Why did Naval say, "Never partner with dishonest people"?

Hey, that's a great question.

Naval Ravikant's statement might sound like a platitude about morality, but if you delve into his thinking, you'll find it's actually a highly shrewd rule for survival and business wisdom grounded in rational calculation.

It's far more than just "being a good person." There are several layers of profound and practical logic behind it. Let me share my understanding:

Why does Naval say "Avoid dishonest people"?

Imagine you're building a boat with others for an ocean voyage. What kind of partner would you choose? Someone who cuts corners, lies about supplies, and might secretly sell the lifeboat midway? Definitely not.

Partnering with someone dishonest is like choosing such a "problematic partner" for your boat-building project. Naval’s advice is essentially to eliminate this biggest risk before the boat even sets sail.

Specifically, here’s why:

1. Core Logic: You're Playing the "Infinite Game," They're Playing the "Finite Game"

This is fundamental.

You (like Naval) are aiming to play the "infinite game." This means you want to build long-term endeavors, accumulate reputation, grow the pie collectively with partners, and achieve win-win outcomes. In this game, trust and reputation are your most valuable assets, far more important than short-term money. It's like a century-old restaurant that would never use unsafe cooking oil.
Dishonest people are obsessed with playing the "finite game." Their goal is to maximize personal gain in a single interaction or short-term transaction. To win this round, they'll resort to any means, ready to sacrifice rules, partners, and the future. They're like vendors at a tourist trap running a "one-shot deal" – scamming you once is enough; they don't expect you back.

When you try to play the "infinite game" with someone playing the "finite game," the outcome is inevitable: you will lose. Your fundamental objectives are incompatible. They will inevitably blow up the ship you built together for short-term gain.

2. The Hidden Costs: Mental Tax, Reputation Risk, and The Inevitable Betrayal

Working with dishonest people incurs massive hidden costs:

Huge Mental Load: You cannot focus fully on creating value. Half your energy goes into "guarding against them": Does their contract have loopholes? Is their reported data accurate? Are they scheming behind your back? This constant suspicion and internal friction will grind you down. Energy is finite; what's wasted here can't be used for truly important work.
Devastating Reputation Risk: "You are judged by the company you keep." Markets and professional circles are small. Once associated with dishonest people, your personal brand and reputation suffer. Others will wonder, "Why is he working with that person? Are they alike?" This guilt by association is lethal. The trust built over years can be destroyed by one wrong partnership.
Betrayal is Inevitable, Just a Matter of Time: Core traits rarely change. A chronically dishonest person might behave when there's no conflict of interest. But when faced with significant temptation or crisis, their inherent dishonesty kicks in. The question isn't if they will sacrifice you for gain, but when and for how much gain. It's like planting a ticking time bomb next to you.

3. Foundational Values Clash: Your Goals May Be Entirely Misaligned

The highest level of partnership is "values alignment" – sharing a common vision and principles.

Your goal might be to create excellent products or services through honest effort, earn market respect, and achieve sustainable returns.
Their goal might simply be to use the project as a stepping stone or grab quick cash before the venture dissolves. The quality, the company's future, the partnership – they don't care.

This fundamental misalignment breeds conflict at every critical decision point. For example: Should we cut corners on the product to reduce costs? Use deceptive marketing for quick customers? Your answers will be polar opposites.

In Summary

Naval’s statement, therefore, is less about moral purity and more about an efficient "risk sieve."

He emphasizes that when choosing partners, integrity outranks intelligence and capability. Why? Because a clever but dishonest person is far more destructive than a mediocre but honest one. The latter might simply botch the job; the former will expertly betray you and pin the blame on you.

By choosing only to partner with honest people, you:

Save immense energy, freeing you to focus on value creation.
Protect your most crucial asset – your reputation.
Position yourself to win the "infinite game" in the long run.

So, beneath its surface as a moral exhortation, Naval's advice is rooted in the shrewdest survival logic. It helps you spot and steer clear of the giant iceberg most likely to sink your ship from the very beginning.