this is what I learned.
Along the way first you have to know what your goals are are your goals clear to you what are your going after and your goals are going to be a reflection of your values but you’re gonna have to be clear on your goals and then that’s the first step the second step is when you you’ll encounter your problems on the way.
To your goals and how you deal with your problems is the most important thing and so you have to identify your problems and you have.
To not taller your problems so life is a game of identifying problems and.
Then solving those problems and being more creative and in order to then go on you have to go on to step three which is diagnose those problems to get at their root causes now often those root causes are weaknesses that you have or weaknesses.
That other people have although they could be other things as well but you have to get at the specific root cause of the problem that’s standing in the way and often that has.
To do with people’s strengths and weaknesses and you got to face up to those so you have to diagnose to the root cause once you have a root cause diagnosis then you.
Have to design a path to get around that something’s got to change.
That will get you around your problems and.
Then once you then once you have a design you have to follow through number five and do what you set out to do and if.
You do those five things well over and over again you’ll have that looping.
That keeps bringing you to a.
Higher level the faster and steeper you do have the looping the greater your evolution is going to be so and the problem is.
That nobody can very few people can do all those five steps to well individually it is that everybody has strengths and weaknesses and to know how to.
Work with people who are strong where you are weak by being clear about those strengths and weaknesses is so important so I want.
To tell you about an idea meritocracy okay so what is my approach what is Bridgewater Bridgewater is an idea meritocracy in which the goal is to have meaningful work and meaningful relationships through radical truthfulness and radical transparency an idea meritocracy the best ideas went out through to have meaningful work a mission that you’re on together and meaningful relationships deep meaningful relationships while.
That’s going on because that’s a power and a joy and to do that through radical truthfulness and radical transparency and I learned that approach because of mistakes that I made and I want to take you into one of my biggest mistakes.
And give you a flavor of what that was like and how transformative it was in 1980-81 I calculated that American banks had lent a lot more money to countries that would not be.
Able to pay back their debt and a lot more.
Money than they had bank capital so that we were going to have a banking crisis and that would have a devastating effect and that was a very controversial point of view at the time and but in August 1982 Mexico defaulted and a number of other countries defaulted on the debt and we had that debt crisis and with that debt crisis because.
It was a controversial point of view I received a lot of attention I was asked to testify to Congress I was asked to appear on Wall Street week which was the.
Show at the time and I just want to give you a glimpse into what that.