Howard Lutnick's Emotional Journey Part 2 | Rebuilding & Perseverance

25 Oct 2024 · 44 min

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Podcast Notes: The GaryVee Audio Experience - Howard Lutnick's Emotional Journey Part 2 | Rebuilding & Perseverance

Episode Overview In this episode, Gary Vaynerchuk continues his deeply emotional conversation with Howard Lutnick, focusing on Lutnick's experiences of rebuilding his company, Cantor Fitzgerald, after the tragic events of September 11, 2001. This part delves into themes of loss, resilience, and the importance of a supportive community.

Key Themes and Discussions

Prelude to Tragedy

  • Pre-9/11 Success: Lutnick reflects on his life just before the September 11 attacks, describing a period of immense personal and professional success.
  • Personal Connections: He emphasizes the familial bonds within his company, stating that he hired people he loved and trusted.

The Impact of 9/11

  • Loss: Lutnick recounts the devastating loss of friends, colleagues, and employees during the 9/11 attacks, revealing the emotional toll it took on him personally and professionally.
  • Crisis Management: He shares how he managed to support the families of the victims and organized memorials to honor them.

Rebuilding Cantor Fitzgerald

  • Community Support: Lutnick highlights the importance of having a strong team and community support during times of crisis. He emphasizes how his surviving employees rallied together to keep the company going.
  • Financial Commitment: He pledged 25% of the profits to families of the victims, a commitment that initially faced skepticism but eventually garnered respect once he followed through on his promises.

Lessons in Leadership

  • Hiring Philosophy: Lutnick stresses the significance of hiring based on trust and relationships rather than just qualifications, asserting that the best hires come from recommendations by valued employees.
  • Resilience through Adversity: He discusses the need for resilience and the ability to pivot in business, illustrating how his experiences shaped his understanding of leadership.

Reflections on Change and Growth

  • Personal Evolution: Lutnick reflects on how the tragedy changed his perspective on business and leadership, particularly the importance of being open to change and adapting to new circumstances.
  • The Role of Empathy: He shares insights about empathy in business, advocating for a culture of caring and support among colleagues.

Key Takeaways for Entrepreneurs

  • Building Relationships: Cultivate and maintain strong relationships with your team and community; they will be your support system during tough times.
  • Financial Ethics: Uphold ethical standards in business, especially when dealing with crises that impact lives.
  • Continuous Growth: Embrace change and be willing to pivot your business strategies as necessary for survival and success.

Conclusion Howard Lutnick’s story is a powerful testament to the strength of community, the importance of relationships, and the resilience needed to rebuild after tragedy. His insights serve as invaluable lessons for entrepreneurs and business leaders, emphasizing that success is often built on the support of those around us and the ability to adapt in the face of adversity.

Final Thoughts In the concluding moments of the episode, Gary and Howard emphasize the importance of being great at what you do and learning how to learn, advocating for a mindset of continuous improvement and empathy in business.

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Transcript

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0:00Welcome back to another episode of the Gary V Audio Experience. I'm Mike from Team Gary Vee and I'm super excited to share with you all today part two of Gary's conversation with Howard Lutnick. Before I get into what they talk about on this episode, if you haven't already listened to the Howard Lutnick part one episode which was posted yesterday morning, I highly recommend you go back and check that one out first. It's an incredible conversation, very emotional, but tons of incredible advice for young entrepreneurs and business owners. In this episode, we hear the second part of Howard's story, one of rebuilding and perseverance.

0:34I personally thought that this was one of the most incredible conversations I've heard, and I'm so excited for you all to hear it today. I hope you enjoy. All right, we're back with part two with Howard. Obviously, an incredibly emotional ending. Speaking of emotions, we're filming this after the Jets had another debacle, so you may sense a very different tone, but obviously, those are silly things to be upset about. we ended with something incredibly challenging. Howard, where do we want to pick this up in part two? I thought maybe we'd go into where my head was just before 9-11. Okay. Right, because I'm thinking I'm the king of the world.

1:10Okay? Sure. I'm making all the money in the world. Yep. I have no debt, so no personal debt. Right. Can a Fitzgerald has no debt, because what happens if you're making hundreds of millions of dollars a year, right? Well, why? Why do you need to borrow from anybody? so it's april 2001 okay i decide i'm gonna declare victory in life i'm not 40 yet i'm gonna turn 40 this summer so i take each of my top six executives out to dinner alone one on me and one on one i get up from the table i walk around the table and i kiss him i tell him i love him right that i love these people these we grew up together we built the company together i tell him i love him i double their stake in the company from mine.

1:56I just give them, I don't know, 25, 50 million each. And I just give it to them. And I say, look, I love you. I declare victory. So here's how it's going to work. I got little kids. Every day, my little kids are out of school. I'm out. I'm out. I'm going to go live my life with my kids. I'm not like stupid. I'm proving that I'm a smart guy. I'm going to live my life with my kids, with my family, be alone. This summer is going to be the the greatest summer of my life. But when I'm in, same crazy man always was. But I'm gonna be out a lot. And I love you guys, and you guys can do it, you guys can run it, and I declare victory.

2:30And then I have my birthday party. Okay, so I turn 40, I have a big party in England, 65 couples, 65, so it's my birthday party. It's not like a business thing. And then 9-11 happens, 20 people from my party get killed. 20 of the couples, like, because they were coupled up, right? Yeah. 20 people get killed. Individual people, yeah. So these are like the people I love. It's your air circle. Of those six, five get killed. Five get killed. I got the guy who lives in England, he survives. But every other guy gone. So all of a sudden, I'm like, so 9-11 happens. Not only do I lose the 200 people I personally hired and all the people we hired.

3:10And we talked about that we hired all our friends. Yeah, of course. Because that's the rule, right? Because think about it. That's how I run my world. Yeah, if it's your company, why wouldn't you only hire people that you love? Of course. And I used to say to people, at the end of your interview, right, stare at the guy and say, do we want to spend time together? Of course. Because people think, oh, this guy's going to do his job. But you know what? You're going to spend more time with the people you work with than you do with your family. It's crazy. When you eliminate the math of sleep, it's scary how much of your life is spent at work.

3:40So if you do work correctly, you love the people at work. You don't say it. No one's going to say it. But really, if you think about it. I say it. If you kill everybody around you, if you kill everybody out here, you know what you're going to do? You're going to cry. You know how long you're going to cry for? You're going to cry for the rest of your life in some form. A long, long time. How long were you in a daze? Are you still in that daze? At some level, right? I'm very close to my brother. We work together as well. Obviously, you can imagine how much your story hits with me, especially back to hiring Fred.

4:11I mean, there's some similarities that obviously resonate. just for just people dealing with other traumas in their life right now how do you break that down that question first day i didn't cry first day you didn't cry october 21st 2004 got it and the reason i know the date is because as i fell asleep with my wife i said you know i didn't cry today and we it sort of resonated because what would happen is someone was just say someone's name anything or bring something up and then and then your mind's eye you see them you see their face and they got killed right then and there right because you couldn't process it all right so it's too much so what happens and i would just start crying and then and then okay it would go away so you still see it like when i tell these stories sometimes so you know i gotta so after 9 11 we uh all right so we plan this memorial okay so first of all i i call my friend he uh he runs food and beverage at the uh at the pierre hotel so i say i need a place to get together his name is author and uh and so he's and he says well i got all the parties and stuff i go they're all gonna get canceled so he gives me his hotel he gives me the hotel and we tell all the families come yep and thousands of people are there of course and they're just there because they don't have any information they have no knowledge this is like the next day right the next day like 12th and 13th we start getting together at the pier and they're all together and i tell them everything i know and and that we haven't found one survivor and i send in everyone to hospitals but there's no there's no survivors there's a couple of people got burned in the lobby yeah but that's that's it and uh and so we're all together and the the new york times comes and uh some reporter like hides in the back and and watches me with all the families and watches me give my talk and they write like a beautiful story okay okay it's like the 15th of september they They write a beautiful story about Canda Fitzgerald and us taking care of the families and all that sort of stuff.

6:06And then, okay, so then that's in the press. That's a little different than the Time story they wrote about you. Oh, wait till, oh man. You know, we all know they build you up and for one reason and one reason only, and that's to rip you down. That's always the case. Back to America's greatness, only to Britney's back, bitch. You know, only to build you back up a second time. I mean the yo-yo that is the way America works is fascinating. So they build me, they write these nice stories, but I'm not paying attention. Of course not. I don't care. What do I care? Churchuary, it's a 57 ,000th thing on your list.

6:41All right, so we plan our memorial. Our memorial is going to be October 1st, something like that, right around there. And so we plan it in Central Park, right, in like summer stage. and uh so we go there to have this memorial and there's 5 000 people because these 658 people who died they got husbands and wives sons and daughters parents cousins best friends everybody so there's 5 000 people so rudy giuliani comes he's a mayor right he comes he comes he comes in the back of the stage right he comes up on the stage so he comes sits next to me on the stage he looks out and there's a sea of people and he leans over to me and goes who the fuck are all these people because he was thinking he was going through like a little town hall right and he has no idea he looks out at the sea of people and i go and i tell him that story you know 658 people with their families this is so so my la office it's my best office okay these guys are outrageously successful producers okay in equity so they make us a lot of money okay and they say they're closing the office they're going to fly in for the memorial and then they say to me i got to meet you uh after and this is really bad because i know what's going to happen right you got a hub and spoke of course about a hub and spoke so the the hub is dead it's gone it's obliterated now the spoke and these guys they could go across the street they could work for anybody and they can make of course and make tons of dough and i know what they're gonna do they're gonna tell me i'm sorry howard uh we love you i'm gonna make a nice donation to the families but you know we gotta go i'm gonna go across the street and i'm sorry and then the whole thing is gonna you know sort of unravel and i'm and i'm screwed so we have this memorial it's a monstrous thing and uh incredibly emotional and brutal so i go back to my apartment and they're and they're all there the whole office 12 guys and they're all in my living room so i walk in the living room and my heart is exploded out of my chest because i know this is it yeah they're gonna and and they all stand up and they surround me and they say we're never leaving and it's awesome you know and i i just want to tell the story that these people like i i told the la times like i don't know at the five-year anniversary like i wanted to go tell the story that did so that their friends who see them at the country club no did you realize these are not these are superheroes this is this is someone Someone who went from making$5 million a year to making 100 ,000 so he could help other people and build their families back up and grow and build.

9:19And they never left. Like they stayed with me and they never left and they helped us rebuild the company. And so the only way a guy like me can rebuild, right? You gotta realize it's on the shoulders of other people. If anybody says, oh Howard, you did it. It's like, no, no. What we did is you reap the seeds that you sow. Of course, you know, it's like sports, right? Of course there's going to be star players or a captain of the team, but it's a fucking team. I don't know how people are confused by this. We announce we're going to give 25%. I announce I'm Larry King. We're going to give 25 % of our profits to the families, the people who got killed.

9:59Because the other people in the trade center are giving, they're going to keep their salaries going for dead people until the end of the year. So the common thing was, which was extraordinary by the way, because no one pays dead people salaries after they die. For the kids that are under 35 who are listening right now, which I know is a lot, and I know world events, Pearl Harbor, Vietnam War. I know world events, the assassinations of the 60s. I know world, I'm very into history and I know world events that happened prior to me. And I'm very fascinated by it. I fucking watched JFK's assassination 17 ,000 times.

10:36like that's just you know something that captivates me it just is the way it is like you don't know what it's really like unless you live through it you also have to understand internet's super new but social media is not here yet so 9-11 happens and a person like me who at the time is 25 is going on dot-coms but most people again kids you need to understand this most people are barely using the internet if not using it at all so you know tv all this stuff but you just you You can't comprehend. And by the way, it's also a little bit local, right? We have these devastating hurricanes in Tampa. I promise you, right now, if you live in Tampa, you're waking up this morning feeling very different than the way you and I woke up this morning and went about our day.

11:21I remember being completely flabbergasted even though it was an American event. I was in the wine business at the time. Just the way when I spoke to my business friends that owned wineries in Napa, On September 28th, they were kind of moving on in a very nothing happened manner. And we're fucking in New York, New Jersey, and it's like, I don't know, it really was an entire year of everything. I remember I was actually flying to Australia when the lights went out at JFK. I don't know if you know this story, remember this. A year later, there was a complete blackout at JFK. I was in the airport and you thought it happened again.

12:01I mean, it was just, there was a lot of trauma in this area, and you just, you can't comprehend how big of a deal this was. You just can't. There is no current event that has happened in America in under 35-year-old's lifetime. So, like, when people were donating salaries to dead people, every piece of television, there were specials, and it was just, it was a surreal month. Sort of stopped the bleeding of the company, right? because we've got everyone who survived wants to get paid. And we don't have any revenue because everybody, like the show, the guy who runs the show gets killed. This is not a show without you.

12:41So whatever the money associated with this is, if you lose your talent, sorry, you got nothing. Yeah, to remind again to do a little color commentary, the markets collapse. The world is in a frenzy. We don't know if we're going into a world war. Just fear. You can't comprehend the level of fear. And so, you know, back to the tough position that everybody found themselves in that was as affected as Cantor and very few were affected as much is, you know, the world moves on. Like the next day happens and a lot of money has evaporated. But real life has to kick in in October, November, December and going into 2022.

13:212002, excuse me. I announced on Larry King we're going to reopen and that we're going to give 25 % of our profits to their families. But, I mean, come on, let's face it. How much profits are we going to make? Come on. We're destroyed.

13:36So the press decides 25 % on nothing. It's nothing. It's nothing. And they start ripping me. Did you put a timeline on that? So for five years, but at least$100 ,000 a family. and if it takes me the rest of my life, I'll do at least$100 ,000 per family, which would be$65 million, and I'll pay for your health care for 10 years, no matter what. Look, I just don't understand the logic of what's there to rip, but I don't know. I have to go back and read it. You know, a guy dressed like me can't be crying. You know, it's like, here's your personality, you're a CEO guy, how could you cry with a mass murder if everybody works for you?

14:11Yeah, and I'm sure from 30 to 40, as you were becoming the Titan of the world, I'm sure there's some people that you ran into in New York City that you rubbed the wrong way. Me, a guy like me. Anyway, so they start ripping. Bill O 'Reilly was a TV personality every night. So I start getting death threats. But here's what we're really doing. Because I agree with him. 25 % of our profits was not going to be anything. But we were giving 25 % of our payroll. But I'm not going to announce that. That's not the way it works. So if we offered you a job for$200 ,000, I said, listen, I can only give you$150 ,000.

14:48but we're going to send 50 to the family. So every two weeks, we start sending money to the families. And then in, but I'm just worried about stopping the bleeding first because I got to figure out how to make the company survive because we're just losing money and the families need money and I don't know what to do. So I take my 100 million, I send it out to the families. I just send it out. So we give a check for, I put 5 million in the relief fund. I cover the bleeding for 3 million bucks and I send$92 million out to the families. in October, and then the media just stops. Because what do you do when someone does what they say they're going to do?

15:26So then they leave me alone in silence. So we start hiring people, and just to stop the bleeding, make the company survive, decide which divisions are going to stay open and which are going to close. And then I just tourniquet the place and cry. Basically, that's what happens. The next couple of years, I tourniquet and cry. And when I stop crying at the end of 2004, then i decide okay i want my company back so here's what i learned i learned that if you hire people who are available just who are available uh that's a fourth quartile hire the bottom if you ask your um headhunters send me a thousand this is for scale i'm talking about scale not one person i'm talking about hiring scale you hire you want to hire hundreds of people.

16:12If you ask, headhunter send you resumes. They send you a thousand resumes. You pick 300 of them. That's a second, that's a third quartile higher. A little better, but not much better. If you want the best people, there's only one way to do it. Ask people who you trust and you rate highly. I'm going to jump in here for people who might be on the beginning of their journey. I love what Howard said here. This is just kind of going off the reservation just to bring value in this podcast for a certain group, disproportionately the thing that has worked for me and disproportionately what I've seen on the boards I'm on, startups I'm invested in, and in dinner circles and things when businessmen and women run around, disproportionately how you grow from a small place is always ask the one, literally the way I built this 2 ,800 person company was the first good hire I made, because at first you're making not even good hires.

17:05The first good hire, I'm like, who else did you work with in agency land that was good? Mickey Cloud, big shout out to you. Gave me a couple, Lee Sparlett, others. And literally the first 50 employees that were good that worked in other places, once I decided they were good, their word of mouth on somebody else that was good was hitting at like a 60 to 80 % hit rate versus the randomness of every other way. Yeah. So people think their HR department is supposed to go out. It's hard. No, no, here's what you do. You go to your staff. 100%. Who you love. And you go to the people you know, who you respect, and you say to them, listen, we got an opening in HR.

17:44Right? We have an opening in HR. Do any of you know anybody? Yep. You gotta vouch for them, and you gotta stand by. And you gotta ask the right question. I remember this just triggered. I'm like, here's what I like about you, and this is what I want. Not somebody, like, you've gotta be very - Well, that's smarter than me, though. I don't do that. You know, like, I'm just like, look, these are the three things why you're winning here. I just want that. Yeah, that's really good. So we would do, so I leaned on everybody I knew. Yeah, of course. I say I rated, but it means I rated them highly. Yeah, of course.

18:16And I called everybody and said, look, I can't do it this way. Yeah, yeah. I need you. And then imagine me calling you after 9-11 and saying, can you help me? Yeah. Everybody helped me. Of course. And they gave me their guy. Like they'd say, you know what? You can have my CFO. I'll get another one. You need it now. And people stepped up with me and they gave me, I hired 4 ,000 people from 2005 to the first quarter of 2006. I just need everybody to hear that story. All this bullshit that traditional media and the humans, because social media is empty to remind all of you, and the humans that are unhappy and cynical, all this bullshit that the world pushes on you that confuses you, Howard just unconfused you.

18:59I'm gonna say this nice and slow for the kids in the back. 99.999 % of the fucking world is minimally decent to good. We have become fixated on the.0001 of the garbage and it has eaten up all the fucking oxygen. Listen to what this man said. People are literally giving him the ability to hire some of their best people who are his competitors, of course reacting to a trauma event, but still understand that humans step up in this manner. It's true. Stop with all the bullshit of negativity. Go ahead. Right. Right after 9-11, we have passwords. Okay. So you're like password protect. So I got, everyone's got a password.

19:45We have a password depository, like at the firm you give, you go around over there and you tell people. And then we had offsite under two world trades. And by the way, 15 minute walk. Right, right. So everybody's dead. The repository is dead. and the offsite repository is destroyed. So you know what we did? Microsoft sent me 50 people and we went to our backup site and 50 people flew in and they broke into our systems. They worked all day, every day. They sent them for free. They just put them on planes and sent them there. They're nerds. Nerds. To break in. So I had people there breaking in. How about Cisco?

20:18The nerds always come through in the clutch. You know the firm Cisco? Of course. They sent to my backup site, they sent 20 18 wheelers with every piece of equipment known to mankind. as far as the eye could see. So if we needed something like modems or this and that, they just take it off the truck and bring it in. These people were amazing. Yeah, one company, my direct competitor thought this was, he literally wrote an email because it came out in a lawsuit, wrote an email. This is my chance to blow a hole in the rest of the place. So of all the people on Wall Street, one asshole, massive asshole, by the way, don't want to understate it.

20:51And everybody else, saint. So basically barbells. you're either a saint or you're an asshole. Right? But no in between. So basically what I said is these kind of events - Well it doesn't sound like a barbell either, right? Like that would mean that there's even weight. It sounds like one massive asshole, right? Fair. Not a barbell. Not a barbell. A little, big little asshole over here. And just a big, just back to my 99 % thing that the world, like right? Pretty cool. I'll give you an example. So one of my base accounts - Is the massive asshole still alive? He's retired. And - We should go over his house.

21:26Jersey, Long Island style. I gotta get by these things. But, you know, so here's an example. Like, so we open for business, okay? We're open for business. It's like Monday, okay? So Monday after, Tuesday is 9-11. We're gonna open for business to try to operate, okay? And so I said, all right, look. Like literally the 17th? Yeah. Okay. We gotta open. Yeah. So I don't know if the system's gonna work. How the hell do I know? I got my backup systems. I jammed in things. I changed things. I just ripped things. like you know it's not going to work. So we say look, one trade per account. One trade per account.

22:01And we'll see what water spills on the ground and we'll fix it up. Fidelity, the giant money manager we all know. The guy who runs it calls me and he says listen our board has met and we've decided we're going to do all our business with you today. And I'm like no, no, no, no. Don't do it. He goes sorry the board met. We know it won't work out well. we know but we're cool with it here's we're sending a runner over with all our orders good luck and he hangs up and i'm like oh shit oh my god we're gonna so we get all this business we of course we just hired a few we have no idea so it's it's mayhem and we do whatever business we can do we possibly do all the business it's unbelievable all these people are trying to help us but i go home that night and my wife says what happened today i go uh we were killed with kindness like i i announced i was hungry and everyone in the world stuck a piece of bread in my mouth okay and that doesn't really work out for the guy with the bread in my mouth of course so i said you know we got two days to settle this stuff so what happens is i had jp morgan in my bank okay so they say okay you want me to settle this stuff sign the firm over to me jesus so they give me a document i give it to my lawyer who survived and uh and i say what do you do with this he goes he goes this is the worst document i've ever seen in my whole life what What do you suggest?

23:21He goes, let's sign it. It's like, wait, sorry. We just signed it. We didn't even change it. We're like, okay, fine. They own the firm. If it screws up, okay, whatever. There's only so many options at this point. Okay, so we've got all the business that was happening before September 11th that we're supposed to pay for. Remember, we're like the center of the world of finance. I get it. We're the buyer and seller of everything. So we got tens of billions coming in and we have no idea where it goes out. So we got to bail out the old stuff. So think about it. You got to bail out the bathtub while the water's pouring in.

23:53Yeah, of course. Because the new stuff's going to go fail. Yeah, of course. So here's the thing. So it's like the next Thursday. That's when it's all going to settle. Okay? Did we bail out enough of the old stuff so when the new stuff fails, because the bank said, it goes like this. Every day you started with$70 billion in errors. Okay? $70 billion in errors. I'll let you live as long as that doesn't go up$1. If it goes up$1, you're out. Right? So as long as it's coming down and you're getting the water out, I'll let you live. But you've got to show me you've got responsibility to get it out. So we start with$70 billion out.

24:31So we open for this business. We do this giant day of fidelity and all this thing. Now I go over to the bank. I'm sitting at the bank and I'm waiting for the computer screen to come up to tell me what the number is at the end of the day. How much, because if it's 71, I'm finished. Comes up 55. 55 billion. So you see me, I leap on the desk and I do my Hulk Hogan. I'm like, and think about it. I'm like crying all day. And if you saw a video of me. You were telling all the kids in the bank to eat their vitamins and say their prayers. So you'd think I'm like, I just won the lottery. Yeah, of course.

25:08I'm like that, because what happens is now I have a company. Yeah, of course, you're back. So then we then, I call my, like, the outside firm who's, like, doing PR. I don't even know who they are. And I said, look, we got to announce that we're going to take care of the families. We're going to do this 25 % thing. Yeah. So then I go on Larry King. Oh, so then from there, this is the best, so you understand it. From there, I've got my head of North America, Joe Shea, fantastic guy. And it's his funeral. So I go from the bank where I'm standing on the table doing Hulk Hogan. and I go to his funeral, St.

25:42James Church on the Upper East Side. Beautiful church. So I go there and he was such an incredibly popular guy. So huge church. They're pouring out in the street. They're everywhere for this guy. Young guys, 40, you know, young 40s. So I go in the church. I go in the front. I say hello to his wife. I kiss his wife. I sit in the second row. They give me the mask card. They hand me the mask card. I look at the mask card. and there's a picture of Joe Shea. Right next to it is a picture of his brother, Danny. And I hadn't processed Danny dying. Like I knew Joe died, so I was like ready for it, but I hadn't thought about Danny.

26:23And Danny worked in the company? Of course. So Danny died because we had 20 sets of brothers we lost. We employed 50. So Danny gets killed to me right at that second. Yeah, of course. So I can't stop crying. So I get up. I walk out of the church. the thing starts i sit on the steps of the church and and water's like i lose it so water's like pouring out of me like a hose out of my face and i'm sitting on the hose i'm sitting there crying and then a black car pulls up some woman who works in some pr company i never heard of comes walking over to me and says uh we booked on larry king uh we gotta go so i'm like i'm like this like mush sob and i go to larry king and all larry king wants me to do is cry so he's talking about the people dying the people die so i start crying on tv and i'm like i can't i can't watch it and then larry king of course uses me crying as his like you know in his montage to start the show for the next two years every time larry king is going to see myself crying i'm like great so that's that's me in the beginning like mush meat but you know we keep it together we build the company then like after i stopped crying 2005 i hire everybody i borrow 500 million dollars uh i put everything of my life on the line and borrow all the money and pour it back into the firm uh split the company in two because my two divisions uh when when you're all making money everybody's a friend right when it's life or death it's life or death especially and in business world if one division is making the money and the other is not it starts to change there was war so i split them in two and and we went out to do businesses and and off we went so we start building our business by 2008 uh now all the employees are given 25 of their pay yep we give the families 180 million dollars 180 million dollars sending out the families and paying for their health care right so the families in the firm become really tight my sister runs a relief fund my sister's shredded got a broken heart because it was only me my sister my brother right and when he dies that's like she's she's gone but she runs my relief fund and together you know we're going on and now the company's strong enough that i can take a division public and let's go we're going to build the place back in a big big way but how do i go forward in my life and try to become a successful guy when i have all my employees they all gave 25 of their pay so you got this guy remember the guy who gave 200 000 so i applied someone for for 200 grand.

29:00They gave 50 grand. They make them 150, they get 50. Then they give 60, then they give 70, then they give 80, then they give 90 because they can get raises. Yeah, of course. So that person's giving$350 ,000 to my families. And he doesn't even know them because they just employed after, just being a great human being. So I got all these employees, just fantastic human beings. How do I go on with my life, become some rich guy, when I have all these people give that? So I can't do it. So here's what I do. It's 2008, right into the hurricane, the financial crisis. But my company's strong enough, and I've got to take care of these families, and I've got to rebuild our company, so we take the company public.

29:40But it's a weird IPO. I give those employees 15 % of the company from mine. I just give it to them. In the IPO, they sell. Each employee sells enough to cover and give them back their$350, which they never were expecting. and then of course i doubled because you know because they saved my life yeah no they saved my i get it my insides were i get it shredded and it was them who showed it back together again so so my employees they own 30 of the company what do they own now 30 of the company what was my turnover like zero who's leaving that company for years i would say every new person has to go out with an old person because the older person was here older me and they were at the firm for five or ten years so that they would say do you have any idea what kind of company this is now this is a special company because we gave and then they gave back so i squared it with everybody like that was that was the thing i had to square it with them so i could go forward with my life so my employees still own 30 of the two public companies still to this day i get 20 the public guys 50 and that's how it works and uh and that sort of 2008 and that then launches me into into the rest of the world then you know 2008 i can tell you tons of stories about the financial crisis at 63 what do you think is the thing in business in business but you can obviously layer it any way you want in the last 15 years what do you think is the thing that you've most changed your mind on that if we did this podcast when you were 48 and i asked you a series of business questions, what do you think you would answer differently with the benefit of the last 15?

31:21Something that caught you off guard, something that you used to have conviction about that now you've had an event or two or seven or just the ability to observe more. The beautiful grays on your beard, they come with value. Anything stand out? I'd say the primary word that I learned was pivot. You're in your lane. You got it. You know what you're doing. Okay? but that is not going to stay with you for your life. You need to know that the pivot must happen or you're just degrading. You're declining. You're declining all the time. Even if it's the top of your craft, as time goes on, things will change too much and will weaken that strength and you'll miss opportunities if you're not in love with the pivot.

Read the full transcript

32:09So you gotta look for the pivot. And is that because prior, the way you answered that, Do you think you were in a mindset of like look I'm fucking phenomenal at this let me not get distracted like all these other fucking jokers I'm gonna fucking milk the fuck out Okay, good. Exactly. That's interesting. Exactly. So I would have probably stayed in my lane because this is the lane that's got Right, I know it. Come on. I made money. I understand it. This is the goose that's golden eggs I don't want the goose to go outside. I don't want the goose to go anywhere. What happened? You saw something change.

32:39You missed it. Was it a missed opportunity or the goose was getting a little thinner? No, what happened is I just got knocked off the lane. So I was trying to climb back into the lane. And as I'm climbing back into the lane, then now my view is different. And I realized that when you're climbing the mountain, and let's say you're free climbing the mountain, okay? Good analogy. You don't look around at the view, okay? I would be scared. I'd be looking at the rocks right in front of me. And then what happens is you get to the top of the hill and all of a sudden there's a view. And then you decide which way you're going to go.

33:11And so you got to realize that while you're in your lane, you're just staring at the rocks. And if you can get your head up and look around every once in a while, you'll see a new view. Because if you're really good at your lane, then the next path will present to you. But you have to be awake enough to see it. If you're just staring at the rocks, you'll never see it. So I think the most important word that I learned was pivot. You got to, you know, you're not just jumping out of this into that. That's baloney. What you really gotta do is you gotta twist and take what you're great at and then go that way.

33:47Go this way. Which thing in the last 15 years do you think you were most wrong about? You were like, ah, social media's a fad, or AI's stupid, or China will never be big. Out of all the things you think about, or like Uber's a stupid idea, just for fun, because I think it really brings value when someone has had the level of success you've had, if you can think about the last 20 or so years, what thing did you like see over dinner? Like somebody's like, hey, you should look at this Facebook thing. You should invest. Like any fun stuff like that? Yeah, well, Amazon was bullshit, okay? Amazon takes Ritz crackers and sells Ritz crackers where it makes a 2 % margin and puts it in as sales of gross revenues.

34:33So people say, oh, Amazon's the king of the world. They're selling other people's stuff and they just make it a small margin. but God let them go public and get away with it. Okay? It was awesome. So I used to tell people, this is bullshit. All they do is lose money. But you know what? If God lets you get away with it. So every once in a while, there's certain people that God lets get away with it. They would never let anybody else get away with it. I mean, think about it. If I did my gross revenues, was the value of the bonds I sold. Sure. I'd be the world's biggest company. I'd be like, you know,$9 trillion.

35:04Oh, Howard is the best. Howard, you know this. You know this better than I do. this was in the prime, you were in it. God let pets.com go public too. God let Cosmo, like, right? I mean, they did get to the other side of it. For that, what was it, it was that spring of 2000. Oh yeah, we did it too. Everything went to zero, you know, on the internet. But PayPal, eBay, Amazon hung on long enough to get to the other side. They let Amazon get away with my revenues include the value of the products I'm selling. That's how they let publishers do shit. So I got, so that was, I got the wrong. I saw that Airbnb and Uber, they just break the, Uber broke the taxi laws, Airbnb broke the hotel laws, but they get away with it.

35:46So if you can get away with it, you're a rock star, right? FanDuel and DraftKings, they broke the gambling rules, you know, in all these states, but they gave them a license at the end and let them get away with it. So that was good. I think the thing that I pivoted best to was crypto, that pre-2020, I thought it was for scammers and crooks. Right. But then when the government said banks could get involved in it, I said, oh, shit. I better like - This is a get away with it moment. And by the way, just so I think people get confused, get away with it means you navigated it. He doesn't really, again, get away with it is whether it's legal entities, government entities, the market, the general consumer market.

36:29Like get away with it is slang for navigated through the choppy waters to get to the other side When you saw that you understood that was one of those moments in something you really understood Correct, so then I pivoted hard. Yeah, and and I went to meet everybody yeah in crypto everybody I went to see Sam Bankman, right? It took me two meetings to realize the guy was a crook. Yeah Okay, two meetings and the second meeting the guy was a crook You know what? I'm gonna I apologize, but I really want to give you these flowers You and I had a meeting with your incredible son and I remember what happened at the end.

37:04We just, we had a nice meal. I talked all my spiel about my universe and you said something that I live on, which, you know, I'm sure this is how you see the world too. When people do things that you also do, there's a warmth to that, right? Totally. And you understand it. And I remember we just kind of, you know, I probably talked for 17 minutes without a breath and at the end you kind of looked at Brandon and you just said, I like this guy. And I'll never forget this about you because it's really how I see the world. You're like, there was a lot of things I didn't understand, but I fully understood it.

37:40Right, you said, I understand it. It made sense to me. I genuinely believe common sense is a topic that is not talked enough about in 2024. When you say that, when you say that there was a startup, I don't want to blow up the guy's spot, that everybody invested in, like everybody in Silicon Valley years ago. And I took two meetings and I'm like, this just makes absolutely zero common sense. And it was an iconic failure in the early stage startup land that got like$170 million valuation. It literally never made a penny in its life. It literally made no sense. And literally, if you showed any person, they would all understand it made no sense, but it caught the wave of the Silicon Valley thing and I just remember you saying that and to me, obviously I've known about you from afar given everything you've been through.

38:33I left that dinner, not too long ago, we're just getting to know each other now, saying, now I understand because that's what works for me. Like, if you can't understand, this is just a good fucking lesson to everybody. Totally. Whether you're putting$10 into something or$1 ,000, like people ask me all the time, especially the kids, literally at the Jets parking lot last night, 17 different 15-year-olds. Gary, what should I put my money into? And I swear on my kids' health, my answer was something you fucking understand. Whether that's sports cards, sneakers. Oh my God, something you understand.

39:03Something you fucking understand. It's the most important thing. Something you must understand. While you were saying it, I said, I hope that God, he said something you understand. Something you fucking understand. That's it. Don't invest in someone else's bullshit. It's just really bad. If you don't understand it, you are going to likely lose. You're gonna just lose about it. the way it is. This goes back to stay in your lane, but get educated and expand your lane. Listen to what fucking Howard said. I decided, I saw a moment, oh wait a minute, they're gonna let real banks get into crypto? That means we've tipped over.

39:38Correct. Let me go meet everybody and then I will decide. Correct, and I decided I love Tether. That's why I do Tether. Yeah, I get it. And that's why I'm their lead advisor and guide and sponsor and everything at Tether. But I met everybody. I met every crook, guys in prison, jerk-a-mows, rip-off artists. People that have won. Yeah. But you know what? Last five minutes is your floor, sir. What do you want them to know? Anywhere you want. Story, 10, 15 things on top of your head, whatever the fuck you wanna take. How do you win in life? You're going to college, okay? You take all these courses.

40:17Most of them don't sing to you. Pick one thing and be great at it. Drive yourself to be great at one thing. Do you think you should like it because the amount of time and effort needed to get there? Like, talk to me about the kids or even the 40 year olds who are thinking about pivoting right now about the concept of I'm good at this, but I don't like it. Colleges learn how to learn, okay? Learn how to learn. Colleges learn how to learn, okay? There's no, like, think about this. You're gonna take a business course. Look at the professor. The professor has no idea about business or they wouldn't be teaching a business course.

40:50They have no idea about money. So here's the point. Learn how to learn. So a professor can teach you how to learn. Interesting. So you can study like Italian Renaissance art history. Why? Because what he's saying is here's 50 years. Let's really study how to understand those 50 years. So then you learn how to understand, how to get out there. Because once you graduate college, no one's teaching you shit for the rest of your life. So you might as well learn how to learn. So college is learn how to learn. High school is color inside the lines. Okay. The teacher who's given up her life. No wonder I failed.

41:25Here's, well here's - Honestly, I swear to God. By the way. That made so much fucking sense to me. I'm like, there it is. So think about this. I was like, fuck the lines. I sit down with my kids. So I have a different kind of conversation with my kids. They come home and they say, teacher doesn't like me. I go, how's your life? My kid's life. I go, your life is amazing, right? Your teacher, how much does she make? Okay? And what, she's given up her whole life to teach you. Whose job is it? Is it your job that you are supposed to have her like you? Or are you so great at being a 12-year-old that she has to like you?

42:02Oh, she doesn't like me, so I'm getting a bad grade. How about this? If she doesn't like you, you get an F. How about that? How about your job is, if she tells you, color inside the lines, raise your hand. Just do me a favor. Make her like you. Do what she asks, because that's your job. When you go to college, right, then we challenge, then we talk, learn how to learn, okay? And when you're done with college, right, then you had better learn how to learn it. So what I think is pick one thing in college and be great at it. Learn how to be great. What if you find it earlier? You know, unlike the way you and I grew up, these kids' exposure 12 to 8, right?

42:40Fair, fair. Man, fuck. But I'm old, so I know old thoughts. You know, these things are old thoughts. No, no, no, but I think they're class. I'm gonna give you a little flower here. They're classically right thoughts. It's just the optionality's so different. You know, like these fucking kids are so blessed. I just learned that now. That is, as you said it, like when someone says something and you know it's true, it like comes on a ton of bricks. And what you just said is true. That optionality is there. So be great. At something. Learn to be great at something. I don't care what it is because that greatness will then help you on the next thing you do, learn to be great find greatness meet greatness learn to be great everything in your life should be great so let's say you take four courses and you suck at three don't suck at four if you suck at four you suck yeah okay but pick one and say all right i'm gonna get straight eight this because you know what i see it i like it to prove to your parents to your friends to yourself that part that you can be great.

43:43So when you go into life, I'll always be great. That shit report card in the top frame up there, all Ds and Fs, one class, A's and B's, predominantly B's, history. At the time, I had no idea why, but using pattern recognition and history telling me the future, all of my great bets of seeing around corners are just me using context of the past. And there it is. That's it. So become great. Yep. and that will help you in your life. Howard, thank you for being great on this podcast and life, all the things you've done and I wish you nothing but health and happiness. Thanks for having me. This is so much fun.

From the publisher

Today on the podcast Im sharing part 2 of my incredible and emotional conversation with Howard Lutnick. If you haven't already listened to part one from yesterday, I HIGHLY recommend that you listen to that first. In part 2 we dive deeper into his incredible journey. We discuss how he managed to rebuild his firm after tragedy.


I hope you all enjoy this episode as much as I enjoyed it.

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