It’s Not About You
A very close friend said something powerful to me recently, he said: “Do you want to be rich or right?”. There’s a lot to unpack in that statement. It’s a common assumption that you get to being rich by being right. What’s really at the heart of this statement is the need to be right in the short term versus a positive outcome in the long term. The need to be right in the short term, in the face of an optimal outcome, really comes down to ego.
To paraphrase from point #1 of my previous post, obviously good ideas don’t generate above average returns, increased margins or higher growth — You need to do something new or non-obvious for these things to occur. This is because none of us are superhuman and we’re going to be wrong more than we’re right. Mike Maples’, Jr. of Floodgate Fund way of expressing this idea is the best I’ve seen so far.
Specifically in the context entrepreneurship or venture investing, you’re always doing something new that has never been done before and working in a world of extreme uncertainty. The function of extreme uncertainty means the probability of being right is low and, therefore, the magnitude of being right is more important. Also, if your probability of being right is low you really need to have a sense of humility, openness to change and learning.
An Investor’s Perspective
“I will fold quickly when the facts prove I am wrong.”
“You want to enter as close as you can to a zen-like blank slate of perfect humility at the beginning of the meeting saying ‘teach me’”
“If you go into a meeting with a startup thinking you know everything, you will learn nothing.”
An Operator’s Perspective
Going back to my friend’s original thought of “Do you want to be rich or right?” and, adding my own operational twist, when getting constructive feedback from a colleague my response was: “Either I can have a successful business or I can have an ego — not both”.
If you want to grow a successful company it needs to grow beyond you and your personal interests. As a leader you become responsible to more people like employees, customers, and shareholders. There will be many times when your personal interests will conflict with what’s best for the company. If you want a successful company in the long run you have to put the company first, and put your ego in the back seat, period! Said another way, it’s not about you it’s about the business.
My friends and I often talk about growing up with nerdy backgrounds. We grew up using our brains a lot to get in and out of situations. As a result, we proved to be pretty smart more often than not. This causes a highly probable risk of falling into the “classic smart person problem” of assuming you’re right, or constantly needing to be right. This is counter productive in the context of entrepreneurship or venture investing:
- You are not superhuman.
- What you’re doing is new, and you have to accept you will be wrong sometimes.
- Embrace humility and continuous learning to improve, and be right (and hopefully rich) in the long run.
- It’s not about you. To have a successful company it needs to grow, you need to put the company (employees, customers, shareholders) ahead of your own personal interests.
Success is a lousy teacher. It seduces smart people into thinking they can’t lose.
Keep learning, keep thinking.