👨🏽‍💻Rishabh Srivastava/
đź“šWhat it takes, by Stephen Schwarzman
Search
đź“š
What it takes, by Stephen Schwarzman
Created
Oct 27, 2020 06:28 AM
Media Type
Books
Lesson Type
Investing
Startups
Business
Project
Second Brain
Property
Created by Rishabh Srivastava, Founder of Loki.ai
This summary was largely done for my own note-taking, sharing it just in case it adds more value to other people.
I have no affiliation whatsoever with anyone in this note. This is a summary largely taken for my own reference, and may contain errors :)

Context

Source URL:
What It Takes
The only similary between Ray Dalio's "Principles...." and Stephen Schwarzman's "What It Takes" is that they both lay out principles towards choice ofThe only similary between Ray Dalio's "Principles...." and Stephen Schwarzman's "What It Takes" is that they both lay out principles towards choice of work, conduct at work, and hiring.
https://www.goodreads.com/book/show/45733318-what-it-takes
Why is it important: Contains some really good insights on setting up a giant company from scratch

Keywords

investing, startups, finance

Summary

On Startups

  1. It’s just as hard to meet small goals than large goals. When choosing what to do, do something really ambitious
  1. If you want to start a business, it must pass 3 basic tests. 1) the idea has to be big enough to justify you devoting your life to it, 2) it should be unique and valuable. When people see what you’re offering, their reaction should be “my Gosh, I need this”. I’ve been waiting for this. and 3) your timing must be right. The world doesn’t actually like pioneers. The market you’re targeting should be lifting off with enough momentum to make you successful
  1. Startups take a lot of grunt work at the beginning. Take small jobs. Build a reputation. Then grow
  1. The harder the problem, the more limited the competition. If something is easy, there will always be plenty of people to help solve it. When there’s a real mess, there’s no one around. If you can clean it up, you’ll find yourself in rare company. People with tough problem will seek you out to solve them. You’ll build a reputation for doing what others cannot
  1. You can’t just pitch once and be done. Just because you believe in something doesn’t mean that anyone else will. You have to sell your vision over and over again. Most people don’t like change. 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 understand. So you give them another opportunity
  1. Don’t make the mistake of trying your half formed pitch on your best prospects (the people you know best or those who would be your best customers). Rather than being forgiving, they will find it all too easy to turn you down
  1. When someone asks for something new, the odds that he is the only person in the planet who would find that of interest is zero. When you get one of those inquiries, it’s potentially a huge opportunity. Those who’re asking don’t know that. They’re just looking to meet their needs. But if those needs make sense, and if you can create a product to fit those needs, you can roll it out more broadly and profit

On Investing

  1. Some investors think that all the value is in driving down the price you pay as low as possible. But this is short-term thinking. If you lose 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 you just pay what you have to pay. When you really want something, pay a little extra and address the key concerns in the sellers mind straight off the bat
  1. 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
  1. Good outcomes come 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
 

Highlights (for my own reference. please feel free to ignore these)

25 rules for work & 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. Almost anyone, however senior or important, is receptive to good ideas provided you are thoughtful.
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 own 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 think 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.

Highlights from the book

General career advice
It’s just as hard to meet small goals than large goals
If your Organization is doing something you disagree with, voice your disagreements on the record so you aren’t blamed when things go south
 
On giving and taking interviews
Being a strong assessor of talent is important for any entrepreneur. Schwarzman starts with reading a resume. Looks for consistency and a narrative. Makes a special note for any anomalies
If a candidate doesn’t demonstrate the ability to connect, pivot, change course, within the bounds of the conversation, they may not be a good fit for a finance role where connecting with people and pivoting quickly is important
Rules for how to have a successful interview:
  1. Be on time. Punctuality is the first indicator of how much time and preparation you have put into an interview
  1. Be authentic. Interviews are a mutual assessment. Everyone is looking for the right fit. Be comfortable and natural. If you share who you are and the interview results in a job offer – great! But if it doesn’t, chances are that the organization wasn’t right for you either. Better to know and move on.
  1. Be prepared. Learn about the company. Interviewers always enjoy discussing what’s happening in their environment. Describes what draws you to the company, and why. An interviewer wants to assess your motives, and whether they fit with their organisational culture
  1. Be candid. Don’t be afraid to talk about what’s on your mind. Focus less on impressing the interviewer, and more on being open and striving for an honest conversation
  1. Be confident. Approach the situation as an equal, not as a supplicant. In most situations, employers are looking for someone who can hold the table, provided they are not arrogant
  1. Be curious. The best interviews are interactive. Ask questions. Ask for advice. Ask your interviewers what they enjoy most about working for the organization. Find a way to engage interviewers, and always make sure that the conversation goes both ways.
  1. Avoid discussing divisive political issues, unless you’re asked. In that case, be straightforward. Describe what you believe and why. But don’t be argumentative
  1. Mention people you know in the organization only if you like and respect them. Your interviewer will be judging your taste in people
 
On Startups
  • Startups take a lot of grunt at the beginning. Take small jobs. Build a reputation. Then grow
  • The harder the problem, the more limited the competition. If something is easy, there will always be plenty of people to help solve it. When there’s a real mess, there’s no one around. If you can clean it up, you’ll find yourself in rare company. People with tough problem will seek you out to solve them. You’ll build a reputation for doing what others cannot
  • You can’t just pitch once and be done. Just because you believe in something doesn’t mean that anyone else will. You have to sell your vision over and over again. Most people don’t like change. 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 understand. So you give them another opportunity
  • Don’t make the mistake of trying your half formed pitch on your best prospects (the people you know best or those who would be your best customers). Rather than being forgiving, they will find it all too easy to turn you down
  • If you aren’t the biggest or the best in your business, you have to pick spots where the problem are toughest, and you’re the only ones offering a way forward
  • Try to get the companies whose name you can use to get other customers as early customers. It’s okay if you have to leave a lot of money on the table to do this. But if you can’t, don’t get too hung up on it
  • Entrepreneurship is not a smooth, upward curve. It’s really hard
  • If you want to start a business, it must pass 3 basic tests. 1) the idea has to be big enough to justify you devoting your life to it. 2) it should be unique and valuable. When people see what you’re offering, their reaction should be “my Gosh, I need this”. I’ve been waiting for this. Without that “aha”, you’re wasting your time. 3) your timing must be right. The world doesn’t actually like pioneers. So if you’re too early, your risk of failure is high. The market you’re targeting should be lifting off with enough momentum to make you successful
  • You have to be ready for the pain. It is the reality of starting something new and is unavoidable. Hire great people to help take on some of this pain.
  • If you’re ambitious, fill your company with 9s and 10s and clear out the mediocrity. Only way to be super successful
  • Be paranoid. Always believe that your company is a little company. The moment you become bigger, challengers will appear to take your customers
  • When someone asks for something new, the odds that he is the only person in the planet who would find that of interest is zero. When you get one of those inquiries, it’s potentially a huge opportunity. Those who’re asking don’t know that. They’re just looking to meet their needs. But if those needs make sense, and if you can create a product to fit those needs, you can roll it out more broadly and profit
 
On Investing
  • Some investors think 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, and in beating up their opponent at the negotiating table. But this is short-term thinking. There’s a lot of value to be had in beating other people to the punch. If you lose 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 you just pay what you have to pay. The returns over a successful ownership will be better than the one-off returns you’ll get from haggling over price
  • Cycles (boom and bust): the success of any investment depends on where you are in the cycle when you make it (valuation and ROI). Rules for identifying market tops and bottoms:
  • Market tops are relatively easy to recognise. Buyers believe that this time is different. It’s usually not. There is a surplus of relatively cheap debt capital to finance acquisitions and investments in a hot market. Leverage levels escalate compared to historical averages, with leverage levels sometimes reaching 10x equity. # of people you know who start getting rich without doing anything particularly smart suddenly starts to increase
  • Market bottoms are more difficult to recognise. Most investors buy too early and under-estimate the severity of recessions. It’s important to not react too quickly. It often takes a year or two for an economy to emerge from a recession. Even when a market starts turning around, it still takes time for asset values to recover. You can invest at the bottom for no returns for a while. One way to get around this is to invest only when assets have recovered from their lows by atleast 10%
  • Investing process: Don’t lose money. Create a framework for assessing risk, and distill every investment opportunity down to constituent variables. Disciplined, dispassionate, and robust risk assessment
  • When you really want something, pay a little extra and address the key concerns in the sellers mind straight off the bat
  • Ask for help when you need it. Hire the right people and get the right advisors
  • Time wounds all deals. If you really want a deal, get it done as fast as you can and don’t let others drag their feet