This Brutally Honest Quote From Warren Buffett Is Something Every Entrepreneur Should Read
The Wealth Gang team writes about financial information, passive income ideas, apps, programs, cash management tools and other wealth gadgets that we think you might want to use or learn more about. Sometimes, we write about products, services or items that might be associated with affiliate partnerships. In these instances, we will earn a small percentage of the revenue from sales. There is, of course, no cost to you.
Thank you for all your support! Without you, we could not keep this site running. Gang Gang!
There’s a motivational quote floating around that says, “If you do what’s hard, life will be easy,” but if you “do what’s easy, life will be hard.”
This is typically true in most business pursuits, but it’s important to remember not to make things harder by trying to accomplish the impossible.
Bill Murphy Jr. is the founder of Understandably.com and a contributing editor at Inc.com. He’s in the process of updating his free e-book, Warren Buffett Predicts the Future and came across this passage from an interview with the business titan from a decade ago.
First, Murphy recalls a series of bad decisions that Buffett admittedly made during his time at Berkshire Hathaway.
Berkshire Hathaway was originally a company comprised of a group of textile milling plants. In his article, Murphy explains how the textile side of the business went bust.
“As Buffett describes it, he made the acquisition almost in a slow-burning fit of pique, after he tried to sell his minority stake in the company, but its then-chief executive tried to needle him on the price.
As a result, Buffett has said, he doubled down and soon had the lion’s share of his investments tied up “in a terrible business about which I knew very little. … I became the dog who caught the car.”
After that, he explained in another shareholder letter, he ‘quickly compounded the error’ by marrying an insurance business with the then-‘terrible’ Berkshire, which ‘eventually diverted $100 billion or so from [his investors] to a collection of strangers.’
But his longest-running mistake in this string was to work so hard and so long to try to make the core textile business of Berkshire Hathaway sufficiently profitable. He put in charge a pair of executives whom he later called ‘excellent managers, every bit the equal of managers at our more profitable businesses,’ but it didn’t matter.
Long story short, Buffett ended up shutting down the textile side of BH and sold the equipment for nowhere close to the purchasing price.
In an interview with CNBC, Buffett recalled his attempts to make the textile side profitable and shared his wisdom about business being much different than other pursuits.
“The interesting thing about business, it’s not like the Olympics. You don’t get any extra points for the fact that something’s very hard to do. So you might as well just step over one-foot bars instead of trying to jump over seven-foot bars.”
Let the second line of Buffett’s response sink in.
“You don’t get any extra points for the fact that something’s very hard to do.”
Murphy adds that Buffett is talking about business, but this brutal truth works for many things in life like “academics, ambitions, even relationships.”
Murphy also stresses that this doesn’t mean people shouldn’t pursue the things they care about or take risks but keep in mind that others might not find as much value in the pursuits or results.