One servant, two masters—part I

Jesus was wrong.

In the Sermon on the Mount, Jesus proclaimed that “No man can serve two masters.” Jesus was warning specifically about the tension between God and money, but his claim expresses a more general bit of folk wisdom: the idea that it’s impossible to work for two parties at once because their differing interests and demands will inevitably cause you trouble.

Why is this claim wrong?

The problem with this sweeping claim is that it rests on a false, unstated premise: that two parties’ interests and demands must always be diametrically opposed, that they are inevitably contradictory. In that case, it might well be true that you will “love the one and hate the other,” as Jesus famously put it. In fairness to Jesus, who’s not here to defend himself, it’s possible he would say that I’m twisting his words around—that of course he was only talking about that special case of opposing interests. And if that’s what Jesus meant, fine—but, nonetheless, people bring up the problem of two masters often enough that it’s important to point out that the problem doesn’t occur every time you have two masters; instead, it occurs only if those masters’ interests are contradictory.

That’s a big “if.”

And it’s a crucial one to recognize when thinking about third parties (middlemen) because middlemen do, by definition, aim to serve two masters. They don’t always succeed, of course. (And sometimes it seems that the only “master” they care about serving is themselves, as I wrote about in my article discussing predatory middlemen.) But that doesn’t mean that failure is inevitable, and that it’s impossible to ever serve two masters. So before we get to the potential problems middlemen face in serving two masters (problems when one master succeeds at the expense of the other), we must appreciate that it is quite possible to serve two masters, and to do so well. 

Finding complementarities

Good middlemen do this all the time, thriving in business by repeatedly doing right by both sides. The key is to find situations in which the interests of the two masters are complementary, not contradictory. When two masters’ desires are complementary—when everyone’s interests line up—the person in the middle can create new value in the world. Finding those situations and making sure the interests continue to line up is both the challenge and the opportunity of being the party in the middle. This is the power of three.

To use a simple example, let’s say you have two friends, each of whom is looking for a new tennis partner. Your friends might already know each other, actually, but don’t talk often enough to know that the other is also looking. So you play matchmaker, and in that one move you’ve simultaneously solve two people’s problems. No money changes hands, but everybody benefits, even you: you get the joy of matchmaking and very likely the gratitude of both friends. This kind of informal effort at finding complementarities is what I call “everyday matchmaking,” and the world would be a better place if all of us looked for opportunities to do more of it.

Business example #1: commercial banks

Now let’s look at an example in which money does change hands, where a middleman profits financially from serving two masters with complementary interests. One such middleman is a commercial bank (as opposed to an investment bank): a commercial bank must attract and serve both depositors and borrowers. These two types of clients are “two masters,” but their needs are quite complementary: thanks to depositors (to whom banks pay interest), banks have money to lend to borrowers (at higher interest), and thanks to interest earned from borrowers, banks have money to pay depositors—while making a profit for themselves. With such a nice synergy between depositors and borrowers (thanks to the bank doing its job in the middle), there’s no reason why a bank would love the one and hate the other. In fact, both types of clients are indispensable because a bank that only served depositors (or only borrowers) wouldn’t make money and wouldn’t last very long! A bank can be a valuable Partner to both sets of clients. As long as the bank holds adequate reserves, the economy is reasonably stable (no runs on the bank), and bankers lend responsibly and avoid fraud, everyone is happy. 

Business example #2: two-sided platforms

The same is true of any middleman business, including the many two-sided markets (often called platforms or marketplaces) that have become household names in recent years. Middlemen such as Lyft and Airbnb, for example, can be valuable Partners to both the supply side and the demand side of their businesses. In fact, their businesses depend on it: Lyft must keep enough drivers happy to attract and retain riders (and vice versa), and Airbnb must keep enough guests happy to attract and retain hosts (and vice versa). Keeping both sides happy isn’t easy, but when the business succeeds in maintaining that delicate balance, it actually sets in motion a virtuous cycle: sellers (whether they be drivers or hosts) want to be where buyers are, and buyers (such as passengers and guests) want to be where sellers are, so Lyft and Airbnb can keep growing and becoming more valuable. 

The takeaway

There’s no doubt that people’s interests can conflict, creating conflicts of interest and questions of loyalty for the middleman trying to serve two parties at once. I will explore those problems in the next article. But these conflicts aren’t inevitable. Middlemen can profit sustainably from serving two masters, working hard to make sure everyone’s interests continue to align.

Where to read more

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About the author

Marina Krakovsky is the author of The Middleman Economy: How Brokers, Agents, Dealers, and Everyday Matchmakers Create Value and Profit (Palgrave Macmillan). She is also co-author, with economist Kay-Yut Chen, of Secrets of the Moneylab: How Behavioral Economics Can Improve Your Business (Portfolio/Penguin). In her writing, speaking, and consulting, her main focus is on the practical application of ideas from psychology and economics. Her articles and essays have appeared in Discover, FastCompany, the New York Times Magazine, Scientific American, O (The Oprah Magazine), Psychology Today, Slate, Washington Post, Wired, and more.