We talked about compounding and compounding interests, but we didn't really dig into it that much.

Relationships are a good example of compound interest.

Once you've been in a good relationship with somebody for a while,

whether it's business or it's romantic, life gets a lot easier.

Because you know that person's got your back, you don't have to keep questioning.

If I'm doing a deal with someone that I've dealt with for 20 years and I trust them and they trust me,

we don't have to read the legal contracts.

Maybe we don't even need to create legal contracts.

Maybe we can actually do it on hand shakes.

That kind of trust makes it very, very easy to do business.

If Nivi and I start another company, I know that if things aren't working out,

we're both going to be extremely reasonable about how to go about it,

how to exit out of it, how to shut it down,

or even if we're scaling it, how to bring in new people.

At this point, we have mutual trust and that allows us to start businesses more easily

and almost compounds the effect, especially when you're dealing with something like a startup,

which is so difficult to pull off.

Removing these frictional mechanisms can actually often be the difference between success and failure.

I think the number one most under-recognized reason startups fail is because the founders fall apart.

There's a couple non-intuitive things about compounding.

The first one is that most of the benefits of compounding comes at the end of the compounding.

So you may not necessarily see huge benefits of it up front.

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