Surveillance, exposure, criticism, PUA — The Hedge Fund King You Don't Know: Ray Dalio | Bill It Up Memo

Original author: Bill Qian

Recently, I read a very juicy book about the founder of the world's largest hedge fund—Ray Dalio, who preaches his "success principles" globally. After finishing it, I have a few takeaways:

First, you can't survive without madness. Both Dalio and Musk belong to the "duelists" and "tyrants" of the Western business world, showing significant symptoms of narcissism and information bubbles. While this has contributed to their secular success, it has also driven them to madness.

Second, Legalism is a universal methodology. Han Feizi's Legalism is the unrefined version of Sun Tzu's Art of War, used by both East and West, yet rarely mentioned. With the help of digitalization and AI empowerment, Dalio has elevated "Legalist governance" to a new height. He might have been Chinese in his past life, which explains his deep love for Chinese culture, even sending his son to Shijia Hutong Primary School (likely due to connections, probably got in without buying a property in the district). Shang Yang had the "Five Techniques to Control the People"—weaken the people, impoverish the people, exhaust the people, humiliate the people, and seduce the people, which feels oddly familiar.

Third, Dalio practices meditation every day. But we can see that living consciously is quite challenging.

Here are some amusing stories about how he successfully iterated himself and his employees into a master-servant relationship, and through digital monitoring, big data analysis, crowd fighting, and various forms of PUA, became the great helmsman of his company and a great mentor in the global business community. For his impressive qualities, you can check out his various works. Here, I mainly describe a Ray Dalio you might not know, reminding me of the TV series "The Ming Dynasty 1566," where Hu Zongxian said, "The books of sages are for people to see, not for doing things."

1. Digitalization, Mobile Internet, and AI

Bridgewater pioneered "algorithmic authoritarianism" long before most internet companies.

• Employees must use "scorecards" and check their dynamic rankings on the honor and disgrace list every twenty minutes via the app. Honor and disgrace points are not just data; they are cultural weapons of Bridgewater.
• Points system + Pain Button: Employees must quantify their mistakes and their colleagues' performances, forming "pain points." Many former employees say this creates a high-pressure culture, even causing psychological trauma.
• All meetings must be recorded, even if executives argue or employees are reprimanded; records must be kept and sometimes shown to everyone.
• Humiliation feedback: Being publicly named "unqualified," the so-called "transparent feedback" turns into a struggle session.
• Dalio proudly states, "The Pain Button was invented by me." However, the so-called "extreme transparency" is actually double standards. Ordinary employees must bare themselves, while Dalio and his inner circle are exempt from transparency and are required to sign strict confidentiality agreements.
• This management style has even led to "aftereffects" for employees. Former executive Paul McDowell's wife described that even years after leaving, her husband still struggles to recover, likening him to a domestic violence victim. She coined a new term: "Ray-diation," meaning the aftereffects of being radiated by Ray.

2. From KOL to KOL

Since starting his business in 1975, Dalio understood that "content is king," and KOL was his childhood skill.

• He initially wrote Daily Observations, which was just a client briefing, but later transformed it into a think tank service exclusively for paying clients. In a sense, he was one of the earliest financial KOLs.
• In the pre-internet era, he had already built himself into a master figure by outputting opinions and establishing thought influence. Once supported by fund performance, his voice in sovereign funds, central banks, and policy circles became more valuable than investment returns.
• Many people think his KOL activities are a recent hobby, but he has prioritized this since childhood.

3. Mobilizing the Masses to Fight Each Other, Digitizing the Struggle Sessions

This might be Bridgewater's most absurd "productized" innovation.

• Employees are required to supervise and expose each other (scoring/commenting), responsibilities that originally belonged to management are delegated to the lower levels and must be digitally archived.
• The most absurd case is the Birthday Struggle Session: A senior executive poached from Apple, on his 60th birthday, expected a celebration but was pulled into a meeting room to undergo a so-called "growth ceremony." Everyone took turns exposing his flaws, and he nearly broke down, shouting, "This is a religion!" Just as the atmosphere was tense, a secretary burst in with a cake and champagne, shouting "Happy Birthday!"
• Of course, the company also establishes "model employees," turning certain employees into role models for others to learn from.
• The content of the struggle sessions is often recorded and made into multimedia files, with everyone liking and commenting, resembling a company version of a "social media feed."

4. Ideology Matters, Revolution in the Depths of the Soul

Bridgewater is not just a company; it resembles an organization with ritualistic elements.

• Dalio discovered that the whiteboard eraser was dirty during a meeting and personally initiated "accountability," causing the entire facilities team to be pushed to their limits over several weeks, even filming a teaching video titled "How many facilities people does it take to put up a whiteboard?" which became an internal joke at Bridgewater.
• During the 40th anniversary celebration, Dalio erected a totem pole in the park, and new employees must confess their weaknesses in front of it. At the party, everyone found pre-mixed drinks hidden under their seats, and at a signal, everyone toasted. The cult-like atmosphere was palpable.

5. Elevating and Discarding Talent

• Greg Jensen: Dalio long regarded Jensen as a "successor," calling him "surrogate son" within the company. However, as Jensen's power grew, Dalio publicly humiliated and stripped him of authority multiple times, even forcing him to "admit mistakes" and "reflect." Jensen was marginalized for a long "penance period," and although he still held the title of CIO (Chief Investment Officer), his real power was significantly diminished.
• Eileen Murray (Co-CEO): She was elevated to a high position, becoming one of the few female executives in the company's history and a potential successor. However, she was eventually sidelined due to conflicts with Dalio and other partners, leading to a gender discrimination lawsuit (Bridgewater later reached a settlement with her). Upon leaving, she expressed feeling "unfairly treated" and was extremely downcast.
• David McCormick: As another Co-CEO, he was initially seen as a "safe heir candidate." However, he was gradually undermined in internal struggles and ultimately chose to leave, turning to politics (running for U.S. Senate in 2022).

• Dalio repeatedly cycles through "elevating someone—then suppressing them." He publicly praises and empowers someone at first, but when they gain independent influence, he begins to strip their power until they are forced to compromise or leave. This pattern has led to a long-standing atmosphere of "insecurity" within Bridgewater, with executives frequently experiencing depression and low morale.

6. Economically Restricting and Binding Management through Loans and Forced Equity Investments

Bridgewater not only controls employees culturally but also binds them economically.

• Employee bonuses must be forcibly reinvested in Bridgewater funds.
• The company also helps employees secure loans, using their future labor to repay the investment principal.
• The result is that employees become "equity slaves," forced to depend on the company both mentally and materially.

After reading "The Fund," you will find that Bridgewater resembles a utopian social experiment: it is both the most extreme model of capitalism and a digital version of Legalist governance in the West, more like a corporate version of "1984." Perhaps Dalio's fate is to have strong financial luck, but he may also feel omniscient and omnipotent, ultimately creating a hedge fund version of a PUA cult.

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