When you hear about legendary tales of iconic partnerships, few are as fascinating as the one about Charlie Munger and Warren Buffett. Many a story has been told about them. In the wake of Munger’s recent passing, the learnings from their extraordinary relationship become timeless and an evergreen inspiration for startup co-founders and indeed all business partners alike.
Complementary Forces at Play
The Munger-Buffett partnership wasn’t forged in a boardroom. Their relationship first manifested back in 1959 when the two got together at a casual lunch spot. Buffett was a value investor and quickly realized that Munger had a sharp legal mind and an inclination to question everything. This would be the perfect complement to his own style and was the start of a partnership that would transform Berkshire Hathaway into the financial powerhouse it is today.
Transpose this scene to that of would-be startup co-founders grabbing a coffee together. A casual conversation often leads to an eventual partnership and can spark off over just a random coffee chat. These relationships almost always involve recognizing each person’s unique strengths, just like Buffett experienced with Munger.
Division of Responsibilities
Anecdotes from Berkshire’s annual meetings reflect the clear division of responsibilities between the two. Buffett once joked that while he was in charge of the talking, Munger handled the thinking. Munger, in his unique wittiness, would jump in with insights that showcased a deep understanding of human behaviour. Munger was also obsessed with the concept of robustness and responsibility, illustrated when he said, “… a really responsible system is the system the Romans used when they built an arch. The guy who created the arch stood under it as the scaffolding was removed. It’s like packing your own parachute.”
For co-founders, this underscores the importance of knowing your lane and leveraging each other’s strengths. If one is the visionary, the other can be the strategist. Dividing responsibilities doesn’t mean compartmentalizing; it means working together in harmony, knowing which superpower lies with whom and how to use it.
United Front in Public
In public, Munger and Buffett presented a united front that was a mirror of their working relationship – inspiring confidence among employees and shareholders. This united front shone through during the 2008 financial crisis when they reassured shareholders with their unwavering commitment to see it through and worked tirelessly to overcome the crisis. Given the unprecedented nature of the crisis, extremely divergent thoughts were commonplace across the financial markets as everyone was trying to figure out the debacle in their own way. The Berkshire boardroom was probably witness to many a disagreement, but you could be forgiven for believing they would not have had any because none of that ever came out.
Startups, take note. The business landscape is a rollercoaster, and projecting unity during turbulent times is essential. Your co-founder isn’t just your partner in success; they are your anchor in storms. To sustain this relationship, it is essential to have confidence in each other, talk through your ideas, fears and challenges as much as it’s vital to have deep mutual respect and not take each other for granted.
Challenging Each Other
Behind closed doors, the Munger-Buffett relationship was one of constant challenge. Munger once joked, “The ability to destroy your ideas rapidly instead of slowly when the occasion is right is one of the most valuable things. You have to work hard on it.”
During circa 2008, Munger questioned Buffett’s decision to invest in the struggling Chinese electric car company BYD. Munger’s skepticism triggered a rigorous analysis of the investment proposal. In the end, they took decisions based on the analysis – ultimately helping make the BYD investment a remarkablly successful one.
Startup founders should not shy away from disagreement for fear of causing friction or bruising egos. Instead, it’s essential to figure out the art of constructive disagreement. Challenge each other’s ideas vigorously because good strategy cannot be created by leaning on the comfort of the status quo. It can only be forged when subjected to the heat of unrelenting objective analysis.
Big Aspirations, Bigger Dreams
Munger and Buffett’s audacious dreams weren’t confined to the Berkshire boardroom. In 2010, they pledged to give away 99% of their wealth. This unique, if not rare, commitment to philanthropy exemplified how they thought beyond personal wealth accumulation (or think of it as their own way of defining how much personal wealth is just enough), leaving a lasting impact beyond their financial empire. Without a doubt, many entrepreneurs have walked the same path, sharing their wealth with causes they care about – but the selfless and monumental commitment of the Berkshire duo has no parallel.
To startup founders, this is something to ponder. You do not have to give away all or even the majority of your wealth, but let’s remember that success isn’t just about profits; it’s also about creating a lasting impact on society and paying it back in your own way. Dream big, not just for your startup, but for the positive change it can bring into the world.
An Eulogy and Timeless Inspiration
As the world bids farewell to Charlie Munger, we celebrate not just a financial wizard but a partner whose wit, wisdom, and spirit enriched the journey with Buffett and is sure to go down not just in economics books but, I would argue, even history books. While Munger’s departure is a poignant though sad moment, his legacy is surely immortal.
It is a moment to reflect on how we work with our own partners in business. We must learn to embrace diversity, divide responsibilities, project unity, challenge each other and dream big. The one big lesson from Buffett-Munger is that one should build something that can be measured beyond just the bottom line. Here’s to dreaming big in the footsteps of these legends!