Knowing the game you play
Check your ladder and be sure you want to "win"
“People may spend their whole lives climbing the ladder of success only to find, once they reach the top, that the ladder is leaning against the wrong wall.” - Thomas Merton
When I began my career in commercial real estate, I was in awe of the powerful men (and occasionally women) who seemed to run the industry.
They were titans and geniuses who had made themselves wealthy and powerful through buying property. As an ambitious Type-A young man, I wanted to be like that.
But as I spent time in the industry, met many of the heavy-hitters, and got to know the rules, a different picture emerged.
We can get into my lessons at another time but I think it’s worth mentioning the picture I got of the “game” that I played. By game, I mean that real estate is simply a game to be played like any other. It has rules, teams, expectations, winners, losers, and even cheaters.
And trophies.
Eventually I realized I didn’t want the trophies of the game I was playing.
I’ll get to what those are in a minute, but the concept actually came up when I was a college senior.
As I was thinking about where I wanted my career to start (with my fancy Economics degree) I started looking at the industries that would like me and my track record.
Accounting was interesting because of the numbers and finance I liked . . . but then I looked at the partners at accounting firms. Many of them were middle-age, vastly overworked, and unhealthy. The divorce rate seemed about twice the national average and most of them lamented how rarely they saw their own children.
Partners at law firms had similar lives.
That didn’t make sense to me. Why would I give up my health, my free time + hobbies, and a relationship with my wife and (future) kids just to make partner-level money?
That wasn’t a price I was willing to pay and was not a game I wanted to win.
So . . . I found real estate.
The aspect I loved most about real estate is the one most often overlooked by Wall Street - passive income.
I saw the senior guys at real estate firms and they played golf, dressed casually, and had time to meet with young nobodies like myself.
It was then that I realized that I wasn’t just playing the career game.
At the risk of sounding corny, I was playing the life game.
That is, I wasn’t trying to design a career that would maximize my income or influence. I was trying to design a life that would allow me to be the kind of man I wanted to be.
Those are VERY different games.
Now, back to real estate and trophies.
As I settled into my real estate career in Atlanta, I started to see what “winning” looked like.
It was something like this:
A fancy home in Buckhead
Kids at one of the best two or three private schools
Membership at one of the fanciest golf clubs
A second home in Highlands, Lake Burton, or Sea Island
And as I dug into these, I realized that I didn’t care about any of them.
Now, I want to be crystal clear that these are not bad things. Not at all. Wanting these things doesn’t make you greedy or egotistical or anything like that.
They are totally fine goals and I’m not above wanting stuff like that. I just don’t want THAT specific stuff.
For example, I don’t have the time or energy to manage a second home. I have way too much on my plate and too many things to figure out to be worried about maintaining a home I don’t live in. Or feeling guilty about not using it enough after spending all that money.
No thanks.
Again, I’m not above second home ownership. I just don’t want to deal with it. It’s not for me.
Same for golf memberships.
I love golf. I think it’s fun and love being outdoors and playing a game you can enjoy your entire life.
What I can’t imagine is regularly telling my wife “Hey, I’m headed out for 5 hours to hang with my buddies. Good luck handling both our young boys by yourself all day!”
Nope.
That is not the husband and father I want to be.
Again, there is nothing wrong with people who have different circumstances and marriages finding time to golf. Good for you! I’m a little jealous.
It’s just not for me.
So, not to belabor the point, but I figured out at a young age (thankfully) that all the rewards and prestige of a career in real estate weren’t things that I cared about or fit into my life.
So, I stopped playing.
Instead of trying to out-hustle and out-clever all the other ambitious real estate people in A-Town, I shifted into another game - PropTech.
Instead of fighting over off-market properties, arguing with NIMBYs at hearings, trying to get broker attention, chasing down non-responsive lenders, trying to convince LPs of the grey hair I didn’t have, and losing my mind over ridiculous appraisals, I decided to work with people who were inventing new technologies and entirely new industries.
To paraphrase the saying, I wasn’t trying to be the best. I was trying to be the only.
What does any of this have to do with PropTech?
I’m telling you because I see far too few people who TRULY understand the game they are playing and the rewards for winning.
For startups, too many of you are trying to cram your model into a venture framework. To oversimplify, if you have a reasonable chance of reaching $100M in sales with Gross Margins above 50% in the next 7 years, you are a CANDIDATE for venture.
Literally everyone else should approach their cap table differently.
Even if you happen to fit into that box, keep in mind that you are in the problem-solving business not the look-how-cool-my-tech-is business. Don’t tell me about your tech. Tell me how you solve MY problems.
For owners and property managers, you are in the tenant delighting business. Yes, I know you have investors and lenders to please. But you know who seems to delight their investors and lenders most often? The ones who have already delighted their tenants.
Make your tenants rave about you and your returns will speak for themselves.
For brokers and realtors, you are in the customer delighting business. Whether it’s a buyer, seller, or tenant, you need to show you understand problems and can remove obstacles.
In another thread, I’ll go through how tech plays a role in each of these games but, for now, do you see the pattern?
All of us, no matter our role, are in some sort of customer service game. All of us need to delight those we serve.
If you can’t do that, you will eventually cease to exist. That’s the game - delight the customer or find another game where you can.
As for trophies -
Be sure you know the trophy you will receive if you win.
In ATL real estate it was prestige and leisure. In PropTech, it’s usually wealth. Specifically quick wealth.
Wealth is good. And not a terrible goal.
Anyone who says money can’t buy happiness has never bought a jet ski.
But it’s a weak trophy.
I know enough successful people to tell you with confidence that the week after you ring that IPO bell at NASDAQ you’ll be right back at your desk doing 90% of the same work.
Sure, your bank account will be fatter, your home will be bigger, and your vacations nicer, but it’s not the life pinnacle you think it is.
Build something meaningful.
Build something enduring.
Build with great people and make them wealthy.
Those are the trophies you REALLY want.
Just as wise people aim for purpose rather than mere happiness, you should aim for building a legacy and not a wealth-making machine.
That’s my view of the game.
Wanna play?