YouSaid · the spoken record

Tony James

lines on the record: 105
first: 2026-05-05
most recent: 2026-05-05
sittings or episodes: 1
sources: podcast

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“And that's mutual. I mean I'm so lucky to have had incredibly talented people. Our hearts For the firm, but for me, I'm only as good as they are, right? And if they play their hearts out and do really well, I benefit. And so I'm, and I think they always knew at the end of the day, no matter what. I was out for the firm first, never for myself. And that created a sense from them of. Loyalty and trust because none of them, if you're out for the firm fruit, they don't really want undue rewards. They just want fair reward. And then, if you can Captained a winning team, and it carries everyone along. It's a virtuous circle.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“What not to do is worry about I'm going to move over to the next firm because they're going to pay me another $100,000 next year. I wouldn't do that at all. Make sure you've got lifelong learning. Make sure you're empowered to do stuff and take risks. Make sure if you take smart risks Your firm's got your back. Roll the dice and be lucky.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, first of all, there's a lot of luck in that. And I never really planned, but I reacted. But I would say some of the attributes you're looking for, or someone was an effort that I looked for, maybe it's a better way to put it. First of all, I wanted an unstructured opportunity where someone didn't tell me how to do something, then expect me to do it, where I could figure out what and how to do. Do it my way. And so that was non-hierarchical, non-structured organizations. I wanted something where I could change the paradigm because that's how I felt. Frankly, intellectually engaged, but it's also where the upside comes from. An opportunity that really provides a lot of Economic firm personally and professional growth. Growth is very important.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“So, and fly fishing is the same way. You can't worry about anything else while you're out there doing that. But it's not stressful intellectually. But it unplugs you from intellectual stresses. So I think those elements have always really appealed to me.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“What I love about it is like so many things, like investing, it's lifelong learning. You never know everything. And there's a randomness to it and a connectivity to it that defies analysis, but rewards that sort of almost six-sense, that instinct, which I think great investors have. So that all appeals to me a lot. The connectivity, when you are engaging with nature in a really tactile way, you connect it and you see it much, much more in much more detail and you appreciate its nuances much more. So that connectivity to nature has been an antidote to the rest of my My existence, which has always been so, so driven and analytical. I don't know if you ski or anything, but if you're going down through bumps, whatever concerns are in your head, you're not thinking about that. You're just thinking the turn, turn, turn.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“Graduation rate. And then those graduates earn on average 50% higher lifetime income than black graduates of non-HBCU. So they get more kids through college for a better life. And they start with the highest percentage Pell Grant and First Generation College. So they're doing a great thing with the toughest kids with one-third the money. They are skeletal in their ability to manage themselves, track students, get students jobs, offer students loans Prepare their own financial statements. So we thought this would be a wonderful thing to empower the HBCUs to be stronger and better. And we now have 11 offices around the country, and we work with about 70% of the students in America that go to HBCUs. It's been a spectacular success.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“And we'd make a lot of money while doing good for society. And we started down that path. But while we were doing that, A number of HBCUs came to us and said, geez, we really need help with this or help with that. And so we kind of morphed the idea to, much like, and I don't know about Andris and Horowitz, but much like a private equity portfolio management capability. We have IT people. We have lean people. We have pricing people. We have on and on and on and on, marketing people. And if we could set up a capability like that and then donate them to HBCUs. We could do, we could help them a lot. And HBCUs do remarkable things for educationally. So 8% of African Americans that go to college go to HBCUs. But 16% of black graduates graduate from HBCUs, so twice the”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, in 2018, a friend of mine who had worked for Obama in their Department of Education came in and said, and he had been an M&A banker at DLJ. And then he went into the government, and he ran the student loan program for the government. He came in and said, You know, I'm out here. The one thing that we didn't clean up in the financial crisis was student loans, and maybe we should come up with something. And we started thinking about that. And we started working with some historically black colleges and universities around income share agreements that a graduate would get his college education for free and then would agree in return to give a certain percentage of his or her income over a minimum wage to repay the college. And then the college would take all those receivables. This is the Blackstone opportunity. Securitize”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“You mentioned you had lots of interests outside of Blackstone Costco and DLJ. I know one of the things that you have been passionate about is spending time with historically black colleges. Maybe talk about that nonprofit and kind of the impact that you've had.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“So I think they'll be, you know, and life sciences, I mean, it's another explosive upside. Longer holes harder than the rest of Venture Just because you're in the body and the regulatory and so on and so forth. But, man, there's going to be some huge fortunes made in that. So I'm optimistic about private capital, but it evolves.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“They find a deal, they draw it down so your money's not been in the ground for a few years. And then a few years later, if it's a successful deal, they sell it for two times their money. You've paid a couple of turns, a couple of tenths of turns in management fees, they take off 20% of the gain and carry. And you've got 1.4 times your money, and you've tied up your five years. Go buy a New York municipal bond. After taxes, you're getting almost as much So I think the opportunity to hold assets longer in a private context and really let them grow. Very attractive. And I think the industry models need to reflect that. LP And certainly private capital and family office capital has much more towards the long hold LP's are getting there, but they need to evolve that way.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“You're getting a seasoned investment and an attractive price with much lower fees. And you're able to, with a sponsor that's doubling down his commitment, and you're able to really analyze it, I think it's one of the great Times to put money to work. Similarly, look what's happened in your business more than I do, but the scale of the business is so radically larger than it used to be A big venture fund used to be a billion dollars, and there weren't There weren't firms like Andreas Norowitz that had lots of different funds. And companies are staying private longer. And I think there's an opportunity to ride those companies longer. And I love that if you're good enough about picking them. What I don't like about drawdown funds, the traditional private equity fund is you commit to them. They charge you management fees for a while.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“So, okay, there'll be a correction, there'll still be an opportunity when that shakes out. To buy private, get debt, and get higher returns than publicly traded high-yield debt. Okay, you know, the AI revolution. I would say you get these things periodically where a new technology makes you question the old business models. And that's an adjustment, but it's just an adjustment I think one of the great opportunities right now is there's about 30,000 Portfolio companies of mid market private equity firms that can't be sold Can't go public. There's no strategic. 20 trillion or something worth of value. All those companies need to be willing that and eventually need to be sold. So for capital pools, there's going to be an immensely attractive being able to pick company by company. Whether it's co investments or continuation vehicles.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“and yields kept coming down into the mid the high single digits for the same risk, but there was so much capital there was more competition for deals, so you also lost covenants and things like that. And the kind of capital that started to be raised with retail money where it comes in one month and it's got to be invested right away or you have the negative drag. Means that you kind of have to buy the market what's out there One of the great things about drawdown funds is always there's nothing good to do. I don't have to do anything right. Kind of lost that with the structure So I think there'll be some correction in private markets, but it's not going to be 2008 where you were destabilizing the system because it's not owned by banks at 30 to 1 leverage. These days, the leverage is lower, but plenty were 20 to 30 to 1.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I try to look at private markets not as a series of individual businesses, but kind of a whole. And I still think private markets over time can significantly outperform public markets. Before we leave Poet Marcus, so many people have the vast bulk of their assets into stocks and bonds they could trade tomorrow. Not only don't they need that liquidity, it has a real opportunity cost, but they also entice them to often do the wrong thing at the wrong time A hidden So I'm a big believer that over time you can outperform in private markets. But markets evolve. I mean, it was clear to us that private credit. Capitalists. It was good for a while, you know, yields were 12%. Capital flooded into that.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, we had a lot of great talent, some of whom you've talked to, and you know, they're remarkable people. I would say, first of all, John Ran our biggest business, so let's start with that. But beyond that, he's a great leader. He's a very natural leader. He's a wonderful external spokesman. He's much better than I am about that. John has a knack for seeing in very complex cluttered environment. He has a knack for seeing the simple path and right path through it. Works incredibly hard. So I think John was a great choice, and he's very decisive, and he's got very good investment instincts. So, I mean, how lucky was I to have John That I could hand the reins to because it would have been a failure if I had Hadn't arranged as someone who could take Blackstone up.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“Such an ego gratifying seat. So I would say most people as a result hang on too long. And I believe you've got to move out of that seat while the company still, while you have plenty of If you wait until it tops out, you're going to lose momentum for a while before, you know. Maybe the new guy can correct it. And there was no reason to lose that momentum. And I'm going to love my years at Blackstone, but I've loved my every day since.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“And credit to Johnny. He said, What do you think, Tony? And I said a couple times, give me another year. But I felt that obligation and I felt he was ready. And so, but it's never easy to let go of that seat. It's such a great seat. It's such a profitable seat.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“Then, too, I have to say leadership transition is the Achilles heel of any asset manager, in my opinion. It's really not so easy, and you don't even see the problems right away necessarily, but you might see them three, four, five years in. For me, one of my top priorities, if I did a good job managing Blackstone, All the statistics we talked about of the growth of AUM and market value and all that, that was fine. But succession planning was one of them. I had to nail that. And that's a process, at least for me, it was a process. It meant picking the succession and grooming him and making sure that there was no breakage around his movement, either in lawsuit, his business or people being disappointed. It meant picking the right succession, making sure he was 100% ready on and on and on.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I'm glad I did because if I hadn't committed myself, I probably would have been harder to let it go. But first of all, remember, Blackstone was my, since my third run, I had DLJ, I had Costco, which started the same year as Blackstone, but became even more successful. And then Blackstone. And I felt like I'm kind of a parapetic kind of person and I have a lot of interest. And I felt like there's something else out there. I don't want to do this for the rest of my life. I want to do it. I want to do it well. I want to build something I'm proud of. But I've got more potential. And so that was one thing. And I just felt by then, and Steve's only four years older than I am. So, and I'm fine with that. I didn't aspire to anything but what I had there.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“Try to minimize hierarch We're hierarchy comes bureaucracy. And I'd learned from DLJ that in contrast to Credit Suisse, that putting more controls in doesn't necessarily protect you, that a lot of it, if you have good people and you trust them and you hold them to very high ethical standards, and that becomes the behavioral norm, that's much better than having lots of watchers and watchers of watchers trying to... Check every little thing that you do. And so Credit Suisse had all kinds of ethical lapses. DLJ had none, but they had immense controllers and process and whatnot. DLJ was scalable. So I kind of brought that attitude to Blackstone.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“I completely agree with that. I always bent over backwards to minimize bureaucracy and process and hierarchy. And so I had at one point, I think 56 direct reports.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“And is helped by the fact that you have a lot of discrete businesses and funds, right? So everyone can feel like they're in charge of their empire.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“You're paying someone else for all the growth. We wanted to deliver the growth, the value of the growth to our shareholders. So those are, you know, we had a. Seven or eight kind of criteria that we looked hard at and made sure fit.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“That were happy fitting in a bigger corporate organization if that helped them scale their business a lot. That's a cultural thing. Other people would just, I'd rather have a small business and not have to talk to anyone, right? So the right culture, the right people, the right balance between what the house brought. What the acquired company bought. We had to feel like we could be a leader in it. I didn't want to buy a company and be not a leader. So we wanted a lead in a few big businesses. We also had to feel we could be. A top quartile investor consistently with this team. I didn't want to be an average investor in any business. We wanted people that, and we wanted to buy small where we could scale them. We never wanted to buy a fully built out franchise.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, culture is key. Having people that fit in is key. Number one. Number two, people that want to really grow something and appreciate what Blackstone brings to the party. You have to have balance between what the House takes from a... Entrepreneurial management team running a fund. And what the house gives them. When that gets out of bounds, if you go buy a hedge fund and you're not doing anything for them and three years into the deal, he's fully vested, you're going to have to buy the company all over again, essentially. So we wanted people.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“The book on financial services firms buying other financial services firms is not very positive. They almost never were. Every one of our acquisitions worked. There were two that didn't really move the needle strategically, but we made a very good return on the investment. We probably made three or four times our money.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“From Credit Suites, right? Because, again, they're ambivalence about the business. So we bought it for $119 million. It's $120 billion business today. It's worth tens of billions. That's amazing. Right. And we've made about a dozen of those acquisitions every single, and the...”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“Smaller companies to get the team. So it's a little hard to say was it an acquisition or was it a group hire? But either way, I knew these were talented guys and I knew they were very ambitious. And most of the purchase price was contingent on future success. So I knew that we could, you know, I thought we could build a big business around them, and we did. We built $100 billion credit business around them. But GSO was the first, but it was only one of about a dozen acquisitions. Oh, interesting. We did a lot of acquisitions. I mean, maybe the best acquisition we ever did was strategic partners or secondary business.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“You could, you know, sometimes an acquisition, especially if you have a lot of the purchase price contingent on future earnings and this and that, it's almost like a team hiring. You see this all the time in tech, right? You have all kinds of...”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“We had a very small credit business. Blackstone had about a billion and a quarter in it And the people running that business then were solid insurance company debt investors, but they were perfectly happy with the business of the scale that it was and really didn't see a lot of ways to drive it. At Blackstone, we wanted to have a few large businesses. We didn't want some other firms have gone to a million little businesses. Popcorn stands there. We wanted to have a few big dominant businesses. When I mentioned before, that a lot of the leadership of the groups needed to be changed. This was one of them.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“And worked out all this with bankers, outside bankers and lawyers, but not internal people. And I would report back to Steve, of course, and to P. Peters about Steve was much more front and center on this. But it was kind of a secret project because otherwise people would have been, Tony, I should be the number two person. You know how it is.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“Small pieces of the whole that you have to think about. And as I say, I could go on and on, but it was incredibly complex. And the other thing I would just say and file on this, Steve and I and Pete, Peterson, who was still around them. Wanted to take a hard look at this and see what it would be and do all of the plumbing to make sure we had the option. But we weren't sure we wanted to do it. So, how do we go through this and not have it loom over everyone in the firm and everyone's trying to come into, and so essentially this was something that Steve delegated to me, and I did really with no one else in the firm actually helping for nine months and did it at night.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“We did that first of all by basically telling people they can't sell any stock for eight years. And then we had unusual vesting, whereas what was unvested we could take away. So most companies, if you have five-year vesting, if you let someone go, that triggers the acceleration of their vesting. We didn't do that. We could let them go, and the last three years of their investing, or if they were demotivated and weren't working, we say, I'm sorry, you're not working hard anymore. We're going to take away your unvested stock. So what's vested is yours, but the unvested stuff on an eight years we had an eight year run at it. And we didn't lose anyone that we didn't want to lose for eight years And people were totally motivated for the whole time. So that part of it worked. But all these things are just little.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“And you're going to give up a little, you're going to give up a million of your annual income, but we're going to give you essentially a stock that's forever and grows over time in exchange. So how do we not demotivate? Not only how we not distract them by looking at the stock reading, but how do we not demotivate them from just, well, I'm worth $100 million. I'm just going to put my feet up and come to work three days a week. So, all of that.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“So, how do you protect your day-to-day working partners that go into work every day and try to make good investments from being distracted or influenced by the public? So first of all, we build an elaborate corporate overhead so that we didn't involve any of them in any of it. Not only the going public, but once we were public. Added $75 million a year at the time to our operating cost, which is nothing a lot more today We also were making people wildly rich. So in those days, if you work for Williams Firms, if you got paid a million dollars this year, that was great. But next year, maybe you get paid a million or 750 or a million a quarter, whatever it was. But it was year to year. We were coming in saying for that, we're going to give you. Hundreds of millions in many cases, or tens of millions.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“You could use option models to compute the option value of the carry and how do they vary over time. We had lots of choices just on something as basic as the accounting for carry. So there was not even an accounting standard. That, you know, the tax structure and all that, should it be a publicly traded partnership, we thought that was more value added because that's what all the insiders wanted because they don't like paying taxes. Sure. Turns out the market. Actually, didn't really like it, so you know we converted, but I don't think that was a compelling error. But we were making it up as we went along. And then the reason we could get public is Blackstone to have a hell of a run. We didn't want to ruin that.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“We could spend an hour on the subtlies and complexities of this, but just to give you some windows on it, Blackstone wasn't a firm. It was 173 independent partnerships. All with different percentage ownerships. Every fund had a different percentage ownership than every other fund. All that somehow had to be rolled together into One entity, and everyone had to have the right number of shares in that entity, just number one. Number two. At that time, there was nothing like Blackstone. We had three different ways for count for carry. We could account the way we did it, and now the industry does it now, which is kind of You get carrie when it's realized. You could do it on a mark to market basis so in a crude carry.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“Investment business, you can be really good or you can have a cold hand. And I didn't want to, I mean, we can live by the sword or die by the sword. I didn't want to die by the sword.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“And then we build our own proprietary data. CRM system and data systems. So we knew more about every Merrill Lynch client and whatever question they've ever asked us than Merrill Lynch knew about that client. And we did that across the board. And we did that for not just Merrill Lynch and UBS and the BWIROS, but thousands of RIAs. And that, I think, is the now the dominant strategic asset that Blackstone has. That no one else can really replicate because no one else has the breadth of product. So that you're always in the market. You always have something that a customer wants or a broker wants to sell it. The number of products that were always open that you could put money in anytime No one else has the revenue scale to justify the overhead And it becomes reinforcing of the brand and the value. So I felt like”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“And we started off not just by hiring salesmen. We started off because the wirehouses, they need training. So we ran Blackstone University and people would come through and every broker of every wire, the only place they were going to come and learn about alternatives is Blackstone University. There was no other alternatives university. And then we had a masterclass where you go back and get the equivalent of a master's in this.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, definitely. I mean, the insurance, like both were big untapped asset classes. So the institutions have generally 25% of their assets in alternatives, let's say. The more sophisticated ones like endowments are 50. Retail was at 2%. So it kind of screamed, and insurance was very low too. Now, insurance has regulatory restrictions to keep it lower. Although they're increasingly structural ways to kind of nudge that boundary. But those seemed like there was just as much insurance assets as there was pension assets and just as much for a 1K assets or retail assets. So how do we tap? We're living with one-third of the market. How do we open up those other thirds? And again, it's all about how we use our scale and our size. There's no other firm that could have afforded to build the retail distribution. We have 500 people in that.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“From multiple different businesses and insights and so on and so forth. And that was one of our competitive advantages that we tried to maximize.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“Infrastructure. And that's an area where these different You take a mosaic tile from each different business, you put it together, and you have a clearer view of it. So, yeah, so we... We could see what was happening in e commerce, but we could also see what was happening in warehouses, and we could see. And so... That ability to develop to see themes because the early significance, if you're going to catch the signals early, they're never obvious. Because by the time they're obvious, it's priced in, right? So you've got to catch them early. Especially if you're blackstone and you want to move a lot of money into it, right? So, how do you see things early? You get reinforcement from independent, no one signal is dominant. This is so clear, of course. But you get reinforcement.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“But those people have tons of opportunities. So I had to create new opportunities, not just a war of attrition with more senior people. So, growth was important. And so how do you mitigate the negatives that come with that? And so we spent a lot of time thinking about that. We tried to add businesses that made the other businesses around them better. They brought insights, access, relationships, capital, something that made each of the other businesses better. Also, this is why we were leaning so early in our stealth effort to build retail distribution Again, just distribution power. I mean, it was a hedge against the time when maybe all the funds aren't high top quartile returns. And so how do we still drive business and customers and AUM and so on and so forth?”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“No, no, no. I want Andreason Horace to do one thing, and there's a genius who sits in the corner and he divines the right answer. We were becoming, right or wrong, not only a supermarket, but a big supermarket with lots of different. And that was not where LP's heads were. Today's different but back then. So my challenge as a firm manager was to figure out how do we take our disadvantages and make them advantages. Because we don't want to stop growing and we don't want to descend into mediocrity. I mean, as we've talked about before, growth in and of itself creates opportunities for new talents. So we could keep talent that would otherwise get frustrated and go do their own thing. I mean, I always wanted to have the most talented people in the world. And train them so they were better than they would have been any other place.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“I do, and I do. One of the tricks of running a firm is making people in a fund care more than just about their fund, right? That's a sensitive balance. You want them to care enough, but not too much. And then within funds or within sub-businesses, maybe private, how do you get the guys in India to care enough about the guy that deals in New York? And for me, I have my way of thinking about that and how to balance the rewards on both sides, really from trial and error and what's worked over the years. There's no theoretical model that makes it right. But the first thing is to make you do want everyone, even people in the fund, to care a little bit about the firm for lots of reasons The issue as Blackstone became successful, the issue wasn't a monoline boutique investor anymore, which is what all the LPs wanted.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“Blackstone as a company, not just a collection of individual funds. It's a much more entrepreneurial question because every entrepreneur wakes up every day asking about their competitive advantage. I'm curious if you agree with that distinction, how you sort of think about that in the context of Blackstone or DLJ. I do.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“And I'm sure there were plenty of times when it went the other way. But that's kind of what you know. You're more than just a referee, but I really felt strongly that it's a collective decision. So when I put my finger on the scale, It wasn't that I was deciding I had to get the other people there. And I just think groups make, especially in investing rates, better decisions than any one individual. And Blackstone came from a lot of, as I say, independent talented people that wouldn't challenge each other, wouldn't even do the work to look at someone else's deal. One CIO that was a Very smart guy, but a bottleneck And it wasn't a scalable model.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source
“There are times when I feel like there's something in investing, there's something that's not on the page. You've got to have a feel. We kind of talk about seeing around corners a little bit. And partly that's... The partner and his conviction. Partly it's my own gut, even though it's not provable. Partly it's the process becomes a little unfair sometimes because someone gets on something if there's a stake or something and they just stay on it and the whole committee kind of Lose this momentum So definitely there were times I put my finger on the scale to level that out for sure.”
2026-05-05 · a16z Podcast · Building Blackstone, Backing Costco, with Tony James · IDENTIFIED FROM THE TRANSCRIPT · source