The Power of Self Interest

While having dinner with a close friend who is a young CEO running his first company in New York, an interesting topic came up.  My friend asked, “What do you find is effective, when reaching out to people you don’t know to take your calls, meet with you, or otherwise be helpful?”

What followed was a somewhat philosophical discussion that ranged from good old fashioned sales tactics to ruminations on human psychology and motivators of human behavior.  I was reminded of a quote from Arthur Schopenhauer, an 18th century German philosopher who, according to Wikipedia, was (perhaps aptly) “known for his pessimism”:

“Most men are so thoroughly subjective that nothing really interests them but themselves. They always think of their own case as soon as ever any remark is made, and their whole attention is engrossed and absorbed by the merest chance reference to anything which affects them personally, be it never so remote.”

Now, just to be clear, I think old Arthur may have been a little jaded.   However, I do believe that most people are more inclined to align themselves with others when they feel there is something in it for them.  That ‘something’ could include: positive reputational benefits, recognition, monetary gain, status, power, enhanced potential for payoffs in the future, expectation of reciprocity, or even the intrinsic “feel good” utility that motivates philanthropists.  Differently stated, “incentive alignment” is a key tenet of the investment business and something I will revisit in greater detail, as it pertains to deal sourcing, structuring, and investor-management relationships, in future blog posts.

I think 17th century French moralist Jean de La Bruyère had it right when he said:  “The shortest and best way to make your fortune is to let people see clearly that it is in their interests to promote yours.” 

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