Ray Dalio’s book Principles is unlike any book you have ever likely read before. Beginning with a brief autobiography, he quickly moves on to identify his organically grown set of principles (fundamental truths that serve as the foundations for behaviour that gets you what you want) for building a successful life and business. As the founder of Bridgewater Associates, one of largest hedge funds in the world with approximately $160 billion of Assets Under Management, Dalio’s ideas are worth listening to. Although Bridgewater itself has been criticised by some for being cult-like (its culture built on the foundations of Radical Truth and Radical Transparency), that Dalio began the company in his two bedroom apartment in New York in 1975, makes him not just one of the world’s greatest investors but also one of the world’s greatest entrepreneurs and leadership visionaries.
One of the principles (ahem) of this blog is not to review books as such, but to choose a strand of wisdom and summarise it. So you should read Dalio’s book to learn about his principles and consider your own – “because we all have our own goals and our own natures, each of us most choose our own principles to match them” – but this post will focus on the fascinating research that Dalio himself undertook into what he calls shapers.
What is a shaper?
A shaper is someone who comes up with unique and valuable visions and builds them out beautifully, typically over the doubts and opposition of others… Shapers come in all shapes and sizes. You probably know a few of them personally. They might be your local business, non-profit, or community leaders – people who drive change and build lasting organisations.
Fascinated by Steve Jobs, and wishing he had shared his own principles before leaving us, Dalio interviewed Walter Isaacson (who wrote a biography of Jobs, and also Albert Einstein and Benjamin Franklin, two other great shapers). He also spoke with proven shapers he knew – Bill Gates, Elon Musk, Reed Hastings, Jack Dorsey and others. He asked them to take an hour’s worth of personality tests to discover their values, abilities and approaches. He says that the answers to these standardised questions gave him objective and statistically measurable evidence about their similarities and differences. It turns out they have a lot in common.
The characteristics of a shaper
In Dalio’s own words (based on test results and interviews), shapers:
Are all independent thinkers who do not let anything or anyone stand in the way of achieving their audacious goals.
Have strong mental maps of how things should be done, and at the same time a willingness to test those mental maps in the world of reality and change the way they do things to make them work better.
Are extremely resilient, because their need to achieve what they envision is stronger than the pain they experience as they struggle to achieve it.
Have a wider range of vision than most people, either because they have that vision themselves or because they know how to get it from others who can see what they cant.
Are able to see both big pictures and granular details (and levels in between) and synthesise the perspectives they gain at those levels, whereas most people just see one or the other.
Are simultaneously creative, systematic and practical.
Are assertive and open-minded at the same time.
Are passionate about what they are doing, intolerant of people who work for them who aren’t excellent at what they do, and want to have a big beneficial impact on the world.
At times. their extreme determination to achieve their goals can make them appear abrasive or inconsiderate. Nothing is ever good enough, and they experience the gap between what is and what could be as both a tragedy and a source of unending motivation. No one can stand in the way of what they are going after.
In the personality assessments, all ranked low in the category ‘Concern for Others’ – when faced with a choice between achieving their goals or pleasing (or not disappointing) others, they would choose achieving their goals every time. Even the likes of Bill Gates, who is devoting most of his wealth and energy to helping others, tested low.
Only true shapers consistently move from one success to another and sustain success over the decades.
Types of shapers, and the difference between a shaper and an inventor
A shaper’s most important difference lies in whether their shaping comes in the form of inventing managing, or both.
While Einstein shaped by inventing, he didn’t have to manage, and while Jack Welch (who ran GE) and Lou Gerstner (who ran IBM) were great managers / leaders of people, they didn’t have to be as inventive. The rarest cases were people like Jobs, Musk, Gates and Bezos, who were inventive visionaries and managed big organisations to build those visions out.
There are a lot of people who look like shapers, in that they came up with a great idea and got it to the point where they could sell it for a lot of money, but did not shape consistently. Silicon Valley has many of these types; perhaps they should be called inventors.
Shaper = Visionary + Practical Thinker + Determined
Shapers get both the big picture and the details right. Dalio’s own view is that:
Shapers trend to share attributes such as intense curiosity and a compulsive need to make sense of things, independent thinking that verges on rebelliousness, a need to dream big and unconventionally, a practicality and determination to push things through all obstacles to achieve their goals, and a knowledge of their own and others’ weaknesses and strengths so they can orchestrate teams to achieve them… They can hold conflicting thoughts simultaneously and look at them from different angles. They typically love to knock things around with other really smart people and can easily navigate back and forth between the big picture and the granular details, counting both as equally important.
An Elon Musk case study (and how reading books can change the world)
Dalio on Musk:
When he had just come out with the Tesla and showed me his own car for the first time, he had much to say about the key fob that opened the doors as he did about his overarching vision for how Tesla fits into the broader future of transportation and how important that is to our planet. Later on, when I asked him how he came to start his company SpaceX, the audacity of his answer startled me.
“For a long time, I’ve thought that it’s inevitable that something bad is going to happen on a planetary scale – a plague, a meteor – that will require humanity to start over somewhere else, like Mars. One day I went to the NASA website to see what progress they were making on their Mars programme, and I realised that they weren’t even thinking about going there anytime soon. I had gotten $180 million when my partners and I sold PayPal and it occurred to me that if I spent $90 million and used it to acquire some ICBMs [Inter-Continental Ballistic Missiles] from the former USSR and sent one to Mars, I could inspire the exploration of Mars.”
When I asked him about his background in rocketry, he told me he didn’t have one. “I just started reading books,” he said. That’s how shapers think and act.
Just start by reading books! That, Elon and Ray, is music to this blog’s ears.