What It Takes: Lessons in the Pursuit of Excellence

Stephen A. Schwarzman

“But I’ve always believed that it’s just as hard to achieve big goals as it is small ones. The only difference is that bigger goals have much more significant consequences. Since you can tackle only one personally defining effort at a time, it’s important to pursue a goal that is truly worthy of the focus it will require to ensure its success.” 

25 RULES FOR WORK AND LIFE 

1. It’s as easy to do something big as it is to do something small, so reach for a fantasy worthy of your pursuit, with rewards commensurate to your effort.
2. 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. 
3. Write or call the people you admire, and ask for advice or a meeting. You never know who will be willing to meet with you. You may end up learning something important or form a connection you can leverage for the rest of your life. Meeting people early in life creates an unusual bond.
4. There is nothing more interesting to people than their own problems. Think about what others are dealing with, and try to come up with ideas to help them. 
5. Every business is a closed, integrated system with a set of distinct but interrelated parts. Great managers understand how each part works on its and in relation to all the others. 
6. Information is the most important asset in business. The more you know, the more perspectives you have, and the more likely you are to spot patterns and anomalies before your competition. So always be open to new inputs, whether they are people, experiences, or knowledge. 
7. When you’re young, only take a job that provides you with a steep learning curve and strong training. First jobs are foundational. Don’t take a job just because it seems prestigious. 
8. When presenting yourself, remember that impressions matter. The whole picture has to be right. Others will be watching for all sorts of clues and cues that tell who you are. Be on time. Be authentic. Be prepared. 
9. No one person, however smart, can solve every problem. But an army of smart people talking openly with one another will. 
10. People in a tough spot often focus on their own problems, when the answer usually lies in fixing someone else’s. 
11. 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. 
12. Never deviate from your sense of right and wrong. Your integrity must be unquestionable. It is easy to do what’s right when you don’t have to write a check or suffer any consequences. It’s harder when you have to give something up. Always do what you say you will, and never mislead anyone for your own advantage. 
13. Be bold. Successful entrepreneurs, managers, and individuals have the confidence and courage to act when the moment seems right. They accept risk when others are cautious and take action when everyone else is frozen, but they do so smartly. This trait is the mark of a leader. 
14. Never get complacent. Nothing is forever. Whether it is an individual or a business, your competition will defeat you if you are not constantly seeking ways to reinvent and improve yourself. Organizations especially are more fragile than you think. 
15. Sales rarely get made on the first pitch. Just because you believe in something doesn’t mean everyone else will. You need to be able to sell your vision with conviction over and over again. Most people don’t like change, so you need to be able to convince them why they should accept it. Don’t be afraid to ask for what you want. 
16. If you see a huge, transformative opportunity, don’t worry that no one else is pursuing it. You might be seeing something others don’t. The harder the problem is, the more limited the competition, and the greater the reward for whomever can solve it. 
17. Success comes down to rare moments of opportunity. Be open, alert, and ready to seize them. Gather the right people and resources; then commit. If you’re not prepared to apply that kind of effort, either the opportunity isn’t as compelling as you think or you are not the right person to pursue it. 
18. Time wounds all deals, sometimes even fatally. Often the longer you wait, the more surprises await you. In tough negotiations especially, keep everyone at the table long enough to reach an agreement. 
19. Don’t lose money!!! Objectively assess the risks of every opportunity. 
20. Make decisions when you are ready, not under pressure. Others will always push you to make a decision for their own purposes, internal politics, or some other external need. But you can almost always say, “I need a little more time to think about this. I’ll get back to you.” This tactic is very effective at defusing even the most difficult and uncomfortable situations. 
21. Worrying is an active, liberating activity. If channeled appropriately, it allows you to articulate the downside in any situation and drives you to take action to avoid it. 
22. Failure is the best teacher in an organization. Talk about failures openly and objectively. Analyze what went wrong. You will learn new rules for decision making and organizational behavior. If evaluated well, failures have the potential to change the course of any organization and make it more successful in the future. 
23. Hire 10s whenever you can. They are proactive about sensing problems, designing solutions, and taking a business in new directions. They also attract and hire other 10s. You can always build something around a 10.
24. Be there for the people you know to be good, even when everyone else is walking away. Anyone can end up in a tough situation. A random act of kindness in someone’s time of need can change the course of a life and create an unexpected friendship or loyalty. 
25. Everyone has dreams. Do what you can to help others achieve theirs.

• Every entrepreneur knows the feeling: that moment of despair when the only thing you are aware of is the giant gap between where you find yourself and the life and business you imagine. Once you succeed, people see only the success. If you fail, they see only the failure. Rarely do they see the turning points that could have taken you in a completely different direction. But it’s at these inflection points that the most important lessons in business and life are learned.
  • “You only ever experience two emotions: euphoria and terror. And I find that lack of sleep enhances them both.” — Marc Andreessen

• The best executives are made, not born. They absorb information, study their own experiences, learn from their mistakes, and evolve.”
• I learned to listen to people, pay attention to what they want and need even when they don’t say it, and be fearless when it comes to tackling difficult problems.
• But what I lacked in basic economics, I made up for with my ability to see patterns and develop new solutions and paradigms, and with the sheer will to turn my ideas into reality. Finance proved to be the means for me to learn about the world, form relationships, tackle significant challenges, and channel my ambition. It also allowed me to refine my ability to simplify complex problems by focusing on only the two or three issues that will determine the outcome.

Blackstone Culture 

• Blackstone is a remarkable success because of our culture. 
• We believe in meritocracy and excellence, openness and integrity. And we work hard to hire only people who share those beliefs. 
• We are fixated on managing risk and never losing money. 
• We are strong believers in innovation and growth—constantly asking questions in order to anticipate events so that we can evolve and change before we are forced to.
• For me, the greatest rewards in life have come from creating something new, unexpected, and impactful. I am constantly in pursuit of excellence. 

When people ask me how I succeed, my basic answer is always the same: I see a unique opportunity, and I go for it with everything I have. And I never give up.

• If you want something badly enough, you can find a way. You can create it out of nothing. And before you know it, there it is. But wanting something isn’t enough. If you’re going to pursue difficult goals, you’re inevitably going to fall short sometimes. It’s one of the costs of ambition.
  • “I believe you can speak things into existence.”― Jay-Z, Decoded
• Today, I understand. You can learn to be a manager. You can even learn to be a leader. But you can’t learn to be an entrepreneur.
• Teaching, is about more than sharing knowledge. You have to remove the obstacles in people’s way.
• If you’re going to commit yourself to something, it’s as easy to do something big as it is to do something small. Both will consume your time and energy, so make sure your fantasy is worthy of your pursuit, with rewards commensurate to your effort.
• No matter how successful, smart, or brave you are, you can always end up in a tough place. People often think theirs is the only reality, but there are as many realities as there are individuals. The more you see of them, the more likely you are to make sense of them.
• If ever I ran an organization, I promised myself I would make it as easy as possible for people to see me and I’d always tell the truth, no matter how difficult the situation. As long as you can be honest and rational and are able to explain yourself, there is no reason to feel uncomfortable. No one person, however smart, can solve every problem. But an army of smart people talking candidly with one another will.
• Those early encounters and friendships have a way of reappearing throughout your life.

Interviewing 

• When I interview people for Blackstone, I’m looking to understand whether an individual will fit our culture.
• At a minimum, this includes the airport test: Would I want to be stuck waiting at the airport with you if our flight were delayed? 
• After thousands of interviews, I have developed my own style of interviewing. I rely on a combination of verbal and nonverbal cues, looking to see how a candidate reacts to my attempts to engage. I don’t have a set formula, but in every case, my goal is to get into candidates’ heads to assess how they think, who they are, and whether they are right for Blackstone.
• The more I can get candidates out of interview mode and into a natural conversation, the easier it becomes for me to evaluate how they think, react, and might adapt to change.
• In reality, this is all an exercise in evaluating their ability to deal with uncertainty.
• Our people are all different, but they share some common traits: 
  • Self-confidence
  • intellectual curiosity
  • Courtesy
  • an ability to adjust to new situations
  • emotional stability under pressure
  • a zero-defect mentality
  • an unwavering commitment to behaving with integrity and striving for excellence in all we choose to do. 
  • Being nice—thoughtful, considerate, and decent—doesn’t hurt either. I will never hire anyone who isn’t nice regardless of his or her talent. It’s also important to me that Blackstone remains free of internal politics, so if jockeying for position is part of your nature, we don’t want you.

• They established strong foundations for their careers by discovering that the smallest things matter and suffering the indignity of their early mistakes.

This reinforced my growing belief that the most important asset in business is information. The more you know, the more perspectives you have and the more connections you can make, which allow you to anticipate issues.

• I observed that when I was the one making the decisions and the voices rose and tempers flared, my heart would beat faster and my breathing would become more shallow. I became less effective, less in control of my own cognitive responses. The fix, I found, was to focus on my breathing, slow it down and relax my shoulders, until my breaths were long and deep. The effect was astonishing. My thoughts became clearer. I became more objective and rational about the situation at hand, about what I needed to do to win.
• Another trick I had learned for managing stress was to take a moment to slow myself down.
• I had learned that deals ultimately come down to a few key points that matter most to each side. If you can clear everything else away and focus on these points, you will be an effective negotiator.

In 1980, the New York Times profiled me on the front page of the Sunday Business Section with a large picture as Lehman’s “Merger Maker.” The reporter credited me with a “drive to succeed, a strong persistence (he once finished running a cross country course even after he tripped and broke his wrist) and an infectious vitality that make other people like to work with him.” The cross-country race had been in ninth grade, and I had to be rushed to the hospital. She went on: “Mr. Schwarzman says he approaches problems by asking himself, ‘What would I want if I were in their shoes?’ That, he says, is what gives him his rapport with people. Still a student of behavior, he listens hard to what people say, believing that things that are said are said for a reason. This art of listening gives him an unusually high gift of recall.”

•  It was a pretty accurate picture of me at the time. Listening to people seemed obvious. But it evidently marked me out on Wall Street. I didn’t just try selling whatever it was I had to sell. I listened. I waited to hear what people wanted, what was on their mind, then set about making it happen. I rarely take notes in meetings. I just pay very close attention to what the other person is saying and the way he or she is saying it. 
• If I can, I try to find some point of connection, an area of common ground, a shared interest or experience that turns a professional encounter into a more personal one. It sounds like common sense, but apparently in practice, it’s relatively rare. One effect of my intense listening is that I can recall events and conversations in detail. It’s as if they are imprinted and stored away in my brain.
•  A lot of people fail because they start from a position of self-interest. What’s in this for me? They will never get to do the most interesting and rewarding work. Listening closely and watching the way people talk puts me much closer to answering the question I’m always asking myself, which is: How can I help? If I can help someone and become a friend to their situation, everything else follows. 
• There is nothing more interesting to people than their own problems. If you can find out what they are and come up with solutions, they will want to talk to you no matter their rank or status. 
• The harder the problem and the scarcer the solution, the more valuable your advice is. It’s in those situations, where everyone is walking away with averted eyes, that the field clears and the greatest opportunity awaits.

The day I started at Lehman, one of the partners had told me, “Nobody at Lehman will ever stab you in the back. They’ll walk right up to you and stab you in the front.”

• But learning the way I did, I saw the intricate ways in which deals can be structured, the subtleties that must be negotiated. Mastery like that takes experience, endurance, and tolerance for pain. And it yields the greatest rewards. 
• The Tropicana deal had shown me that under pressure, I was capable of far more than I ever thought. 
• Pete Peterson had shown me the value of a great mentor and partner. I had forged some treasured relationships with wonderful people—colleagues at the firm and executives like Jack Welch who would keep popping up throughout my career. I had experienced Wall Street at its best, the highs of executing complex deals, that sense of being at the center of the universe, exchanging information with some of the most interesting people in the world. 
• And my exit from Lehman had shown me Wall Street at its worst, everyone for themselves. Watching the Lehman partners fail to take on Lew Glucksman had shown me how morality and ethics can buckle under fear and greed. I had seen that some people are vindictive and jealous. My experience selling Lehman and being forced to stay against my will not only taught me the worth of a good lawyer but also that money is a poor cure for a bad situation.

Even if most start-ups failed, we were sure ours wouldn’t. 

• Observing my father at Schwarzman’s and all the businesses and entrepreneurs I had advised subsequently, I had reached an important conclusion about starting any business: it’s as hard to start and run a small business as it is to start a big one. You will suffer the same toll financially and psychologically as you bludgeon it into existence. It’s hard to raise the money and to find the right people. So if you’re going to dedicate your life to a business, which is the only way it will ever work, you should choose one with the potential to be huge.
• The key to all investing is using every tool at your disposal.
• The third and final way we thought about building our business was to keep challenging ourselves with an open-ended question: Why not? If we came across the right person to scale a business in a great investment class, why not? If we could apply our strengths, our network, and our resources to make that business a success, why not? Other firms, we felt, defined themselves too narrowly, limiting their ability to innovate.

10 out of 10’s

• Pete and I thought of the people we wanted to run these new business areas as “10 out of 10s.” We had both been judging talent long enough to know a 10 when we saw one. Eights just do the stuff you tell them. Nines are great at executing and developing good strategies. You can build a winning firm with 9s. But people who are 10s sense problems, design solutions, and take the business in new directions without being told to do so. Tens always make it rain.

Businesses often succeed and fail based on timing. Get there too early, and customers aren’t ready. Arrive too late, and you’ll be stuck behind a long line of competitors.

• “When I started my business I couldn’t think of a name. In the end, we just invented one: ‘Sesame Street.’ What a stupid name that is. Now it’s in 180 countries all over the world. If your business fails, nobody will remember your name. If your business succeeds, everyone will know it. So just pick something, get on with it, and hope you succeed enough to be known.”
• When you’re presenting yourself, the whole picture has to make sense, the entire, integrated approach that gives other people cues and clues as to who you are. The wrong aesthetics can set everything off kilter. Our business cards were an early step in establishing who we wanted to be. (Little details matter) 

One sweltering evening, I went for dinner alone to a Japanese restaurant on the second floor of a building on Lexington Avenue in the thirties. As I was sitting there, I began to feel dizzy, as if my whole body wanted to collapse. I felt I was failing on every count. I was overwhelmed by self-pity. Wall Street loves nothing more than watching other people fail. To see Pete and me, who had been so powerful at Lehman, so sure of our success, take a beating would have given many people pleasure. I couldn’t let it happen. I could not fail. I had to find a way.

Innovative Strategy 

• I had staged a two-round sealed-bid auction. In each round, the bidders submitted their bids in a sealed envelope, not knowing what others were offering. The first round weeded out the low bids, the people just fishing. The serious buyers then got to review the target company’s financials and visit with management. After that they submitted another sealed bid. The magic of this kind of auction is that if the buyers are desperate to acquire the asset, they won’t just try to offer a dollar more than the second-highest bidder. They will offer the highest price they can afford to ensure they win. This style of auction was little known in the M&A world when I began doing it, but it has since become standard practice.

As an investment banker and later as an investor, I found that the harder the problem, the more limited the competition. If something’s easy, there will always be plenty of people willing to help solve it. But find a real mess, and there is no one around. If you can clean it up, you will find yourself in rare company. 

I had come to understand that success is about taking advantage of those rare moments of opportunity that you can’t predict but come to you provided you’re alert and open to major changes.

• People with tough problems will seek you out and pay you handsomely to solve them. You will earn a reputation for doing what others cannot. For a pair of entrepreneurs trying to break through, solving hard problems was going to be the best way of proving ourselves.
• As a salesman, I’d learned you can’t just pitch once and be done. Just because you believe in something doesn’t guarantee anyone else will. You’ve got to sell your vision over and over again. 
  • Most people don’t like change, and you have to overwhelm them with your argument, and some charm. If you believe in what you’re selling and they say no, you have to presume that they don’t fully understand, so you give them another opportunity.

• He picked me up and kept me going. He assured me that when you believe in what you’re doing, overwhelmed or not, you have to keep moving forward, even when the quest feels hopeless.
  • This book provides such an honest account of what even the most successful people experience when running a business. The highs, the lows and everything in between. 

• People in a tough spot will often focus on their own problems when the answer may lie in fixing someone else’s.
• To be successful you have to put yourself in situations and places you have no right being in. You shake your head and learn from your own stupidity. But through sheer will, you wear the world down, and it gives you what you want. The money had to be out there.

Deals

• Some will tell you that all the value is in driving down the price you pay as low as possible. These investors revel in the transaction itself, in playing with the deal terms, in beating up their opponent at the negotiating table. That has always seemed short term to me. What that thinking ignores is all the value you can realize once you own an asset: the improvements you can make, the refinancing you can do to improve your returns, the timing of your sale to make the most of a rising market. If you waste all your energy and goodwill in pursuit of the lowest possible purchase price and end up losing the asset to a higher bidder, all that future value goes away. Sometimes it’s best to pay what you have to pay and focus on what you can then do as an owner. The returns to successful ownership will often be much higher than the returns on winning a one-off battle over price.
• Most public and private investors buy too early and underestimate the severity of recessions. It’s important not to react too quickly. 
• Most investors don’t have the confidence or discipline to wait until a cycle fully plays out. These investors suffer by not maximizing the profit they would have otherwise made from executing the same idea at a later point.
• While most investors say they are interested in making money, they are actually interested in psychological comfort. They would rather be part of the herd, even when the herd is losing money, than make the hard decisions that yield the greatest rewards. Doing what everyone else is doing seems like a way to avoid blame.

Company Building 

• We then examined our decision making. For all our entrepreneurial strengths, our drive, our ambition, our skills, and our work ethic, we still weren’t building Blackstone into a great organization.
• Failures are often the best teachers in any organization. You must not bury your failures but talk about them openly and analyze what went wrong so you can learn new rules for decision making. Failures can be enormous gifts, catalysts that change the course of any organization and make it successful in the future. 
• Edgcomb’s failure showed that the change had to start with me and my approach to investing and evaluating potential investments.
• Finance is full of people with charm and flip charts who talk so well and present so quickly you can’t keep up. So you have to stop that show. Decisions are much better made through systems designed to protect businesses and organizations than through individuals. We needed rules to depersonalize our investment process. It could never again rely on one person’s abilities, feelings, and vulnerabilities.
• Next, we insisted that anyone with a proposal would have to write a thorough memorandum and circulate it at least two days before any meeting so it could be carefully and logically evaluated. The two-day requirement would give readers time to mark up the memo, spot any holes, and refine their questions. No additions could be made to the memo at the meeting unless there was a significant subsequent development. We did not want extra sheets of paper going around the room.
• These discussions had two fundamental rules. 
  • The first was that everyone had to speak, so that every investment decision was made collectively. 
  • The second was that our focus should be on the potential investment’s weaknesses. Everyone had to find problems that hadn’t been addressed. This process of constructive confrontation could be challenging for the presenter, but we designed it never to be personal. The “only criticism” rule liberated us to critique each other’s proposals without worrying that we might be hurting someone’s feelings. The upside of the potential investment should be included as well, but that was not the focus of our early investment committee discussions.

• Psychology would be one of my strengths as an investor. I didn’t need to remember each number in an analysis. I could watch and hear the people who knew the specifics and tell how they felt from their posture or tone of voice.
• We have created a framework for assessing risk that has been incredibly reliable. We train our professionals to distill every individual investment opportunity down to the two or three major variables that will define the success of our investment case and create value. At Blackstone, the decision to invest is all about disciplined, dispassionate, and robust risk assessment. It’s not only a process but a mind-set and an integral part of our culture.
• We structure our investment process to democratize decision making and encourage intellectual engagement by everyone involved—the deal team and committee members. 
• There is no “us” and “them,” no seeking of approval from a group of elders. Instead, there is only a collective sense of responsibility for identifying the critical drivers of a deal and analyzing the extent to which those drivers could affect the financial performance of an investment in various scenarios. 
• Everyone around the table, from the most junior to the most senior person, is expected to have an opinion and participate. No one person, or subset of people, dominates the conversation or holds the power for approval. It’s team ball. 
• Everyone must debate and agree on the variables and decide the range of possible outcomes. In some cases, the variables are obvious, and in others, it takes a few rounds of rigorous debate and discussion to determine what they are. But we don’t move forward without agreement.

Expectations 

• We formulated a clear set of expectations, which I laid out in a welcome speech to our new analysts. It boiled down to two words: excellence and integrity. 
• If we delivered excellent performance for our investors and maintained a pristine reputation, we would have the opportunity to grow and pursue ever more interesting and rewarding work. If we invested poorly or compromised our integrity, we would fail. 
• To ensure my message got through, I defined excellence in narrow, practical terms: It meant 100 percent on everything. No mistakes. That is different from school or college, where you can get an A with 95 percent. At Blackstone, that 5 percent of underperformance can mean a massive loss for our investors. It is a lot of pressure, but I suggested two ways to relieve it.

Achieving Excellence

• The first was FOCUS. If you ever felt overwhelmed by work, I said, pass on some of your work to others. It might not feel natural. High achievers tend to want to volunteer for more responsibility, not give up some of what they have taken on. But all that anyone higher up in the firm cares about is that the work is done well. 
• There is nothing heroic or commendable about taking on too much and then screwing it up. Far better to focus on what you can do, do it well, and share the rest. 
• The second way to maximize your chances of achieving excellence was to ask for help when needed. Blackstone is full of people who have worked on a lot of deals. If you are spending all night trying to solve a problem, chances are there is someone a few offices away with more experience who could solve it in far less time. 
• Don’t waste your time trying to reinvent the wheel, I advised. There were plenty of wheels all around you, ready-made, just waiting for you to spin them faster, further, and in new directions. As for integrity, the easiest way I could explain it was in terms of reputation. To earn a great reputation, you think long term. I had been building my reputation since growing up in suburban Philadelphia, true to those middle-class values of honesty, hard work, respect for others, and always doing what you say you will. 
• If those values sound simple, it is because they are. Anything more complicated can get lost amid the traps and temptations of our work. So my message to our new analysts was simple: stick to our values and never risk our reputation.
• But I made the mistakes of an inexperienced CEO: I let the differences between us brew. I stood my ground on the dilution of our equity because I considered it a moral principle to respect the terms of the original deal. Instead, I should have recognized that when a situation changes and a business is doing extremely well, sometimes you have to make accommodations.

Everything in business is connected. 

• We would see opportunities and markets in unusual and different ways from our competitors. Our perspective would broaden and deepen. The more feeds we had running into the firm, the more we’d know, the smarter we’d be, and the better the people who’d want to work with us.
• When you enter a market, you send signals with every choice you make, from the people you hire to the offices you rent. They are an important piece of your brand. I was determined that our new European headquarters exude the values of the firm: excellence, integrity, and care for all the people associated with us, those we employ and those whose money we invest.
• And the best way to get what you want is to figure out what’s on the mind of the person who can give it to you.
• At Lehman, I had realized that I spent more time at the office than at home, so I wanted a beautiful environment. It made me feel happier. I wanted the same for everyone at Blackstone: warmth, elegance, simplicity, balance, and natural light pouring in from huge windows. When people come to a Blackstone office to work or for meetings, I want them to feel as blown away as I am by the experience.

• It was a real pinch-me moment and another reminder of how people you meet accidentally early in life keep popping up to surprise you.
• It’s important to always be open to new experiences, even if they don’t completely fit your agenda. My role at the Kennedy Center allowed me to use my experience—running organizations, fundraising, hiring talent—to give back to an important American cultural institution.

ASK FOR HELP WHEN YOU NEED IT

• All that mattered was the quality of their thinking. To this day, Monday mornings remain the clearest demonstration of our commitment to transparency, equality, and intellectual integrity.
• He instituted 360-degree performance reviews to assess everyone at the firm. He overhauled the compensation system toward one based on group bonus pools, written feedback, and open reviews.
• I was never a founder who needed to hang on to power at all costs. Lifting the day-to-day management burdens energized me for the deal making I loved.

ENTREPRENEURSHIP: NO ONE TELLS YOU ABOUT THE PAIN

• My experience of entrepreneurship was anything but a smooth, upward curve. It was so grueling that I have never understood the idea of people wanting to be “serial entrepreneurs.” Doing it once is hard enough.
• If you are going to start a business, I told them, I believe it has to pass three basic tests. 
  • First, your idea has to be big enough to justify devoting your life to it. Make sure it has the potential to be huge. 
  • Second, it should be unique. When people see what you are offering, they should say to themselves, “My gosh, I need this. I’ve been waiting for this. This really appeals to me.” Without that “aha!” you are wasting your time. 
  • Third, your timing must be right. The world actually doesn’t like pioneers, so if you are too early, your risk of failure is high. The market you are targeting should be lifting off with enough momentum to help make you successful. If you pass these three tests, you will have a business with the potential to be big, that offers something unique, and is hitting the market at the right time. Then you have to be ready for the pain. No entrepreneur anticipates or wants pain, but pain is the reality of starting something new. It is unavoidable.
  • Finally, to succeed as an entrepreneur, you have to be paranoid. You always have to believe your company, regardless of size, is a little company. The moment you start to become big and successful, challengers will appear and do their best to take your customers and defeat your business. You are never more vulnerable than at the moment you think you have succeeded.

• Even when you are small, though, and your resources most constrained, finding the right people is the most important thing you can do.
• That means, at a minimum, you must reduce your criteria to a simple question: Does this person have the same zealous commitment to the mission of this business as you do?
• Many founder-led companies stumble trying to make the transition from scrappy start-up to a well-managed machine. Entrepreneurs often prefer to trust their instincts rather than the more orderly systems that professional managers use. Entrepreneurs often resist any limits placed on those instincts and the energy that brought their company into existence. But eventually it is those limits that create the foundation for the next phase of growth. The turbulence of starting a firm must at some point permit systems to be implemented that allow other people to help drive the organization forward.

LISTEN FOR DISCORDANT NOTES

• All my life, I have been looking and listening for patterns. It is like the old TV show, Name That Tune. The more songs you know, the more likely you are to be able to identify the song from just one or two notes. You become like an experienced clinician, who can tell what’s wrong with a patient long before seeing the results of all the tests.
• Changing your behavior in the face of changing information is always hard. But when people are doing well, they don’t want to change. They choose to ignore the discordant notes and the tunes you are hearing. They feel threatened by bad news and dread the uncertainty of change and the hard work it demands. This tendency makes them passive and rigid at the very moment they should be most active and flexible.
• I have always regarded worry as an active, liberating kind of activity. Worrying allows you to articulate the downside in any situation and leads to action to avoid it.

In 2001, I had a 95 percent blocked artery in my heart, which was solved by inserting two stents to relieve the blockage. Every day since, I have taken an anticoagulant drug, Coumadin, that keeps me alive. Each birthday is a reminder of how glad I am still to be alive and in good health.

• As a parent, you strive for balance between doing enough at work to succeed and being there in person for your family, emotionally available for your kids. At the time, you never know if you’re doing a good job. The reckoning comes years later. Looking back on the night of my sixtieth and the memories of those closest to me, I didn’t think I’d done so badly.

IPO

• We priced the offering at $31, the top of our expected range, and increased the number of shares we put out to market. On June 24 we sold 133.3 million shares and raised more than $7 billion, including the investment from China. It was the second largest IPO of the decade after Google.
• The night we priced the deal, I went home to an empty apartment. Christine was traveling in Africa with her daughter, Meg, and her nephews and nieces. I was drained. I took a hot shower; changed into jeans, a polo shirt, and slippers; and slumped down in a chair with my dinner on a tray. I turned on the television, and to my horror, there I was. The channel had been left on CNBC. I was too tired even to change it, and just sat there, mesmerized, staring at myself, wondering if I was ever going to escape this IPO madness.
• It was strange to feel this way at what should be a high point in any entrepreneur’s