The one conversation that saved my business partnership

I’ve had my fair share of bad partner relationships.

Romantic. Friendships. Business.

And almost every time, the same problem was at the root: we didn’t actually want the same things, and our values weren’t aligned.

When you’re caught up in the excitement of a new venture or partnership, it’s easy to overlook those differences. But they always show up later — and usually at the worst possible time.

So, before starting my latest company, Arbor Permanent Owners, with my co-founder Simon, I decided to do things differently. I wanted to be certain that our values, goals, and lifestyles were in sync before we signed up for the long haul.

The process was surprisingly simple and it’s something I now recommend to every entrepreneur I meet.

Step 1: Write your future vision

Before we talked about product ideas, business models, or market strategies, I asked Simon to do this exercise with me:

“Write where you want to be in the future, and be honest about what you’re willing (and unwilling) to do to get there.”

• What do you want long-term?
• What’s important to you financially? 
• What do you want for this venture?
• What is your realistic financial commitment to this venture?

No vague “I want to be successful” fluff. This was about being specific.

For me, that was:

• Complete financial independence: Goal is $20 million to $40 million in net worth by age 50. A post-tax cash distribution of $500,000 after tax per annum to support family lifestyle.
• Influence: I want to educate and inspire others around business, finance and wealth creation. I want a seat at the big boys’ table.
• Freedom: I want optionality to do cool business shit with smart and values-aligned people. I want to be a family man. I’ll always call Brisbane home, but I want flexibility to take an annual holiday with my family for four weeks per year.
• Being content: In 20 years I must feel proud of myself that I took a risk, worked hard, achieved something great, possibly novel. 
• Respect: As a business owner and leader.

Step 2: Set anti-goals

I’ve watched plenty of friends climb the business ladder — becoming richer and more “successful” — only to end up with objectively worse lives.

• Calendars so packed they can barely breathe
• Constant flights and time zones
• Marriages hanging by a thread
• Kids they hardly see
• Four hours of sleep a night

On the outside: Impressive, wealthy, living the dream.

On the inside: Exhausted, miserable, running on fumes.

Charlie Munger and the power of inversion

Warren Buffett’s long-time business partner Charlie Munger loved inversion, solving problems by flipping them around.

In other words: “Tell me where I’m going to die, so I’ll never go there”.

Instead of designing our “ideal day,” we imagined the worst day possible and worked backwards to ensure it never happens. 

Here are some of the goals we set:

• High and constant stress (you know, the bad kind of stress).
• Lots of travel (never at home with the family)
• Misaligned/wrong people at the board, executive and investor level
• Limited autonomy and unbalanced work/life
• J-curve businesses and unrealistic growth expectations
• Broken trust within the inner sanctum
• Being told what to do by people who have never done it.

Of course, we still and will continue to have unavoidable crappy days, but these simple anti-goals set the tone, or at least a reminder to make our working lives immeasurably better.

Try this framework sometime, it’s insanely simple and strangely powerful.