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My First Million$500B PE titan: Stop fooling yourself with big plans
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EVERY SPOKEN WORD
50 min read · 10,489 words- 0:00 – 5:13
Turning $5M into $500B
- DRDavid Rubenstein
I raised five million dollars from four investors in 1987. Today, Carlyle manages not five million dollars, but five hundred billion dollars.
- SPSam Parr
How old were you then when you started Carlyle?
- DRDavid Rubenstein
Thirty-seven. I said, "Geez, if I don't do it now, I'll never do it."
- SPSam Parr
Do you have any habits that you think would shock people?
- DRDavid Rubenstein
I always view myself as being from a blue-collar family in Baltimore.
- SPSam Parr
But even, like, in year ten, you weren't thinking, like, "All right. I can breathe a little. This is gonna work. I think I'm safe."
- DRDavid Rubenstein
No, because if you're an entrepreneur, you always think something bad's gonna happen.
- SPSam Parr
Do you still feel that way?
- DRDavid Rubenstein
Every day. Ninety-nine point nine percent of the companies that are started in the United States are not in business five years later. If you go back and look at anybody that built a company, they have self-confidence that is staggering. I met Jeff Bezos for the first time, and he said, "Well, I'll give you twenty percent of the company that I'm about to build." Later, after the company was going somewhere, I said, "We should have taken that deal." That was stupid. That stock's probably worth fourteen, uh, billion dollars now.
- SPSam Parr
Can I ask you about seeing people get power?
- DRDavid Rubenstein
Well... [upbeat music]
- SPSam Parr
I was looking at this photo. There's this photo here of... I think it's you and your parents.
- DRDavid Rubenstein
Yes. It's with President Carter when, uh, you know, I was twenty-seven years old. I got a job as the deputy domestic policy advisor. I obviously wasn't qualified and wasn't experienced, but in our system, if you work in a campaign and you win, you might get a job in the White House. And so my parents, who are blue-collar workers, never graduated from high school, when I got a job at twenty-seven at the White House, you know, they couldn't believe it. And then I took them in to meet the president, which is what that picture shows, and they were, you know, in awe because they were what you would call Yellow Dog Democrats.
- SPSam Parr
What's that?
- DRDavid Rubenstein
It is an old expression. It means that I am a Democrat, and I would vote for a Democrat for a candidate, s- for a president or for any office, even if it was a yellow dog.
- SPSam Parr
So they were just hardcore Dems.
- DRDavid Rubenstein
Absolutely.
- SPSam Parr
What do you do your first month when you're in office? Because getting any type of new job is a big deal, particularly one where it's, like, one of the most powerful things on Earth. What do you do your first month? Do you remember?
- DRDavid Rubenstein
Carter had a lot of promises, and what I did is I worked on compiling what his promises were. See, there wasn't no internet then, and so Carter had wanted to know what he actually promised in the course of his two years campaign. Well, you have to go dig it out, talks, interviews, questionnaires. What did he actually promise? And I got to sit in a lot of Carter's meetings because I would-- I knew his promises better than anybody, and so I would be able to object and say, "Mr. President, it's a good idea this person has, but it's a violation of a campaign promise." Every administration, the current administration, every administration has young people who are in their twenties or thirties who worked in the campaign, and they're en-energetic, e- and eager, and they get jobs, and they... And some of them turn out to be great, and some will turn out to be not as great.
- SPSam Parr
But how did you figure out how to make good decisions? Because you are so young.
- DRDavid Rubenstein
I mean, I didn't have a lot of policy experience. I'd worked on Capitol Hill for, uh, y- about a year, so I didn't really have that much policy experience. My boss did. And then we hired a staff of really talented people. Uh, they were all young, but they were talented in their ar- area, energy or environment or whatever it be. And then we'd have issues, and we'd come up with positions. Remember, the president has policy positions that he wants to take because of campaign promises, so we would articulate, you know, how we could fulfill his promises.
- SPSam Parr
Uh, so you were there for four years. What did you feel like when it was done?
- DRDavid Rubenstein
Well, when you work in the White House, people come to you and tell you how great you are. Nobody says, "Yeah, you're an idiot." They come and tell you, "You're a smart guy. You're great. And by the way, can you help me on this or that?" And they always will say, "And by the way, if you ever wanna leave, call me 'cause I, I'm gonna hire you some day." But I always said, "I don't wanna be hired, but I'm gonna be here for four years. When we win, I'll be, uh, maybe the senior domestic advisor in the next four years." After we lost the election, I started calling these people saying, "You remember me? I'm the bright young guy you said I was so great." I didn't get calls back because you're out of power. People wanna go and get contacted with the Reagan people. So I, I, I struggled for a while to find a law firm that would take me because nobody really wanted a junior White House aide who was a Carter person.
- SPSam Parr
And you're thirty-two?
- DRDavid Rubenstein
I was left in White House at thirty-one. So at thirty-one, I'm trying to figure out. I didn't wanna tell my mother, "Look, uh, your son is unemployable. Nobody wants a Carter White House aide." Not unlike the experience that the Biden people have had. The Biden people have found it more difficult to get reestablished than they would have preferred. And when you lose an election, y- y- you know, you're out of power. So as Harry Truman said, "You want a friend in Washington, get a dog." Eventually, I got a job practicing law, and I realized I wasn't that great a lawyer. I didn't really like it. And so I, I started a f- investment firm a- about a year or couple years later.
- SPSam Parr
I think the best way to become successful is to see how other people did it, whether you're gonna copy them or just use it as inspiration because then now you know what's possible. So starting at the age of twenty-four, I did this relentlessly, and I was very methodical about it. And I created a spreadsheet where I tracked roughly fifty people who were uber successful, and I looked at the year that they were born, the year that they started their apprenticeship, and then the year that they started the first thing that made them successful, finally the year that they broke through. And I aggregated all this data along with the stories of what they did to be an apprentice and what they did to finally break through, and I put it together in a database. And HubSpot went and s- found this thing that I frankly even forgot about, but it did change my life, and they resurfaced it. They made it even better, and they put it into a thing that you can download for free right now. So if you click the link in the description or click the QR code right here, you can see this database that I made when I was twenty-four, and it changed my life. And so if you're looking to become successful or you're already successful and just want some more inspiration, check it out.
- 5:13 – 11:58
Scrappy private equity
- SPSam Parr
How old were you then when you started Carlyle?
- DRDavid Rubenstein
I was thirty-seven because I read that an entrepreneur will start his or her first company between the ages of twenty-eight and thirty-seven. Now, obviously, there's the Mark Zuckerbergs and Bill Gates of the world that are different, but average person will start a first company between twenty-eight and thirty-seven. If you haven't done it by thirty-seven, I read, you probably will never start a company. So if you have an entrepreneurial instinct, you better do something by the age of thirty-seven was what, uh, I read. And so I was then thirty-seven. I said, "Geez, if I don't do it now, I'll never do it."
- SPSam Parr
Did you think-- Like a lot of times when people start businesses, they're like, "How much runway do I have?"
- DRDavid Rubenstein
Yeah, when I started Carlyle, I, I was married. When I left the White House, I wasn't married. I got married a couple years before I started Carlyle.
- SPSam Parr
So you had the pressure of, like, "I need to provide."
- DRDavid Rubenstein
Well, you have some pressure, but, um, you know, there's pressure, but the pressure of getting a company off the ground is, is considerable. As you know, you've started your own company. You ne- you never know when you start a company if you're gonna be able to pay the rent the next day or next month. And, uh, are the, uh, are people gonna want your services? You don't, you don't know.
- SPSam Parr
Yeah. When I started my first company, that was the one that, uh, led to some success. I was lucky because I was twenty-four or twenty-five, and I was single, and, like, I only spent fifteen hundred or two thousand dollars a month. And so, like, I had saved up maybe, I don't remember, fifty thousand dollars. So I'm like, "I'm good. I have thirty-six months," or something like that.
- DRDavid Rubenstein
Well, remember, ninety-nine point nine percent of the companies that are started in the United States are not in business five years later. Ninety-nine point nine percent. So it's a small percentage of companies that are there five years later, and a very small percentage that are there ten years later. So most companies that are started just don't work out.
- SPSam Parr
What did you do the first handful of weeks after you decided to start the company?
- DRDavid Rubenstein
Well, I had to recruit people and recruit people, and then we raised... And then I had to, to raise money to get a start. I raised five million dollars from four investors in nineteen eighty-seven. Today, Carlyle manages not five million dollars, but five hundred billion dollars. So it's grown to be up one of the larger private equity firms in the world with the help of a lot of people. But I did that for many, many years.
- SPSam Parr
Who was your first few hires?
- DRDavid Rubenstein
Well, I, I had a couple partners. Well, I hired a person who had been the chief financial officer of a company called MCI, which was a long-distance telephone company, and he became my co-CEO with me over the, for some thirty years. His name is Bill Conway. And we hired another person, a senior officer from Marriott. So we hired a number of people at the beginning, four of us at the beginning, and then we grew it. The companies we-- Carlyle controls have about a million and a half employees. And the Carlyle itself has got about twenty-three hundred core.
- SPSam Parr
It sounds like the... Like, whenever I started my last company, the people, or in this company, the people who I initially hire, they're basically like rejects. Like, it's like, it's like smart, ambitious, rebellious. But it sounds like the people you hired early on were very pedigreed.
- DRDavid Rubenstein
Well, they have pedigrees in the sense that they had went to good schools. I, I was, uh, probably a, um, a sucker for hiring people that went to good schools. But in the end, everybody is leaving somewhere because they're not happy there, and they're not thinking it's w- it's working well for them. So everybody is really incented to try to get a better position in life. And a lot of people at the age of twenty or thirty, they realize the job that they currently have may not be so great, so they take a chance. And, you know, some people work out, and some people it doesn't work out.
- SPSam Parr
I know your, your job was recruiting, and your job was helping fundraise. And I already know because I've listened to so many of you, you're very charming, and you're very persuasive. You do-- You're very good with words.
- DRDavid Rubenstein
I, I don't know about that, but I would say that my partners had MBAs. I didn't have an MBA. So they really knew the investment world. So I figured, okay, they can really assess deals better than I can. What I'll do is I'll raise the money, and then I'll ultimately recruit people, and then I'll be the face of the firm because I was better at that than maybe they, they were. And so that's what I did for thirty f- plus years, run around the world raising money and then recruiting people to build our new firms. So what we did, uh, that was different was we sh- we had mult- multiple funds. In private equity, historically, you had a, a buyout fund if you're a buyout business, and you had a venture fund. Every four years, you raise a new one if your track record was good enough to justify it. I came up with the idea of having a buyout fund, a growth fund, a real estate fund, a debt fund, and I had multiple funds. And then I had the idea of globalizing. I have a fund in Europe and Asia and Japan, so forth. That was novel at the time, but to do that, I had to run around the world recruiting people and raising the money. And so that took a lot of time.
- SPSam Parr
Do you remember how... So you got your first five million dollar fund. How long did that take to raise?
- DRDavid Rubenstein
Well, it was one person who was a friend of mine who helped me raise the five million dollars and was from four investors. And we did, we did things what's called deal by deal. We didn't have money to do a big fund, so we'd find a deal, and then go raise money for that deal. If it worked out, then we'd go raise money for another deal. And we did that for a number of years before we raised our first fund, which was a hundred million. The second fund was a billion, and so we got bigger.
- SPSam Parr
How did you pay your team then if you're, if you don't have a fund, if you're doing deal by deal?
- DRDavid Rubenstein
Well, it's harder because if you do a deal by deal, you have to go to people and say, "Here's a good deal. Give me some money for it." They say, "I'll get back to you. I'm not sure." So it takes time, and it's hard to do. What we were trying to do at the time was we were buying publicly traded stocks, and you can't tell people, "Here's the opportunity," because they could trade on it if they, i- if they didn't give you the money, and they legally, I guess, they could trade on it that they shouldn't have. So it took a while to get funding. But that's true of all, everybody. Anybody that's built a successful company is always gonna have a hard time at the beginning. And, you know, we had a hard time at the beginning, but Blackstone and K-- and Apollo and KKR, they all had similar stories of having no money at the beginning, and then they started Blackstone, which are the biggest of the, uh, private equity firms these days. Steve Schwarzman wrote in his autobiography that, you know, they got turned down by ninety-seven percent of the people they went to to raise their first fund.
- SPSam Parr
Yeah, and the first one was huge, wasn't it? Like-
- DRDavid Rubenstein
It was maybe eight hundred million, I think.
- SPSam Parr
Yeah, it was huge. But what I'm curious about, I don't think that you... You don't talk too much about your entrepreneurial side, and I'm always very curious about that. Do you remember, like, the scrappy stories of what your first office looked like?
- DRDavid Rubenstein
When I started the firm, um, we didn't have any money. We had no credibility. So there was a new office building that had been built in Washington. It looked like a building that was a classic building for wealthy kind of set of, uh, tenants. And they had a little space left because they had filmed the movie c- called Broadcast News with Jack Nicholson in that space. So the space was now available. I said I would take the space. It was five thousand square feet. And the leasing agent said, "Look, then we can have another five thousand if you want. You have an option for five thousand." I said, "No." I didn't take it. I said, "I don't want it." She said, "It's free. You just sign the thing here. You get the option to have five thousand square feet more." I said, "I don't want it because I don't want to be tempted to ever grow that big a firm."
- SPSam Parr
Why didn't you wanna grow that big?
- DRDavid Rubenstein
At the time, I didn't know much about business compared to what I know about government or I knew about the practice of law, and I was afraid if I took a, a bigger space that we would try to expand too rapidly. So that's probably why we didn't do it. Then later, we had to expand, and now we're the biggest tenant in the bus- in the building.
- 11:58 – 14:14
Don’t fool yourself
- SPSam Parr
About one night a week, I'll be laying in bed with my wife, you know, doing pillow talk, and I'm like, "You know, one day, if we nail this, this, and this, in the next ten years, maybe we can be this, or maybe in fifty years, we could be this." And like, you like have these like, you know, vision sessions. Were you doing that with your spouse?
- DRDavid Rubenstein
Every day was a, was a challenge because we're trying to start a firm. Remember, and private equity was not as big as it was today. In fact, the phrase private equity hadn't, wasn't even invented yet. We were in Washington, D.C. Washington, D.C. was not New York. People didn't take you seriously. And people asked me, "Why did you do it in Washington?" Well, Senator Everett Dirksen, used to be a Senate minority leader, said famously, "When you're getting kicked out of town, get out in front and pretend you're leading a parade." What does that mean? It means take advantage of the situation you're in. So I said, "We're in Washington. We understand the companies heavily affected by the federal government better than the guys in New York." Maybe it was true, maybe it wasn't, but it sounded good, and kind of some people gave us money.
- SPSam Parr
You're the second person in the past couple weeks over here. We've had Ray Dalio in, uh, recently, and I asked him the same question. I was like, "When you were first getting Bridgewater going, did you... Like, what were some crazy ambitions? Did you say like, 'Oh, it would be awesome if we made $100 million or a billion dollars or had 10,000 employees or whatever?'" And he was like, "I just wanted to make 100 grand a year, so I could, like, pay for my family. That was my goal."
- DRDavid Rubenstein
In Ray's case, um, I think he started the business out of his apartment.
- SPSam Parr
Yeah, and he had to ask his dad for money one time because he went broke.
- DRDavid Rubenstein
He, he had to borrow money from his father, that's correct.
- SPSam Parr
Yeah. And so it's funny hearing you say this because you've built such an amazing company that, like, I can't believe that there was no, like, aspirations early on, just for the sake of motivation.
- DRDavid Rubenstein
You know, if you have the grandiose, uh, expectations or plans in the beginning, you might be, you know, fooling yourself. I don't think Bill Gates when he started think he was gonna build what he built or Mark Zuckerberg or all these others. For example, Mark Zuckerberg was at Harvard. My now son-in-law was one of his classmates. And I heard about the opportunity. This guy was building this company, and they asked me to invest. And I said, "I'm not gonna invest in that. It's a dating company." Because the original idea was simply to, uh, help people get dates at Harvard. You'd have pictures of people, their faces, and you can do it through social media. And then they thought maybe they'd expand it to Yale or Princeton. That was it. The idea of doing non-students really hadn't e- wasn't even surfaced then. I don't think Mark Zuckerberg actually thought he would ever build what he built.
- 14:14 – 16:23
Turning down 20% of Amazon
- SPSam Parr
Yeah, I think I remember some awesome story of Jeff Bezos a- at a pitch. He goes, "Look, if we really nail this, I think we can make $100 million a year."
- DRDavid Rubenstein
Look, I saw Jeff at the beginning because he had the... He had a bibliography of books in print to be able to sell books over the Internet. One of our companies had a bibliography of books in print. He came to rent it from us, and we said, "We don't rent it." He said, "Well, I'll give you 20% of the company that I'm about to build." And our guy said, "We don't want a piece of an illiquid company, a startup. That's not more than- We want cash." Ultimately, we agreed to, I think, 100,000 a year for five years. We rented him the bibliography.
- SPSam Parr
Wait, you owned a company that was a book publisher, and it had a book that had a list of every book ever written, and the offer was 25%?
- DRDavid Rubenstein
It was 20% to 25%. Later, after the company was going somewhere, I said, "We should've taken that deal." I flew out. I met Jeff Bezos for the first time in a... He had one office, and he was doing the books himself, and he would take them to the post office every night. It was very small. And I said, "You know, you're gonna compete against Barnes & Noble." He says, "Yeah, but I understand how to do com- do this better than they do." And so I, I said, "This guy's not gonna really make it." I said, "Look, we'll take some stock now. Uh, we'd like some stock. 20% is okay." He said, "Well, David, that was a couple years ago. Now, I don't need you quite as much, but I'll give you some stock." We got some stock, but then we sold it at the IPO. That was stupid. That, that stock's probably worth $14 billion now.
- SPSam Parr
Did he have any attributes back then that you saw this guy is gonna be the, be the guy?
- DRDavid Rubenstein
He's very smart and, and had a lot of self-confidence, and he said he had a lot of good computer skills, and maybe he did. I didn't re- couldn't judge that. But he was very driven, very smart, hardworking, like a lot of entrepreneurs. Entrepreneurs, people that build companies are not shrinking violets. You know, if you go back and look at anybody that built a company, they have self, uh, confidence that, that is, is staggering. Because if you're, you're a shrinking violet, you're not gonna build a company. Bill Gates as a young man and Jeff Bezos or Mark Zuckerberg or Steve Jobs, the enormous amount of self-confidence, and that's what it takes to really build a company.
- SPSam Parr
Did you have that?
- DRDavid Rubenstein
I didn't have as much as they did because, um, I didn't think I was as smart as they were. But I, I was surrounded by people that had more. I recruited people that knew more than I did.
- SPSam Parr
And you got really
- 16:23 – 20:40
Recruiting big shots
- SPSam Parr
good at not just recruiting talented people, but you got really good at cru- recruiting big shots. Like, you, you had a bunch of big shots who are... I, I don't know the right terminology. They're like advisors?
- DRDavid Rubenstein
Well, what happened was when we were starting the company or right after we started it, um, we started in '87. Ronald Reagan's presidency was over in '88. And a former law partner of mine said that a man who had been the Secretary of Defense was gonna go on a lot of corporate boards. But he, in those days, if you were not a lawyer, you couldn't join a law firm. So he was looking for a place to be a base. And he, my former law partner, knew about what I was doing. And since we weren't a law firm, he said, "Why don't you interview Frank Carlucci, the former Secretary of Defense, or about to be former Secretary of Defense, and he can join your firm. He's gonna be on a lot of corporate boards, so maybe he can open some doors for you." So we interviewed Frank Carlucci. He joined us. And then he, he, he could open doors that I couldn't open. He was a former Secretary of Defense. Four years later, Jim Baker was leaving as Secretary of State. Thought, "Well, this is the ultimate great, uh, man of the world, Secretary of State, Secretary of Treasury, White House Chief of Staff." And I was able to recruit him.
- SPSam Parr
How many other options did they have? Like, why would they trust, like, a, a startup?
- DRDavid Rubenstein
I mean, they always had other things that w- we weren't doing. In Frank Carlucci's case, he was joining like six or seven corporate boards. That was his main activity. In Jim Baker's case, he went back to his family's law firm. He was a partner there, but he was also a partner in our firm. And then after Baker, we had Dick Darman, who'd been one of his, uh, uh, protégés, who had been the head of OMB. And then later, George Herbert Walker Bush, former President of the United States, became a, uh, an advisor to us. And then John Major, former prime minister, became an advisor to us as well. So we did open doors with these people because if your last name is Rubenstein and you go to the Middle East to raise money, might not be as compelling as if you go with Jim Baker.
- SPSam Parr
Do you remember what the pitch looks like or sounds like when you're, when you're- Swinging above your weight?
- DRDavid Rubenstein
I was saying, "Look, we're a firm in Washington. We understand h- uh, companies heavily affected by the federal government. We're buying an aerospace defense company. We have a former Secretary of Defense." And, you know, in the end, uh, you have to build your track record. So if you did one deal and it exited well, then you can go and s- use that to say, "We're gonna do another deal similarly." So it worked out. But, but we made some mistakes, and everybody makes mistakes and, you know, but it worked out.
- SPSam Parr
Yeah. That's crazy. But it seems like h- you guys had, like, a pretty good trajectory. Do you remember any times where you were like, "This is not gonna work"?
- DRDavid Rubenstein
One time we had a limited amount of cash, and then we were trying to buy a company, and it was in bankruptcy court. We were trying to buy it out of bankruptcy, and we basically spent all our money trying to buy it, and then we lost in bankruptcy court. So we'd spent all our money. We didn't get the company. We had no more cash. So we were-- we said, "Hey, what are we gonna do to meet the payroll?" But in the end, we actually got the company, and in the end, uh, it turned out to be a very successful deal. But, you know, I remember waking up in the middle of the night thinking, "Hey, how am I gonna pay the rent?"
- SPSam Parr
What year or how many years into the company did you feel like you personally were like, "All right, I'm m- financially stable"?
- DRDavid Rubenstein
Maybe a, th- yesterday. It takes a while. I mean, uh, when we were building the company, we ultimately, um, sold a piece of it to CalPERS, I think about five% to California, uh, retirement system, and they'd value the company at something being worth, like, two billion dollars. The company was worth two billion or two and a half billion. Nobody thought that a, a private equity firm in those days had franchise value and could be sold, but we sold five% to CalPER. Uh, that was probably two thousand and nine or something like that. And then a few years later, we sold, uh, seven and a half percent to Mubadala, which was a Abu Dhabi investment arm that-- and that valued the company at being worth twenty billion. And then we later took the company public.
- SPSam Parr
But even, like, in year ten or so, you weren't thinking, like, "All right, I can breathe a little. This is gonna work. I don't know how well it's gonna work, but it's actually gonna work, and I-- and, and personally, I, I, I'm-- I think I'm safe."
- DRDavid Rubenstein
No, because if you're an entrepreneur, you always think something bad's gonna happen. And so I'm always worried that something bad's gonna happen. Tomorrow, somebody will do something they shouldn't have done or we-- a deal won't work out. So I never felt comfortable. You know, I, I tend to be a workaholic a bit, so I'm always working on things, and I'm always thinking what can go wrong.
- SPSam Parr
Do you still feel that way?
- DRDavid Rubenstein
Every day.
- SPSam Parr
Really?
- DRDavid Rubenstein
Look, I'm always, uh, thinking bad things can happen. Maybe that's what entrepreneurs do because you have to have sel- certain self-confidence, but you, you always have to assume something bad can happen. You have to protect against
- 20:40 – 22:02
Finding the right partner
- DRDavid Rubenstein
it.
- SPSam Parr
But it seems like you've had good partners. I'm, I've-- I'm highly neurotic. My business partner who runs Hampton is not neurotic at all, and he's very calm and steady, and it's, like, the greatest pair ever because he's the only one who I will be neurotic with.
- DRDavid Rubenstein
Well, I have two people that I really built the company with, and one of them is now eighty years old and has all dark hair, doesn't have one gray hair. So he may be not as neurotic as I am. And then Bill Conway has gray hair, but he doesn't seem to worry about some of the things as much as I do, maybe because he's more self-confidence about his abilities to and being an investor. But look, you're always worried something bad's gonna happen. I'm worried every day. I'm now the principal owner of the Baltimore Orioles. I'm worried every day that something bad can happen.
- SPSam Parr
What are you worried about with the Orioles?
- DRDavid Rubenstein
Well, I wanna make the playoffs and, uh, you know, we're now one game out of the playoff, uh, but one game away from being able to get into the playoffs, but one b- one game behind the Cleveland Guardians, and then there are other teams that could catch up to us. So I'm always worried that I didn't do a good enough job in, in helping the team.
- SPSam Parr
I get worried about looking stupid on the internet, and, like, the comments, I t-- I act like they don't bother me. They do. Do you get bothered by comments or people criticizing an interview?
- DRDavid Rubenstein
Advisors have, have trained me not to read social media because you're inevitably gonna find people saying something critical of you.
- SPSam Parr
Does that bother you?
- DRDavid Rubenstein
Well, nobody wants to be criticized, so I tend not to read the social media.
- SPSam Parr
[laughs]
- DRDavid Rubenstein
Sure. So I generally don't go onto social
- 22:02 – 27:39
Trade-offs
- DRDavid Rubenstein
media.
- SPSam Parr
I was reading about how, I think you said you were traveling, like, two hundred plus days a year. So how old were your kids when you were doing that, and how did you balance being a good dad?
- DRDavid Rubenstein
Well, it's always a challenge, of course. But as you know, um, my el-- my-- all three of my kids have MBAs, and they all are in private equity. So you can say I either did something wrong or did something right. But look, um, parents who are driven and have businesses that require the travel, you have to depend on your spouse and other people that help make sure the kids get grown. And I-- when I came back on weekends from my travels, you know, I would try to spend time with them.
- SPSam Parr
Do you get to work with them on a weekly or daily basis now? Like, are they part of an organization that you're a part of?
- DRDavid Rubenstein
No. I have a family investment office, and very often a family investment office will, um, be, uh, something where you can bring your children to work in it and so forth. Some people do it that way. I didn't wanna do that. So, uh, they have their own businesses that I've helped support, but now they're kind of on their own. And I have a family investment office which is owned largely by the people that work there, professionals, and I own a piece of it as well. And then when I drop dead, my children will get some- something probably out of it. But I'm, I'm committed to giving away most of my money. I was an early original signer of the Giving Pledge, and I've given away a lot of money, and I intend to give away the bulk of what I have left.
- SPSam Parr
One of the reasons that I respect you is because you seem like a very fulfilled person. Have you ever thought about who you know in your life who seems fulfilled and has a really rich life, like a well-rounded, rich life? Because a lot of times successful people, you don't wanna trade spots with them.
- DRDavid Rubenstein
Well, there are very few people who every- everything works perfectly for. There may be some people like that, but everybody's got their challenges. And this weekend, I hosted in, in Nantucket, uh, friends from mine from high school, from sixty years ago. When I was growing up, I wasn't a great athlete. Some of the people I had at my home this weekend were great athletes. Now they often have artificial hips or artificial knees because they were such great they, they hurt themselves. So I don't really have those-- that problem, though.
- SPSam Parr
But when you think of-- do you ever think of, like, who do you admire most, not just for their business ability, but for their, like, holistic, like, this person under these circumstances has mostly nailed aspects of life that I admire?
- DRDavid Rubenstein
Well, there are a lot of people. Um, the person who was in my firm, I thought his professional and and career was extraordinary, and that was Jim Baker. Great job in the federal government and very well-respected person. You know, there are a lots of business people that I, I've looked at and admired over the years, and people have great personal lives, professional lives, and the people want to emulate. Yeah, I'm sure a lot of people like that, but there's nobody that's out there that's perfect.
- SPSam Parr
I talked to, uh, someone who worked with you, uh, at Carlyle. He was an associate. But he was saying something. He's like, "I love, uh, working for David because I think he's lived in mostly the same house for a very long time. When you walk into the office, his office, you don't see, like, a lot of fancy stuff. He's pretty low-key. When he leaves the office, there's not, like, a limousine driver or whatever you would think of, like, the stereotype." And he said that, "That's one of the reasons why I really respect him and I really like him, is because he seems like he's still very down to earth regardless of how successful he's got."
- DRDavid Rubenstein
Well, I always view myself as being a, from a blue-collar family in Baltimore, and I always, you know, realized that neither of my parents graduated from high school. I got lucky in life and, um, you know, you wouldn't have predicted what would have happened to me. And, you know, I've tried to give back to society, and I've given and done a lot of things in philanthropy, and I've tried to chair a lot of nonprofit boards and so forth to kind of give back to society. But, you know, in the end, um, you know, I'm not that fancy a person, I guess.
- SPSam Parr
When we had Lloyd in, he was like, uh, he told a story about how, how, I think his father was a post- post office-
- DRDavid Rubenstein
No, his father had the same job my father had, postal clerk. His father did it in New York, I think Brooklyn, and my father did it in Baltimore. Uh, I forget his father was high school graduate, but my parents didn't graduate from high school, and my father came back from World War II. The only job he could get was this postal job, and that's the job he had his entire life.
- SPSam Parr
And he told the story. He was like, "I still have the lower tier of Netflix." He was like, "It's kind of funny." He was like, "I could afford these things, but I definitely like being broke or not having a lot of money at a young age. It still has impacted me." Did it- Does it still impact you? Do you have any habits that you think would shock people?
- DRDavid Rubenstein
You know, I still go to the same barber for like fifteen dollars to get a haircut or something in my neighborhood. So, um, I, I am wealthy, but, but not so wealthy that I am, you know, have yachts. And I don't know. I, I guess I'm, you know, somewhat, uh, old school, and I still have this suit I'm wearing. I've had it for like ten years. The trick is being able to fit in your suit, say, for ten years. That's the trick.
- SPSam Parr
How many do you have? Because that's, uh, that's the only thing I've ever seen you wear.
- DRDavid Rubenstein
I have, uh, a lot of suits, and, uh, it's an interesting phenomenon. Today in the business world, not wearing a suit is considered more normal. But I guess, I mean, my father was a blue-collar worker, and he had this obsession with never wearing a tie. He just thought ties were terrible. And I guess to kind of show that I was achieved more than he had achieved, I guess I bought a lot of suits, and I have a lot of ties, and I'm amortizing them by still wearing the same ties and suits I've had for many years.
- SPSam Parr
Well, it looks good. I mean, that photo when you were twenty-seven, you look sharp there too. By the way, they dressed the presidents and government official. They dressed amazing, uh, during that era. Like, when you look at Ronald Reagan's suits, he was a sharp dresser. He was very good at dressing compared to a lot of people now.
- DRDavid Rubenstein
He was an actor, and he looked, wanted to look, you know, good. And Carter was, um, you know, Carter was a little cheaper than Reagan was probably. He had his suits made in Plains, Georgia, or someplace like that. And, you know, but he wasn't a fashion
- 27:39 – 31:40
Witnessing ascents to power
- DRDavid Rubenstein
plate, I think is fair to say.
- SPSam Parr
Um, can I ask you about seeing people get power? Because I've read, I think, is it the governor of Virginia was like a, was an intern with you guys.
- DRDavid Rubenstein
Glenn Youngkin worked at Carlyle for twenty-five years, and he got elected governor. Glenn Youngkin, yes.
- SPSam Parr
And then you also know world leaders. You know a lot of really successful entrepreneurs. What is it like when you see someone go from just knowing them as a young person or someone without as much power, money, or success and then seeing them become like the man? Is there something that power can change you and how-
- DRDavid Rubenstein
Power does change some people. Glenn Youngkin, I hired him pretty much out of McKinsey, right out of Harvard Business School. He worked for us for twenty-five years, and then he decided to leave and run for governor. I didn't think he would get elected because he'd never been in politics before. He got elected, and all of a sudden, people are talking about him being potential President of United States. So look, uh, I met a lot of people over the years who I thought were modestly talented or very talented, and you never know which ones are gonna be the ones that actually go on and, and-
- SPSam Parr
You don't think you can predict that?
- DRDavid Rubenstein
It's impossible. You know, you just have lucky breaks. I mean, who would have predicted Bill Gates dropping out of Harvard and is gonna build a company that became Microsoft? Or Steve Jobs didn't even go to college. Who would have predicted any of these things?
- SPSam Parr
Yeah, but there are some, like, traits or little antidotes or stories that you hear about these guys where they just like, they sound like animals. Like, I, I heard this story, and a lot of these stories, they could be myths at this point, but it was a story about Bill Gates, and apparently he didn't have a radio in his car because he said that distracts me from thinking about Microsoft just in my twenty-minute drive. And like, you hear these things and you're like, "I don't know if it's gonna work amazingly well," but like you got something where you seem a little bit unstoppable.
- DRDavid Rubenstein
Well, but there are a lot of people that have those qualities, and they don't make it. You know, you have to have some luck too. Microsoft, um, you know, had some very good fortune at the very beginning. Uh, IBM, in effect, made a, I think, a mistake. When IBM was looking for a, uh, software or operating system for its, uh, PC, they, uh, hired, uh, Microsoft to provide it, but they didn't, uh, own the, like, operating system. Had they owned the system, Microsoft wouldn't have made all that money by selling the effect operating system to other, other, other computer operators or by building a whole system of software. Uh, had IBM had said, "We'll buy Microsoft at the beginning," because they have the operating system, it would've been different.
- SPSam Parr
Can I ask you about owning all these awesome documents?
- DRDavid Rubenstein
Yeah, sure.
- SPSam Parr
How much have you spent in sum?
- DRDavid Rubenstein
I've never, uh, added it up. I don't really honestly know. But what happened was I stumbled into buying the Magna Carta. I didn't really intend to, but I-- somebody told me it was about to be sold, and, and it was g- the only copy in the United States, and it was the only one in private hands, and it would leave the country, blah, blah, blah. So I bought it. And then I put it on display at the National Archives on a permanent display. And then I started getting other historic documents, the Emancipation Proclamation, Declaration of Independence. I owned, I think, more rare copies than anybody of that. And then, uh, the Thirteenth Amendment, which freed slaves, and then other historic documents. And I started fixing up buildings like the Washington Monument, Jefferson Memorial, Lincoln Memorial. And the reason is, I want people to know more about American history. And if you have original documents, people may be more likely to look at them, learn more about history. And the same is true of, of, of these buildings. If they're restored, people might go visit them and learn more about American history.
- SPSam Parr
When you're bidding on them, are there other bidders typically?
- DRDavid Rubenstein
Well, there typically are, sure. When you have... Like, when I bought the Magna Carta, I was bidding, but I was in a room. They put me in a little room with a telephone, and I, I... They said, "How are-- Aren't you gonna bid? The, the auction's almost over." And I said, "Okay, I'll, I'll bid." I put a bid in, and they said, "Sold" right away. I don't know if anybody else ever bid. I never found out.
- SPSam Parr
How big is the market, though, of people buying these documents?
- DRDavid Rubenstein
Yeah, um, it's n- wasn't as big as it's now becoming because now some art buyers who spend three hundred million dollars for a painting are now getting, buying documents for a lot less. So, and they now gravitated to that, so there's more competition. And look, the Declaration of Independence, because of the Semiquincentennial, become a, a document of greater interest to people. So the prices have gone up dramatically to buy these historic copies.
- SPSam Parr
Um,
- 31:40 – 33:37
The Greatest Sentence Ever Written
- SPSam Parr
uh, well, I think it's Walter Isaacson. He's got a, a new book about The Greatest Sentence Ever, Ever Written, and it's awesome. And I didn't realize how amazing the Founding Fathers were when it came to a bunch of different stuff, like thinking really long term and then, like, the idea of, like, we hold these truths to be self-evident. That's kind of interesting in that it's a very self, it's a self-amending document. Like, it, there's a lot of, like, really interesting parts. Did you think that when they were writing this, that they thought someone is willing to pay all this money to own this and save this and, like, cherish it?
- DRDavid Rubenstein
Well, when they, they, they didn't treat the document that well. When the Declaration of Independence, um, after it was drafted and signed, they basically folded it. They, they, they hid it places. They put it in sunlight. No, I don't think they thought that at all. Uh, not until eighteen twenty-three when John Quincy Adams was, uh, Secretary of State. He realized that the document was fading so much, they better get some copies or sooner nobody would be able to see it, and they made copies then.
- SPSam Parr
Yeah, I often think about that, um, about what they were, like, where their mind space was when they were doing it, because it's pretty amazing. How old was Thomas Jefferson? I think thirty-three.
- DRDavid Rubenstein
Thirty-three. Remember, the, the, there were three million people in the United States at the time of the, the Declaration of Independence, and half a million slaves, and two and a half million whites. And it was on the Eastern Seaboard, and nobody really thought this country would amount to that much, even if we won the war, which no one thought we would do. But even after winning the war, it was not clear the country would survive. Jefferson didn't think it would survive for more than twenty years.
- SPSam Parr
He said that?
- DRDavid Rubenstein
He did. He, he wasn't at the Constitutional Convention, but he wrote with Madison back and forth, and he kinda thought twenty years would probably be about what it would take.
- SPSam Parr
And so that's kinda like a common trend of what I was asking earlier about, uh, Jeff Bezos, and how it's kind of hard to, like, have big ambitions when you're just getting going.
- DRDavid Rubenstein
Yeah, look, the Founding Fathers, if they were to come back today, they'd be astounded that the country that, that was a tiny country on the Eastern Seaboard has been, for at least since World War II, the most powerful country in the world in every category you can mention. They would never have
- 33:37 – 35:49
History that repeats itself
- DRDavid Rubenstein
dreamed that.
- SPSam Parr
One of my favorite parts about reading history is that there's, like, a handful of rules or axioms or trends that, like, tend to repeat themselves. For example, I was reading about Winston Churchill, and he was talking about how he was... He, like, said it, like, to someone. He's like, "I think the world might end." Like, and it, and, like, it was just, like, funny that there was, like, different periods of time where people always think, like, the worst is gonna happen, and we end up working it out. Are there any, like, sets of rules or axioms or trends that you have seen repeat themselves over and over again that have helped you deal with whatever you're dealing with at the current time?
- DRDavid Rubenstein
Well, you're always, um, worried about things. I worry about the federal debt, for example. We have forty trillion dollars of federal debt. Our ability to pay this off is virtually nonexistent. And so what we're really gonna have to do is, is, uh, in effect, pay it off in devalued dollars, and the dollar will go down in value almost certainly. And you always worry if you have children, as you do, right? That are they gonna grow up in a world that's gonna be more difficult than the world that you grew up in? And will they be ready to deal with the world? Are they gonna be educated appropriately? And what are they gonna turn out to be? And it's a more complicated situation. Every parent worries about the, whether the world will be good enough for their children to kind of be able to do what they did. So I've read a l- a lot of great books. And, uh, the reason I do it is, one, I have some TV shows where I interview authors, and I feel it's a courtesy to the author to read the book.
- SPSam Parr
Yeah.
- DRDavid Rubenstein
Secondly, I actually generally interview people about books I am interested in reading. Uh, this kind of forces me to do it. Third, it's my anti-Alzheimer's device because they tell you when you reach a certain age, if you don't have a genetic predisposition to Alzheimer's, you could still get it by maybe your brain is allowed to, to, to not be exercising enough. They tell you to learn a musical instrument, do a crossword puzzle, learn how to do crossword puzzles, and do that frequently, or, um, or learn a foreign language. I'm not good at any of those things. So one of the things I do is I read a lot, and I interview people. And when you interview people, you gotta keep your brain sharp, as you can see. You gotta go back and forth, listen to what the person's saying, think of the next question while you're listening to a person, and you gotta keep your brain active. And it, it's a good way to keep your brain active when you reach my age. So I do it as my anti-Alzheimer's
- 35:49 – 44:46
Recommended Reading
- DRDavid Rubenstein
device.
- SPSam Parr
What are some of the favorite things that you've read in the last six or eight or twelve weeks?
- DRDavid Rubenstein
Um, I've read a book, uh, on Roy Cohn. It's called, I think, s- American Scoundrel, which was a really good book by Kai Bird, who previously wrote a book on Robert Oppenheimer that won the Pulitzer Prize. And it's just amazing, uh, what Roy Cohn was, was and so forth. Recently read Beverly Gage's book on, uh, J. Edgar Hoover, which was an astounding book and won the Pulitzer Prize. Uh, a really terrific book. So I'm, I'm always reading books. And one of the programs-- I have another book coming out this year on my best interviews at the Library of Congress. About fifteen years ago, I started a program- Where I interview a great historian about um, uh, an American history subject in front of members of Congress only. And I, I pay for it, I host it, and I, and I— We have a dinner. Members of Congress come. They sit with people from the opposite party. No press is there to see them fraternizing with somebody from the opp-opposite party. And then, then we have a great person, Doris Kearns Goodwin or somebody like that. I'll interview them, and members of Congress are fascinated by American history, as they should be, and then they ask questions after the interview's done, and I've, I've now taken the best of those interviews and put them in a book coming out in a couple weeks.
- SPSam Parr
Who do you think, uh, the audience lear-learned from most given what they needed to learn at that time?
- DRDavid Rubenstein
Uh, well, I'll give you one example of a story. Um, I interviewed John Roberts, the Chief Justice of the United States. I wanted members of Congress to learn more about the Court, and he did a really good job explaining the Court and so forth. And, um, at one point I said, "Uh, Mr. Chief Justice, do you always wanna be, um, Chief Justice of the United States?" "No." "Well, did you wanna be a lawyer?" "No." "Well, what did you wanna be when you were growing up?" "I wanted to be an American history professor. That's all I cared about is American history. My father said, 'John, you'll starve to death. There's no money in American history. Get a real profession.'" But John went to Harvard, and he majored in American history. And after his junior year, he came back from spring break, got into the, uh, airport at Logan in Boston, got into the cab line, got into the cab, and said to the cab driver, "Take me to Cambridge." And the cab driver said, "Are you a student at Harvard?" "Yes, I am." "What are you majoring in?" "I'm majoring in American history." Cab driver said, "Well, when I was a student at Harvard, that's what I majored in also." So John concluded maybe-
- SPSam Parr
He didn't wanna be a cab driver
- DRDavid Rubenstein
... maybe he shouldn't be a cab driver.
- SPSam Parr
Well, I'm like a, a, history's my passion. American history, particularly from like eighteen eighty to like nineteen forty, that's my favorite era.
- DRDavid Rubenstein
Well, there are a lot of great books in that era. Um-
- SPSam Parr
I just started readi- finally reading The Power Broker.
- DRDavid Rubenstein
Power Broker is a historic book considered one of the fifty best books of the, uh, of the, of the twentieth century.
- SPSam Parr
Yeah, and the American History Museum, or I forget what it's called, up here in the Upper West Side, just did a big exhibit on Robert Caro when he was writing the, that book.
- DRDavid Rubenstein
And that's the New York, it's the New York Historical.
- SPSam Parr
Yeah, sorry. And, uh, it was awesome. And so I saw that, and then I also saw you say that it was one of your favorites, so I started reading it last week.
- DRDavid Rubenstein
It's a great book. But, uh, he's now... Everybody's waiting for him to finish the fifth volume of his series on Lyndon Johnson, a thirty-five-year project.
- SPSam Parr
I don't think I can read five volumes on that. Maybe, but that's a lot.
- DRDavid Rubenstein
Well, one of the volumes won the Pulitzer Prize. That might be the best one. But, um, but, you know, people would really wanna see. Remember, the fourth volume ended when John Kennedy was assassinated and Lyndon Johnson sworn in. So the entire Johnson presidency, we're waiting to see what he thinks after all these years of working on the fifth volume. He's now ninety years old.
- SPSam Parr
I also love, um, Titan. That's probably my most favorite, uh, business biography.
- DRDavid Rubenstein
On John D. Rockefeller.
- SPSam Parr
Oh, yeah. He was a very fascinating character. Uh, he seemed like a mostly a good dad and a good husband and a ruthless businessman, and I like that combination. I think that's super interesting. Carnegie is one of my favorites. I got married at Carnegie Hall because I loved his book so much.
- DRDavid Rubenstein
Well, he was famous, uh, for saying you should give away your, all your money, and there's a book of that era, nineteen twenty-nine, by, uh, Andrew Ross Sorkin. If you really care about the early twenties, it's a great e- great book.
- SPSam Parr
Yeah, I thought, I thought that was awesome. Other than, um, I, you cite Lincoln all the time. You cite JFK and I think Washington. When you think back to some of the early presidents or ver- really early leaders or business folks, who do you often refer to when you're like, "How would this person handle this situation?"
- DRDavid Rubenstein
Well, look, Lincoln was in a league by himself as president 'cause he saved the Union and he emancipated the slaves, and he did it with grace and humility. He didn't say, "Guess what, everybody? Look how great I am. I just won the Civil War," or, "I just wrote the Gettysburg Address by myself." He... Humble. Humility. George Washington set the tone for what a president should be, and he really got us off to a pretty good start. So those are people that I often cite as really great leaders as presidents, and we've obviously had some great in the twentieth, twentieth century as well.
- SPSam Parr
Have you read Manhunt about Lincoln's assassination?
- DRDavid Rubenstein
I did. Um, that is a, is, is an interesting book, uh, in the sense that, uh, John Wilkes Booth thought he would be a hero. And, you know, interestingly, what happened there is that had Ulysses S. Grant taken the invitation to go to Lincoln that night to go to see, uh, Ford's Theatre, he would have had twenty military grades or, or aides around him. Probably John Wilkes Booth would not have gotten into that presidential box 'cause there would have been a lot of military aides. Lincoln only had one military aide, and he was drinking at a bar at the, at the time the shot occurred. He wasn't there.
- SPSam Parr
One of my... So I've read, uh, there's been four books, uh, four presidents I think have been successfully assassinated, and I've read... I don't know if there's one on, um, McKinley, but the, there are, there's a bunch on Kennedy. There's a few on Lincoln, and then, uh, Garfield has his most famous one. Or there's a book, a famous book that-
- DRDavid Rubenstein
Garfield, the book, uh, was written, um, is a, is a good book this way.
- SPSam Parr
Yeah, it's awesome. I didn't know anything about him. He seemed like a really good guy. I didn't realize how great of a person he was. And what's crazy when I'm reading these books is the Secret Service really wasn't a thing until like the seventies. Like, they talk about JFK's Secret Service. It was pretty rinky-dink.
- DRDavid Rubenstein
Well, I wouldn't use the word rinky-dink, but I would say the mistake that was made on the Kennedy assassination was, was this: The Secret Service allowed the route to be put in the newspapers. They shouldn't have done that. Um, secondly, it was raining that day, and they had a bubble top on the convertible. The Secret Service asked whether they should take the bubble top off or not because it wasn't clear whether it was gonna be raining or not, and, uh, President Kennedy's chief of staff said, "No, the president wants to be seen. Take the bubble top off." Secret Service should not have listened to a political advisor. They should have kept the bubble top on. Had they done that, Kennedy would have lived.
- SPSam Parr
And I think one of his whole shticks was like, "Look, my father is this big shot rich guy. People think that I'm out of touch. It's important that I like appe- I'm like a man of the people."
Episode duration: 44:46
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Transcript of episode zEB6IP-FQsY
