Competition is not “validating”. It’s deadly.

Think this at your own peril. And a story of Julian Robertson.

When we hear new pitches from founders or updates from founders we have backed, there is one word that irks us. It is a word that almost always comes up when we ask about competition. The word is “validating”.

And it may be unfair to think so, but it usually says much more about how the entrepreneur will treat competition than anything about the competition itself. And it can be a clue (often but not always) that the entrepreneur will get out-competed.

If you are a girl who likes a guy and your best girl friend starts dating him or steals him away, you wouldn’t say it’s validating the attractiveness of the opportunity. It is only validating that you are losing.

I confess I am a preternaturally competitive person and take to very competitive founders. I like the unrelenting spirit. It leads me to a sense of confidence that, when faced with tough obstacles, they will have the will to power through. Make no mistake: being competitive does not mean being mean or cut-throat or nasty or disrespectful or breaking rules or laws. It also does not mean only looking for zero-sum situations. Life is filled with positive-sum situations and the best performing teams, partnerships, alliances, joint ventures and acquisitions represent this most rewarding kind.

But even teams face many situations that are zero-sum, and there is a winner and a loser. Someone gets invited, someone gets excluded. Someone wins a new account, someone loses it. Someone gets hired, someone else doesn’t. Someone gets to invest, someone doesn’t. Someone wins a big deal, someone misses out. The essence of economics and business, of geopolitics and even of evolution and life itself, is competition over scarce resources.

Being competitive means achingly wanting to win, and hating to lose. It means being unsatisfied with not seizing opportunities you want and being unforgiving if you wittingly ceded it to someone else who wants it more.

So when we ask about competition and we hear that the existence of a competitor is “validating”, what we really hear is a company playing defense or being naive that they are playing. They may say: “there is nothing we feel we can do about them”; or “there’s room for everyone to play nicely”; or “we aren’t really worried about them”.

Those may seem like innocuous comments. But the company that makes those comments may be in a weak position and at a big disadvantage to the company that is playing hard offense and says “we will outcompete them”, “our people are better and we are hiring their people away”, “we are aggressively going after all their customers”. It is not sufficient to be really competitive but I do think it’s necessary. And I find our best performing investments are in companies led by founders who are really competitive. It comes in all kinds of varieties. They can be calm and display great equanimity on the outside, or they can be intense with a caged energy. But they all seem to feel a constant restless paranoia, a motivating fear, a burning worry that their competitors might one-up them, and a drive to be seen as being the very best by their customers, employees, suppliers, vendors, investors, partners and even journalists.

A few years ago I was with hedge fund legend Julian Robertson in his office. We talked about this topic of competitors and he told me he loved hiring smart, driven athletes who were competitive, understood the value of teams, wanted to win and, most importantly, hated losing.

He said he wanted to ask me a question. And he took me over to a picture of some pro golfers and fund managers who were walking away from the camera atop a golf course he owned in New Zealand. The group of them, he said, had just bet on who would win. They were walking to the last hole. So, he asked, who would win?

I studied the picture, then pointed. He smiled and nodded and asked what I had seen that tipped me. I told him it was the body language. One guy held his head high, walked confidently into the future. He wasn’t the tallest or most athletic. But he looked poised like a warrior, a fierce competitor. The others were sullen, heads bowed, resigned, hesitant or slouched as they walked. He outcompeted them. He won.