Amazon founder Jeff Bezos once asked legendary investor Warren Buffett, “You’re the second richest guy in the world. Your investment thesis is so simple. Why doesn’t everyone just copy you?” Buffett replied, “Because nobody wants to get rich slow.”
Warren Buffett may be an outlier, but the lesson from this conversation applies not just to investing or business, but to life itself. The odds of success, whether in professional or personal life, are much greater if you view it as a marathon rather than a hundred-meter dash.
The early years of my career were spent with global investment banks. This was in the equity markets, where you were as good as your last call, where one year was considered the ‘long term’ and career plans extended only as far as the year-end bonus. Our clients included the who’s who of the investment world, from global financial powerhouses to hedge funds. The clients were almost always focused on short-term issues how would stock prices react next week to an announcement, would a company’s quarterly results beat expectations, would the year’s monsoon rainfall be good, would the economic cycle turn soon, and so on. Very rarely would we get asked our views on a company’s prospects over a five- or ten-year horizon.
Therein lies the edge Buffett talked about. Sometimes, the key to a great investment is hidden in plain sight, available to any investor who plays the long game. For instance, a long-term investor in shares of HDFC Bank would have multiplied his or her money fifteen times over the last fifteen years, without having to dodge the minefields of quarterly results and daily news flow.
This holds for entrepreneurship too. I see some startup founders smitten by the allure of securing venture capital funding at high valuations. The focus then is often exclusively on hitting certain short-term metrics, with scant regard for profitability or the toxic hustle culture being created within the firm. This breeds destructive behavior, of which we have seen many examples recently, including hedge funds going bust due to too much debt, and entrepreneurs defrauding banks and investors.
History has shown that firms that are most likely to thrive long-term and make their stakeholders rich are those that have patiently developed the right organizational culture and durable competitive edge, a genuine business moat. Jeff Bezos said that when somebody congratulates Amazon on a good quarter, he thinks to himself that “those quarterly results were pretty much fully baked about three years ago.” Not surprisingly, he has been consistently ahead of the curve. Closer home, in the high-octane world of unicorns, Zerodha has built its leadership position among brokerages by resisting the temptation to cash in on high short-term valuations, opting instead to build an organization-based on profitability and long-term orientation.
But playing the long game is not easy. We are all addicted, in varying degrees, to dopamine fixes, more so in the age of smartphones and social media. The lure of instant gratification is too strong to resist. This, in turn, translates to life choices that prioritize immediate gain.
Building an enduring business requires going through the painstaking process of building, failing, building again, and toiling through challenging phases of uncertainty and pain. Building a long-term partnership means being open to listening and navigating through rough patches with trust and introspection. All these require work, often requiring us to let go of short-term gratification.
Playing to get rich requires truly having skin in the game. As an entrepreneur, it means building a business to run it, not selling it at the earliest. As an investor, it means having the mindset of an owner when buying shares of a company. As a journalist, it means sticking to the core truth rather than pursuing whatever gets short-term eyeballs. As a teacher, it means genuinely having the child’s long-term interest in mind. It means truly committing.
Playing the long game builds endurance and resilience. It means you are less likely to throw in the towel during the inevitable rocky periods that occur in any endeavor. But the biggest reward of playing the long game is that your focus is on the journey rather than the destination. When you enjoy the journey, the odds of success are greatest. So, ironically, the fastest way to get rich is to be okay with the wait.
S.Venkatesh is the bestselling author of AgniBaan and KaalKoot, a leadership coach and an investor who has held key positions with JP Morgan, Credit Suisse and Macquarie. He writes about mindfulness and its link to creativity, business and wealth.