Build the System That Builds the Thing
Mental Models, Missed Calls, and the Shift Every Founder Must Make
"In the early days, you’re just trying to build a thing. But later, you’re not building a thing — you’re building a system that builds things.”
— Henry Ward, CEO of Carta
Ever since I started making real decisions for myself, I’ve run into the same pattern: now and then, I’d replay a few key choices in my head — wondering what I missed, what I misunderstood, and how differently things could’ve turned out if I’d gone another way. It wasn’t just about regret. It was about how even a single step can carry you into a completely different future.
It started quietly — the occasional second-guessing — but grew louder over time. I found myself stuck in loops, replaying the same questions over and over. “What was I thinking?” “Why didn’t I do ‘X’ instead of ‘Z’?” Judging myself.
I couldn’t even find comfort in that old phrase, “Never a failure, always a lesson,” It felt too neat. Too forgiving. I kept seeing people who didn’t seem to need much failure to learn, people who were able to optimize the trade-off — who could learn without always having to stumble first— and somehow stayed clear-headed. They didn’t just bounce back better. They chose better to begin with.
That contrast gnawed at me. We talk a lot about the value of failure, but rarely about its cost. Mistakes have opportunity cost. It burns time, energy, and sometimes reputation.
Eventually, the loop became the problem itself. I was spending more energy revisiting the past than building the future — and I was afraid I’d do it again. That today’s mistakes would become tomorrow’s regrets, and I’d be trapped in the same cycle.
That made me question if I was thinking clearly enough — if I had a strategy for making better calls upfront, not just rebounding well after the fact. Maybe it’s not about avoiding failure entirely. Maybe it’s about building a loop that learns faster than the pain sticks.
That’s where this story begins.
Ray Dalio and the Architecture of Thinking
Not long ago, I realized that what I needed wasn’t just fewer mistakes or better instincts. I needed a system. A way to think that could hold up under pressure — when time is short, stakes are high, and clarity is nowhere in sight.
I discovered that perspective at Principles, a book by Ray Dalio.
Dalio isn’t just a successful investor. He’s the founder of Bridgewater Associates — a firm that, at one point, managed over $160 billion, and was the world’s largest hedge fund. What set him apart wasn’t just his returns, but how he thought.
In Principles, Dalio argues that clear thinking isn’t a talent. It’s something you can engineer. You don’t wait for the fog to lift — you design the compass. And you do that by writing down your rules. He puts it simply:
“If you can’t make your decision-making principles explicit, you’re not thinking clearly — you’re just reacting.”
So that’s what he did. When a decision worked, he’d ask why — and write it down. When it didn’t, he’d trace the flaw and turn it into a rule. Over time, those patterns became principles. And those principles became a system.
He tested his thinking like software. He kept decision logs for himself and his team. He even wrote algorithms to model how they made calls — and used those models to stress-test decisions before making them.
The core insight? You don’t need to trust your brain, you need to debug it.
“If you can’t write down your principles, you don’t really understand them. And if you don’t understand them, you can’t improve them.”
Reading that gave me a strange sense of relief. Maybe I wasn’t lost in overthinking — maybe I just hadn’t built my operating system yet.
That moment — turning a failure into a formal principle — was the inflection point. It made me realize something: success doesn’t come from avoiding mistakes. It comes from shortening the distance between mistake and mastery.
Dalio’s genius wasn’t in pretending to be free of bias, but in designing systems that worked despite it. A kind of intellectual scaffolding that got stronger with each hit it took. And that’s when it all clicked.
That’s when the personal and professional clicked for me. This was more than being just about hedge funds or finance: it was about anyone who has to make repeated, high-stakes decisions — under stress, under uncertainty, with imperfect information.
And that includes founders.
Henry Ward and the Founder’s Shift
A few months after reading Principles, I came across a podcast interview with Henry Ward, the CEO of Carta, on a16z. He echoed the same theme, but from a founder’s lens — and that landed like a second domino falling.
“In the early days, you’re just trying to build a thing. But later, you’re not building a thing — you’re building a system that builds things.”
That line snapped things into focus. I’d been grappling with mental systems; Ward was doing the same thing — except in an org chart.
Early-stage founders are builders. They’re in the weeds: writing code, signing deals, talking to users. But once the company starts to grow, the game shifts. You’re not just building a product anymore. You’re building a team that builds the product. You’re not solving every problem yourself — you’re designing the system that solves problems without you.
Ward described the turning point like this:
“If my team comes to me and asks whether to choose A or B, it means I failed to give them the framework to decide for themselves.”
That one hit me. Because it reframed leadership as system design. The goal isn’t to have all the answers — it’s to embed the logic that lets others answer without you.
Ward admitted it took him a full year to understand what “systems thinking” really meant at scale. But once it clicked, it reshaped how he led. He stopped answering questions. He started teaching frameworks. Not because he didn’t care — but because he knew his job was to make the system smarter, not just himself.
“I don’t make decisions anymore. I write the system that makes decisions.”
That shift is where many founders get stuck. They move from builder to manager — but never become architects.
They keep reacting. Keep stepping in. Keep solving the same problems again and again — instead of solving the system that produces the problem in the first place.
Ward didn’t just scale Carta by hiring fast or fundraising well. He built a decision-making engine: onboarding flows, hiring protocols, comp plans, comms norms. He didn’t stay in the loop — he designed the loop.
That was the turning point that tied it all together.
Dalio built a system for investing. Ward built a system for scaling. But underneath both was the same discipline: systems thinking. A way to turn ambiguity into logic. Chaos into structure. Emotion into process.
A way to scale judgment without burning out.
And that’s where we’re headed next: how this mindset — once forged in personal survival — becomes a founder’s most durable tool for scale.
How Founders Can Start Thinking in Systems
Reading Dalio or hearing Henry Ward, it’s tempting to think systems thinking is some elite founder unlock — only useful once you’re scaling a 700-person company or managing billions. But the truth is, the earlier you start thinking in systems, the fewer fires you’ll have to put out later.
This isn’t about building org charts or documenting every workflow from day one. It’s about developing the reflex to ask:
What pattern is causing this problem?
What principle should guide how we solve it?
Is this a one-time fix — or should we design a loop that solves it next time without me?
Here’s how to start small:
1. Turn Recurring Problems into Principles
If you’ve made the same mistake twice — you need a principle. Don’t just fix the mess. Step back and ask: what decision pattern led here? What would’ve prevented it?
Write it down. Literally.
One of Dalio’s earliest principles was: “Don’t confuse what you wish were true with what is actually true.” Simple. Sharp. But it helped him catch his own optimism bias — and saved him from risky trades later.
Founders can do the same with hiring, product bets, and even co-founder conflict. If you keep slipping, don’t just blame chaos. Install a better rule.
2. Build “Default” Thinking for Your Team
Ward’s biggest insight was this: when someone on your team comes to you with a decision they could’ve made, it’s not their fault — it’s yours. You didn’t give them the system to decide.
This doesn’t mean setting rigid rules. It means giving people shared heuristics: “In cases like this, we value X over Y.” Or: “If this happens, do A. If that happens, escalate.”
Systems don’t have to be software. They can be stories, rituals, checklists, or FAQs. The goal is clarity — not control.
3. Use Feedback Loops to Evolve
The best systems are alive. They respond, adapt, and get sharper over time. That only happens if you build loops that catch your blind spots.
Ask yourself:
What decisions went wrong this quarter — and why?
Did we act on assumptions we didn’t test?
What did we learn — and how do we make that learning automatic next time?
Your system is only as smart as your willingness to debug it.
4. Don’t Wait Until You’re Scaling
Systems thinking isn’t just for big orgs. It’s for solo founders, small teams, and messy 0-to-1 phases. In fact, those are the best times to start.
If you document how you run interviews when you’re small, you’ll avoid chaos when you’re hiring fast. If you reflect on how you prioritize when there are only 10 features, you’ll be sharper when there are 100.
Scale doesn’t create systems — it punishes the lack of them.
The Real Work
Whether it’s a personal decision or a startup at scale, the logic holds:
👉 The longer you wait to build the system, the more energy you’ll spend fighting symptoms.
👉 The sharper your principles, the less noise you’ll feel in moments of chaos.
👉 The clearer your loops, the faster your team learns without you.
In the beginning, it’s okay to wing it. But eventually, the work changes.
And the sooner you embrace that shift, the longer you’ll last.
Reading Principles and listening to Henry Ward, I realized founders and investors aren’t just solving business problems. They’re solving decision problems. And often, they’re doing it better than we do in our own lives.
That’s what draws me to startups: not just the ambition, but the mental frameworks behind every ambitious leap. The way building something external forces you to build something internal, too.
Maybe that’s what this piece is really about.
Bonus Resource
If you’re curious about Ray Dalio’s worldview and want a faster entry point, this animated short captures his core philosophy on decision-making, success, and systems thinking:
Amazing. This applies also for the personal life. Your own OS.
Great piece. Love it.