What I Learned from Warren Buffett About Friendship

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This is the second year I’ve taken students to Omaha to meet Warren Buffet. And again it was his comments about life and people (not business) that made the biggest impression on me. He talked quite a bit about how you to become a better person, which I wrote about here. And he spoke about how much your friends shape you.

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Here is his quote (not exact but very close) on this last point:

“Treasure the people that bring out the best in you…Who you associate with, starting with your spouse, is the most important decision you make. You will learn from them.”

He talked a lot about how if you surround yourself with good people, people better than yourself, you will naturally move in their direction. And you should definitely marry someone better than yourself. “Look for someone who brings out the best in you.” You will be ‘helped in appreciable ways by friends and spouses.”. As an example, he mentioned he has worked with Charlie Munger since 1959 and they have never had an argument.

But I also thought it was interesting that he mentioned that for 6 years he worked completely by himself. When he first started his Buffett Partnership, he worked in a little room off his bedroom and did his investments alone. So he is clearly able to operate almost entirely solo when he wants to – and he did so for long periods in his life. But he said he found life and business are more fun with partners.

Time allocation vs. capital allocation

I think this raises an interesting question about how strategic you should be about who you spend your time with. Is this something we really think about that much? Or does It just sort of happen haphazardly? Should we plan our friends?

If we are talking about how we spend our money, they we would say yes. Most people are very logical about capital allocation. Most people know their income vs. their expenses. And their investments (a whole field of study).

But friends are ultimately about time allocation, which is our other big resource in life. Isn’t time allocation as important as capital allocation? And in truth, you can’t really be close to 100 people. You can’t spend significant time with 200 people. Looking at my own life, I probably spend most of my free time with 20-30 people. And these are the people who will likely shape me the most.

I’ve been thinking a lot about this since the meeting. Who do I spend most of my time with? How are they affecting me? And how conscious am I about how I allocate my time?

Two of his other comments on this have really stuck with me:

“If you want to have a happy life, that is about the people you are with. And mostly your spouse. But “good human relationships are vital in both” business and life.

“Material success correlates with receptivity with others.”

A final point on friends and partners

One word he kept using over and over was “passion”. That is what he looks for in business partners. And that is what a lot of his managers have in common. Hardly any of them work because they need the money. They work hard all the time because they have a passion for what they do. He talked about how he himself has spent his life painting on a canvas. His company is his painting. And he just keeps going, even at 87.

So you want people with passion. That is what you look for. And he made the point you “cannot put passion into someone or a business. But you can squelch it”. He also mentioned that “incentives do work”. But they are a pale comparison to real passion for one’s work.

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Those are my notes on this. I’m still mulling all this over. So this is me thinking out loud.

Thanks for reading – jeff

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I write, speak and consult about digital strategy and transformation.

My book Moats and Marathons details how to measure competitive advantage in digital businesses.

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