November 10, 2020
Lessons From Billionaire Stephen A. Schwarzman
The best executives are made, not born. They never stop learning. Study the people and organizations in your life that have had enormous success. They offer a free course from the real world to help you improve.Stephen A. Schwarzman, What It Takes, pg 351
6 Takeways From ‘What It Takes’
Graduating from an Ivy League School can’t hurt one’s chances of success in life. Stephen Schwarzman graduated from Yale University, where he was a member of the secretive society commonly known as ‘Skull and Bones’. Through his undergrad experiences he made connections with the likes of George W. Bush, John Kerry and Averell Harriman. Schwarzman even went to Averell Harriman seeking career advice:
He had told me I could do anything to which I set my mind. At some point in life, we have to figre out who we are, he said. The sooner we do it the better, so we can pursue the opportunities that are right for us, not some false dream created by others. But if I was going to turn my worthy fantasies into reality, to become a telephone switchboard filled with inputs, I’d need money. Stephen A. Schwarzman, What It Takes, pg 33
My take on reading about Schwarzman’s academic experiences are that the connections he made in the process, and the doors his education opened-up for him at Lehman Brothers, proved the most valuable as the real-world experiences he gained at Lehman gave him the skills he needed to be truly successful later in life.
John Gray is another incredible success story inside the success story of Stephen Schwarzman. Hired by Blackstone right out of college in 1992, he was running the Blackstone real estate business by 2005 at age thirty-four. Today, Gray is the COO of Blackstone and next in line to become CEO. His net worth is purportedly north of $4 billion (according to Forbes).
Schwarzman provides (3) valuable litmus tests for entrepreneurship. First, your business idea should have the potential to be huge (because the associated startup pain will be significant). Second, your business idea should be unique and fill some need in the market. Third, the timing of your offering has to be right.
Michael Bloomberg once came to Blackstone seeking capital to help fund and grow his young financial data company. At the time, this kind of investment did not fit the Blackstone investment paradigm, so they passed on the deal. But learning from their loss on this deal, they created a new investment fund call Tactical Opportunities, which could go after special investment deals like that being sought by Michael Bloomberg. ‘Tac Ops’ (as it came to be called) grew to become $27+ billion business.
According to Forbes, Bloomberg’s net worth is now $48 billion compared to Schwarzman’s $15.4 billion.
Graham Allison, a Harvard historian, coined the term ‘Thucydides Trap’ to describe a state between nation-states where the people of one feel threatened by the success of the other (like the rise of Athens over Sparta) and go to war as result of the perceived imbalances. Schwarzman, growing concerned about a possible Thucidydes Trap between the US and China, set out to try to help divert such a disaster through education and cultural exchange by creating Schwarzman College and the Schwarzman Scholarship Fund.
This struck me as Schwarzman almost single-handedly sets out to avert global disaster through education and cross-cultural exchange, which one might think should be the job of nation-states. Cindy offers some good insight into this in the podcast.
Finally, at the end of the book, Schwarzman concludes his book with ‘25 Rules For Work And Life’. Cindy and I had a good, thought-provoking discussion about some of my favorites in this list.
‘What It Takes’ was well worth my time investment, one I hope to capitalize on in my own professional life. I highly recommend it for your own library. You can purchase it through our Amazon affiliate store by clicking this link (which also helps support this blog and podcast).
podcast billionaires stephen a. schwarzman blackstone michael bloomberg lehman brothers goldman sachs hank paulson john gray thucydides trap schwarzman college schwarzman scholars sailing ted turner yale university harvard business school skull and bones