What do you mean, it's better to be a mediocre person than a villain than a saint and gentleman?
It probably means that no matter what you do, it is best to be with people with virtue and talent, and the second person should choose people with virtue and talent. When you can't get the first two, you would rather choose a mediocre person without virtue and talent than a talented villain. Warn everyone that virtue is the most important thing in choosing people or doing things, and warn everyone not to associate with villains.