S9E7: David Rubenstein on Leading the Parade

21:44And you have some presidents who will say, look, I can't make these decisions myself. I have to listen to staff. I want to have things come from the bottom and percolate to the top. We have a system today where the president is making decisions from the top down, and he makes all decisions, and he's not really reading memos and not looking for both sides of the issues as much as maybe other presidents have. So you can get a lot of influence with this president by doing the right things with this president or other presidents as well.

22:11Sanil Rajput:Gotcha. So you got to pay to play. So with that said, moving on from the White House, I want to talk about Carlyle. You founded Carlyle in 1987, and leveraged buyouts were still a fairly new concept. You also had no finance experience at the time. So how did you get the right to compete in that arena? Well, the phrase private equity hadn't even been invented then. What happened was I was a lawyer. I went back and practiced law. I wasn't that good at it. And as I said, if you're not that good at something, you probably aren't going to enjoy it. And I didn't enjoy it. And my clients reminded me I wasn't that good at it.

22:47So I kind of looking for something else to do. And then I read about a man named Bill Simon, who had been Secretary of Treasury under Gerald Ford. And he did something called a leveraged buyout. I didn't know exactly what it was. But it turned out, reading this newspaper article, that he put a million dollars of his own money into an investment, and he made$80 million in 18 months. I said, wow, that must be good. He bought a company called Gibson Greeting Cards from RCA, and he made$80 million in about 18 months. So I said, I didn't know exactly what a leveraged buyout was, but I thought it was better and practicing law.

23:19So I went down the street to Bill Miller, who'd been secretary of the treasury in the Carter administration and said, look, your predecessor did a leverage buyout. You know a lot about finance. I don't know anything about finance. Why don't you start a leverage buyout company and I'll be your lawyer? And he obviously realized my legal skills weren't so great, so he didn't really do it. So ultimately, I decided I would do it myself. And if you want to do anything in life and you really think it's great, do it yourself, probably you'd be better off. And so I decided I would start a firm. I would hire people that had MBAs, and then they knew something about finance, and then I would tell them, and I would help them raise the money.

23:53And so originally, I recruited three other people that had MBAs. They knew something about finance. They were all living in Washington, and I told them I would raise the money. I raised$5 million to get started from four investors, and that was it. And then we came up with some things that enabled it to grow over the years, and we transformed the private equity world a little bit. Some have done a better job than we did. But I came up with the idea of having multiple disciplines, not just buyouts, but we do buyouts, growth capital, venture capital, distress debt, what it might be, and have different funds.

24:19And then I decided to globalize it by putting funds together for Carlisle in Europe, Asia, Middle East, Africa, and other parts of the world. So globalize it and have many different disciplines. And that was novel at the time. And so I made myself into a fundraiser for Carlisle in the face of the firm. And I had other people focus on the investments more than I was. So I was on the investment committees. The other guys really knew more about it than I did.

24:40Sanil Rajput:you described yourself as the fundraiser. There are a lot of people here that are starting companies. What can we learn from you about the art of fundraising? Well, in most business schools, I don't think there are, I don't even look at your curriculum, whether there are courses in fundraising. But, you know, I've often thought that people spend half their life asking people for money, and they should learn how to do it better maybe in school. So, for example, it used to be the case to get a PhD, you had to have two foreign languages in addition to knowing your subject and having a thesis. And I always thought instead of having two foreign languages as part of a PhD requirement, it should be a course in fundraising.

25:20Because PhDs in the academic setting are always raising money for research grants or something. And people don't really know how to raise money. They don't teach it much in schools because it's considered the lowest part of the totem pole. And the highest part is to be the CEO or the top people making the deals. And the lowest part is the fundraising part. And so people really don't like being fundraising. And there's three different types of fundraising. One is you're doing it for business, like private equity. Another is you're doing it for charitable purposes. Another is for political. And there are different skill sets in doing them.

25:52But in the end, I made myself into somebody willing to go around the world and beg for money for Carlisle. And I learned how to do that. But in the end, I had to do it by not reading books on fundraising because there weren't many books on how to do fundraising. You just have to learn how to do it in the end. and that's what helped grow the firm. We had a good track record, but in the end I was willing to go around and ask people for money at a time when it wasn't that common for people to run around the world and ask for money.

26:18Sanil Rajput:One of my favorite fundraising stories of yours is going to the Middle East with former President George H.W. Bush. Right. Now, it's one thing to know powerful people. How do you get them to work with you? To work with you? Well, I was in Washington, D.C. and if I'd started Carlisle and I'd moved to New York, people would have laughed at me. You say, you're not an investment banker. The extent that there were private equity firms, they were then called buyout firms, I guess. They were all run by former investment bankers out of New York investment banking firms. And so if I'd moved to New York, people would have laughed, said, you don't have any investment bankers in your firm and you don't have any background in finance.

26:58So rather than move to New York and be humiliated by people saying I wasn't qualified, which I wasn't, I decided I would stay in Washington and base it there. And it was novel. And I remember a famous senator from Illinois named Edward Dirksen, who once said, when you're getting kicked out of town, get out in front and pretend you're leading a parade. What does that mean? It means take advantage of the situation you find yourself in. If you're getting kicked out of town, say you're leading a parade. If you're in Washington, D.C., say you understand companies heavily affected by the federal government better than the guys in New York do.

27:28And so I said, we understand aerospace defense better. We understand other industries better, telecommunications better than the guys in New York. And to some extent, maybe we did, maybe we didn't, but it sounded good. And so we invested in those areas and it tended to work out. But then I realized that even if we were doing reasonably well, people weren't going to come to an annual meeting to hear David Rubenstein's views on something or another. So I decided I would bring in some famous people who could draw people into our firm, into our annual meetings, into our fundraising meetings. So I initially recruited Frank Carlucci, who had been Secretary of Defense, smart man.

28:01And then he did a very good job of opening doors for us in an appropriate way. Obviously, you have to have reasonable good talent ultimately and track record to get people to give you money. But if you get in the door, it's going to be helpful. And then four years later, one of the most impressive people I ever met was available because he'd lost. His friend, George Herbert Walker Bush, was defeated for president in 1992 by Bill Clinton. And so Jim Baker, former Secretary of State, former Chief of Staff of the White House and former Secretary of Treasury as well was available. So I went to see him and I was a tiny little firm then, but I tried to convince him that we had former Secretary of Defense Carlucci with us.

28:41Maybe he could join us. And he did ultimately join. And, you know, when you went around the world with Jim Baker, you could get him to see anybody. And I, you know, my last name was Rubenstein. So I never thought that I could go to the Middle East and raise money probably that effectively. But Jim Baker said, look, it's not true. You come with me and we can open doors. So I get to the Middle East, and the first time I'm meeting people, I didn't think they would like me, but they did. And in the end, we raised money there. And then he said, you know, my friend is kind of tired of being retired, and maybe he could join us as well.

29:12I said, well, who's your friend? George Herbert Walker Bush, former president. I said, okay, he can join us too. And then George Herbert Walker Bush said, well, my friend would like to join too. Who's your friend? John Major, former prime minister of England. Okay. So I got a lot of former people who were serving government. Now, they weren't making investment decisions, obviously, but they were able to do this. If I have a dinner in London and say David Rubenstein is going to make a speech about something, nobody's going to show up. If I say Jim Baker and George Bush are going to talk about X, Y, and Z, people will show up and then I could get my little pitch in at the end.

29:43So it was an effective tool. I didn't invent it, but other people have done that kind of same thing as well. So it was a way to get in the door. But in the end, if you don't have a good track record, you're not going to raise money. You got to have a reasonable track record to get people to listen to you, even if they hear a speech from George Herbert Walker Bush. So it was an effective technique. We were later criticized for it, and we had to end it, because when the Gulf War went south under George W. Bush, people started blaming Carlisle, saying, well, we have nothing to do with the war. Well, George Bush is at your firm.

30:14Jim Baker used to be with George Bush. You're all friends with George W. Bush. You're responsible for the war. I said, I have nothing to do with the war. But in the end, you know, I had to go and tell all these famous people that they were retired one day, which wasn't easy. You know, you go to George, the President of the United States, and say, you know, a friend of mine, you've been in the firm for X number of years, and you're very helpful, but you've got to retire today. Because, you know, we were just being heavily criticized because our image was that we were part of the George W. Bush administration.

30:43So I would say that wasn't easy. But in the end, our track record was good enough so that I didn't need to go out and bring in a lot of other pinnacle like that. Other firms have now done that same thing. They've brought in a lot of famous people. David Petraeus was brought into KKR. Other firms have brought in famous people, and we wouldn't be against doing it, but it's not necessary. At this point, we're so well-established.

31:05Sanil Rajput:Fast forward 40 years, and Carlisle is now one of the most successful PE firms in history. But back in 1987, there was a ton of white space to start a PE firm. If you look at private equity today, is there still opportunity to start and grow another Carlisle? You know, business people will say over the last couple hundred years or so, everything that's been invented that should be invented has already been invented. And so there's always a tendency to say there's nothing new to invent. But there's always something new to invent. There's always new things to invest in. So, yes, the white space is different.

31:37In the old days, private equity. There was private equity. There was venture capital and very few things other than that. Now you've got so many different gradations of it. Distress debt, private credit. that there's an infinite number of different categories of kind of private investments. There's always new opportunities. For example, as artificial intelligence comes along, things in the AI area, as nuclear fusion comes along, there's new areas to invest there. As quantum computing comes along, new areas to invest there. There's always going to be something new, and there's always going to be a wrinkle that somebody will apply to it.

32:10There's never been a case in the history of the world where entrepreneurs or people that have some willingness to work harder or to try something different have not ultimately produced some successes in what they're doing. Not everything is going to work, but I think there is a culture now that if you start a business, you're always going to succeed. That's probably misleading as well. Not every new business starts. 99 % of the business that start don't work. But if you have a graduate degree from Stanford, let's say, or an undergraduate degree from Stanford, or you dropped out of Stanford or Harvard or something, and you're reasonably intelligent, you start to have a good idea, you probably have a reasonable chance of getting something off the ground.

32:46The trick is, if you get it off the ground and you make money, what are you going to do with the money? And that's a bigger challenge.

32:57Sanil Rajput:We'll be back with more of David Rubenstein after this. Thank you.

33:29its part has to create accountability for all people.

33:33Sanil Rajput:These things have real consequences for the welfare of countries and the people that live in them. Join me, Kevin Kuhl, for If Then, a podcast from Stanford GSB, where we explore the forces transforming business and society today. Find If Then on Apple, Spotify, or wherever you get your podcasts.

34:02Sanil Rajput:You mentioned a major inflection point right now, which is AI. And there's a race going on between OpenAI and Anthropic, who are trying to partner actively with private equity firms. A few of Carlyle's competitors have leaned into a partnership with one firm or another. So as you watch your competition take on AI, how do you make sure that Carlyle stays ahead? Well, we have developed close relationships with major AI companies. some of the things we haven't announced, some things I can't talk about. But we have our own internal AI unit that's set aside from a different city than the core of our businesses.

34:40We spend a lot of time on that area, and we think we're in reasonably good shape in it. But nobody has yet unveiled, and maybe at some point somebody will, an AI system that is so good that you can get rid of all the people on your investment committee and just say, we'll use AI. But it is used. I'll give you an example where we do use it. I think we've publicly talked about this. We bought a company years ago called Alpinvest, which was a leading secondaries firm. And at the time, it was not thought to be that big a deal. Today, it's a gigantic business for us and for other firms that have secondaries business.

35:14businesses has boomed in the secondaries world, and secondaries is more than just secondaries, but people buying secondaries or people using financing to do different kinds of things or co-investment funds and so forth. But if you buy a large secondaries portfolio, let's suppose Harvard wants to sell$2 billion of its buyout and private equity portfolio. To do that, you're going to have to examine probably 500 different partnerships. And if you examine 500 different partnerships. You've got to look at each deal in every partnership. That can take months and months and months. And it does take months and months and months and really know what the value is.

35:51With artificial intelligence, we and other people, presumably in our business, have been doing it. You can analyze these 500 partnerships in an hour. And you can figure out whether you should bid X, Y, or Z to buy that partnership or that part of things that's being sold. So artificial intelligence is already being used. And in turning deals directly, clearly everybody that is in this business is using artificial intelligence to either assess whether the company should be bought or what price you should buy it, and then how to fix the company once you do buy it. So yeah, it's already had a big difference in our business for sure.

36:27Sanil Rajput:Private equity as an industry comes with critics. And one of the main criticisms I've heard recently is that PE contributes to a K-shaped economy. Gains compound at the top while others fall behind. Now, as someone who comes from a modest background yourself, how do you respond to the criticism that Carlyle contributes to in equity? Well, there are two main criticisms. One, you could argue that private equity, when private equity first started, it was seen as the leverage buyout phenomenon. And what it was, at the early days of private equity, the deals were 99 % leverage. The deal I talked about earlier, Gibson greeting cards, 99 % leverage, 1 % equity.

37:07and very typically that 1 % was taken out as a 1 % fee, so there was almost no equity in it. The famous RJR deal done in 1989 by KKR was 5 % equity, 95 % debt. That was very typical. Then in 1988, 89, a lot of the deals started going south because the economy wasn't good, and there was looking at these deals again. And so ultimately, the world of private equity changed to a deal where you probably put 45 % to 50 % equity, and so not as leveraged. Well, how do you get high rates of returns if you're not that leveraged. In the early days of private equity, what people would do when they were leveraged that highly was they sell off assets, cut employees, ship jobs offshore, do all the kinds of things that are the standard playbook then, and you could make a lot of money just basing the leverage working in your favor and then selling off assets and so forth.

37:53Today, what you have typically is what we call EBITDA growth, where you're basically, you have operating executives who come into the companies that you buy and try to help grow the company's EBITDA. And you're not focused on shipping jobs offshore. You're not focused on shutting down plants or cutting costs. You're focusing on growing the business. And that's how the business has changed. It's much different. Now, you're never going to convince somebody that's not in the private equity world or the investment world that investment professionals or private equity people are good for society. You're never going to convince people of that.

38:24So you can try, but you're not going to likely succeed. I think my own view of private equity is that you have to recognize that what private equity people are doing is they're trying to make companies better than they once were. And in the case of buyouts, if you buy something, presumably it's got some opportunity to fix it up and you can make it better. And by doing that, you are employing people, enhancing the employment if you're really successful, you're paying taxes, and you're doing other things to help society. I'll give you one example that I'm personally involved with, though I wasn't at the time.

38:57There's an Armenian immigrant to this country. And he came and he went to a school called MIT and got a PhD. And he was a biotech guy. And he started doing biotech investments. And one of his companies was one that was trying to do a new type of biotech, and it wasn't really getting anywhere. My son-in-law, who went to Harvard Medical School, Harvard Business School, Harvard College, knows a lot about biotech. He wanted to join that company. And I said, look, I've looked at this company. It's never had a product. In 10 years, they've never had a product approved by the FDA. So forget it. He said, well, this guy is passionate about this company he's built.

39:34And I think it will turn around. I said, look, listen to me. It's not going anywhere. He didn't listen to me. He joined the company. And then later he came to me and said, my son-in-law, this company is going public. I said, public? You've never had a product approved by the FDA. How can you go public? He said, well, it's like a research project. It's going public. So you want to buy the stock? I said, I'm not going to buy that stock. So later, when COVID came, the company turned out to be successful. It was Moderna. And the Armenian immigrant stayed with it. And what he did is he showed that people in the investment world do good things for society by staying with it and producing a great product that saved people's lives.

40:15It shows what people that do investing can do. You can save people's lives. You can make people's lives much better. I should say I'm on the Moderna board now, but I wasn't then. And my point is that private equity, you're never going to convince somebody that is not in the investment world that people in the investment world are great. You can spend all your energy doing that. You're just not going to do that. But if you take examples like the Moderna example, other examples where companies have been improved and jobs have been saved or enhanced, I think you've done a good thing for society in the end.

40:47But there's no doubt that the private equity image is not great and it's not going to get better. Initially, these firms were called leverage buyout firms and the word leverage became odious. They again called them management buyout firms. Then the word buyout became odious and they came up with private equity. Now, private equity became odious, so they come up with other things. And it's an interesting phenomenon. If I have a family office now, and it's called declaration. When I go to people and I say, I'd like to do a transaction with you, they say, I don't really like private equity firms.

41:16I say, no, I'm going to do it with my family office. Family office, that's wonderful. We love family offices. The family office has an incredible and great image. And so everybody that's in private equity world should rename their private equity firms family offices because people love family offices. It's amazing. We haven't ruined the image of family offices yet. But the image of private equity is not as great as I would like it to be. Let's put it that way. And I do think that it's unfortunate. We've made some mistakes in the beginning of the private equity industry, and we're now fixing some of those things.

41:45And the industry does a pretty good job today with EBITDA growth and growing companies. But there's always going to be some mistakes and some things that don't look good. And there are certain industries that you're never going to invest in and look great in. For example, if you invest in nursing homes, it's very difficult to look good in nursing homes because you're making money when older people are not getting medical treatment that maybe they should get. And then people in nursing homes eventually die, inevitably. And so people will come after you and say, well, look at all the people who died in your nursing home.

42:17Well, what do you expect people to do in a nursing home? So eventually they're going to die. So that's why you should avoid certain industries, in my view. But in the end, private equity, I think, does a pretty good job for society. And I don't think it ruins society. I think it can be improved in certain areas. It's much better than it used to be. And we are the envy of the world in terms of what we've been able to do with the private equity industry. Other countries haven't really done what we've done, and we've benefited from it, I think. The United States and Western Europe are still the epicenter of private equity investing.

42:50Two-thirds of all private equity dollars are invested in Western Europe and the United States and Canada still.

42:57Sanil Rajput:I want to take a step back from private equity now and talk about society. You read over 120 books a year. So I'm curious what we're missing. What are you paying closer attention to that the American people are either not discussing enough or is underreported in the media? Well, I read a lot of books because I do a lot of interviews of people who are authors of books. And I think it's a courtesy to read the book. And actually, you're probably going to be a better interviewer if you actually read the book. So I kind of force feed myself to do it. And it's another thing that I, the reason I do it is this.

43:32And one of the reasons I like doing interviews, if you get older, and this is a young crowd, but anybody that's 60, 70, 80 will recognize what I'm talking about. When you get to be a certain age, you realize your body and your mind aren't going to work quite as well as it used to. It just, that's the way life is. And so you're always worried, is your brain departing and not going to function that well? And obviously, you have a genetic predisposition to Alzheimer's, there's not much you can do about it. But if you don't have a genetic predisposition to it, your brain will still slow down at a certain age.

44:07And earlier onset Alzheimer's can be in the 50s or 60s. But if you're in a normal pattern, your brain is not going to work perfectly as you age. But they tell you to keep your brain exercised, do crossword puzzles, do musical instruments, do foreign languages. I'm not good at foreign languages. I can't do crossword puzzles, and I have completely tone deaf. So I took up the habit of interviewing people. And interviewing, you have to spar with people. You have to listen to what they say. You have to be prepared. And if you're doing an interview of somebody who has a book that's written, you read the book.

44:40So it's kind of force-feeding yourself to read the book. So that's why I enjoy it. And I think reading books is something that more and more people should do. Sadly, in this country, we're reading less. About 18 % of adults in this country are functionally illiterate, which means they can't read past the fourth grade level. If you can't read past the fourth grade level, you're very likely to wind up in a bad situation. Economically, you're not going to do that well if you can't read. About two-thirds of the people in federal prisons are functionally illiterate. and about 80 % of the people in juvenile delinquency courts and juvenile delinquency system are functioning illiterate.

45:16And so I try to encourage people in a lot of things I do to encourage people to read. And some people who can't read can be taught to learn how to read. You can still learn how to read as an adult and we have to improve literacy. And I try with some of the things I do to kind of get people to read more and read books. Books focus the brain more than an email does, in my view. And it helps your brain. So that's why I like the interviewing in terms of the books and so forth. And I'll tell you how the interviewing came about. It wasn't like I said, hey, I should be an interviewer. It wasn't really anything like that.

45:51What happened is I now have five TV shows on interviewing that I interviewed. And I have one on books now on C-SPAN, and I read, interview great authors, encouraging people to try to read these books. What happened was when Carlisle was starting and I started having a big business of having annual meetings with our funds, I wanted to make sure people showed up at the Carlisle annual meeting. So I could not only tell them how their fund was doing, they invested in them, but let them know about the new funds that we had. So I'm going to sell new funds as well as let them know about the existing funds.

46:24Well, to make sure people showed up, I had to have attractive attractions. Am I saying David Rubenside is going to make a speech? Probably wouldn't attract that many people. But if I hired former presidents of the United States, former secretaries of state, former CEOs of famous companies, and paid them a fee, people might show up. So I started doing that, and then I realized these former presidents sometimes are boring speakers, and the former states of secretaries of state are boring speakers, and I'm paying them a big fee. So I went to the speaking agents one time and said, look, I might think I could interview them and maybe make it a little bit more interesting.

46:55And they said, is the fee going to be the same? I said, yeah, the fee's the same. As long as the fee's the same, they don't care. So I started interviewing people. I made people look funny who aren't that funny. I made people look more charming than they are. And as a result, I even made Ben Bernanke look exciting. And so I took that in my brain that I could do that. And then what happened was I became the head of the Economic Club of Washington. And I was supposed to get four business people a year to speak and let them speak and then take questions from the members and read the cards. And then when I did that, the business people that came in that I recruited were CEOs of big companies, but they were terrible speakers, and they were reading a text that somebody had written for them.

47:32And people were falling asleep. So I got the questions from the members, and they were terrible too. So I pretended I was getting questions from the audience, but I was making them up. And they were funny questions. So I had some humor. And so eventually I said, I'm going to junk that format and go to the interviews. And that's what Bloomberg saw. And then they put me on TV, and I started doing interviews. But I kind of happened to fall into my happenstance. Anyway, it's something I do now because you get to meet a lot of people and you get to read a lot of stuff. And, you know, that's how it came about.

48:04And I think you're obviously going to, I hope, get your own TV show soon, right?

48:09Sanil Rajput:Knock on wood, that wasn't the original plan, but I'll happily take one if you're willing to bankroll it. All right, well, you never know. You never know. You might wind up on TV tomorrow. Hopefully for good reasons. Right. From all the conversations you've had, you've spoken to presidents, founders, entertainers. What have you learned about what separates the most influential people from the rest? Well, the most successful people, or usually the most influential as well, are people that have a drive to achieve something. They don't say, you know, I really want to be a follower. I really want to follow somebody else.

48:41Those aren't the most successful people. People that have an idea, they want to do something with their life. We're only on the earth for a relatively short period of time, 70 years, 80 years, 90 years, whatever it might be. Still in the grand span of life, it's relatively short. And some people say, I want to just go through life. Don't bother me. I'm not going to bother anybody. I'm just going to go 9 to 5, work 9 to 5, and just have two and a half children and just have an average life. And those people probably might have an enjoyable life. But if you really want to achieve something and you want to be a leader, that is a different skill set.

49:16And you have to really be driven to do it. And you have to feel like you want to do something that's more important than just, you know, going to work and then coming home and doing the same thing over and over again. So I notice that leaders are people that are driven either because they had personal problems in the background. They want to prove that they were great and they can overcome the problems of their youth. Or they want to just accomplish something for purposes of life. They want to leave a mark behind when they're gone. They want their children, their grandchildren to feel like their father, grandfather, grandmother, or mother were successful and did something.

49:50So there are many different things. But the leaders are people that have a vision of where they want to go, and they're willing to take the trouble to try to get there, even though it might be unpopular at times to do that. And they're willing to go through walls, even if at times the walls are very difficult to go through because they're going to be failing. And most people that get anywhere in life have failed. There are very few great leaders that have gotten anywhere just going on a trajectory this way. They fail, and they pick themselves up and get back into the game, and they just march on.

50:22Everybody has had those problems. And if you don't fail at something in life, you're probably not working hard enough, in my view. And remember, if you're going to be a leader, you have to know where you're taking people. And you also have to know how to persuade people. All of life is really about persuading people to follow you if you're a leader. How do you persuade people? Learn how to talk well. You don't have to be Martin Luther King at the Lincoln Memorial to be an effective speaker. You can talk less effectively than that and still learn how to get people to follow you by expressing yourself well.

50:54Or you can learn how to write. You don't have to write the Gettysburg Address to influence people, but you can still write well in a meaningful way that people will follow you. People will follow you if you talk well and you have a convincing case or you write well. or the most effectively is do what you tell people you want them to do. Be a leader by showing them how you're doing what you want them to do. Like George Washington stayed at Valley Forge in 1777 with his troops. He could have stayed at the Four Seasons of the Grand Hyatt or something, but he stayed with his troops. He stayed with his troops, and they really admired him for that.

51:25And so that's a really effective way to be a leader. So great leaders are people that have a vision where they want to go. They know how to communicate it, And they're not interested in making money only for the sake of making money. Because the great leaders in the business world want to achieve something more significant than making money.

51:41Sanil Rajput:Amazing. And I'm hearing this theme of grit and determination and influence from leadership, which I think we see a lot of in our class. Well, the most important point I wanted to convey today is really this. And it's that what everybody should want to do who's in this audience is to figure out what you can do with your life that's meaningful. We're celebrating the 250th anniversary of our country's beginning. Many of you are Americans. And we're celebrating it really because one sentence that's in the Declaration of Independence is a sentence that has been the inspiration for people in this country and around the world.

52:18We hold these truths to be self-evident that all men are created equal, that they're endowed by their creator with certain unalienable rights, and among these are life, liberty, and the pursuit of happiness. Now, obviously, we haven't had equality in this country, and no countries had equality perfectly. But the idea of moving towards equality for everybody is a goal that everybody should have. And as Thomas Jefferson wrote, part of what life is about as well is the pursuit of happiness. What is happiness? He didn't mean happiness by giddiness. He meant really to be able to pursue one's life in doing something meaningful with it.

52:56And everybody here should try to figure out what do you want to do with your life that's meaningful? How are you going to give back to society? And how do you become happy? The most elusive thing in life is personal happiness. As all of you probably know by now, it's not that easy to be happy. How many of you wake up every day and you're happy all day? Very rarely the case. Your happiness occurs because you're doing something useful with your life. In the end, generally people who are the happiest are people that are helping other people and helping other people in society. So all of you who are building careers should have a career that doesn't just help yourself, but in the end, either through the profits you make and the money you make or your time, do things for other people.

53:36And the most valuable thing you have is your time. You can make money all you want if you're inclined to do so, but you can't increase the amount of time you have. You have a finite amount of time. And think about how you can give your time to help other people in ways that are going to improve their lives and ultimately improve the country that you're from or the country you're living in. And that's what I think is the most important thing that business schools can do, which is to give people skills about how they can make money or run an organization, but ultimately how they can take the benefits of what they've done with their business career or whatever their career might be and help other people, either by giving money to help other people or giving their time and doing something useful.

54:14Because what you want to do is you want to get to the point of your life when you're in your 70s or 80s, you can look back and say, I did something useful with my life. And if you think the only thing you're doing with your life is piling up money, you're never going to be that happy. The most tortured people I know are some of the wealthiest people in society. They're tortured souls because they have a lot of money. They have a lot of art and other accoutrements of wealth, but they're not really happy. The happiest people are people that found a way to do something useful with their life and to help other people.

54:43And just think about that when you get your degree, what you're going to do that's useful with your life, not just making more money.

54:49Sanil Rajput:David, thank you so much for your time. I appreciate it. Ladies and gentlemen, David Rubin-Sag. Thank you.

55:01Sanil Rajput:That was a phenomenal conversation. There was a ton there. David has had such an incredibly varied and diverse career, truly a man of the world, as you said at the top of the episode. What do you think his story reveals for those who aspire to make their way on the global stage? What I realized from talking to David was that we spend so much of our time thinking about linear paths, how taking option A will lead us to option B, then option C until we get to an eventual success. But if you look at David's trajectory, it was very much nonlinear. He started in the White House, then went back to law, then went into private equity, then dipped from private equity into politics again, and then into sports ownership.

55:43Sanil Rajput:And it's very hard to form a straight line up and to the right to say that he would for sure be successful. He is an amazing example of somebody who accumulates learnings across different distinct experiences, but has found a way to intertwine those learnings into painting a bigger picture. And what he ended up doing, from law to politics and to eventually finance, was finding a way to create a private equity firm that gave back to the country, which was sort of his original goal when he was inspired by JFK, when he was just a little kid. So I've started to give myself a little bit more grace with my career, to chase what my gut feeling tells me is the most interesting or exciting thing for me, and trust that at the end of the day, there's going to be a positive outcome.

56:26Sanil Rajput:And while doing so, making sure that I'm working on what I think is the most important thing for me at the time. So early in the conversation, he shared this wonderful vignette of President Kennedy waving to him as an adolescent and later referenced JFK's inaugural address. I'm going to quote a bit of it. And so, my fellow Americans, ask not what your country can do for you. ask what you can do for your country. My fellow citizens of the world ask not what America will do for you, but what together we can do for the freedom of man. Why do you think we need leaders? Why does leadership matter hearing that?

56:58Sanil Rajput:I think we're seeing now more than ever that the future of our country depends on the people that are leading it. And leadership and impact on society doesn't just happen in DC. It happens in the organizations across the country who are impacting their local communities and the broader country as a whole. As leaders, we have access to capital and resources and control over how those resources influence other people's lives. And I think we need to be especially mindful of the fact that the country is changing. There are broader macro-level changes if you consider things like geopolitics, and then there are local-level changes within the United States, things like demographic shifts that we need to be aware of.

57:42Sanil Rajput:So in my opinion, leaders now more than ever need to have an understanding of what's going on in the country because it will affect their employees, it will affect the work that they do, and it will change the impact that they have on the country in the long term. So if you're someone who's worried about legacy, your trajectory, and the way people in society perceive you, you have to be plugged into what's going on in America. I don't think it's unfair to say that education is everything for David. I'm curious what you took away from how he talked about education, literacy, and what that means for individuals in society.

58:17Sanil Rajput:David describes education as a means of economic mobility. He grew up in a working-class household in Baltimore, and it was through working hard and a little bit of luck that he was able to go to Duke, then UChicago. So he is a prolific donor to some of the top institutes in America, specifically for scholarships, because he believes that he can give other people just like him that same chance to rise up. He also is worried about the state of literacy in the U.S. today. Our ability to read has gone down. Our education levels across the U.S. have gone down. And the average American today is not as educated as they were before.

58:56Sanil Rajput:We are now competing in a world of information technology. So one of my personal beliefs is that as a country, we need to be investing a lot more in our educational system. We need to be paying teachers more, give students better access to lower student-to-teacher ratios, and make sure that every child receives a high quality of education. We need to invest in our future. Because it matters for all of us. It matters for everybody. I want to ask you a little bit about David's work as an interviewer on the other side of the table. So if David was going to interview you, what do you think he'd ask?

59:30Sanil Rajput:As we were walking out, I asked David his favorite question to ask anybody he interviews. And his question is, did your family live long enough to see you hit success? Wow. Yeah. But to me, when David mentioned that, that is probably one of the most beautiful and hard-hitting questions I've ever heard. And I wish I put it in the script for him. Saneel, thank you so much for sharing and thank you for this conversation. Thank you so much. I appreciate it.

1:00:23Sanil Rajput:Special thanks to Liz Walker. View from the Top is the Dean's premier speaker series. It was started in 1978 and is supported in part by the F. Kirk Brennan Speaker Series Fund. During interviews led by students, leaders from around the world share insights on effective leadership, core values, and lessons learned along the way. You can find more episodes of View from the Top on our website, gsb.stanford.edu slash business dash podcasts. Don't forget to rate and subscribe and follow us on social media at Stanford GSB. And see you next time on View From The Top.