| Ray Dalio (Photo Credit: Jason Alden/Bloomberg). |
Recently, Kip McDaniel — editor of this magazine — asked me what it was like to work with Bridgewater Associates founder Ray Dalio and how that compared with my experience starting Marto Capital.
I have been building Marto for the past three years, starting from an idea shared with friends in a coffee shop to what is now a 20-person firm. Before launch, I spent more than nine years working closely with Ray at Bridgewater. Though it may be surprising to some, I found that the same grit and attitude were required to survive and succeed in both cases.
Bridgewater inspires wildly different emotions, ranging from curiosity to admiration to dislike. I do not want to engage in corporate mythology, but rather to share the core characteristics that I found truly inspirational when working directly with Ray.
During the decade I was at Bridgewater, the firm grew exponentially. Ray maintained a culture of high performance and entrepreneurship that reflected his own character. The mind-share I saw him expend on talent and culture seemed extravagant in relation to the core business. Yet it is that focus that led to continued success.
I admit my perspective could be biased, but I believe that much of Ray’s success is a result of his ability to remain an entrepreneur at heart and to create a culture that encourages innovation. Ray does everything in his power to suffuse into the fabric of Bridgewater his principles, which he embodies and considers one of his greatest legacies. It shouldn’t come as a surprise, then, that a disproportionate number of Bridgewater alumni become founders of companies not just in financial services, but also in technology, talent, health care, and more.
The investment industry is ruthlessly competitive. The barriers to entry are high, and the complexity of the business spans investment, technology, and regulatory requirements. I don’t believe I would have been able to do what I do today without having been in the trenches with Ray and seeing how he handles challenges — and having been inculcated with his core values, such as:
Invest in a culture of meritocracy.
All companies say they value talent and reward merit. The difference with Ray was that when running his company, he was blind to anything but the merit of an idea. His belief is that markets give immediate feedback and that the only way to beat them is to value meritocracy. Age, gender, experience did not matter to him. Creating an environment where merit rules was a reflection not only of how Ray sees the world but of how he built his company.That is a difficult challenge, as all human beings are plagued by unconscious biases, deeply and biologically ingrained, that help us survive. Those biases are lethal to success in entrepreneurship, as being the best requires allowing the best ideas to come to the surface and be implemented.
In practice, this would sometimes manifest in junior people directly questioning their superiors. As James Comey, who was a senior executive at Bridgewater before becoming the FBI director, says of his experience at the firm: “My initial reaction was ‘What? You, kid, are asking me that question?’ . . . I was deputy attorney general of the United States; I was general counsel of a huge, huge company. No 25-year-old is going to ask me about my logic,” he recalls. “Then I realized, I’m at Bridgewater.’”
Making mistakes is okay. Not learning from them is a fatal flaw.
Mistakes at Bridgewater were recorded in a transparent, companywide log. People were not fired for making mistakes, but they could get fired for hiding, ignoring, or not learning from those mistakes. Bridgewater had no more problems than other companies, but the issues were recorded and addressed rather than remaining hidden. This takes a mental shift, as it is human nature to hide mistakes and be concerned about perceptions.Be assertive and open-minded at the same time.
Often, entrepreneurs are champions of innovation, and all great ideas require dogged commitment to a vision. Yet there is a tipping point: Being too dogged can lead to tunnel vision, lack of evolution, and the risk of not learning from external feedback.Many see Ray as a strong and even difficult personality. But in reality, I witnessed him adapting incredibly fast as he built Bridgewater. He would strongly champion a view, but when presented with new information from others, from markets, or through observation, he would quickly adjust.
What has helped me personally at Marto is starting from the premise that I have blind spots and, by definition, cannot see those blind spots. I surround myself with truth-tellers, who are hard to find. The best way to empower truth-telling is by rewarding it while punishing dishonesty and complacency. My core team of thought partners has many other talents, but this is the characteristic I appreciate the most.
Katina Stefanova is the founding CEO and CIO of Marto Capital
