Academy of Achievement Logo
Achiever Gallery
  The Arts
   + [ Business ]
  Public Service
  Science & Exploration
  My Role Model
  Recommended Books
  Academy Careers
Keys to Success
Achievement Podcasts
About the Academy
For Teachers

Search the site

Academy Careers


If you like Stephen Schwarzman's story, you might also like:
Lawrence Ellison,
Ray Dalio,
Henry Kravis,
Carlos Slim,
Ted Turner,
Dennis Washington
and Sanford Weill

Related Links:
NYC Public Library

Share This Page
  (Maximum 150 characters, 150 left)

Stephen Schwarzman
Stephen Schwarzman
Profile of Stephen Schwarzman Biography of Stephen Schwarzman Interview with Stephen Schwarzman Stephen Schwarzman Photo Gallery

Stephen Schwarzman Interview (page: 3 / 4)

Chairman and CEO, The Blackstone Group

Print Stephen Schwarzman Interview Print Interview

  Stephen Schwarzman

So at some point did your father start whispering in your ear, "What are you going to do with your life?"

Stephen Schwarzman: When all fathers do. That's a normal thing. I'm now a father, and I have a child that's a junior in college, and I know better than to whisper, because when you're whispering, they're truly not listening. You have to let them do their own thing. But I think, as we got closer to the end...

I remember interviewing with a company. It's fun for me to remember some of these things. It was a company called Pan American Airlines, which at that point was the dominant international carrier, subsequently bankrupt, and it was started by Yale graduate Juan Tripp. So they interviewed at school, and I went to interview with them, and I sat down, and there was a very establishment-looking fellow, and he said, "Well, why do you want to work at Pan American?" And I said, "Well, I've sort of got an idea." I said, "The Vietnam War looks like it's coming to a close, and there's probably a lot of surplus airplanes around, and why don't you just buy up a lot of those airplanes and go into the cargo business?" and the guy looked at me like I was completely deranged, which may have been true, and he said, "It's not your job to think about things like that."

What a response.

Stephen Schwarzman Interview Photo
I listened to that, and I said, I don't know anything about business, but I think this company is going to do very badly if that's the response of their representative to what I thought was a pretty clever idea. There were companies started around that time, apparently, to do that, like Flying Tiger and other types of things.

It's not a ridiculous suggestion.

Stephen Schwarzman: Given the Pan Am name, which was the best branded name in the airline business. I was 21. What did I know? I thought that was a good thing, but it didn't sell, and I didn't go to Pan Am. I had no job when I graduated, and it's a wonderful story of how I ended up where I went to.

I was working at a reunion, because I didn't have much money and I also had no plans, and I was a senior. I don't know why I did this, but there was a family at these reunions. This was the 15th reunion, so that meant that the people were 37 years old. There was a family having a picnic in the quadrangle, and I thought they looked really romantic and like a nice family. And I went out, and for no reason, because I didn't even have any money, really, I bought a Babar the Elephant book, which is a book that my parents used to read to me. I just went over and I gave the book to this kid. The father looked up and said, "What are you doing?" I said, "I don't know what I'm doing, but I used to read this as a kid. You look like you have two wonderful children." And the fellow was a gentleman named Bill Donaldson, and Bill started a firm that was very small then, called Donaldson, Lufkin & Jenrette.

I didn't do anything directly with him at that point, but...

He had a friend that was sitting with him named Larry Noble, and Larry worked at the admissions office, and Larry sort of befriended me. And you know, as I was looking for a job, he would introduce me to people in New York. At that point, this was a very formal world of finance, and I had had no economics courses. In fact, I didn't even own a suit. So I bought my first suit, and Larry would send me on interviews. I met the number two person at one of the New York banks. I had only been in a bank to make a deposit in a passbook, and here I was meeting the number two person at some giant money center bank. I could remember being almost completely overwhelmed that I went to this man's office and he offered me lunch and it was right in the next room. The idea that, one, you could sort of offer somebody lunch in an office building, and second, that he would do that with me was pretty overwhelming. The offices were so big I thought I was on one of those walking belts at an airport going the wrong way. I could never get to his office, it was so far. But he offered me a job. He's a very nice man, and he offered me a job and recommended I not take it, and I said, "Why is that?" He said, "I think that you're too smart and too quick for my type of organization. What you should do is go to an organization that's very small, comprised of very bright people doing anything." He said it doesn't matter what they do. It just matters that it's small and the people are very smart. He said, "Otherwise, you're going to be unhappy."

Wonderful advice.

Stephen Schwarzman: I went back to this fellow, Larry Noble, and said that was the advice. He said, "Oh, you should go see Bill Donaldson. He has a small investment banking firm." I went down to see him, and the appointment -- he was late, he was doing something else -- and I was sitting in the lobby, and at that point, they had nothing but young guys working there and beautiful girls, and I was watching all this, taking it in, and looking at this skyline out of a new building, 140 Broadway, in 1969. Then I went to see Bill for my interview, and he said, "Why do you want to work here?" And I said, "Frankly, I don't even know what you do here, but I know that everybody I've seen is very excited about it, and with all these bright guys and pretty women, whatever they're doing, I want to do it." And he gave me a big smile.

The right answer.

Stephen Schwarzman: He said, "That's a good reason, and offered me a job. I was there for six months, and then I went into the Army Reserves and then back to Harvard Business School.

By this point, it sounds like you were set on a career. Was the decision to go to Harvard Business School a decision for banking, particularly?

Stephen Schwarzman: Well, I learned an interesting thing.

People have observed that you only learn truly by failing, and I was, I thought, a complete failure at this job. I had no economics. I had no ability to read a financial statement. I had never had accounting. They gave me an office and a secretary and some annual reports and assignments. I didn't even know how to approach it. I'm pretty good on my feet, I'm pretty decent at bobbing and weaving, but there's only so long you can bob and weave when you don't have a good base. So it became clear to me, without anybody advising me, that leaving myself in an environment where I was intellectually unprepared was a danger not only to me but to everybody that I had anything to do with. So I went to business school, really, just to deal with this complete lack of preparation that I had. I really didn't like the kind of research-oriented business that DLJ was doing. I found I wasn't particularly good at that either, instinctively, so I interviewed at a variety of businesses out of business school, investment banks and advertising businesses and I think a consulting business.

[ Key to Success ] Preparation

I'm almost reluctant to tell you some of these stories on tape.

I remember going to an advertising firm. They offered me a job, and the compensation was $10,000. So I looked at the fellow who offered me the job, who thought it was a wonderful thing, and I started laughing, and he looked at me and he said, "Too high or too low?" And I said, "The fact that you wouldn't know is the problem. The starting salaries at that point in the investment banking business were 17,000; he was at ten. Now you know, when you're off by that percentage, that's pretty bad, and the fact that he was so unaware of what sort of was being paid competitively, I said, "Well, this is an industry where you can't make a lot of money if they don't really know even where they are." I interviewed at the different investment banking firms and in the corporate finance business, which I sort of thought felt like the right thing. It felt like the right thing because you were helping people. In other words, executives would tell you their problems and you would come up with a solution. You were both on the same team, and they were helping, you were helping. That seemed like something that wasn't too complex. You didn't have to be over-burdened with intellect. We're not talking about brain surgery here. This is finance -- add, subtract, multiply, and divide. It wasn't until decades later that calculus really came into finance on the trading side. So it seemed a comfortable fit.

Was it the relationships part of the business that attracted you?

Stephen Schwarzman: When I was at Yale, I figured out what I wanted to do, but I didn't know it existed. I figured that I wanted to be a telephone switchboard -- and we don't have telephone switchboards, just about, anymore -- but I wanted to have coming in enormous amounts of data, I wanted it to go into a central processor, and I wanted some kind of output. But I really wanted the volumes of input, and I didn't know where in the world I could find a job like that. I didn't know it was investment banking. I didn't have any real understanding of investment banking, so I just started looking around, and I guessed Pan Am wasn't it, and advertising wasn't it. Consulting was okay, but nobody really listened to you. I mean they do, but usually you're hired for political purposes as often as real purposes. You know, have one executive's view be the controlling one, or to convince a board to do something that maybe they don't want to do. But I was very lucky. As soon as I sort of found this corporate finance field, I said, "That's it."

[ Key to Success ] Vision

You recognized it?

Stephen Schwarzman: I recognized that that was the model that I already had in my head. That was a fun model, because you keep getting all this stimuli, and always changing, and then you need to do something with it, and then you actually make something happen, not just talk about it.

Stephen Schwarzman Interview, Page: 1   2   3   4   

This page last revised on Dec 22, 2007 13:28 EST
How To Cite This Page