Lebron James and the Cavaliers just brought a championship back to Cleveland for the first time in 52 years. And they certainly didn’t have an easy road to do so. Not only did they have to beat the defending NBA champions who had won a record 73 regular season games, but they became the first team to ever win a championship after being down three games to one in the finals.
I could talk about how important it is to never give up and how Cleveland represented that will and perseverance despite all sorts of adversity this season. But I think the Warriors’ collapse is more instructive.
Indeed, since the Warriors set an NBA record by winning their first 24 games, a second championship almost seemed locked up from the get-go. The inevitability of it came into question once they reached the playoffs, however, first when Stephan Curry missed a few games due to injury. Then it got dicier still when Oklahoma City had them down three games to one. Even once they escaped the Thunder and went to the finals, memories of the Cavs putting up a valiant fight the year before even without Kyrie Irving and Kevin Love were alive and well.
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The Dangers of Overconfidence
But by the late stages of Game 4, that sense of inevitability was back. The Warriors were on their way to winning and going up three to one on the Cavs. But with the outcome no longer in doubt, Draymond Green made a critical mistake by taking a cheap shot at Lebron James. Whether or not it deserved a suspension can be debated, but either way, there was no point to it. Yes, Green always plays hard regardless of the situation, but you have to play smart, too.
This gave the Cavs an opportunity to win Game 5 in Golden State against a shorthanded Warriors team. Then Game 6 came around, and Golden State looked almost lackadaisical, as the Cavs exploded to a 31-11 first quarter lead before cruising to victory.
All of a sudden, the Warriors had left it all up to one game — and in one game, anything can happen. Despite actually showing up for 48 minutes on Sunday and a great performance from Draymond Green, it wasn’t enough, and they let a second championship and historic season slip through their fingers.
Now, I won’t go so far as to say that Golden State got lazy, but it does appear they became overconfident and got sloppy. (Indeed, Warriors coach Steve Kerr had noted the team’s tendency to be sloppy several times during this season.) And as they say, the higher you climb, the farther you fall.
What Real Estate Investors Can Learn from the Warriors
No matter what field you’re in, be it professional basketball or real estate investment (I prefer real estate; professional basketball just doesn’t pay well enough), there is a tendency to become overconfident as you become successful.
Just ask how many successful real estate investors got wiped out in the 2008 financial crisis or how many have gone bust in some other way, form, or fashion.
Indeed, I’ve noticed in myself a growing hesitancy to ask questions about real estate investment as our business has grown over the years. Early on, I was new to the game, so I would ask just about anyone and everyone in real estate for their advice on investing.
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But as our company has grown and I’ve gained experience, a sneaky little voice inside my head has started to say something to the effect of, “You should already know that, so there’s no reason to ask.”
Well, no, you shouldn’t. No one knows everything, and as Ralph Waldo Emerson once said, “In my walks, every man I meet is my superior in some way, and in that I learn from him.”
You Never Know it All
There are few bigger mistakes that one can make than thinking they know it all, even if it’s just a subconscious feeling. No matter how experienced and knowledgeable you are, there’s always more to learn. It’s not like Gerald Levin and Richard Parsons were amateurs when they decided to merge Time Warner with AOL. They were seasoned and successful businessmen, and yet they still make a catastrophic mistake.
The same goes for reading. Indeed, many real estate books may sound somewhat similar, so it might be harder to find good and new information. Seasoned investors may be tempted to just stop. But it’s important to keep digging. Many times I or others in our company have found great ideas or information that have helped transform our business from various books, be they on real estate, business, or personal growth. This includes books such as Who, Tribal Leadership, The Power of Habit, Thinking Fast and Slow and Great by Choice.
Networking is another key activity. It seems to get harder to continue to prioritize this because as you get more successful, you also tend to get busier. But it’s critical to make a commitment to networking. Not just because you can get connected with people who can bring you good deals, employees, contractors, vendors, lenders, etc., but it’s also because there’s plenty more to learn.
Don’t Stop Learning
Even when listening to someone less experienced, they still might have great insights. Timothy Ferris’s new book recommendation is a book called Ego is the Enemy. I haven’t read it yet, but that title sums it up when it comes to overconfidence. Ego is your enemy, folks. No, you don’t know it all, and yes, you still can (and most certainly will) make mistakes.
When you just get started, the greatest risk is your lack of knowledge. Once you’ve started to have some success, the greatest risk is the facade of knowledge. Don’t fall for that trap. Make sure to always and forever be a learner.
What do you think caused the Warriors’ downfall? What do you think we can learn from it?
Let me know with a comment!