YouSaid · the spoken record

Stephen Schwarzman

lines on the record
75
first
2019-11-12
most recent
2019-11-12
sittings or episodes
1
sources
podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

  1. “10 times faster than your semiconductor, so you've basically been put out of business. You don't even know what's happening. In real estate, you got three years to think about it At least very slow cycles, and your job is if you're in one of those bad areas where everybody's optimistic and they're piling on supply, you sell yours to people and you're gone. That's what you do. It's pretty simple. And those rules of supply and demand almost always end up taking people down who are optimists.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  2. “Real estate is a supply and demand type of business. And the place you get in trouble typically is when there's a lot of supply coming in, either in a geographic area or in asset class or both. So the lovely thing about real estate, it's the slowest moving asset class you could ever find because supply takes around three years to manifest itself. And 100% of supply is visible because you can't build anything without filing for permits. And those permits get published so you know what 100% of supply is. In terms of demand for rentals and other types of units, those get produced every month. And so unlike investing in a company that makes semiconductors where you could wake up one day and find out that somebody secretly has been developing something that's”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  3. “I never worried about negative interest rates other than the fact we're there and I think it's like a terrible thing. But if you think a country or a geographic area is going to slow, then you know interest rates are going to be lower. You don't know how much lower, but you know where they're going. Sometimes just a general direction is important to avoid messes.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  4. “Well, the way you look at it is what you're doing sound and safe. And is that going to work? And when you can find things like that, you do them. Whether you do them at the bottom of a cycle or the middle of a cycle or nearer the top of the cycle. You always have to know where you are in the cycle. So if you're near the top, this thing's got to really, it's got a lot to prove to deploy that money. It's got to have a just a rip-roaring, wonderful set of momentum thesis. So it'll power through a downturn and the price creation net of other things has to be safe by historic standards, not the standard of the day. You know, we always look at almost every asset class in terms of its cyclicality. Where is it and what burden does that place on you to be more conservative than at a different stage?”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  5. “The exact same way with the same values, we've just become more popular because the type of investing we do makes about double the stock market. So if you do that for decades, eventually people will discover you and say, would I rather earn double or half? And it takes a decade or two to convince them that double is better because they think it's somehow an accident, like a magic trick, which is odd. So then they say, okay, I give up. I'm going to join this party. These are all people very good to have at a party. They have lots and lots and lots and lots of money and they give it to us and we give them, you know, those type of returns and everybody's happy”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  6. “Where banks or insurance companies. So finance total assets were shrinking, one, because of losses, but secondly, the only way you can increase your equity to total assets, you either earn money and keep it and build up your equity or you do an equity offering. Nobody wanted to buy equity in these miserable companies, or you shrink the size of the company, and then the exact same equity is a bigger percent. So everybody was shrinking. At Plaxton, we ended up growing six times in 11 years. Six times. So we were completely counter indicator, and that's taken our market value up from, I guess it was $4 billion or something at the bottom to 60. So 60 is a lot higher and four, but we still run the company.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  7. “And the other day we were 54. As my brother said to me, he said, Steve, you never seem to be very concerned about it. I said, I wasn't. We had gone public. We had billions of dollars of cash. There was nothing we could do to stop the global deleveraging. I didn't believe it was anything that had to do with us in particular. And I was quite sure we could without any risk survive through this awful period. And so, you know, you can't get emotionally tied up in it because you didn't have anything to do with it. And we got through that period. And since that period, the regulators basically shrunk permanently, the financial system to increase the equity to total asset ratio of the major financial institutions, whether those”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  8. “Financial system normalizes, which is what happened, but the average stock of a financial company bank, money manager didn't matter. During the financial crisis went down 85%. So if you've ever been involved with something that went down 85%, you would not be a particularly happy cemper. Blackstone's always been an outperformer, so we went down 90%. Yeah, you were down.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  9. “That was very interesting intellectually, right? Because all of a sudden everything was going down. And that was part of the massive deleveraging in the financial markets. And the reason things go down is if everybody's deleveraging, which means everybody's selling, and there's hardly anybody buying, the law of supply and demand will just collapse prices. Believe that a price every day is the inherent value of something, you can really get freaked out. If you're people like us who apparently have a stunted emotional life, you just look at it and say, geez, they're like four sellers for every buyer. So that means that all financial assets are basically going to collapse. But so what? You know, that's just temporary. And those will all turn around when the...”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  10. “So we didn't have any concern about that. People just looked at us and said, what are they doing? And the answer is we knew exactly what we were doing. And that deal turned out to be the biggest profit in private equity history. And I just read some articles somebody wrote, which makes you wonder who said we were completely irresponsible doing that because journalists can say anything they feel like. But that was completely untrue. That's why we made $12 billion. We knew exactly what we were doing.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  11. “If we had held all of it, we probably would have been buried. So we had a way of making it conservative. And in Hilton, we knew there were, we're running like four separate headquarters. And they hadn't expanded outside the United States in 20 years. And there was huge demand to do that. And you could do it in that type of business putting up no capital. So we knew there was 500 million dollars of savings by just consolidating the operations. And then there was another 500 million of profit. We didn't have to invest anything for to get. So we had a billion dollars in our pocket. Today we bought the asset and everybody thought we paid a high price. And, you know, the company did well for about a year and a quarter before the financial crisis. And then it went down, but it was always safe because we had that extra billion.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  12. “One or two large things in the face of that, but it wasn't without knowledge that those bad things were going to happen. And we bought it. One was Hilton Hotel Group, and the other was something called equity office properties EOP, which was the largest office building group in the world. And we did each of them for particular reason. The assemblage of assets in EOP was like unrivaled. So we bought and sold $70 billion of properties in one month. The most anybody ever had sold in a year was like bought and sold 10. So this was like a complete out-of-body experience. We just sold the last property in the last month or two. We made 3.2 times profit.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  13. “Crazy things that were going on, and you can usually identify these types of situations that investors who basically lend you money decide they don't like any cash interest back. Usually people lend you money to, you know, you pay interest to them. But, you know, you start developing securities where you didn't have to pay interest for five years. And then you could pay it in more bonds if you didn't have any cash. And so I had a pretty good sense that something bad was going to happen. And I didn't know what, but I knew something. And it wasn't that far away. And because these periods of excess start building and that building accelerates. It's almost like you can just see it in front of you, almost like sort of some kind of mountain. There it is. And so we happen to buy.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  14. “Yeah, you could sort of feel that things were getting pretty hot. I remember going to one sort of small conference with some of the biggest pension funds in the world. And I was on a panel with another guy from private equity who's quite a good investor. And two of the biggest corporations in the world, and the moderator was talking about how private equity was so competitive compared to one of these companies in terms of buying assets because our cost of capital was so much lower. And they were comparing us with the AAA company. So how could art cost of capital be lower than a triple A? And I was sitting there going, somebody just asked that question as if it's reality. And it's clearly can't be true. And so there were like,”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  15. “Interesting. Oh, you learn that people change over time and that objectives could be different in personalities change one way or another. And, you know, it's hard when you're trying to match two people for 60 years. I mean, if you think about it, that's an almost impossible equation to do in your 20s. But I think it's easier to make good choices when you're older and you have a better sense of yourself. You know, I got married when I was 24. Now I realize I was pretty young. I thought it was pretty old. And so, you know, you go through changes and that's not surprising.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  16. “My personal life is different. That's more foundational. In other words, if you're with the right person or you're doing something that you love, you don't have to worry about the downside. Those are choices that if you make them wrong, you find you can't fix them.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  17. “If you are constantly worried about what can go wrong and you sort of have a pretty good idea of what it would be, it enables you not to do things that get yourself into peril and it enables you to price things in a better way. And once you've figured out the correct action step, then life is good.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  18. “Really big, you can keep growing within that field because the field is huge. And if you catch a wave or a cycle, I mean, this is really how we built the firm.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  19. “Win huge, but you also can excite other people to go on the journey with you. If you have some very small idea, who's going to really join you for that? There's not that much room at the inn to compensate people. But if you have a big vision with something that looks like it's pretty much a sure thing because entrepreneurs don't really like taking risk. People who write about them and report on them think they're taking risk. But the person who's actually betting their life really thinks it's going to work. Or else, why would you bet your life? Having a vision to do something unique in the huge field where all the trends are going your way. That's where you should spend your time because you win on every level, easier to recruit people. The success is...”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  20. “Sure. You only have one shot to do something. And if you're focusing on doing something with your life, if you make a choice, that cuts off other choices. So you ought to wait until you find something that's really worthy of the effort because you're going to be making a heroic effort in any case. You should find a really big idea addressing a really big opportunity because then if you win.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  21. “Oh, that's easy. You know, you just declare that's what we're doing. And, you know, we set up a 360 degree review. You'd have, you know, sort of upward reviews, peer reviews, and downward reviews. So if you have 20 people commenting on your capabilities, we had roughly 25 different categories that people were reviewed on. And this was all done anonymously. You've got so many observation points that if one person didn't like somebody, their one dislike was overwhelmed by 24 really liked them. So if everything's done in that kind of mechanical. Anonymous way, you don't have trouble figuring out how good people are.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  22. “It's hard. And sometimes bad apples just get passed around because the legal system says you can't tell the truth about them.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  23. “Oh my god. Never compromise when you're hiring people. Good enough is not good. And people need to be trained. You can assume they know things just because they tell you they do. And so the whole onboarding quality control, psychological comfort of knowing what you're doing is axiomatic. And when you start something, you just assume because you know it and they say they know it's not any reason to push that further. People are sometimes delusional about their own capabilities.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  24. “You can describe a situation and say, How would you handle it? You're older, you're more experienced. And then they'll usually say, well, what were you thinking of doing? And you'll tell them and they'll say, nope, that's not the right way to do it. You're jamming this thing. You're going to alienate not just that person, but a bunch of other people don't do that. Try it this way. It's a learning experience. And after you have that coaching in that situation, you then when you see a situation like that, again, you know a lot better how to handle it than the first time.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  25. “If you're negotiating something and you get more money for your team, that means the other side gets less. So my biggest fall short because I really was more of a deal person and not really trained as a manager. You know, sometimes you'd have problems with people. You knew what the right answer was, but if you went ahead and implemented that, you could blow up a whole part of your business because other people become destabilized. So I learned that figuring out what to do wasn't hard, but how to do it and what kind of time frame to have and what sequencing to have was a learned behavior. It's good if you, you know, sort of have a partner or someone you can talk to.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  26. “Oh my God, you don't have enough time for this interview because I was just terrible when I started out. And I was sort of treating people like they were deals in deals. They're mostly a zero-sum game.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  27. “Evaluative process, and if somebody really needs to have that spot who can play better, then we try and help the person find a job somewhere else. You never terminate somebody because it's not fair. In other words, they're there because you ask them to be. And so the mistake is yours, right? It's interesting that some people like that who are sevens at our place could be an eight to nine in a different business area because we don't hire people who are not capable. They just might not be as good for us. And so if you help them get another position and their life works out well, then ironically they're sort of grateful because they know they're a seven.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  28. “It's always a tough decision because the individual in that zone is serviceable, but they need supervision and they're not going to develop after you make a decision that you've tried to help the person develop that won't develop beyond their capability range. And in certain functions, they may have a place, but not many of them. Because, you know, we're in a high performance area. It's just like a sports team. I mean, you could be the Patriots or you can be the Jets, right? So the Jets have a bunch of sevens and the Patriots have a quarterback who's a 10. They've got some receivers who are nine. They have a line that's probably eight and a half to nine. They win, right? So you know what the outcome is if you want to staff with sevens. And we have very detailed.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  29. “And they can build enormous businesses where there's none, or they can take an existing business and dramatically accelerate its growth. So that's a 10. They can play all positions at the top level. A nine is like really good person. They can execute anything. They're clever. They're hardworking. They're reliable. You can put them in charge of something where you describe the situation and they can pretty much bring it home without coaching. And so nines are great, but nines can't do what tens can do, right? They're not franchise determinative. Like a 10. And below nine, you have eight who do what they're told. And then sevens you don't want, and there are no numbers below that.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  30. “Who's a 10, and there aren't that many tens. A 10 can do just about anything. It's sort of like a LeBron or a Steph Curry, you know, or Michael Jordan. Why are they tense? Because they can score at will. They're great ball handlers. They get great rebounds. They can see a whole court. They can pass the ball for assists. There is no facet of the game. They can't do as well or better than anyone else. And people who are in that position create championships. So I was giving you a sports analogy, and it's the same in the business world. There are just some people who have that sixth sense of what's going on in their area. They can sense danger. They can see opportunity. They know how to hire people. They inspire loyalty. They tend to be really nice people as a rule.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  31. “Well, you train them and you coach them and you have them discuss with you difficult situations where they're not sure where to go because sometimes being executives has to do with making the best bad choice that you can. There are two or three different ways to do it. Nobody likes to do that in isolation and you don't want them to because the objective is to mobilize experience and judgment to help people. So someone's been through that, of course, then they've learned some stuff. That's why when you're older, you're usually a better executive than when you're in your 30s. When you're in your 30s, if I remember correctly, you really think you're very smart.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  32. “We have weekly meetings with each of our groups. And when something goes wrong, we can talk about what we missed. And, you know, we'll talk in different groups, we'll talk among the partners and say, well, how did we miss that? And is there something wrong with our process? Or did somebody not tell us something was going wrong? Do we not have enough of an early warning system? We basically try and do a diagnostic of everything that doesn't work out. You know, the way it should and running a great organization is an exercise in lifetime learning of things that didn't work out. So you can change the process. The objective isn't to blame anybody. It's to develop new rules so you don't visit the same mistake twice.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  33. “The structure of the deal, you learn how to protect capital pretty easily. That's not so hard. The first rule is never meet a maturity. So if you're borrowing money, you can almost always pay the interest. In almost every case, you analyze it and you see how bad the company performed in previous recessions and then you take a discount from that and you'll pay your interest. Where you get in massive trouble is if during that kind of economic period you basically have to refinance your debt. And then people look at how miserable the company's doing and they say, well, it's good that you want to refinance your debt. I don't want to lend you money now. And then you're done.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  34. “The system is great because what happens is the people on the team don't feel the weight of a decision because they're not making the decision. Everybody at the table knows what those two or three key drivers are. And usually in about 90% of the cases if something goes wrong. With the investment, it's about those risk factors. And we got them wrong. The team didn't get them wrong. We all got it wrong. And so if that's the case and the outcome is optimal, the team doesn't get blame. So this kind of intellectually rigorous culture that comes at everything basically frees everybody up. It's a protective system. So it's comfortable to work there at the firm because it's not somebody's fault if it doesn't go well. We missed it.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  35. “Yes, they tongue themselves. And so our job is to protect our investors and protect the firm. And what that does, by the time we have two or three meetings on the same thing, we really understand what those risks are. And I believe the most important decision is to not lose money. Some people care about the upside. They don't worry much about the downside if they think the upside is great. I like to start in the reverse sort of like a doctor, you know, do no harm. So if you lose a lot of money, then you have to have a really great deal next to make it up. You're better off never losing. And then if you have the same upside, somebody else does, then you do much better over time. So that was the theory of the case, and that's how we operate still today. It's 34 years later.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  36. “The team, you'll find that everybody at that table. It's pretty smart, or else they shouldn't be at the table. And you'll learn more about the risks than one person doing it with everybody else as an unpaid audience. They write it up, they come back, they send us the stuff in writing, you know, hopefully two days before we have a meeting so we can read it and absorb it. And nobody has a chance to blow something by us with flip charts or people in finance or good talkers. And so they'll con you not because they think they're doing something wrong. They think they're doing something right and they're just trying to confirm.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  37. “Made some huge structural changes which basically has helped make the firm what it is today. And I realized I wasn't some kind of investment genius would have been nice if that was the case, but it wasn't. And so I realized the best way I thought to make decisions, which was to get all the partners together around a table when any proposal comes in, make sure the proposal is written up and all the risks are laid out with what the team thought the outcome of those risks would be if the risks materialized and then have each of the people around the table in effect attack that thesis and look at each of those risks and any other risks that they thought and give their own view of where they thought things would come out. And if you go around a whole table like that, instead of just having the one great person interrogated.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  38. “It's sort of like a moral obligation. Somebody trusted you. And if that trust was misplaced, I always felt we should wear it, not the person who trusted us or me. They were just doing what I asked. And so this is my problem, not theirs.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  39. “Capital that was in, but yet we never had in our whole first fund ever lost any money for any bank. And, you know, we've almost never in the firm's history lost money for any bank. So if you ever had something bad happen, you would absorb that pain as the equity.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  40. “Yeah, the deal went bad because I was inexperienced and I made a bad call in terms of proceeding with the partner who had originated the deal at the firm. And one of the other partners said he thought the deal was terrible. And we go bankrupt. And I evaluated it. And I didn't deserve a C or a D. I deserved an F. And I went with the first partner. And the thing got in trouble. And, you know, then I was really concerned because it was so early in the firm's history. And, you know, so we put more money into try and save the deal. Then I realized, oh my gosh, we're going to lose the new money as well as the old money.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  41. “One day before the Black Monday crash in 1987, if we would have waited, I think the thing just would have all fallen apart. You know, I have a good sense of timing. I was just so nervous that the person who was working with me. We had one employee, a woman we had hired from Goldman Sachs, and she was working on the closing. And, you know, I'd go into her office every 10 minutes. I'm sure I was beyond annoying. And she subsequently quit investment banking and became a psychologist. Got a PhD doing therapy. So I guess that gives you some idea of the intensity of the experience.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  42. “It's based on our, yeah, our track record as human beings. They have a name for that in the banking business. They're called character loans. So it's just basically a bet on Peterson, my partner, and me as people who have prevailed in a lot of different situations. So, you know, I remember each one of the investors because we were turned down 17 times for every one yes. And those are live presentations. Those are people looking at you saying like in gladiator, the emperor puts his hand up and the thumbs in the air and he just puts it down and you're looking at it. And so we rejected so many times that, you know, that was almost as bad as no business in the advisory business. So yeah, we finally managed to raise all the money at our final legal paper.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  43. “We raised $8 And then went back a year later, got another hundred for money in the firm. So I looked at it. We sort of with two people with no investment capability raised $950 million, when I think the biggest fund in the world was like a billion two of people who were really competent and experienced.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  44. “One level, it's a little easier because you're not so busy, right? Because you don't have any business. So you have more time for your family. On the other hand, the sense of impending doom is so refined that it's hard to be emotionally present when you're worried about completely wiping out financially. So at the very beginning, it's not hard from a time commitment perspective. But as you start getting going and you don't have a big staff and you're trying to be successful, it becomes a very all-consuming type thing. Most entrepreneurial experiences are not leisure time based. I mean, to become successful, particularly in with a new concept where you have exceptional competition, you don't survive, let alone thrive without pouring your heart into it.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  45. “Going to eat you to death, it really focuses the mind, as you can tell by my voice and my recollection. I have no trouble recreating the feelings of complete fear of failure.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  46. “And you know, it took a while. I remember when we got our first assignment that was from Squib, which was a pharmaceutical company for $50,000, which was less than the smallest legal bill I had ever gotten on a transaction, but $50,000. We started with $400,000 total capital, 200 from each of us. And when you're an entrepreneur and you start something the first day, you start losing money because you're paying the rent. And, you know, if you need furniture, you either buy it or you rent it. So you're losing more money. And at that point, you needed telephones, landlines, because they didn't have cell phones then. So now you're paying the phone company. And then you have the insurance and you couldn't replicate anything without a Xerox machine. And they had rent. Then you realize if you don't get some revenue in here, this rent's going to...”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  47. “Of you, not in terms of your capability, but maybe it's not you, maybe it's just the firm where you're working, but for your own ego-driven reasons, you think it's you working at the firm that creates the business. Well, I learned was mostly the firm. That's what corporations were looking towards. And so we found ourselves out there on the high wire with no model for corporations to hire two people, you know, with some made up name to handle their most sensitive issues, even though they turned to those two people for the same type of sensitive work, they just assumed that if you weren't domiciled someplace. So without really understanding it, we didn't realize we were establishing a new paradigm in finance, which we were, unfortunately.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  48. “Yes, of course. I thought about it all the time. I thought about it every day. The difference was that there were no M&A boutiques that existed. Relatively few of them, so it was in effect a bit of a cartel. But from the user, which were corporations, there was enormous security in dealing with sort of like a Morgan Stanley Goldman Sachs, Solomon Brothers, First Boston, because they had a hundred years of history, they had prestige, they had other businesses besides M&A that the organization might want to use and they had global access. And so why make a change for two guys who used to be at one of those places? I sort of in my own mind thought we were still doing equivalent work because I mistook the fact that when you leave an established place, apparently that changes people's view.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  49. “I didn't think it would be hard at all because we were so busy all the time that why should it make a difference if the same two people were at one address versus another? It was the same people with the same capability and brain and ability to understand what was going on. I thought it was like a lot of misguided entrepreneurs. I thought it would be easy. Guess what”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT

  50. “Sort of almost a fire sale basis so that the acquiring institution, which is larger, basically provides the same function as putting equity in there. They're guaranteeing the rest of your balance sheet. So that was the position we found ourselves in. And I sold the firm to American Express.”

    2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT