When asked, Jeff Bezos’s boss at a hedge fund tried to discourage him from resigning to start Amazon, saying his idea was “probably a better idea for someone who doesn’t have a good job.” When asked, Walt Disney’s brother (and business partner) Roy tried to talk him out of making Snow White.
When asked, Warren Buffett’s father told him it was a bad time to enter the securities industry.
Hold that thought.
A few years ago, a real estate developer trying to decide whether to buy a certain apartment complex asked me for advice. I thought for a second and said, “The area seems overbuilt. Interest rates are falling, and the tenant demographics make them more likely to want to purchase homes rather than rent. And based on the age of the property, the maintenance costs are likely to accelerate rather than stay relatively flat. If it was me, I wouldn’t do it.”
Did that sound like good advice? Or at least relatively intelligent advice? Maybe.
But that doesn’t matter.
People who ask for advice regarding complex or important decisions rarely want you to tell them what to think. Usually, they’ve already thought too much; they’re so lost in data, analysis, and the pros-versus-cons weeds that finding clarity is almost impossible. At that point, the last thing they need are answers.
Seeking sound advice: Questions to ask
Instead, they need non-leading questions they should ask themselves.
Unfortunately, that’s not what I did with my friend. I told him what I thought he should do, even though I had no way of knowing what he should do. I didn’t know his financial situation. I hadn’t sifted through all the data he had gathered. I hadn’t spent time studying market trends, rental capacity and demand, other apartment projects that might be in the works, etc.
Even more importantly, I’m not him. My level of risk aversion, my desire for capital preservation, and my willingness to spend the hours required to manage a 100-plus-unit apartment complex is surely different than his.
Who was I to tell him what to do? When asked for advice, who are we to tell anyone what to do?
We’re us. We’re not them.
What we can do, though, is help the people who ask for advice work through the process of making the right decision for themselves.
Not long ago, the same friend asked for advice about a commercial property he just purchased. He couldn’t decide whether to lease as-is, or spend the money to convert the entire building to mixed use, or renovate one floor of the building and wait until he has sufficient funds to renovate the second floor…
I knew what I thought, but what I thought didn’t matter.
Instead, I asked him a few questions. “How do you feel about your capital reserves?” He felt a little exposed in terms of cash, so I said, “One thing you have to decide is how much you want to tap into that. And at what point maximising this opportunity is worth possibly not being able to jump on another opportunity in the next six or 12 months.”
“You’re the only person who can answer that,” I said.
He nodded. He loves his properties, but the next deal is always his favourite deal. (Until the next next deal, of course.)
“Then you have to decide how much time you have available,” I said. “And are you better off doing the bare minimum, so you have time to complete the other projects you have going, or is optimising this property’s cash flow and bottom line worth a few delays on other buildings?”
He nodded again.
I asked other questions. Like whom he considers to be his ideal tenants. Like his long-term plans for the property. Like how this building would fit into his overall portfolio.
Because there was no way for me to know what is right for him, I tried hard not to steer him in a particular direction; instead, I just tried to help him determine the right questions to ask himself.
If a friend is considering leaving a great-paying job to start a company, don’t tell her it’s a good or bad idea. Help her find the right questions to ask herself. One of those could be, like Bezos, whether she will someday regret never having tried a lot more than having tried and failed.
Or, like Disney, whether he believes audiences would love a full-length animated feature in a time when 7-minute shorts were the norm.
Or, like Buffett, whether he believes his determination and work ethic can overcome poor market conditions.
The next time someone asks you for advice, don’t tell them what to do. Don’t tell them what you would do. Instead, try to help them find the right questions to ask themselves.
Because no matter how smart we may like to think we are… their answers are the only answers that matter.
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