Step 27 - The Frontman & The Two Ways To Pick Your Trench Mate
This lesson is about the importance of coalitions and on how to choose the right allies.
Many undertakings, like a business, can be compared to a trench war, because we live in a highly competitive world where not every business we start is going to succeed and not every investment will win.
Even in trench warfare, if we stick it out long enough and we do the right things with the right people correctly, we start to win ground.
But we will loose quickly if we are the only person in the trench. We must have allies and form coalitions. In family, business or even just in a gym membership. Whom do you want to have side by side by you?
As an example in wealth there are four levels in Financial Fundamentals:
- Scarcity
- Financial Independence
- Prosperity
- Wealth Impact
At minimum we need to get out of the first to reach at least Financial Independence, and for this we need to know how to assemble a coalition.
How to assemble our trench mates.
Number 1: Loyalty
When Warren Buffet assembles his trench mates, he is looking for three things: Energy, Intelligence and Integrity, because a person without integrity will screw you over.
Tai Lopez looks mainly for loyalty. He rather has people who are a little less skilled, little less intelligent, little less energy but loyal instead.
The loyalty factor can be ranked from 1 to 10 using your intuition for your partners, investors and employees. The loyal people will stick around, when the bullets are flying around in the trenches, the hardships come, you are sick or other friends are leaving you.
Number 2: Complementary
There is no such thing as a well rounded person, but only a well rounded team. Similarly a team in the trench needs to complement each others weaknesses and don't compete with each others strengths. When trench mates compete on their strengths, the guns are pointed at the trench mates instead of at the enemy. Every business partnership needs people who are extroverted and introverted. We want the people on our side are not the ones that are competing with you.
Therefore we need to define who is going to be the front person. You don't want the guns of the trench man shooting at you. They should be shooting at the other side.
What are the best ways to choose trench mates?
There are two very opposite ways which both work and have their advantages and disadvantages.
Charlie Munger way / Quicker approach
With this approach, we don't interview the person directly, but his referrals and references of the person, because if we get by direct interviews, we hire people who are really good at interviewing. Their main skill might not be what we think it is. They might just be good actors.
Lets say we want to hire Bob, get everyone Bob was around the last ten years and get their opinion on Bob. Don't ask Bob directly. The reason this works is because people are not naturally going to deceive you, but they are naturally putting their best foot forward. Simply find out the background of people, though the background doesn't predict the future. But we should at least have that information. If we do it right, it is very effective.
Private Equity Hedge Fund way / Slower approach
Direct Interview. Meeting people face to face. They did 27 interviews over one year with one person. We can understand a person in a blink of an eye, but it takes about a year to gather enough information to really see all sides of them.
The Hedge Fund takes you out to dinner in the last interview and counts how many times you say thank you to the valley, the doorman, the waiter and if you don't do a minimum, then all the other 26 past interviews don't count, they don't hire you.
Questions
What is a relationship you have been betrayed in? And how can you make it better next time?
B.G. Find out his background. Give it more time, before choosing ultimately for the relationship.
What is a business relationship you have been betrayed in? And how can you make it better next time?
Fortunately haven't been betrayed in business yet. There was an incident where there self-interest of the co-founders out weighted the interest of the company, but I wouldn't call that betrayal.
What is a friendship you have been betrayed in? And how can you make it better next time?
Haven't yet been betrayed romantically.
Where is a partnership where you have not been complementary?
Business. He was good in programming. I wanted too. Clearly I shoot at him in the trench, because I didn't see him executing his tasks.