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Many moons ago, during my short stint as an intern at Goldman Sachs, I learned a phrase that has stuck with me throughout my career:
Be long-term greedy, not short-term greedy.
It sounds a little harsh, but the idea is simple. Short-term greedy means maximizing what you can get out of a transaction today. Long-term greedy means being willing to give up some immediate gain because you understand that a great relationship, reputation, or product will create far more value over time.
I've thought about that lesson often while building and running businesses, and I think it's particularly important for small business owners.
Being long-term greedy means you don't try to squeeze every last dollar out of every customer. Sometimes you do more than what was in the scope. Sometimes you absorb a cost instead of passing it along. Sometimes you recommend the less expensive option because it's genuinely better for the customer.
You may leave a few dollars on the table today, but you've created trust. And trust compounds.
The same philosophy applies to your product or service. It's tempting to improve margins by cutting a corner customers probably won't notice. But do that enough times and eventually you've created an average product. Being long-term greedy means continuing to invest in the experience, the people, and the details that make customers want to come back and tell others about you.
I think about vendors the same way. Good vendors should be treated like partners. Pay them fairly and on time. Don't negotiate every engagement down to the last dollar. When you find great people, invest in the relationship. You'd be surprised how often those relationships pay you back when you really need something.
And then there are employees. You can look at compensation, training, flexibility, and benefits purely as expenses to minimize, or as investments in people you hope will help build the business with you for years.
None of this means ignoring profitability. A business has to make money, and I've always believed strongly in running a financially disciplined company.
But there's a big difference between being financially disciplined and making every decision based on what maximizes this month's profit.
Some of the best investments I've made in business probably didn't make financial sense when viewed over 30 days. They made tremendous sense when viewed over 10 years.
That's what being long-term greedy means to me.
Invest in the relationship. Invest in the product. Invest in your employees and vendors. Protect your reputation, and don't sacrifice tomorrow's opportunity to make an extra dollar today.
The irony is that if you consistently put the long term ahead of the quick buck, you often end up making a lot more money anyway.
You just have to be patient enough to let it compound.
