How to cultivate mentors, make friends, and develop deep relationships (part 1)

As regular readers know, I went back to Harvard Business School on March 27 for a day honoring my friend and mentor, Professor Michael Porter.

In my March 28 and April 1 e-mails, I reflected on the most important things I learned from him.

Thinking back to those lessons also reminded me of an e-mail I once received from a young guy, Angelo Martorell, who had recently launched his own hedge fund and signed up for the first investing seminar I taught in late 2017. As he wrote:

When I launched my fund, I found myself in a position with no mentors. I didn't have a boss anymore to give me feedback and mentor me so that I perform better (yes, my ex-boss is an investor in the fund, but it is still very different).

I have made lots of connections among peers (people who launched their funds over the past few years) but it is a different type of relationship – mainly discussing ideas.

So I have always been thinking: "How I can find a mentor in the space?" Even when I found more experienced fund managers (let's say 10 years ahead of me) and I was able to get their attention because of my research (typically published on SumZero or ValueInvestorsClub), it was difficult to move that relationship beyond discussing ideas ("Hey, here is a great one! You should look into it!", "Thank you! Here is one from me!").

I totally get it – people are very, very busy. However, if I can be better at building that relationship, it can move the needle.

My former student (and now friend) was asking an important question, because few things are as important in building a successful career as developing mentors.

As I look back on my decadeslong career since I graduated from Harvard, it's something I've been good at – but until Angelo's question, I had never sat down and thought about how I did it.

When I did so, the most interesting thing I realized was that the same techniques for cultivating mentors apply to making friends and developing deep relationships with people.

I ended up developing a teaching module for my students, which I'd like to share in today and tomorrow's e-mails. I hope you enjoy it and find it useful!

Cultivating mentors is a five-step process:

1. Pick a target
2. Precontact preparation
3. Initial contact
4. Initial follow-up
5. Long-term relationship building

Let's go through each...

1. Pick a target

A mentor is an experienced and trusted adviser who can help you in your life and career (and ideally become a great friend). Typical candidates might be:

• Your boss (or someone else at work, ideally very senior)
• Someone who can help you build your business (investor or board member)
• A professor/teacher
• A sports coach
• Simply someone you really admire and would like to learn from and emulate

You need to be realistic. Neither the pope nor the president are likely to become your mentors. That said, sometimes aiming high pays off (for me, Warren Buffett and the late Charlie Munger).

2. Precontact preparation

People really like it when others show a genuine interest in them. So if you want someone to become a mentor, you must show genuine interest in and appreciation for them.

To do so, you need to know as much as possible about them, so before contacting them, start with a Google search so you can demonstrate that you do your homework, show that you're interested in them, and learn about connections (college, kids, pets, sports, travel, language, culture, etc.) that, over time, can lead to good feelings, bonding, and mentorship.

But don't stop there – look for other ways to gain insight.

For example, when I learned that Anderson Cooper would be interviewing me for an exposé on Lumber Liquidators that I had brought to 60 Minutes, I read his autobiography and discovered many connections (he was a Yale '89 political science major who traveled around Africa after graduating... I am a Harvard '89 political science major who has lived and traveled extensively in Africa).

Knowing a lot about someone will allow you to find multiple ways to engage and build a relationship.

3. Initial contact

Be succinct – the initial contact is usually less than a minute in person or two or three paragraphs in an e-mail.

Your goal is to make a good first impression so that when you follow up (of course get their card), they'll remember you and be inclined to agree to a meeting, take your call, or respond to your e-mail.

Ideally, meet in person – go to an event where they'll be (e.g., a conference or charity event – but no stalking)... otherwise send an e-mail (don't call unless someone introduced you and they're expecting it).

Flatter them – who doesn't love this? – but don't be too obsequious – and it must be genuine. If there's an opportunity, ask thoughtful questions and get them talking.

Don't be nervous (even if you are) – you must project an air of confidence that you are an interesting person who is going to be valuable to them in many, many ways over time (and then, of course, deliver on this promise).

See if you can figure out a way that you can add value to them (e.g., offer to send them information about a stock they own or a great new stock idea you have that's likely to be in their sweet spot – if not during the initial contact, then soon thereafter).

If you know someone in common, be sure to mention it.

Prepare to be persistent. If the front door is locked, try the back door... if the back door is locked, try the side door... if the side door is locked, try crawling in a window. If you can't do that, wait a while then try the front door again. Someone might answer this time!

Set up a Google alert on them so you can keep abreast of what's going on with them, where they might be speaking, etc.

Don't get discouraged by rejection. The job of an assistant is to make you go away – don't take it personally. Know their name, be polite and gracious, and suck up to them. And don't remind them that you've called or e-mailed in the past. They probably won't remember and laying on a guilt trip is unlikely to help you.

If you get any response, follow-up quickly and take whatever they offer – a quick phone call, share a taxi to the airport, etc.

Here's an example of an excellent initial contact – an e-mail I received from Gabriel Grego, now a well-known activist short seller:

Subject: Sodastream

Dear Whitney,

I attended your Value Investing Congress a couple of years ago in NYC. I am running a long/short equity hedge fund with offices in NYC and Tel Aviv, where I am currently based.

I have noticed you've recently opened a long position on SODA. We are about to complete quite a thorough short thesis on the stock and I was wondering if you would consider exchanging ideas? Being based in Israel we have good access to the company and have performed thorough due diligence.

Looking forward to hearing from you.

Best regards,

Gabriel

This is perfect: It's brief, the sender was a paying customer of my conference business, and he was offering me on-the-ground insight into a stock I own.

Here's another example of an outstanding initial contact – from Angelo, the same young man I mentioned earlier who asked me about finding other mentors after I had become one to him:

Subject: Mentor

Dear Mr. Tilson:

We have never met. My name is Angelo Martorell. I was born in Mexico and am a recent 2015 Wharton MBA grad.

I had an incredibly tough time recruiting for an investment job during and after my MBA. Even though I won more stock pitch competitions than anybody at Wharton including the Boston Investment Conference, and the Sohn Investment competition, employers such as Baupost, Tiger Global and about 100 other hedge funds found a way to ding me.

After finding a position on a fund that soon after closed shop, I started my own fund with $4M. I have a ~120% return since June 2016.

I respect your knowledge on investments – sometimes we are on the same side, and sometimes on the opposite. I believe you are a great person of integrity. I am completely self-taught, and have sold a business as a CFO before Wharton in CA. I am a 6x cycling national champion in both Mexico and the U.S.

Bottom line is I have no mentor. I have found few people to trust in this industry. I went through community college when I moved to the U.S. when I was 17 and my family has no connections.

If you have time to chat or feel inclined to give advice, you would have no idea how much it would mean to me.

Very best regards and from a Mexican – Gracias,

Angelo Martorell, CFA, Martorell Capital Partners, LLC

Who's not going to respond to an e-mail like that?

A scrappy, entrepreneurial guy who comes from nothing, winning investment competitions and putting up huge numbers – and a six-time national cycling champion to boot.

4. Initial follow-up

Whether your initial follow-up is via e-mail, phone, or in person, refer to the initial contact. Remind them who you are and thank them for having taken the time to e-mail/talk/meet you earlier.

Be brief and quickly make it clear why you're contacting them again. They are crazy busy, so don't waste their time.

Don't ask for anything – it's too early for that. Instead, if you can, offer to provide something useful/interesting/value added such as:

• Differentiated, insightful information or analysis about a stock they own (either something you created or an article/report they may not have seen)...
• Or, in one page or less, outline a great new stock idea that's likely to be in their sweet spot...

• Or, it could be something as simple as an article or analyst report that they're likely to be interested in.

Ideally make another personally connection (it must be genuine).

Again, you must always project the confidence that, years from now, they are going to be delighted that they met you.

Here's an example of an excellent initial follow-up e-mail, from another former student and now friend, Paco Carrillo:

Subject: Value Investing Congress

Whitney-

Congratulations on the Value Investing Congress! It was a great learning experience and I enjoyed it all around.

All the invited speakers gave great presentations and the opportunity to meet colleagues and make new friends with whom I share common interests is priceless.

I just wanted to send you a quick thank you note since I can only imagine the time and effort that you must have placed in organizing the event.

I look forward to seeing you at the next VIC in New York!

Best,

Paco

PS – My investment focus is mainly Mexico and Brazil; I will e-mail you whenever I find interesting investment opportunities in these countries.

Paco isn't adding any value here, but it's a very nice note and he differentiates himself from most other investors by highlighting his focus on Mexico and Brazil.

In tomorrow's e-mail, I'll continue with my thoughts on the final and most important step: Long-term relationship building. Stay tuned!

Best regards,

Whitney

P.S. I welcome your feedback – send me an e-mail by clicking here.