In matters of heart vs mind, for me, the heart wins. Naval Ravikant famously said ‘play long-term games with long-term people’. What I am thinking this morning is a conflict related to this. Of course, Naval put this out perhaps in the context of picking business partners and associates. My dilemma isn’t the same. But I like to build relations before business. Be it the nearby cafe or the guard at the parking lot.
So should one attempt to play long-term games with short-term people? There are many transactions in life that are short-term. Often just one-time. Should one seek a long-term player on the other end for these transactions too?
Think of a used car salesman. Should one just see the car they are buying and make the trade based on due diligence? Or also assess if the salesman is trustworthy? I find it extremely difficult to do such transactions without establishing trust in the counterparty unless it is something as basic as buying a cheap earring from a roadside vendor.
Buying a car is a multi-week process. It probably ends with having the car registration and insurance done. At times it involves loan processing as well. With a bad operator, things can become sour at any of these stages. Things are much better in matters like a new car, but even that isn’t as straightforward either. If you are like me, you would fret over small things like the dealership adding annoying promotional stickers to your car.
The problem of trust is much higher when renting an apartment. A troublesome landlord can affect your peace of mind perpetually. I happily pay a premium to get an apartment (or office) from a landlord whom I can work with without suffocating conversations. And no, WeWork does not solve this on the commercial side. But it sure does much better than alternatives for a small setup. Dealing with a brand that has to care about reputation does help.
I was speaking to a friend recently and he talked about how his partner let go an employee who was asking for a salary raise and created a bit of a ruckus about the same. The effective loss of business to the company was in the range of 2.5x – 5x the salary paid. We discussed how managing egos and making the compromise would have been profitable.
And when I see the above three scenarios, a car (used or not), an apartment rental, and a part-time employee, I seem to be aligned with Naval’s long-term games with long-term people in 2 of the 3 scenarios. In the case of the troublesome part-time employee, I seem to be favoring the business profitability more. And that’s the conflict brewing in my mind this morning.
Am I over optimising for peace of mind? Aren’t so many successful people around me making the difficult trades all the time? Am I thinking of making more such compromises at work but not in personal dealings?
I am putting the conflict to rest for today thinking that if I were in the situation that my friend described, maybe I would have let go of the profits for peace of mind. In matters of heart and mind, the heart wins.
^ Why do I call it in matters of heart and mind? Isn’t trust a matter of mind as well? The reason is simple. Trust is often a feeling for me. A subtle one.