I recently completed Michael Eisner's new book on successful partnerships called Working Together. I was very motivated to read the book because I have had both good and bad teamwork/partnership experiences in the past, and I was curious to hear about how 11 of the world's most famous partnerships worked. I understand that all people and partnerships are different, and all of the lessons may not apply to everyone directly. However, I wanted to understand as closely as possible the things that made others' partnerships work and not work so that I too can be an effective partner and can identify potential effective partnerships to be a part of in the future.

(I will confess that I "read" this work as an audiobook and was not able to take great notes on it. Most of the information below is from the best of my memory, and where it's sparse, it's all my fault; the actual text has a lot of great stories and details that left an impression on me but which I can't perfectly recall.)

1. Michael Eisner and Frank Wells: This is the team that led Disney through numerous acquisitions and helped it grow when it was struggling. There are several things that I remember about this pairing.
   
   First, the author worked to defeat the notion that one of them was the "emotional" guy and one was the "brains;" or one the "idea" guy and the other "execution." People like to put such labels on partners in order to feel like they understand something much more complex than they really do. Eisner recounts how in fact the two of them would constantly switch roles and work to question and support each other in different ways.
   
   Second, I found it remarkable how close the two partners got and how good of friends they and their families became. There is always the tension between doing business with friends and keeping friends away from business; it was neat to hear a story of how two people and families could really grow close through a successful partnership.
   
   
2. Warren Buffett and Charlie Munger: This is the second time that I've had the pleasure of reading about this partnership; the first time was in Buffett's biography, The Snowball.
   
   The point I remember most about this partnership was the different roles the two people played and how their own philosophies meshed and complemented each other's. It was clear that a lot of what helped the partnership succeed was the joy that each man got from talking to the other about business and investing; they would talk for hours and not need anything or anyone else to keep them entertained.
   
   In addition, the two had somewhat different styles towards thinking of new opportunities, but in the end, they gave in to each other equally out of pure trust and respect. Buffett would always fight to convince Munger of why they should invest in something, and Munger would always be suspicious and think of reasons why not to invest. In the end, depending on who cared more and who had more evidence and information, the partners would go one way or the other, with equal distribution over time. They trusted each other and worked to support each other because of their partnership and mutual respect. This was a key lesson for me; I think it's critical for partners to let the other side have their way with equal frequency so that both people are valued and respected. Otherwise, if one is always "right" and "winning," the partnership dynamic soon fades.
   
   
3. Bill Gates, Paul Allen, and Steve Ballmer: The story of Gates and Allen founding Microsoft demonstrates how partnerships can grow and thrive based on two people's love of the same field and common goal. The way the two founders concentrated so intensely to build their company and the strategies and techniques each brought to the table made the company a success.
   
   It was equally interesting to hear the story of the transition to Steve Ballmer. I enjoyed hearing about the tenuous and difficult process that at many times did not work effectively and needed multiple iterations and both people coming to terms with each other to eventually find its groove. It became crystal clear to me how difficult planning for succession and actually managing it can be. In addition, giving up "control" and trusting someone else to nurture your "baby" can be a very stressful and unnerving process.
   
   
4. Bill and Melinda Gates: This was a unique partnership in that it combined elements of personal and business relationships.
   
   On a personal level, I enjoyed hearing about how Bill and Melinda met and how their marriage grew. It was neat to hear about the daily walks they took and how those actually turned out to be their most productive times in brainstorming for their foundation work. It was also very interesting how Bill let Melinda take as much ownership and command of the foundation work as she wanted, including her on everything and finding a way to be true equals in marriage and in business.
   
   On a business level, I was impressed when I learned about Melinda's leadership abilities and how involved she is in international policy meetings and getting the foundation's research and initiatives really enacted out in the world. It is clear that she is behind Bill in all of the world matters that he is deeply passionate to solve, and it is clear that he supports her in the ways she goes about working to solve those problems.
   
   
5. Brian Grazer and Ron Howard: This entertainment duo was formed when Grazer called Howard to meet him out of the blue one day. Grazer had a custom of calling a new person every day during his lunch break, and he had always wanted to meet Howard. Since that day, they have worked on numerous films together and have helped build a strong brand for their partnership. The two partners worked on different coasts of the US, but despite that, they grew their relationship very closely and collaborated on almost every detail of their work together. In addition to their trust, it was clear that each man worked hard to learn from the other throughout their relationship.
   
   
6. Valentino and Giancarlo Giammetti: Everyone has heard of Valentino, the famous Italian clothing designer, but very few have heard of his sidekick, Giammetti. Valentino was a struggling designer in Rome, having great creative flair but lacking business abilities. Giammetti quickly became his full-service business partner so that Valentino could concentrate fully on his fashion design. This was, unlike Eisner/Wells, a conceptual split of duties/specialization that worked.
   
   What was key to this partnership was Giammetti's willingness to let all the spotlight be on Valentino. WIthout this, they would have failed. Every piece of the business was controlled by Giammetti, and he had an enormous influence on the brand's growth and distribution. However, he not once ever wanted the fame and worked to make sure that Valentino received all of it. In an emotional moment, when Valentino was receiving a prominent award for this lifelong work, he thanked Giammetti publicly and explained how he could not have done it without him. Giammetti's combined humility and ferocious resolve to succeed and lead the business allowed the partnership to thrive.
   
   
7. Steve Rubell and Ian Schrager: This is the duo famous for opening Studio 54, the world's most famous nightclub, and thereafter a successful group of boutique hotels. The two worked fiercely to come up with strategies that were completely unheard-of at the time in promoting their new club, such as celebrity endorsements and extremely selective criteria for getting in through the line outside (practices followed to this day at most clubs that want to be "exclusive").
   
   In this partnership like in Valentino/Giammetti, the two men had their own "specialties" and helped in different ways. Schrager was the business guy, coming in early, working on the books, managing the staff, and leaving early. Rubell was the vibrant figurehead, standing outside in line (picking people worthy to get in), promoting the place through celebrities, and partying hard each night (starting late and ending late). I was impressed to see such a gap between the roles and responsibilities of the two partners, and I was happy to see that it could work. The two men apparently loved working together on their venture and had full trust in each other's abilities.
   
   
8. Arthur Blank and Bernie Marcus: I had never really heard the story of the founding of Home Depot until I read about Blank and Marcus, its founders. The two took a big leap of faith in believing they could start a business with a completely different model than any other home improvement store in the country. The two brought different past experiences to the table, having worked across different parts of business and the home improvement industry, and they worked closely together in navigating the path of the business through its many cycles and growth segments. They needed to constantly adapt and reinvent their model, training their staff and conveying their own attitudes and culture of service and focus on quality.
   
   They are apparently still involved, and the current management always appreciates their insights and perspective (which is different from the way many successors end up acting).
   
   
9. Susan Feniger and Mary Sue Milliken: This pair of famous female chefs proves that sometimes you can get away with more than one cook in the kitchen. The two chefs each independently blazed their trail into the world of professional cuisine, a world dominated by men and not very tolerant of female entrants. Through begging and nagging and lots of hard work and discipline, each got their break and happened to meet when working as the only two women in a top restaurant. They decided to start their own restaurant together and worked on every aspect of it together (absolutely no separation of duties), and it ended up working well for them. They would joke how they would consult each other on everything, and it increased their trust in each other and made each feel included. They even shared the same man as a husband (at different times); one of them married the other's ex-husband, to whom she is still married to this day.
   
   The interesting part, though, came at the end when I learned that now one of them is starting a restaurant on her own to learn about how that can work for her. However, there is no dissidence between them, and they both still work together and help each other often. It is apparently through a successful, equal partnership that a person can grow the confidence to be able to work on his or her own.
   
   
10. Joe Torre and Don Zimmer: I confess I'm not up to snuff on my baseball trivia, but I enjoyed hearing the story of these two gentlemen who led the Yankees to win four World Series championships. Torre was the main coach, but he called on Zimmer, who had had vast experience coaching and running team to be his sidekick. Instead of focusing on superiority and chain of command, Torre would consult with Zimmer on every play and would realize quickly that Zimmer had a wise, seasoned point of view that helped the team succeed and get out of sticky situations in clever ways (like picking the right player or the right play). When Zimmer was gone, Torre would ask himself, "What would Zimmer do?"
    
    It was interesting to hear about this dynamic. Zimmer knew that Torre was the boss, but he always got his opinion out there and didn't care if it made Torre mad. Torre, on the other hand, was interested to hear Zimmer's opinion, even if it didn't always match his, and both were totally alright with that. Torre also knew that even if he didn't want Zimmer's opinion, Zimmer would give it to him anyways, so he didn't have much of a choice. I enjoyed hearing about the dynamic of the superior learning from the assistant and both helping each other for the good of the team.
    
    
11. John Angelo and Michael Gordon: This partnership was somewhat of an interesting blend of the others, including many elements of the other pairings. Angelo and Gordon had worked together in the world of finance and investment management for a while, and their families had been close friends for many generations (and still are). On the one hand, they were very similar in their goals and interests, but on the other hand, they had different personalities and were able to bring complementary skills to the table when starting their own firm. Angelo was outspoken and charismatic, coming up with new ideas (like leverage) and deals, while Gordon sat in his seat all day and was careful and methodical and helped the firm stay conservative (fighting the concept of leverage) and not take on the same foolhardy risks that the rest of Wall Street was taking (and eventually going to get wiped out because of).

I enjoyed the book greatly, both from the perspective of partnership and also from the perspective of entrepreneurship. It was fascinating to hear the stories of such a diversity of businesses being started up, and similarly, such a diversity of people working together. I realized the key in all of these partnerships were the following commonalities:

• Immense respect, trust, and friendship
• An urge toward equality and giving in to each other
• A clear overlap of goals, interests, and/or background
• A clear non-overlap in skills, responsibilities, and/or perspectives

The combination of matching and non-matching elements, when present in an environment of trust and respect, can lead to some pretty remarkable results.

Eisner concluded the book with some thoughts on why to even be in partnership and how to set them up. He said that in the end, what makes life truly worth living is sharing experiences with other people. This is the core reason at the end of the day to have partners. He says that if partnerships have failed for you in the past, the problem is not with partnership in general, and so you should keep trying new partnerships until you find some that work. I personally think that for some people or in some situations, full equal partnerships might not be the best. But no matter what the actual situation, treating your peers as partners with full respect, trust, and support always does.

In addition, he cautions against using pre-nuptial agreements or buy-sell agreements in businesses (contracts that aim to plan for the partnership dissolving). He says they are unproductive and cause more hurt than good. He preaches that people should work things out, and if they can't, to part ways. I personally think this is a valiant notion, but often times the complexities and logistics with figuring out how to part ways once there is trouble can be much worse than planning for it when times are good. I really think it depends on the type of personalities of the partners; if they are both level-headed, rational, and can think about the issues at arm's length in the beginning when setting up a fair agreement, it will not do much harm and can prevent problems down the line.

In my last entrepreneurial finance class, we went over a reading by a famous Harvard professor of entrepreneurship, one of the first formal papers on the subject submitted to a colloquium in the 1980s. It is surprising how much the advice from 30 years ago is so close to today's. Below were the points that most caught my eye and caused me to think; some I agree wholeheartedly with, and others I'm still trying to come to terms with.

1. The definition of entrepreneurship. The professor's definition read as follows: "the relentless pursuit of opportunity to create and sustain value by making decisions on both sides of the balance sheet at each stage of a complete process which begins with identification of opportunity and runs through harvesting without regard for resources currently controlled." This is somewhat long-winded in my opinion, but it does cover all the important areas (but places a bit too much emphasis on the finance/accounting aspects).
   
   I prefer the more concise definition I learned at Stanford: "the pursuit of opportunity without regard to the resources currently at hand."
   
   Either definition, though, highlights the difference between the entrepreneur and the administrator. Entrepreneurs look forward and are not hampered by insufficient resources, whereas administrators or managers often look backward and worry about constraints and what is or isn't "possible." I find that the entrepreneurial mindset most jives with me because I'm a naturally optimistic person, and I think a lot of entrepreneurship has to do with an innate optimism (combined with accuracy and some sense of being realistic as well).
   
   
2. Financing decisions and incentives are critical to deal structure and overall success. This I definitely agree with and posted on these subjects more extensively in the prior weeks.
   
   
3. Greed vs. Fear. These are the two counteracting forces that the entrepreneur balances in making any decision. For instance, in the decision of how fast to raise money, the greed is the consideration of equity given up, and the fear is the threat of time for other players to enter the market.
   
   
4. Some projects are better with limited resources and fume dates. Often, people will perform more efficiently when they have no other way out, and if they are forced to come to various "fume dates" when their funding or resources run out, they will have to make decisions in rounds and re-evaluate their strategy continuously. This turns out to be better due to the inherent "real" options present in the strategy, such as the option to abandon the project or the option to grow or change the plan. By raising capital in smaller steps and over several stages, the entrepreneur can receive better valuations as he or she and the investors have more information (and less uncertainty) over time.
   
   
5. Financial analysis never reveals truth; it only cuts down on "the region of darkness." This is why our professor always said to not worry about the numbers so much; it is impossible to make accurate predictions, and the numbers can be manipulated to show anything you want. They should be used more for reality-checking and understanding what is not within the realm of likelihood ("the region of darkness") rather than guessing what will happen.
   
   
6. From whom money is raised is more important than the valuation terms, and the terms of the money are more important than the amount or even getting it. This was an interesting play on words, but I agree with most of it. Generally, raising money from parties who will be on your side and bring value to the table is more important than the terms. However, the flip side is that if you're in a rush and accept horrible terms, it can often be worse than not accepting money at all. I think this needs to be tempered somewhat and considered within context, since it could be better to raise money at mediocre terms (from a good partner) than to worry about optimizing the terms and run out of cash.
   
   
7. Acknowledge your ignorance; no one can predict markets and the economy, so don't build ventures or make decisions depending on your ability to predict these unknowables. I definitely agree with this. I am most frustrated when I have to work with people who think they know more than they know or do not acknowledge the likelihood of their being wrong or being able to learn from others.
   
   
8. Pay attention to the ultimate harvest strategy, and never fall in love with operating your business; there is no ROI until you cash out. I have the most qualms with this point. I think that considering exit strategies is important, and yes, if one's goal is purely economic gain, then this is true. However, I think that if one's goal is happiness and accomplishment, then one can get that through a combination of financial windfalls and pride in operating a growing, healthy business.
   
   
9. When you can gather distilled market data on a company or industry, that usually is a good clue that there is no opportunity. This point made laugh, as I personally have believed in variants of this thought for a while. My personal philosophy is that anything in life that's worth doing or having is hard to achieve and complex to understand. Anything that looks too good to be true or a quick buck doesn't last or do much good.
   
   
10. The distinction between high- and low-tech, service and manufacturing, and for profit and non-profit is artificial; all businesses have elements of each and the only distinctions lie in cash flows and risk characteristics. This is an interesting point and one that I think is valid and grows in importance in current times with the increasing diversity of business models combining social good with for-profit enterprise. I definitely agree that there are important common elements among all of them, and that many of the same strategies can be effective across domains. I do think, though, that the differences between the domains provide important sources of value for entrepreneurs who can understand them and access them more directly than completely general practitioners.
    
    
11. The length of time invested by the entrepreneur and his or her experience is key; the most successful age happens to be between 35-50. Well, given my age, I'd obviously like to disagree and hope I can achieve success throughout my life. Clearly, there are many recent examples of wild success of "inexperienced" entrepreneurs who possessed special skills or brains. I think as a general rule, though, experience is important. It's often a difficult decision, however, between which experience is more valuable: working as a consultant or general manager and then trying a start-up or having the experience of doing a start-up. I tend to lean towards the latter and therefore somewhat disagree with this point from the professor.
    
    
12. Success is ephemeral and can be destroyed when people focus on protecting existing resources rather than creating value by pursuing opportunity. This point rings extremely true to me based on some of my past experiences. Part of what excites me about working on building new companies is the pursuit of new opportunities, whether they be new markets, locations, or new people to work with and learn from. I am always turned off by people who want to just stick only to what they know and are good at and protect that versus stepping out of their comfort zone to try something new.
    
    
13. Each person in the team has different goals of how much he or she wants to earn and how hard he or she can or wants to work; also, everyone is mortal and aging, so teams are by definition ephemeral. This is a slightly pessimistic viewpoint, but the essence is certainly true. People tend to have different outlooks on life and styles of working. I've often heard the advice that one should first choose whom to work with and then choose the project; it's often easier said than done, but I agree with that. The other lesson inherent in this point, though, is that one needs to plan ahead and be flexible, realizing that things may change drastically over time, and a team needs to have measures in place to continue functioning and growing even as its membership may change.

I found that most of the lessons above rang true today and particularly hit close to home for me and my personal past experiences. I'm sure I read advice like this before, but it's strange how it always takes on a new meaning when it matches things that you've actually had to deal with in your personal life.

I feel a bit like Borat as I write the title of this post -- reminds me too much of "Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan." Except in this case, it's not just cultural learnings, and it's not just Kazakhstan that's benefiting.

The "America" that I dived into this week is called business school orientation at UCLA Anderson. It's been a lot of fun, and I've really enjoyed meeting my classmates and taking part in all of the activities so far.

The experiences have been pretty varied, including classwork and games/experiential activities. I'm looking forward to even more non-traditional learning experiences next week as we play even more games and do an obstacle course (yes, of course this is critical for becoming a true professional!).

At the same time on my own, I've been reading Nassim Taleb's first book (before Black Swan) called Fooled by Randomness. I've been pleasantly surprised to have already learned something substantial and non-intuitive from my orientation experiences which ties in with my independent reading as well.

My main "light bulb moment" learning experience was during the murder mystery. Yes, we had a murder mystery to solve on our second day of business school. It was presented like a normal business school "case" (written by Stanford Graduate School of Business), except instead of a business situation, it presented the facts and testimonies of different suspects of a murder mystery. Our task was to solve it, and we were allowed to work in teams.

My team, like almost all the others, formed by just combining the people sitting around the same area (who were all assigned seats randomly anyways). We read the case, discussed it, and picked the wrong answer. Nice way to fail the first assignment, huh?

Except that this failure probably taught me more than if we had succeeded.

What we later learned is that not every person received the same case handout and mystery facts. In fact, different versions with extra information were spread out around the room, so getting input from people around the room would've helped solve the crime better.

In addition, our team's conversation started with a vote of who each of us thought did it, then a discussion of the merits of each person's case, and then finally a team compromise or decision on who we would convict. We started with the goal of conviction, discussed the evidence that most of us had in common in our cases rather than diving deeply into analyzing some details of the evidence, and came out with little new information than when we started. This proved to be a pretty ineffective way to go in hindsight.

I learned many things from this exercise. First, studies have shown that most teams end up forming by physical proximity, personal similarity, and other criteria of convenience. This ends up putting people together who already share a lot in common. This makes it easy to work together but lousy to create new ideas or have intense breakthroughs or changes in any one person's opinion.

The best teams are often the most diverse, bringing people together from different backgrounds and ideally dissenting intellectual opinions so as to foster critical, deep analysis rather than simply agreeing or glossing over things that each person assumes all the others know or agree with.

The second thing I learned was that in teams, the most discussed knowledge is common knowledge. People like talking about things they understand and know and compare new data to that. They tend to have a "confirmation bias" in incorporating new data that makes it a lot more difficult to take in a fact that refutes an established theory than one that simply supports what they already know. Unfortunately, this makes it a lot harder to actually be creative and sometimes leads to fatal mistakes, like the NASA Columbia disaster, blamed in part on this type of "groupthink."

It turns out that teams that welcome dissenting and minority opinions and environments where even smaller or non-traditional viewpoints are thoroughly discussed and fleshed out produce better outcomes. Having someone play devil's advocate sincerely or actively considering multiple options before deciding on a plan of action will make it a lot less likely to ignore important details. For example, in the murder mystery, if someone had extra information about the stolen wallet and asked a question like, "What about the wallet?," many teams would respond by saying, "Yeah, so what?," thereby making it awkward to discuss something that is actually not common knowledge but which is made to seem like common knowledge. Instead of making assumptions or jumping to conclusions on what's redundant or already known, each team member's thoughts should be fully heard out and considered for what they could potentially change or refute in the team's current thinking.

Also, we would statistically have been better off if we worked in an evidence-based manner (rather than verdict-based). Instead of first starting with a vote and seeing how close we were to our "mission" of reaching consensus, we could've ignored our own initial anchoring positions and simply delved into the evidence directly and discussed it as a group. This would prevent anyone from having to go back on what they proposed earlier or worry about saving face. This sort of advice goes well for juries that are deciding a final verdict based on evidence.

This discussion of being evidence-based and looking for clues that refute existing theories reminded me a lot of my reading in Fooled by Randomness. I'm only halfway through the book, but the first half has been stressing the difference between pseudo-science/finance/economics/"theories" that can never be proven because they speak about something fundamentally untestable or about the future versus true science and theories that can easily be refuted/shown wrong. For example, "All swans are white" can be refuted by the existence of one black swan, but seeing thousands of white swans does not really help in "proving" the initial statement. If teams can come up with hypotheses together that can be tested against evidence and challenged/shown wrong, then the team can make decisions in a manner that's rational and eventually more effective.

This was exactly the approach shown by the "correct answer" of the case: analyzing each character's evidence in turn and seeing what pieces of evidence could "acquit" a particular character's "guilty" verdict. The character who could not be acquitted by any evidence was the one chosen as the guilty party.

I'm looking forward to many more fun and deeply educational experiences in the coming weeks.