Rare Interview: Neil Shen (Sequoia China) and Stephen Schwarzman (Blackstone) Part II

Earlier this week, I came across a live discussion between Neil Shen (Founder of Venture Capital firm Sequoia Capital China and #1 on the Forbes Midas List in 2018, 2019, and 2020) and Stephen Schwarzman (Founder and CEO of private equity firm The Blackstone Group). In this wide-ranging conversation, these two giants of their respective fields discuss everything from China’s economy and the impact of COVID-19 to the core traits an entrepreneur should have and what to look for when hiring.

No recording, but I’m sharing my transcription for easy consumption.

In this section, the pair discuss the core values an entrepreneur should have, as well as recommendations for entrepreneurs navigating uncertain environments.

This is Part 2 of 4. Part 3 will be posted tomorrow, and cover why culture is more important than management.

For more fun stuff, you can follow me on twitter @kevg1412. And definitely check out my compilations page.

Part II: Entrepreneurship in an Increasingly Uncertain World


Neil Shen: Yeah. Let’s go back to the book. You talk a lot about the core value, the culture, etc. So, what are the core values required for successful entrepreneurs? What should entrepreneurs do to deal with the current world, which is obviously increasingly uncertain?

Stephen Schwarzman: Well, I think, as you know from working with entrepreneurs and being one yourself, there are a number of core values.

The first, is you have to be able to take a lot of setbacks, a lot of pain. You need to be very psychologically strong, emotionally stable, and you need to have enormous amounts of energy. Because you constantly have setbacks.

Secondly, you need to learn and adapt from mistakes. And we all make mistakes. But most people may pretend those mistakes didn’t happen. They don’t analyze them. They don’t look at them to figure out what went wrong, so it’ll never go wrong again. So I think that’s the second part of an entrepreneur.

The third, is to have a worthy dream. Just going out and doing something everyone else is doing, is okay, but it’s not sufficient to have a great dream. So I think that entrepreneurs need to look at the world, and figure out how their talents can be best used to create something that doesn’t exist now, but that other people will want, once you point it out to them.

Another core value, core competency, is entrepreneurs typically have to be convincing. They have to convince customers, they have to convince suppliers, and they have to convince people to join them. So its very hard for an entrepreneur to be successful just as a single person. They have to have all of these groups form a system, and so they have to recognize what it takes to deal with other people. So all of those, and it’s helpful, in many cases, to have some basic understanding of finance and numbers to make sure they don’t run out of money.

The final thing, is fear. Fear is a very good thing, because it makes you work harder, but it also helps you avoid areas where things might really go wrong. And if you’re scared of failing, you’ll take that fear, and adapt it to de-risk types of decisions that you might normally not think so much about, that taken could go wrong.

So those are elements of what makes a terrific entrepreneur.

Neil Shen: Yeah, I think these are very good suggestions on traits. I found it interesting that when you’re look at US entrepreneurs and Chinese entrepreneurs, the very top ones share very many similarities, in terms of their entrepreneurial traits.

Stephen Schwarzman: I enjoy meeting with all of the great Chinese entrepreneurs, and in fact, other than the language — which is different. But many of them know English as well. The American ones don’t know Chinese, but we don’t know many languages at all, other than English — that the similarities are really overwhelming.

Neil Shen: Yeah. What’s your suggestion to them? Now we’re getting to a world with so much uncertainty compared with before. Any specific suggestions for those entrepreneurs?

Stephen Schwarzman: Sure. Well, I’ve been through a lot of downturns, probably five or six in my life. And they’re all scary at the time. This is so extreme, that maybe you have to look at this and say, “Okay. Humans were not meant to be hiding in their houses. They are social creatures. They are going to come out of their houses. And they will want to go back to work.” So, since we know that is going to happen, and we know that the virus has a life of maybe a year and half, maximum. In the meanwhile, the medical people and the drugs are going to get better and better. So in effect, we know there’s going to be a movement of people back into the workplace. We know, with pretty good certainty, that once that starts, economies are going to get better all over the world. So it’s important to not have an emotional response to this, but to look at it and say, “What’s going to come back first? What’s going to come back last? What’s going to change, and not go back?”

So there’s going to be much more on the internet, people meeting virtually, just like you and I are. So that’s going to hurt, maybe travel, but it’s going to help technology. And what that does for an entrepreneur, is you have to have a view of what the new world is going to be, where the demand is going to be, where you can get capital to do something in the areas that are unique to this. And then, when you think through something specific, you just go there. And you go there with 100-120% total commitment. And you’ll be successful. And other people will be frozen.

And it’s the pre-disposition to action, when you see major trends that are going to be happening. And if you put yourself in front of that major trend, odds are, you are going to be successful. Most people will be scared and do nothing.

This is Part 2 of 4. Part 3 will be posted tomorrow, and cover why culture is more important than management.

For more fun stuff, you can follow me on twitter @kevg1412. And definitely check out my compilations page.

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