Stephen Schwarzman, Blackstone Group, on Entrepreneurship (Part III)

Stephen Schwarzman, Blackstone Group, on Entrepreneurship (Part III)

Schwarzman is arguably one of the most successful entrepreneurs of this era. He has been an innovator in the financial services industry. He wouldn’t be viewed in the same category as Bill Gates, Steve Jobs or others because he has not produced a consumer product that is readily identifiable. However, he could be viewed as the Jeff Bezos of the finance world—an innovator in the delivery of services.

In light of Schwarzman’s success, his insights generally, and on entrepreneurship specifically, are of interest. He cites three basic tests for an entrepreneurial venture. First, must have the potential to be huge. Second, should be unique. Thirdly, your timing must be right [199]. To some extent, the last factor is beyond a person’s control—but critical to success.

He makes an interesting point about being first. “The world actually doesn’t like pioneers, so if you are too early, your risk of failure is high.” [199-200] Schwarzman would rather be a quick second, rather than a dead first. As the saying goes, “the early bird gets the worm, the second mouse gets the cheese.”

Being an entrepreneur is not easy. “No entrepreneur anticipates or wants pain, but pain is the reality of starting something new. It is unavoidable.” [200] If you persist and succeed, you will reap rewards. “But one of the great things about the entrepreneurial experience is that over time if everything works out, life does get easier.” [283]

How to maintain the spirit of entrepreneurship? “The trick…finding fantastic people and giving them the chance to be the best at what they do. We keep our edge by reinventing everything we do to make it better.” [334]

“Establishing and imparting a strong company culture is perhaps one of the greatest challenges any entrepreneur and founder is tasked with, but it is also one of the most gratifying if you get it right.” [347] “…a culture of lifetime learning, excellence, and relentless innovation in action….” [347-8]

[China first invested in Blackstone in 2007] [China’s GDP per capita since 1980 has increased 33x and the US 5x] “China’s emergence is the defining geopolitical fact of our time.” [289]

“So if leaders don’t want their organization to tire, they have to start working on succession when their drive, their intellect, and their competitiveness are yet to peak.” [329]

“It is so important that people understand how much you appreciate them and that you make them feel good about themselves. That self-confidence is the basis for great performance.” [334-5]

Schwarzman has made some significant philanthropic contributions. “What if I apply my entrepreneurial energy and the skills I had acquired building Blackstone to philanthropic challenges of similar ambition?” [286] He gave US$150 million to the University of Oxford. “I never attended Oxford but had visited as a teenager. To this day, I remember being struck by its history and the contrast of the vivid green lawns against the golden sandstone of centuries-old colleges. Oxford has been at the heart of Western civilization for nearly a thousand years…” [342] He has no qualms about using his name for philanthropic undertaking—although he doesn’t address why everything is eponymous. Perhaps it is a billionaire’s ego or, essentially, “because I can.”

What’s it all about? Schwarzman doesn’t dig too deep. He is clearly enjoying the baubles of success, able to taste whatever the world has to offer. “My successes and failures have taught me much about leadership, relationships, and living a life of purpose and impact.” [347] “Believe in something greater than yourself and your personal needs. It can be your company, your country, or a duty for service. Any challenge you tackle that is inspired by your beliefs and core values will be worth it, regardless of whether you succeed or fail.” [352] Perhaps not profound, but for him, it doesn’t need to be. Others may need more.