Today, business schools across the world teach students how to be entrepreneurs. There are frameworks and checklists for building and financing new ventures, and charts that plot the milestones of a new company, usually on a single slide along a smooth, always-upward curve. No one ever spends enough time telling you about the pain.
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My experience of entrepreneurship was anything but a smooth, upward curve. It’s been filled with ups and downs, unpredictable challenges, and many hard-learned lessons. Starting a business requires grit, determination and the relentless pursuit of a great idea. It requires years of blood, sweat and tears. It involves anguish over decisions about people and strategy that may ultimately make or break you.
Thirty-five years ago, I left a successful career in mergers and acquisitions to start my own business. My partner Pete Peterson and I were committed to creating a different kind of investment firm than those we had experienced firsthand — one grounded in principles of meritocracy and excellence, openness and integrity. This, we thought, would make us smarter investors, better employers, and allow us to more effectively serve our clients, which were institutions like public pensions who trusted us to invest the retirement savings of teachers, firefighters and others.
If you measure us against that goal today, you would see dramatic success. We are the largest alternative asset investor in the world, managing over $500 billion in assets today. We have invested in and helped grow companies around the world, which employ around 500,000 people. But getting here was far from an easy ride.
In 1985, Pete and I were confident we could leverage our track records and connections in deal-making to get our new venture off the ground quickly. We had a deep Rolodex of leaders across the corporate and financial communities who we had worked closely with in our previous roles. Surely they would clamor to give us business.
We were wrong. After sending hundreds of letters, making countless phone calls and an even placing an advertisement in the New York Times, we had nothing to show for our efforts. The constant rejection was mentally, physically, and emotionally grueling.
Every entrepreneur knows the feeling: that moment of absolute despair when the only thing you are aware of is the giant gap between where you stand and the vision you have for your life and business.
But failure can be the best teacher for an entrepreneur. My experiences building Blackstone have taught me an enormous amount about growing a business, including how to build successful teams, evaluate risk, and establish an organizational culture that transcends generations and title levels.
I have never fully understood the idea of people wanting to be “serial entrepreneurs.” Doing it once was hard enough for me. Here are some of the lessons I learned that might be useful to someone just starting, or thinking about starting, their entrepreneurial journey:
1) The best executives are made, not born.
They absorb information, study their own experiences, learn from their mistakes, and evolve. The process of launching your business is a continual, never-ending learning experience.
2) It’s as easy to do something big as it is to do something small, so reach for dreams worthy of your pursuit, with rewards commensurate to your effort.
Every person and organization has limited time – choose where you commit your attention and resources wisely and be ambitious.
3) Success comes down to rare moments of opportunity. Be open, alert, and ready to seize them.
Gather the right people and resources; then commit and don’t look back. If you’re not prepared to apply that kind of unrelenting effort, either the opportunity isn’t as compelling as you think or you are not the right person to pursue it.
4) When evaluating your potential business idea make sure it passes these three tests:
• Is your idea big enough to justify devoting your life to it? Make sure it has the potential to be huge.
• Is your idea 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.
• Is your timing 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.
5) No one person, however smart, can solve every problem. But an army of smart people talking openly with one another will.
To that extent, 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.
6) 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.
7) Never deviate from your sense of right and wrong.
Your integrity must be unquestionable. Always do what you say you will, and never mislead anyone for your own advantage.
Stephen A. Schwarzman is the Chairman, CEO and Co-founder of Blackstone. His first book, What It Takes: Lessons in the Pursuit of Excellence, is available for sale now. To learn more about What It Takes, please visit: readwhatittakes.com/.