Build Your Yacht

I rarely if ever will put something here that I didn’t write myself - but this is too good not to give a ton of attention to.

I started writing in public & creating content for two reasons:

1) Seeing how much money an influencer (who was not very sharp) was making, simply by having an audience.

2) This article

Hope it has the effect on you, that it did on me.

The author is Real Estate G6.

 Creating Your Own Yacht

@TheRealEstateG6

The average person goes through life and nothing they do compounds. Their investments don't compound, their skill sets don't compound and their relationships don't compound. Instead of using one of the most powerful forces in the world to make their life easier as they get older, they start from scratch every single time with everything they do, making their life unimaginably harder. It really is a massive disaster and it's completely avoidable.

Most people are familiar with the first two concepts. Compound investing is one of the most harped about topics in the world. Compounding skillsets is somewhat well-known as well. Relationship compounding, however, is rarely, if ever, discussed. And that's a shame. Because not utilizing it leads to a massive time sink and people don't even realize it.

How the Average Person Treats Relationships

The average person starts from square one in nearly every relationship. This means that they're not leveraging their past relationships or their past body of work (basically all of their successes in life up until that point) to create new relationships. It also means that those new relationships are not starting off on a favorable footing.

Let's start off with a very basic example of how people try to build relationships: Going to a new bar alone to meet people.

I think everyone realizes that this is playing life on difficult mode. You have no social proof, no credibility, no one knows who you are and none of your past work is reflected in the interaction. This is all fine and good if you're out to have fun (and it's actually a good way to test your social skills), but it's incredibly inefficient.

Do you know how much harder it is to "convert" (start a new relationship with) someone who isn't familiar with you at all? Ask any ecommerce guy how much harder it is to convert cold traffic than warm traffic. It's miles apart. You're making your life way harder for no reason at all.

So let's start thinking of ways you can start establishing the items listed above (social proof, credibility, people knowing who you are and your past work being reflected in the interaction). We'll start off very simple. First off, your body. You can be in good shape. You can have a good haircut. You can be well-groomed. Then, your clothes. You can wear expensive/well-fitting clothes. You can wear a nice watch. You can make sure that your outfit looks well put together. That's pretty much all you can do directly do with your appearance.

What do these items and attributes convey? Mostly just your past work (a good body shows all of the hours you've spent in the gym, a nice watch shows you're fairly successful in business, etc). They convey a tiny bit of social proof and credibility as well (dressing well proves you fit in with society) but not enough to move the needle.

You've hit the base-level. But the base-level doesn't get you anywhere. You need to do more. Now that we've addressed how to best portray yourself to the patrons, how can you manipulate your surroundings to convey all of these traits as well? An easy way to confer social proof is to bring friends along. Bringing friends along further conveys that you fit into society. And the cooler your friends, the more high-status you must be (from other people's perspective). I know this is all basic stuff so far, but understanding the basic human psychology behind interactions is incredibly important when you're "creating your yacht".

Let's stop there for a second. So far, this essentially describes every semi-successful person in every major city. In other words, this isn't impressive - nearly everyone has figured this part out. You're going to have to do a lot more if you want to stand out.

What else can you use?

How about the bar itself? Instead of going to a new bar every time, you can go to the same bar several times. You can get to know the waitstaff, the bartenders and the owner. This is far better. Now you're in the minority at the venue. Very few people casually at the bar know the workers or have any standing with them. And other people will see that you know them, which will help you out in every future interaction at that bar. You can see the compounding slowly start to occur.

You're on the right track now. You have to create venues or situations where you're in charge. It seems simple, but pretty much no one does it.

How Relationship-Building Should Actually Work

Let's think about the time and energy usage of the average person. As mentioned above, the average person goes to a ton of different places and never makes deeper relationships at any of them, meaning that they essentially start back at square one in every social situation. This leads to that ground-hog-day-feeling that most people get in their late 20s when they realize that pretty much every weekend they've had for the last 5 years has been exactly the same. All that time spent going to new places results in...nothing. They literally have nothing to show for it. Just wasted time. The value of any new time spent creating relationships is exactly the same as it was when they first started going out - and it's a very low baseline.

For the average person, the first energy spent in each new interaction is to establish things that they've established a thousand other times to a thousand other people. Who you are, where you work, what your lifestyle is, if you're cool or not, how successful you are, how popular you are, whether you're worth knowing etc. These are all things that other people feel out when they first meet you whether they admit it or not. These are also things that should've already been established at this point in your life simply by virtue of compounding. What if you could establish all of these things beforehand? Wouldn't that give you an upper hand in starting a relationship? And if the answers to all those questions were positive, wouldn't that make other people want to start relationships with you, without having to exert any of the energy that you normally exert and waste any of the time that you normally waste?

The graph above shows the tragedy of the average person's relationship strategy. They never leave the baseline. Why's that? Because they never put the work in to manufacture a venue or a situation that allows their relationships to compound (we'll get into this more later). Instead of spending time working on manufacturing advantageous situations, they spend time trying to force new interactions, simply because it's easier in that the return is more "guaranteed" (smaller, but guaranteed).

If you decide to go to a new bar, you will meet new people. You may not meet them on favorable terms, you may even strike out, but you will meet new people. Manufacturing advantageous situations, on the other hand, has no guaranteed return. You could spend weeks trying to create an advantageous situation and it never materializes. Maybe you spend 3 weeks trying to become a regular at a bar only to find out that you don't really gel with the clientele there.

Like anything else, it's a lot of work and time on the frontend with no guarantee of success on the backend. So, instead of even attempting it, most people keep plugging along at their same strategy, which as we've seen, results in severe time and energy wasting. Basically relationship compounders spend all of their time manufacturing advantageous situations. Average people (relationship flatliners) spend that time in new interactions. Over time, that leads to the disparity in the graph above. Eventually, the relationship compounder can create new, valuable relationships with barely any effort, energy or time expended.

That's because, as you can see in the graph above, the value of their new time spent on relationships is off the charts. More valuable time = less time needed. Average people (or relationship flatliners) forever spend the same amount of time creating each new relationship because the value of their time never changes. They don't take advantage of compounding, which has disastrous effects on their relationships as time goes on. As mentioned before, this is incredibly inefficient.

So what do you actually want with regard to your relationships (how can you avoid being a relationship flatliner)? At a base level, you want several things: For all your old relationships to lead to new relationships, for all of your past work to lead to new relationships, for people to come to you to want to start a relationship, for relationships to start off on a positive footing.

Creating Your Own Yacht

For those of you who aren't familiar, Aristotle Onassis was one of the wealthiest businessmen in the 20th century. He started off as a tobacco trader, but he soon realized that the real money was in shipping, and became a shipping magnate as well as one of the richest men in the world. He was also a socialite, dating famous actresses, opera singers and ex-first lady's, including Maria Callas and Jacqueline Kennedy. Needless to say, the guy knew how to build relationships, both socially and financially. He was an expert at manufacturing advantageous situations at venues he controlled. He approached relationship-building different than most.

Once he had established himself, he bought a massive yacht and named it "Christina" after his daughter. To give you an idea of how big the boat was, he purchased it at the end of WWII and, as of 2018 - over 50 years later, it was still the 45th largest yacht in the world. Onassis would often live out of the yacht. And, most importantly, he would hold all social and business events on the yacht.

The brilliance of this move has never really been talked about. Think about how easy it is to build a relationship with someone after they board your yacht for a party or even just for a business meeting. Social proof, check. Credibility, check. Everyone knowing who you are in a positive way, check. All of your past work (in this case his success as a shipping tycoon) being reflected in the interaction, check. Then there's the physical act of boarding the boat as well, which implicitly tells you that you're not on your home turf anymore. You're on his. It's really utterly brilliant. By stepping on the yacht, you've completely fallen into his frame. Everything after that occurs on his terms, not yours.

Regarding the 4 pieces of criteria listed above:

Did all of his old relationships lead to new relationships? - Undoubtedly yes. Not only did all friends of friends who were invited to the party know who he was, but people who weren't invited to the parties talked about the parties and wanted to meet him/come to future parties.

Did all of his past work lead to new relationships? - Yes. Everyone could see the work he'd put in over the course of his life in purchasing the yacht (an extremely impressive accomplishment). That work (the yacht) served as a visual "resume" for people and allowed him to easily build new relationships.

Did people come to him to try to start a relationship? - Obviously yes. Everyone wants to be friends with the guy who owns the yacht and everyone wants to do business with a successful person.

Did his relationships start off on a positive footing- Yup, being introduced as the owner of the yacht tends to do that.

Now obviously you're not going to be able to actually buy your own yacht. But you can and should be able to create similar situations that are advantageous towards relationship-building. The idea is to "create your own yacht" in which all of your cumulative work (socially, financially, etc) compounds into creating an environment in which your credibility and reputation is already firmly established, without you having to do anything additional in each successive outing. This gives you a gravitational pull. Most people have no "pull". There's nothing attracting you in, nothing making you want to become friends with them. There's no reason why you'd want to start a relationship with them more than anyone else you'd meet on the street. "Pull" is exactly what you should be looking to create. You want everyone to come to you and to get sucked into your gravitational pull without any additional effort. Goal of life should be to have everything (business, friendships, etc) come to you, instead of you having to go to them. Everything should be happening on your terms and under your control. That's really when you've reached the peak. All other forms of relationship-building are essentially pissing into the wind.

Relating this back to the graph above, the purpose of creating your own yacht is essentially to manufacture venues or situations that make high-quality people want to know you. This leads to the effect in the graph shown above in which the value of your new time building relationships increases exponentially as a result of the fact that you don't have to go to other people anymore to start relationships, they come to you. You barely have to spend any of your own time creating new high- quality relationships because you put in all that time on the frontend manufacturing the advantageous situation to make the high-quality relationships come to you ("creating your own yacht").

I know this has been really abstract so far so let's dive into some examples.

Reverse Engineering It - How Can You Create Your Own Yacht?

In my opinion, concepts are only really useful if you can reverse-engineer them for your own gain.

So let's start off with some modern-day examples of "yachts", then we can dive into how to reverse-engineer it.

Shark Tank - Shark Tank is one of the best examples of creating your own yacht. Most venture capitalists spend the majority of their time searching for deals. They'll do cold outreach, send out cold emails and take hundreds of meetings with business owners before finding a deal. Then, they often spend months competing against other venture capitalists for the deal itself. Shark Tank completely flipped the script, making the business owners come to them. In fact, business owners beg to come to them. Not only that, but they make favorable deals with the sharks because they're interested in more than just their money - they're interested in the sharks' expertise and prestige.

Shark Tank was able to position themselves as experts in the space, which changed the nature of their relationships with the business owners. Instead of the usual script where it's the venture capitalists who're lucky to find a deal, it's the business owners who're lucky to make a deal with a shark. They make it a spectacle as well, in which they're in highchairs overlooking a stage where the business owners desperately plead for an investment. The power structure is completely inverted. And the more people that watch it on tv, the more business owners that want to get on the show. Instead of spending their time on outreach to find a deal, sharks spend most of their time on qualifying the deals that come to them. The value of their new time spent on building relationships is extraordinarily high.

This is the effect of compounding. When the show first started, I'm sure it was difficult to find business owners who wanted to pitch on the show. Now, they have too many people who want to be on the show. People beg to be on it. It got easier over time. Therefore, it takes the sharks no time at all to build new, high-quality relationships - in fact, in their case, they've become so efficient that the hardest part about building business relationships for them isn't finding people, it's finding the people who're the most qualified. Needless to say, this is the apex. This is what everyone should be shooting for - setting up scenarios that make people beg to build a relationship with you.

Lastly, in their final stroke of brilliance, the venture capitalists on Shark Tank use the money they make from the show to fund the ventures they see in the show. So there's not even a capital outlay on their part. Since it's venture capital, they essentially found a way to print out free lottery tickets. They use money they wouldn't have otherwise had to take moonshots with fast-growing companies. Truly a brilliant model.

Twitter account (or really any social media account) - I've mentioned this countless times before. Building a high-quality twitter account is one of the easiest things you can do to make your life better. Your work is public and can be seen forever by anyone. Your reach is unmatched - can hit millions of people with a single tweet. There are incredibly high-quality people on the platform (yes there are tons of low-quality people too, but you don't have to engage with them). Also, once you have a large account, people come to you.

People DM you with business opportunities, give you advice, or just simply want to be friends. And, most importantly, relationship-building gets easier over time. The longer you've been running the account, the bigger the account gets, the bigger your reach, the higher your credibility, the more of your work that gets archived for everyone to see and the more people that want to build relationships with you. The compounding becomes more and more pronounced the bigger you get. Think about it. Writing a tweet takes the same amount of effort whether you have 10 followers or 10 million followers. But the impact of the tweet (both in terms of benefit to you and benefit to others) differs massively. When you write a tweet to 10 followers, you may gain one new follower ("relationship") as a result. When you write a tweet to 10 million followers, you may get 100,000 new relationships as a result. What's happening here? The value of your new time is increasing. You used to send a tweet and it got you 1 new relationship. Now you send a tweet and it gets you 100,000 new relationships. The action is the same, the time spent is the same, but the result is way different (way better). That's how you know the compounding is working - the value of your time is going up.

With something like twitter, the time frame towards creating your yacht is also greatly shortened. You can build a twitter account, tweet good content and have a decent sized following (or "yacht") within a year. Meanwhile, it took Aristotle Onassis his whole life (and millions of dollars) to create his yacht. Twitter accounts are free. That's the power of the internet. Zero reason not to be building a following on social media.

Reverse Engineering Continued - The Basic Heuristics for Creating a Yacht

Now that we've seen a few examples of "yachts", we can start to break out the common elements of a good yacht so that we can use these elements to create yachts in our own life. The way I see it, there are five core questions you need to answer to determine if a venue or situation qualifies as a good yacht or not.

1. Does it allow potential new relationships to know who you are before officially "meeting"

2. Have you established credibility before meeting?

3. How many people can you reach at once?

4. Are the people you're meeting quality individuals?

5. Is relationship building getting easier over time (this is likely the most important criteria)?

In my mind, the fifth question is the most important. This relates to what we've talked about before. You're either a relationship compounder or a relationship flatliner. And if the relationship building isn't getting easier over time (the value of your new time building relationships isn't increasing over time), you're a relationship flatliner, which means you're going nowhere.

With these five questions in mind, let's walk through two more examples of a bad yacht and a good yacht to really drive the point home. We'll start off with a bad yacht.

Example of a Bad Yacht:

Dating Apps - Let's take something like a dating app. Why does this not qualify as a yacht?

1. Potential new relationships knowing who you are- Not at all. Unless they knew you beforehand, the person on the opposite side of the screen won't know who you are and there isn't anyone there to introduce you and make a mutual connection.

2. Establishing credibility - You can actually establish pretty decent credibility. Respectable job, respectable college, conveying the right message through your pictures, verifying your account etc. It's not 100% there since there's still an element of mystery, but it's not horrible.

3. Number of people you can meet at once - You can actually meet a lot of people at once - you can have thousands of matches. But this cuts both ways. Because while you can meet a lot of people at once virtually, you can only really meet one person at a time in person on a date. So there's a lot of wasted time and energy involved here. You create one deep relationship (the person you went on a date with) and all the other relationships that you created stay superficial and become a wash. None of those superficial relationships result in new relationships either so there's no compounding occurring (you're not going to meet any new people as a result of those superficial relationships). We can refer to that as a relationship dead-end. Which means the web of relationships ends there. Not what you want.

4. Quality of people you can meet - Generally you're meeting very low-quality people on a dating app. Dating apps are similar to LinkedIn; you never want to "network" at a place where everyone is *trying to network. On LinkedIn, everyone's trying to network, which inevitably makes it a horrible place to actually network. On Twitter, most people aren't trying to network, which is precisely why it's such a good place to network. Same goes for dating. The fact that they're trying to find dates online implies they can't find them in real life. Does this always hold true? Of course not and there are certainly high- quality people on those apps. But, in general, it's not the best place to find them as it's inherently self- selecting for low quality people.

5. Relationship building getting easier over time - With dating apps, you waste a countless amount of time building relationships that never come to fruition. And the relationship building doesn't get easier over time. In fact, it's the same process every time, no matter how much time you've spent. Swipe, match, chat, go on a date. There's no way to shorten this process, there's no way to make the process more efficient, there's no way for your past efforts to compound into a better process. It's the perfect example of the "relationship flatliner" shown in the graph above. At no point does your effort compound or get easier. You're in no better place at your 10th month on a dating app than you were at your 1st month on a dating app. To put it simply, it's ineffective.

Ignoring the societal impacts of dating apps (I consider them a massive net negative), you can see that dating apps are not a good yacht because it doesn't satisfy the 5 central questions above (most importantly, it doesn't satisfy the 5th question).

The idea is for relationship-building to get easier over time, requiring progressively less time, effort, and energy on your part as you move forward. If you find that the time and effort involved is remaining the same, you're doing something wrong and need to reassess - that means you're not compounding, you're actually flatlining. So, now that we've seen an example of a bad yacht, let's look at an example of a good yacht.

Good Example of a Yacht: Running a Yearly Trip/Conference

A great example of this is something like Moses Kagan's "Re-convene". As a side note, I'm by no means insinuating it's a ploy to "network"" or anything like that (and from everything I've heard, it's an incredible event that everyone should go to), just that it's a great example of a yacht and that more people should create events like this.

1. Potential new relationships knowing who you are - Yup, every single person knows who Moses is before actually physically meeting him since he's the one that sets up the conference.

2. Establishing credibility - Setting up a conference like this affords you massive credibility. It puts you in a position of choosing the speakers, deciding which guests to allow and serving as the final "authority"" over all of the very talented people who attended.

3. Number of people you can meet at once - Can meet a ton of people at a conference like this, very easily, in settings that facilitate new relationships. I don't know the exact number that go, but I'd assume in the hundreds.

4. Quality of people you can meet - The people are incredibly high-quality because you can filter who gets in.

5. Relationship building getting easier over time-Definitely. The more years you hold the conference the more people hear about it from word of mouth, the more people want to join - and the effort/time involved on your end remains the same. Each year you hold the conference, you're in a better spot with more leverage.

As you can see, hosting a conference is a perfect example of a yacht. It hits every single qualifying category and heuristic. Just perfect positioning and a great way to foster relationships. And-most importantly, it allows you to become a relationship compounder, as your ability to generate high-quality relationships improves over time while spending the same exact amount of time and effort on it.

Summary

This email should have convinced you that you're not spending your time correctly. The majority of your relationship-building time should not be spent going out and attempting to forge new relationships. Instead, your time should be spent working on yourself (creating a "body of work") and creating situations that allow your relationships to compound and for people to come to you. The central question you should be asking yourself is: Is the value of my new time spent on relationships going up? If the answer is no (meaning that it still takes you the same amount of time and energy to create a new high-quality relationship as when you started performing that action), it's time to reassess. Either the action itself is low ROI or you're not approaching the action from the proper angle (your positioning is wrong). This means that you should revisit the five central questions, figure out which question isn't being satisfied, and reverse-engineer a new situation where it is being satisfied.

Does this mean you shouldn't go out to a new bar, restaurant, or golf club where you don't have an established presence? Absolutely not- they're a great time and you can make great connections doing that. It's just probably not the most effective use of your time. The most effective use of your time in the relationship-building sphere is to manufacture situations that lead to advantageous relationships. No doubt, it takes a lot of time upfront to figure these scenarios out and like anything else that's worth it, the returns aren't guaranteed. But once you do, you can reap the benefits of easy compounding for the rest of your life.

Lastly, there's no reason why you can't have more than one yacht in your life. Your twitter account can be a yacht, your beach house could be a yacht, the massive party you hold each year can be a yacht. The possibilities are endless and the idea should be to create as many yachts as possible to make the value of your time as high as possible and the time spent creating quality new relationships as low as possible.

Create your own yachts and let people come to you.

Thanks again to @TheRealEstateG6.

Incredible piece of writing.

Yallah Habibi,

Jon

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