Entrepreneur and investor Naval Ravikant says in an
interview that many of the benefits in life come from compound interest—whether in learning, money, or relationships.
As Ravikant notes, to be successful in business, it’s important to play “long-term games with long-term people.” Staying in the game increases your chances of success, and consistent interactions with the same people over time reduces friction, and creates familiarity and trust.
This is a key factor behind Silicon Valley’s success: a network of people in a relatively small geographic area who know each other, do deals together, and have built trust over time: “… they do right by each other because they know this person will be around for the next game.”
But he acknowledges that this long-term approach doesn’t always work. When it’s possible to make a lot of money with a single move, people sometimes betray one another, thinking: I’m going to get rich enough from this one deal that I don’t care.
For Ravikant, this is why it’s important to determine a person’s integrity and long-term orientation early on.
He defines integrity as “what someone does, despite what they say they do” and offers two signals for gauging it in a person:
1. Their track record: As Ravikant points out, people are “oddly consistent” and if someone has has acted in angry, unethical, or vindictive ways with colleagues or rivals in the past, then they are likely to continue doing so in the future.
2. How they treat others in non-work situations: For example, if a person treats a waiter or waitress really badly, “then it’s only a matter of time until they treat you badly.”