#384 Ken Griffin: Founder of Citadel and Citadel Securities

23:39What's the essence of running a business? How do you build your competitive moat? And so by this time, when I'm going back through and doing the transcript to get ready for this episode, I had already read Hardball. And I just wrote, that's exactly what the book Hardball is about. Are you playing to play or are you playing to win? It's how do you build your competitive moat? We trade financial assets that involve a research process. We need to understand what moves the prices of assets more thoughtfully and more quickly than our competitors. And then trading is simply how we monetize our research.

24:17That is how he thinks about what he does. We are just researchers. The glory is in the research is exactly what he says. He says the glory is in the research. Trading is the monetization of that research. Now, he just got done mentioning the fact that his first edge was competed away. And so the advice he's giving, he's like, you have to. This is just the importance of lifelong, continuous learning. It's related to the fact that his first competitive edge, you know, was, was commoditized for all that you've learned so far at Yale, the vast majority of what will matter in your career, you have yet to learn.

24:49If you look at the people who have been extraordinarily, extraordinarily successful in finance, they are lifetime learners. They are always learning. And so he even talks about the fact that, you know, he was gifted in math at an early age, but eventually he builds a company where he's able to recruit. And there's some crazy numbers. I think there's like 100 ,000 people that applied to work for Ken last year. And so he knows his own skills as he continues to build his company. He's going to be able to hire people that are better at each individual skill than he is. It's very simple. Remember the episode I did a few weeks ago with Jensen Wong?

25:24I can't stop thinking about the way that Jensen looks at his business. So Jensen's point was like, hey, we're going to have all these like super brilliant, smarter than us, AI agents. They're going to go out and be able to actually complete entire jobs for us. You know, people are scared of this. He's like, it's ridiculous to be scared of it because it's, it's my life now. And so what he's talking about, he's like, I have 60 direct reports. Every single one of them is smarter at, in their respective part of the business than I am. And yet I am able to manage and direct them and essentially direct their activities.

25:53He's like, you're going to be doing exactly that, but instead of doing it for people, you'll be doing it through AI agents. So when he's talking about the fact like, yeah, I used to be good at math and then I can hire people that are great at math. And he has a funny way to talk about the story. He says, it's funny. You speak of me as being mathematically literate. There's a conversation that I had inside Citadel that always makes me smile with one of my absolute top guys. We were going through a particular problem and he looks at me and he goes and he says this in front of a room full of people.

26:19So he looks at Ken and he goes, hey, if you were good at math, this would to be much easier to explain. And so he thought that was obviously humorous. He says, my mentors now are my colleagues that I work with, that I choose to surround myself with. What I see inside of our four walls is my sharpest young colleagues gravitate towards people who invest their time with them. In fact, this is another thing that he says. I'm going to read to you. He's asked in another interview that I found, he says, how much, this is going to sound a lot like Steve Jobs, really all the great entrepreneurs understand that it's just talent over everything.

26:54He goes, how much time do you spend on recruitment? I am talking to candidates all the time. Nothing is more important than the talent that we're bringing into our four walls. And so he goes back and continues some more advice. You need to find yourself in relationships where somebody takes an interest in you. Now, an interest in you won't always be, he says, let's be clear. That doesn't necessarily mean it's like this big smiling festival, right? Some of the best people that you will work for, you will find to be just incredibly painful to work for. An interest in you does not necessarily mean like, wow, everything you do is great.

27:29Sometimes the best advice you get is here are four things that you need to do better. You want to find somebody who's going to push you. Some people push you in a more kind way than others, but you want to find people who are going to push you. So I would say way before I had ever had people, you know, because I had absolutely no network at all, you know, before I started the podcast, I would say, and I think that's true for most people, right? The vast majority are not surrounded. I always talk to some of my friends. It's like, you understand we're in a bubble inside of a bubble inside of a bubble.

28:01If you just look at like the vast majority of humanity, they don't have access to these networks. Then maybe they can access them online, but they definitely can't access them in person. but biographies can do that in the very beginning like when i started reading biographies where he says hey you want to find people that push you i feel that every time i read a biography like every single person in my opinion every single person i've studied on founders podcast so far is smarter and more productive than i am and they're constantly stretching what i believe is possible they're constantly pushing me realizing like even that story think about that maybe you want you want to win right everybody wants to win like how bad do you actually want it.

28:37And Ken will tell you how bad it is. Actions express priority. Ken, actions express priority. How bad did Ken want the information that was inside of Enron's trading department? To the point where he's like, hey, I will come wherever you are and I will get on the plane right now. And he's going to talk about chartering a jet and all this crazy shit that he did to get this information. Then he winds up making like $30 billion off that information from then until now. So like, how bad do you want it? So again, I do think like, yeah, you can have people around you that push you. And I definitely now have a network that does that and friends that do that.

29:10But even before that, these biographies just like, dude, I could be doing so much more. You know, what you thought was possible. There's a great line. Like, uh, it's mediocrity is always invisible until passion shows up and exposes it. Mediocrity is always invisible until passion shows up and exposes it. The way that Ken goes around running his life, his business is full of passion. He's showing you how far you can go. So more advice, if you're in an environment where you've been somewhere for six months and you haven't learned much, do not make it six months in a day. The most valuable equity that you'll create in your lifetime is your career equity that you own.

29:43It's really about your education, your skills. It doesn't go up and down with the market. You own that equity and you want to think about how to maximize your career equity because that toolkit that you develop over your career, that's your ultimate job security. That's your ultimate ticket to success. Another piece of advice that Ken has here. Really, I'm going to read this Warren Buffett quote that came to mind first. because this is exactly what he's talking about. So Warren Buffett says, a rising tide floats all boats. Only when the tide goes out do you discover who has been swimming naked.

30:10Ken will reference multiple times the fact that Citadel almost went out of business completely during the great financial crisis from 07 to 08. He says, when you're in a firm in difficult moments, you actually see in well -managed firms, you see what real leadership looks like, what real leadership teams are actually made up. It's much like when that the rising tide lifts all boats, poorly run firms and great run firms. It's sometimes hard to distinguish between the two. But when times are tough is when you really see the character of the firm. Again, this is why we say that time is the only filter that I trust.

30:46There's another great piece of advice that Warren Buffett gives. You know, he's like, listen, I don't really believe in formulas, but I tell all the managers of our wholly owned businesses. It's like a three step formula. It's like make every decision as if you own 100 % of your company, as if it's the only asset that your family owns or will ever own, and then you can't sell it for 100 years. And if you run your decision -making process through that rubric, you're optimizing for long -term survival, right? Time is the only filter that I trust. So what's interesting is the number of people that I know that started their careers during the 07, 08, 09, and they started in finance who have this just incredible perspective.

31:25So he is talking about the fact that adversity is an asset. And that's something that also Ken has in common with a lot of history's greatest entrepreneurs. So he's like, okay, well, if you started your career then, right, you're going through hell at the very beginning. And he says later on, you know, now we're 13 years later, 15 years later, whatever the time is, the people that had to go and had to survive that adversity, you know, decade, decade and a half later, they are remarkably wise and well grounded and able to navigate moments of adversity as if it's a walk in the park. Because they've been through a difficult time.

31:58First thing that popped to my mind when I got to that part, it's like, oh, this is like Rockefeller. Rockefeller praised the benefits of adversity all of his life. In fact, he said, what a school, the school of adversity and stress to train a boy in. He's talking about himself. Another great line, D. Hawk, the founder of Visa, has this great maxim. He says, the wise make great use of adversity. The foolish whine about it. And so Ken's going to keep talking about that. And he says, I say it's Citadel. We forge talent. That implies a concept of pressure. The world also forges talent. And those difficult moments give people almost extraordinary opportunities to make decisions in the most difficult of times and to have a very fast rate of development and growth.

32:40and then he talks about the opposite when times are good what happens it makes you soft and so he's talking about it on a country level and again so many i think the benefit of of watching the interview then obviously transcribing and reading it at the same time i read hardball you see how the way he thinks is connected there's ideas you could see why he recommends that book i guess is what i'm saying so he's talking about hey you know in the united states we have a really big problem. We've been, after post -World War II, the United States really had no competitors. That has shifted in the last 15 years.

33:14And he talks about this report that really bothered him when he was reading it. He says this report was published in Australia. There was a survey of roughly 45 of the most important emerging technologies from quantum computing to solar power cells to various areas in biotechnology. And the Chinese led in 30 of these areas. That is really frightening now in the United States. The United States is so entrenched in this unshakable belief that we cannot be challenged in technology, oblivious to the fact that not only are we being challenged, we're being beaten. And so if you read Hardball, there's a great line that I just sent to a friend of mine who's dealing with this with a massive organization.

33:50And there's a line from Hardball. It says, when an organization, Ken's talking about it could be a company, obviously in the example he just gave, it could be a country. When an organization achieves advantage, it develops a tendency to continue operating with the same strategy that produced the advantage. It is the leader's main role to keep alive the quest for advantage. And so then we get to the part where Ken talks about almost going out of business. He says, there's a little saying, a little quip that I like to make. History is written by the winners. So the wonderful history of Citadel is how we are the most profitable hedge fund of all time.

34:29The chapter of how we were on the verge of going out of business in 08 is now a footnote in that book, but it is a very important note. It has not been an easy march to success. I think I have the most interesting position in life. I've probably lost, and my team has probably lost, more money than any other firm in existence. We just happen to have made more money than almost any other firm in existence. And it's the net that everyone talks about. There are years where our losses are hundreds of billions of dollars. I don't know if it's hundreds, but it's over a hundred. The number is incomprehensible.

35:09It's also why it's really important, like who's interviewing the person or who gets to ask the questions. There's so many times during this, it's like, If I was the one talking to Ken, I'd be like, wait, pause, pause, pause. Can you explain that? How did you lose $100 billion in a year? And no disrespect to the guy asking the questions. There's multiple times where I'm like, no, no, I just think I could do a better job. I guess that's what I'm saying. No disrespect to him. But I want to know more about how the hell do you lose $100 billion in a year? It says the numbers are incomprehensible. But this is the main point.

35:44I didn't mean to distract our conversation. All of my losses are my tuition, and I have the most expensive education in American history. If every time you lost money, you got depressed and angry, and you couldn't deal with it, you'd have a very short career. So you need to be able to take a step back and go, it's a tuition bill I paid. This doesn't mean that you don't think very long and hard about what went wrong, but you have to keep it in perspective. In 2008, that tuition bill almost became getting expelled from school because we lost half our equity in 16 weeks in a firm that had never had a double digit drawdown in 20 years.

36:23Now, this is another example. He says he's always going to like the scene of the crime, I think is how he puts this. I actually love the fact that he did this. The principal reason that we survived is that when long -term capital management failed in 1998. So 1998, Ken would be 30 when he's doing what he's about to describe here. In 2008, when he almost goes out of business, he's 40. Okay. So he's like, this is the reason that we will survive 10 years later. Because back in 1998, I went and met with a number of the senior people that worked at long -term capital management. And why did I do this?

36:56What was my agenda? I wanted to understand how does a firm that loses 90 % of its equity in a levered financial service industry still stay in business? They lost 90 % of their equity before they lost control of their business. And much of what we learned from how they survived was actually fundamentally and existentially important to our ability to withstand the turmoil of 2008. So there's a very important lesson here, which is not only do you want to learn from your mistakes, you really want to learn from the other guys and the other people's mistakes too, because they're much cheaper tuition bills.

37:36So a few episodes ago, I think it's episode 380 on Buffett and Munger. It's 400 pages of Buffett and Munger in their own words. They said this exact same thing. In fact, they quoted Patton. I think Buffett's the one that said this. He says the best thing to do is learn from the other guy's mistakes. George Patton used to say, it's an honor to die for your country. Make sure the other guy gets the honor. And so this is another great idea that Ken has here. I spent over my lifetime a lot of time at the proverbial scene of accidents where other firms have gone awry. And so now he's going to talk about what we talked about the very beginning when Enron filed for bankruptcy.

38:12Enron was the largest energy trading firm in the United States, and they blew apart spectacularly in 2001. So that means around this time that Ken would have been around 33 years old when he's doing this. So that story we told at the beginning. The day they filed for bankruptcy, I charted a Gulfstream jet and put 16 people on it straight to Houston. And all we did was interview people at Enron for several days. The day, not the day after, not a week, let's wait a month. He says the day I chartered a jet and went down there again, hardball. He's playing. It's very obvious that Ken plays. He's not playing to play.

38:48He's playing to win and he wants a landslide. All we did was interview people at Enron for several days. What worked, what didn't work, how they made money, how they ran their business, what their competitive advantage worse. Now, the great part of this story is I hired the entire leadership team of the quantitative research effort at Enron, all the people who actually knew how the place worked. And we've made $30 billion in commodities since then. So he calls this being on the ground. That's about being on the ground. That's about understanding where the business actually created value. That's about extracting the right people from that moment in time and surrounding them with the right leadership team, the right investment professionals, the right software engineers, and building what is today one of the most important commodity businesses in the world.

39:31So going back to our 2008 experience, the first point is when, this is hilarious, is when you're walking through hell, just put one foot in front of the other. Just keep going. I was praying that we would find our way out of the fire. And he goes, why do I use this fire analogy? I called Lloyd Blankfein, who ran Goldman Sachs at the time. And I said, Lloyd, when is this going to end? And he goes, a forest fire ends when there's nothing left to burn. He said, that did not make me feel a lot better. But we never gave up during that period of time. And so when you're going through hell, he has a piece of ice for you.

40:11Make sure you push your decision making to those who are mentally in the game in the right way. Because some people just, if it's their first adversity, they're like the proverbial deer in the headlights. So I was thinking about this where adversity is an asset. He's going to talk about the importance of reps later on. He's seen so much in his 40 -year career in finance. So when he's talking about this, like, you know, people are going through hell. There's some people are just like completely freaked out and some people are cool and calm and collected. You have to push the decision -making to those who are mentally in the game in the right way.

40:41This is where who you surround yourself really matters because when you surround yourself with the right team, you will buttress each other on your darkest days. And he talks about some people just are going to struggle with stress and adversity. Other people are going to prosper. In fact, one of my favorite lines I've ever heard of any founder ever, and I think it's the right mentality, is Herb Kelleher was the founder of Southwest Airlines. Didn't start at Southwest. He was like in his mid -30s. I think he was like 35. And he winds up for the next 40 years just completely kicking all his competitors' asses.

41:14And he was asked by an interviewer one time, you undergo a lot of stress all the time. How do you handle it? And Herb's answer was perfect. I don't handle it. I like it. Entrepreneurs are seeking stress. You're seeking challenge. You're seeking problems that you can solve that no one else can solve. And if you can't deal with stress, then you just can't do this job. What Ken's about to say here, I think he has a comment with a lot of history's greatest entrepreneurs, is their main sources of stress are not external. It's the pressure and expectations they put on themselves. It comes from within.

41:47He says, my biggest stressor, that's me. I'm always trying to figure out how I can be better, how I can do better. I might be demanding of the people that work for me, but I am no less demanding of myself. And so one of my favorite stories to ever tell is I'm watching this interview with Kobe Bryant and Ahmad Rashad asked him, like, how do you deal with fans' expectations. And before Ahmad could even finish his sentence, Kobe makes the stanky face. He's just like, oh, just like complete disgust comes a look at disgust comes or takes over his entire face. He immediately interrupts Ahmad Rashad.

42:19And he says, their expectations will never be higher than my own. Never, never, never. And things exactly what Ken says. I think, again, I think a lot of history's greatest is like, if other people's expectations of you are higher than your own, you're probably, again, not in the right job. And so one reason that entrepreneurship is full of stress, I love this idea that Mark Andreessen said one time that you only ever feel two emotions, euphoria and terror and nothing in between. And part of the reason that there's a lot of terror and uncertainty and stress and discomfort, and I loved Herb Kelleher's perspective that you should just think of that as a good thing.

42:57It was like, I don't manage it. I like it. I don't handle it. I like it is you're constantly making decisions under uncertainty. Like that is the job. And so he's going to talk a lot about that on you have to get used to, and you have to understand that you're part of the job is making decisions under uncertainty. He says, good leadership is about acknowledging that I'm going to make decisions under uncertainty. And people who are very good at business are very good at understanding the processes of what matters. Do I make decisions with a well -framed and thought out process? People get in trouble when they start to become reductionist.

43:28Like if I do X, Y is going to happen. Very little in business is actually that straightforward. And so he gives an example about the fact that you're working in this constantly evolving and changing environment. You can't survive over... Citadel was founded, what was that, 40 years ago? Citadel Securities, I think 25, five years ago. So he's seen a lot in in that time. And his example is like, okay, well, how many retailers had a mobile strategy in 2004 before the iPhone? He said, no one, the world around you is going to be constantly changing and by, and you need to leave yourself in a position to be more psychologically flexible and to be clear, financially flexible to deal with evolving change.

44:11And if you do that, you have a much higher chance of being a survivor. So you have to leave yourself to be psychologically flexible and financially flexible to deal with evolving change. There's a great line. And as far as like the changing technology, there's this, uh, interview that Steve jobs does in this book called in the company of giants. I think it's episode 208 where the Stanford MBA students interview like 16 or 17, I think 16, uh, technology company leaders at the time. So like Michael Dell's in there, Steve jobs, Bill Gates, all these other people as well. And Steve's point was like, I don't, they're like, I don't, he's like, I don't know.

44:44Remember he's saying this in 97 and he goes, I don't know what the next big thing is. I just know there will be a next big thing. And so he was psychologically and financially flexible to deal with that. But the greatest example of this that came to mind when I read what Ken was saying here comes from Henry Singleton. Charlie Munger said Henry Singleton was the smartest person he ever met. Buffett says that it's a crime that more business schools don't study him, that he put up one of the greatest records in American business history. One of Singleton's main ideas was like, I'm going to maintain flexibility.

45:15I'm going to steer the boat a little bit every single day. And so as once criticized for not having a business plan, Henry replied that he knew a lot of people running companies that had very definitive plans that they followed assiduously. But we're, and this is a direct quote from Henry now, but we're subject to a great number of outside influences on our business and most of them cannot be predicted. So my plan is to stay flexible. My only plan is to keep coming to work every day. I like to steer the boat each day rather than plan way ahead into the future. So back to Ken, you have a much higher chance of being a survivor if you're financially and psychologically flexible.

45:55And then he gives us an example that should terrify you. You do not want to wind up like these people. I keep going back to this main point that in my fifties and even my forties, I would have friends or contemporaries who you saw got off the learning treadmill and life just passed them by. And it doesn't pass them by in 20 years. It passes them by in five or 10. They stopped learning. They lost their edge. It's really important. If you're not finding yourself learning and growing as a leader and as a domain expert in your field that you pursue, you've got to move on. The other thing I would say is that if the field that you chose to pursue ultimately inspires no passion, you need to move on also.

46:38Because if you're not passionate about the field you're engaged in, you won't have the grit or perseverance to compete with those who are. And does that not repeat over and over again in these biographies that you and I go over? You could say passion. I definitely think that's a word. Another way to think about that too, which I think is very similar, is Charlie Munger has this quote that he says, another thing that I found is that intense Interest interest in any subject is indispensable if you're going to excel in it. So think about that. It's like, you know, if you don't have this in the field that you're engaged in, you're just you're not going to have the grit or perseverance to compete with those who are.

47:17Think about Todd Graves. Go back to, you know, built a $10 billion company. And one of the greatest things about that episode that I did a week or two ago was the fact that he's asked, like, you know, he's in his case, he's competing with his industry. he's competing with a lot of essentially corporate owned companies. There's no founder led companies that he's competing with. And so that's why he's just trouncing them all. One of the reasons he's trouncing them. And he says, I don't fear, you know, the big corporate guys. I'm not worried that McDonald's is going to come in and destroy me. What I'm worried about is the young guy that has the same hunger that I had that is wants to compete head to head with me.

47:53But then he makes this, this warning where he's like, that's fine, but understand that I love competing. He goes, and I'm on this day and night. Are you? That's an interesting question to ask yourself. And again, I have tried to maneuver myself into a position where I don't think there's anybody in the planet that is more passionate, more interested in working harder on what I am, on this exact thing. I don't care about anything else, but I will collect more information and I will keep doing this on History's Greatest Entrepreneurs than anybody else in the world. And I'm glad if somebody wants to jump in, but like I'm on this day and night.

48:22I told you in the Todd Graves episode, I was laughing to myself when I was preparing for the episode and I looked at a clock. It was Saturday night. at 9 .05 PM. I didn't want to do anything else. I didn't want to go out. I want to work on this podcast. And the people that I respect and admire the most and people I try to learn from is like, they're that. They're like, I'm on this, that whatever I'm interested in, I am more interested in it than almost anybody else in the world. And certainly more than anybody else that I know of. I think that's a great line. Again, let's go back to that. Like I'm on this day and night, or you go back to that idea.

48:51If you, if you're not really, if you don't have this intense interest in what you're working on, right. You're not going to have the grit or perseverance to compete with those who are. Think about the very beginning, that story he told. And I'm pretty, this guy was wildly successful, but he's like, listen, I started with a niche fund and I burnt out after 17 years. Ken started with a niche, built one of the most successful financial firms ever, and he's never tired. He's still on it. All right. So let's go back to this. So Ken says, this is very fascinating too. Success is elusive. However you climb, success is probably twice as far.

49:25That was told to me by one of our friends who's one of the most successful people in the history of finance. When he's asked what is success, his answer is it's twice what I've accomplished. That is a pretty daunting concept. And he noticed another thing about the most successful people that he knows, and it's definitely true for him. It's really important that you hit the ground running and you run really hard early in life. You know, there's great stories where Ken had convinced, uh, Harvard to install like a satellite dish. And I think it was the first person ever on his dorm. So he can get real -time information.

49:59So he could trade all these options and all these financial instruments that he was trading. You know, he starts Citadel at 19. He's going to Dorb's house and pulling out boxes and boxes of data for, for Prince, from Prince and Newport partners. And his whole point is just like all the stuff that you're doing. Yeah. Life might be long, but it compounds the infinite, like the, the skillset and the knowledge you have, like, don't like, Oh, I have time. Like, no, just work as fast as possible. There's no doubt that in your twenties and thirties, your rate of learning is astronomically high. There's a much stronger focus.

50:30And he's talking about the issue of something he brings up over and over again, that I'm kind of skipping over, but I'll just kind of fill it in for you. He's very concerned about American competitiveness and that we're not working as hard as the young people are not working as hard. He says there's a much stronger focus on gratification in the here and now. And great anything, great companies, great anything. It takes time. Now, perfect example. Citadel was founded 35 years ago. Citadel Securities was founded 23 years ago. His best and most profitable years have come in the last like three to four.

51:07so 25 years into his fund is the most successful years same thing with we see this over and over again this is something that that peter teal realized that the problem a lot of technology company entrepreneurs is they optimize for growth at the expense of durability but if you actually look at when these companies make the most money it's like 10 20 30 years into the future so that takeaway was like you don't want to optimize for uh growth at the expense of durability because you want to be around two, three, four decades from now to reap all those rewards that are so much greater than the ones you'll get early in your career.

51:40And so it's like, you can't just be like, oh, I have to be really, really rich in like a year or two. Because highly likely what you think is really, really rich, right, will seem like a drop in the bucket if your company is successful and you're still running it three or four decades from now. In fact, a friend of mine was showing me revenue numbers. He was texting me this last night. In 2017, I think his company did 8 million in revenue. And this year it'll do close to 200 million. And one of my texts back to him is something that I've noticed. It's very obvious if you read all these biographies, like things grow in mysterious ways.

52:09Your job is to get into a great business and stay there. That's exactly what Ken did. So I'm all over the map. Let me go back to this on hitting the ground, running and running hard. Okay. So great companies, great anything, take time. It's not clear to me how this is going to play out because what I see is that people that had really intense careers early on just tend to go so much farther over the ensuing 20 or 30 years. This idea of late bloomers in careers. Yeah, it happens, but I think it's pretty infrequent. I think it's important to hit the ground running and to run pretty hard. So there's a bunch of founders that I've profiled that got their break or their big break later in life.

52:48So Estee Lauder, Sam Walton, Ray Kroc. But I think Ken is dead right about this. If you look at what they were doing when they're in their 20s, They weren't just like sitting around waiting for inspiration. They were honing their skills. They just were waiting for the right opportunity. So Estee Lauder, you know, she started her company as a 40 -year -old stay -at -home mom. But for 25 years before that, she was obsessed with making these potions. And essentially, she was running her business before running her business. She was making these skincare, these beauty routines, and giving it away for free and bothering all the people around her, her sister, her mom, everybody she ran into.

53:24She was doing the job before she had the job. Same thing with Sam Walton, same thing with Ray Kroc. They just needed, they were hitting the ground, they were running, they just didn't unlock their greatest opportunity for a decade or two. If the work isn't really satisfying, go find somewhere else to run. That is a great line. Go find somewhere else to run. Because if you're not running and it's not satisfying, where do you think you're gonna be in 20 years? Where are you going to be? You're going to be miserable and unhappy is where you're going to be. So, again, it's another the Todd Graves episode on Raising Cane's I did, you know, very well received.

54:00A lot of people are listening to it. What's interesting, like these guys get some random comments online like, I can't believe this guy dedicated his life mission to, you know, making the best chicken fingers. And as if that was a bad thing. And my response is like, most people never even find a mission in life. What are you talking about? I'm just glad he I don't care what other people's mission is. I'm just glad he has one. The vast majority of people that have ever lived and died never even had a mission. And the pursuit of that mission is going to be difficult. It's going to cause stress. But I think it is fundamental.

54:30Like the humans with missions, even if they have to go through a lot of stress adversity, will be much more satisfied when they're looking back on their life. In fact, there's a great line. I found this biography. It's really hard to find. It's on Bugatti. And the founder of Bugatti, his daughter writes the book. I think it's published in 1960. I want to pull this line up because she's quoting somebody else. But I think it's excellent. It's really talking about the fact that try to find work that's satisfying, that you can do for a long time. And this is a description of Bugatti's, you know, passed away at the time that his daughter's writing this book.

55:02And she finds this quote and she's, you know, it sounds to her like what her father was. It says a human life by its very nature has to be devoted to something or other, to a glorious or humble enterprise, an illustrious or obscure destiny. This is the strange but inexorable condition of things. So I think it's exactly what he's saying. Because listen, if you're not running and you're not satisfying, where do you think you're going to be in 20 years? Where are you going to be? You're going to be miserable and unhappy is where you're going to be. I read the biography of George Lucas, which is remarkable.

55:33It's by Brian J. Jones. It's called George Lucas of Life. What's remarkable about that is how much struggle everybody knows. Oh, yeah, this guy sold his company for $5 billion. He invented Star Wars and all that stuff. You didn't see that he was obsessed with building a life that he was in charge of, that was dedicated to a mission and all the struggle, the debt that he had to go into. He was in credit card debt. He was borrowing money from friends. And even when he was doing this, he was talking about the contrast between the path that he's pursuing in life and how most people would just, they wouldn't even take the risk.

56:03They'll just sit there in jobs they fucking hate. And this is what George Lucas said in 1971. People would give anything to quit their jobs. All they have to do is do it. They're people in cages with open doors. Let's go back to what Ken is saying here. If your work is actually engaging and exciting, you're going to look back on the first 10 years of that journey and say, you know what? I worked really hard, but we did some really amazing things. And I'm really proud of, I think doing work that you're proud of is really, really important to the satisfaction that we're going to draw out of life.

56:35Now, now we're going back into this idea that great takes time. Things grow in, you know, mysterious ways. Citadel founded 35 years ago. Citadel Securities founded 23 years ago. and yet 23 and 35 years into his business, we have 100 ,000 applicants for positions this year. We've never had so many people looking to work at our firm. So then at this point in the talk, he starts taking questions from audience members. One of these questions was, okay, there's these unknown, unknowable, and highly uncertain future that we all have to navigate. Many of the decisions we're making, decisions based on judgment rather than facts.

57:15Like at what point in your career did you feel you were able to develop the ability to comfortably make those judgments? And Ken has a great line here. He goes, it was the quantity of decisions made. Steve Jobs said something very similar when everybody talked about how great his taste was. And he said taste was a byproduct of the number of decisions he made. Again, he gave this interview with Michael Moritz. It's on the Steve Jobs archive website, which if you haven't checked out, it's run by Steve's widow. It's excellent. He says, this is what Steve says, things get more refined as you make mistakes.

57:48I've just had a chance to make a lot of mistakes. Your aesthetics get better as you make mistakes. So Ken says, it's the quantity of decisions made. And to be clear, the more decisions of a similar nature you can make, the better at those decisions you become. So when we think about business activities far away from our core, I get much more anxious. Decisions within our core, I think we make pretty easily and pretty fluidly. It is repetition of the type of decision. Reps matter. If you go through my notes, you'll see I'm constantly, the notes and the highlights that I accumulate through the research for the podcast.

58:24I see that over and over again. I just, the shorthand I have is reps, reps, reps. You see this over and over again. Quantity, reps matter. It's the repetition of the type of decision. So then he's asked how he decides which new businesses to pursue. He says total addressable market matters. Why does it matter? Because the odds that you get everything right to launch a successful product, those odds are not high. So when it all comes together, you want there to be something at the end of the rainbow. Think about the total addressable market of the product or business that you're going to pursue.

58:54The markets that we're in are deep, liquid markets. That means that when we do our research right, we can monetize it because we can get the liquidity to express that view. We want to be in deep liquid markets. And then in the middle of this, answer this question, I think he gives one of the most important pieces of advice during this entire talk. Really, the most important piece of advice that anybody can give is that entrepreneurship is sales. And you better damn well get comfortable selling. He says, you're always selling. When the guy that backed me out of college retired from Chicago, he said I could have whatever I wanted from his office.

59:32I took a plaque that probably cost $9 .99. And that plaque said, if we're going to eat, someone's got to sell. That is a great line. If we're going to eat, somebody's got to sell. That is the story of being an entrepreneur. And that is the story of being a CEO. If we're all going to eat, somebody's got to sell. Every CEO is a salesperson. They've got to sell a venture capital firm. They've got to sell a customer. They have to sell an employee. You are always selling. And if you don't like to sell, here's my advice. Get over it. I had no interest in selling when I was 20 years old. This is hilarious.

1:00:10So he's 20 years old. He's trying to raise money for his fund, right? He says, I was in a conference room in 1994 in Switzerland trying to raise money. Let me tell you about this bad trip. I show up for lunch and the guy I meet with goes, you're not John Griffin. And I said, no, I'm Ken Griffin. And he goes, I thought you were John Griffin. John Griffin was at Blue Ridge at the time. He goes, I thought you were John Griffin. I need to go. Well, great. I just flew all the way to Switzerland to have my lunch walk out on me. Then I get to another meeting later that day. And we were doing convertible bond arbitrage.

1:00:43And in 1994, that was a tough space to be in. And I'm in this beautiful office in Switzerland. And this guy is just smoking his cigar. Puff, puff, puff. So Ken does his pitch. At the end, the guy goes, so sad, such a bright young man picked the wrong career. My point is you've got to be able to play through these moments. And then the last comment he has, he's, this is where he's recommending all these books. He's talking about the importance of playing hardball, about playing to win. And he's talking about really having the ability, like going through this experience in life. And this is really what, you know, Founders Podcast is doing.

1:01:18this is like, you want to learn not just from your competition, not just from inside your business, but you can grab all these ideas from businesses and industries that are far afield of where you are. And he gives a great example of this. So first he's talking about all these books that he likes and he goes, another book that's out of print is hardball. It's really fun to read. Hardball is just great. In business, you don't play to win. You play to win by a landslide. landslide if you don't win by a landslide then your competitors come back so and come back and beat you again when i when i think of this this is the way ken thinks but jeff bezos has a line that's almost exactly like this jeff says when it comes to competition being one of the best is not good enough that is how i would describe it's almost like a one sentence summary of hardball being one of the best is not good enough you want to be the best so it says when it comes to competition being one of the best is not good enough.

1:02:13Do you really want to plan for a future in which you might have to fight with somebody who is just as good as you are? I wouldn't. That's Bezos. Think about how Bezos built Amazon, right? He played hardball, just like Ken Griffin. Ken gives another example of somebody playing hardball. He talks about Michael Dell. He says, Michael Dell of Dell Computer. He manufactured computers in America and won. Think about how well he ran the business to do that. The next episode is actually going to be on Michael Dell. Michael Dell sent me the greatest DM I've ever gotten in my life. He DMed me and he says, your podcasts are A++ and a bunch of like trophy emojis.

1:02:49It's just incredible. I couldn't believe it. But I've read two books on Michael Dell and I'm going to do an episode. The next episode is going to be on a second autobiography, which is fantastic. If you want to start reading that now, I highly recommend. And he reads the audio book too, which I listened to like three times. Excellent. So it says, think about how hard or how well he ran the business to do that. He says, you're going to do this for the rest of your life. So you want to study successful businesses, even if they're far afield of what you do. And so he says, I have a story that you'll love.

1:03:18You'll love this. We built a risk wall in Chicago at the headquarters of Citadel. Okay. Before we built this risk wall, it was written that we had a B quality risk management. So everything you've heard about Ken so far, he's not going to be accepted. He's not going to find getting a B on something acceptable. Okay. So they decide to build a risk wall. What is a risk wall? It's this giant screen in their headquarters. It's 30 feet long, 10 feet high, and they rendered all the risk information in one place in this giant visual and then put it where everybody has to see it, right? And so he says, we went from getting a B to being an industry leader.

1:03:57He says, packaging matters. Where did the idea for the risk wall come from? It came because he went to Saudi Aramco's headquarters in Saudi Arabia. He says this is where they oversee their production from their oil fields. They have this giant wall on all the important data of their business is what he's telling us here. They oversee their production from their oil fields, the output from their power plants, the ships on the open sea. And looking at that visualization and seeing how powerful that was, and I said, you know what? What if I render all of our risk numbers that same way? You always need to think like an entrepreneur.

1:04:35You always need to think, how do you create advantages and how do you learn, not just from your competitors, but from businesses far afield from where you are? And when you do this, a lot of interesting and fun things happen that you can learn from and incorporate. And that is where I'll leave it. I will leave a link down below. If you want to watch the full talk, I will also leave a link down below in case you want to grab that book that he recommends called Hardball. If you haven't yet joined my personal email list, make sure you do that. That link will be down below. And it's also available at davidcentra .com.

1:05:05I email the top 10 highlights from every single book that I read. That is 384 down, 1 ,000 to go. And I'll talk to you again soon. Real quick before you go, I need to tell you the update to Founders Notes. There is now a monthly option. And I brought back the lifetime option by popular request. If you subscribe to Founders Notes, you'll get access to all of my notes and highlights. That's over 20 ,000 notes and highlights on history's greatest founders. You can search through all of them by keyword, or you can have the AI assistant that I built for Founders Notes, which is called Sage, read everything and summarize it for you.

1:05:41I use Sage almost every day. It's actually a tool that I built for myself. So when you subscribe to Founders Notes, you see exactly what I see. It's the same exact tool that I use. Jensen Wong, the founder of NVIDIA, said that in the future, everyone will have a virtual assistant, almost like a brilliant intern with near perfect memory, capable of instantly recalling any piece of knowledge. Sage is that now, the future is already here, except Sage is hyper -focused on the collective knowledge of history's greatest entrepreneurs. So if you have access to Sage, you then have access to all that collective knowledge on demand.

1:06:15I really believe you should be using it to supplement the decisions that you make in your work, and you can do that by going to foundersnotes .com. That is founders with an S, just like the podcast. So that's foundersnotes .com. And the link is also down below and available at founderspodcast .com.