Invest Like The Best - Life, Leadership, and LBOs

“We were based in Washington, DC, and by being based in Washington, we were out of the gunfire of people in New York who would've said, 'You don't have investment banking background. You're not qualified.' Secondly, by being based in Washington, I could recruit people who wanted to stay in Washington or be connected to somebody in Washington. Third, I came up with an idea, was kind of my idea, that sort of worked, which is to say this.”— David Rubenstein

p. 9

Business & Entrepreneurship · Strategy & Decision Making · Operations & Execution

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Three advantages: geographic escape, multiple funds, shared infrastructure

“The most effective speeches like Teddy Roosevelt's are speeches which do not promise to do anything. They are not speeches which list legislation. They are not ones that have the word I. Let me take three famous speeches. The Kennedy Inaugural Address, the Martin Luther King I Have a Dream speech, and the Gettysburg Address. In those speeches they basically don't use the word I virtually at all. They all end with the use of the phrase, God, at the end.”— David Rubenstein

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Leadership & Management · Psychology & Behavior

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Five patterns: no promises, no I, theme-driven, brevity, inspirational

“Many of the great fortunes are made because people observe that government has developed a policy, had a policy or has a new policy that will encourage one industry versus another industry. Don't think of almost any company. They're probably going to take advantage of something the government has done to make it possible for them to do what they've done. Take Amazon as an example. Amazon's biggest profits really are not from selling books over the internet or anything over the internet.”— David Rubenstein

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Strategy & Decision Making · Business & Entrepreneurship · History & Geopolitics

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Government contracts create credibility and market validation

“I tried to focus on what I knew best. I didn't really have the investment skills as a background. I didn't go to business school. I was a lawyer. So, I brought in people actually knew what they were doing about investing. And so, I let them take care of that. And I decided to figure out what was my comparative advantage. And it was that I was willing to go on the road and raise money and ask people for money. I was willing to go recruit people. I was pretty good at convincing people to join us.”— David Rubenstein

p. 8

Strategy & Decision Making · Leadership & Management · Business & Entrepreneurship

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Focus on comparative advantage, defer on weaknesses

“I have four standards for my philanthropy. Number one, start something that wouldn't otherwise get started. Second, I try to finish something that otherwise wouldn't get finished. Third, I try to find something I'm going to have an intellectual interest in so that I'm willing to be involved not just by writing a check, but being involved on the board or other ways. It's my view that philanthropy is derived from an ancient Greek word that means loving humanity.”— David Rubenstein

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Leadership & Management · Strategy & Decision Making

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Four standards: start new, finish incomplete, intellectual interest, visible progress

“Oprah said to me, when I interviewed her, 'Look, I'm not a great interviewer. I'm a good listener. A really good listener.' And she's right. To be a good interviewer, you have to listen to what the person says and then play off of it. When the FBI comes by and does a background interview of me for somebody else, the FBI will typically have a checklist of 12 questions. You could say in response to question number three, 'The person's actually an ax murderer, and I know where they bury the bodies.”— David Rubenstein

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Leadership & Management · Psychology & Behavior

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Listening means playing off responses not following checklist

“I have a tortoise and hare theory, that if you're really a hare and you're great in high school, you might peter out and you might say, 'I don't need to work so hard.' I've often gone back and tried to find out these things, because surprisingly it's very rare to have somebody to be a great student leader, a great person in the middle part of their career, and then in the latter part of their career, they're still a great leader. In my high school, there were 1500 people in my class.”— David Rubenstein

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Psychology & Behavior · Leadership & Management

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Early dominance often leads to complacency

“Jeff Bezos went to Baker & Taylor and asked if he could rent their bibliography of books in print, because he was going to sell books over the internet. Our guy said, 'No, we want cash.' And we ultimately agreed to $100,000 a year for five years. When I heard about all this, about two years into Amazon's existence, I flew out to meet Jeff and said, 'Look, I think we would take some startup capital now, because you're going to do well, and I think we now made a mistake. So, can we get our 20%?”— David Rubenstein

p. 9

Business & Entrepreneurship · Strategy & Decision Making

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Preferring cash to equity in startup cost 20%

“I'm looking for people that are reasonably intelligent. Geniuses are tough to back because sometimes they get a little crazy. But reasonably intelligent, hardworking, have a vision of what they want to do. This is their life. They're putting up whatever they have in money in terms of alongside you. They are available to answer questions. They can explain what they're doing. If somebody can't explain what they're doing to me, I get nervous.”— David Rubenstein

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Business & Entrepreneurship · Strategy & Decision Making

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Six criteria: intelligence, work ethic, vision, skin in game, communication, focus

“Number one, have a vision of what you want to do. You can't just sit around in your office, say, 'I don't really want to do anything.' And all of a sudden, you're going to be a leader. Second, you got to persist. Because whatever you say you want to do, there'll be inevitable resistance to it. Because it was such a great idea, somebody would've done it already. Third, at some point in your career, as you're persisting, or maybe before you started this new idea, you have to fail.”— David Rubenstein

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Leadership & Management · Strategy & Decision Making

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Six elements: vision, persistence, failure, communication, sharing credit, rising

“What I do is I do as much research as I can. And then, I put it in my brain and I sit down and I type up what I would like to have as the questions. And then I send the question to the person. When I have the conversation, I don't use those notes. I memorize them because I wrote them. So, I know about 80, 90% of it. And then I start with the interviews, and then I listen to the people.”— David Rubenstein

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Leadership & Management · Psychology & Behavior

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Research, write, memorize, send, humor, never embarrass

“Right now, 14% of Americans cannot read past the fourth grade level. If you're functioning illiterate, which is what that definition means, if you can't read past the fourth grade level, you have no chance of succeeding in our country or in any country. We let 1.7 million people drop out of high school every year. 80% of the people in the juvenile delinquency system are functioning illiterate.”— David Rubenstein

p. 16

Culture & Society · Economics & Markets

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Literacy as bottleneck to social mobility

“Geniuses are very, very hard to manage for one thing. I've hired a few people that some people might say are geniuses, but they usually didn't work out. Geniuses are coddled for a bit by people telling them their whole life how brilliant they are. And when people tell you how brilliant you are, you believe so much in your ideas that you are maybe not going to listen to other people. You're going to be tone deaf about certain things.”— David Rubenstein

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Leadership & Management · Psychology & Behavior

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Genius coddling creates tone deafness

“The hardest thing in the world to do is raise children. Even harder than raising children is raising children if you're wealthy or famous, because we've all seen examples where that didn't result in such wonderful offspring. I tried to be a role model a bit by doing things that I think they would be proud of and try to not spoil them by giving them undue money but make sure they have a good education. As of this moment, I've never told my children, 'I'm giving you X dollars when I die.”— David Rubenstein

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Psychology & Behavior · Leadership & Management

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Five rules: role model, education not money, time priority, listen, earn not give

“When you're meeting with investors and you have investors, you have to be honest. If you make mistakes, explain it. Tell people upfront what went wrong and be honest about it. If you do a good job, don't brag about it so much and tell people how wonderful you are. People will read the material and they'll figure out you've done well, if you've actually done well. But also making people feel like they're part of a club.”— David Rubenstein

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Leadership & Management · Business & Entrepreneurship

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Three principles: honesty about mistakes, humility about success, belong not transaction

“When I was making a lot of money at Carlyle, my mother never called me and said Carlyle's making a lot of money, you're really rich and so forth and so on. When I started giving away a lot of money, she'd say, I'm really proud of what you're doing. When she passed away a few years ago, I went through all of her possessions, and the stuff that she saved, all the articles about me, were the ones where I gave away money not the things about how much money I'd made.”— David Rubenstein

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Psychology & Behavior

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Parents value giving over getting

“Everybody wants to feel that they're part of a healthy culture. Everybody wants to enjoy where they work. If you build a culture where people think that you care very much about them, you compensate them fairly, but you tell them that maybe you can make money elsewhere even more than you're making with me, but you feel like you're part of something, you enjoy going to work, you enjoy your colleagues, that can make a big difference.”— David Rubenstein

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Leadership & Management · Psychology & Behavior

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Culture and belonging beat pure compensation

“I try to maintain some humility. Trying to recognize that I wasn't gifted in many areas so I had to work harder than other people. Trying to learn from people that could be mentors or could educate me. Trying to make as many contacts as I could, because you never know who might call you up with some good idea someday or help you with a job. Many of the jobs I got, I got because I had some random contact I didn't think would lead to anything, but it ultimately did.”— David Rubenstein

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Leadership & Management · Psychology & Behavior

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Seven habits: humility, work, mentors, network, oral skills, writing, credit sharing

“Masters are people who, they didn't invent golf or they didn't invent basketball, but they perfected it in a way that almost nobody else did. And there's no one skill that anybody can say is the way to do it. But practice, practice, practice makes a big difference. To become a great master at something, you have to just give up other parts of your life and really practice it, and perfect that skill over and over and over again.”— David Rubenstein

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Psychology & Behavior · Leadership & Management

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Mastery requires sacrifice of other life areas