From blue collar to billionaire: How David Rubenstein built his $500B investment firm

The Genesis of Carlisle [00:00:00]

• Raised $5 million from four investors in 1987 to start Carlisle.
• At 37, felt a sense of urgency to start the company, believing "if I don't do it now, I'll never do it."

• "I always view myself as being from a blue-collar family in Baltimore."

The Entrepreneurial Fear Factor [00:00:00]

• Even after 10 years, did not feel secure or believe the venture was safe.
• The belief that entrepreneurs always think something bad will happen.
• The statistic that 99.9% of US companies fail within five years.

  "No, because if you're an entrepreneur, you always think something bad is going to happen."

A Staggering Missed Opportunity [00:00:00]

• Met Jeff Bezos for the first time and was offered 20% of the company he was about to build.
• Later regretted not taking the deal, estimating the stock is now worth $14 billion.

• "Later, after a company was going somewhere, I said, we should have taken that deal. That was stupid. That stock's probably worth $14 billion now."

White House Beginnings [00:00:00]

• At 27, became Deputy Domestic Policy Advisor in President Carter's administration.
• Acknowledged not being fully qualified or experienced but secured the role through campaign work.
• Parents, blue-collar workers who hadn't graduated high school, were in awe of his White House job.

  "And so my parents, who were blue-collar workers, never graduated from high school. When I got a job at 27 in the White House, you know, they couldn't believe it."

Navigating Campaign Promises [00:00:00]

• Tasked with compiling President Carter's campaign promises due to the lack of the internet.
• This involved reviewing talks, interviews, and questionnaires to document commitments.
• Gained access to Carter's meetings by knowing his promises better than anyone.

  "Carter had a lot of promises. And what I did is I worked on compiling what his promises were."

Early Career Decisions [00:00:00]

• Hired talented young staff to help articulate policy positions and fulfill campaign promises.
• Relied on the experience of his boss and talented staff for policy guidance.

• "My boss did. And then we hired a staff of really talented people. They were all young, but they were talented in their area, energy or environment or whatever it would be."

Post-White House Struggles [00:00:00]

• Faced difficulty finding a law firm willing to hire him after the Carter administration lost the election.
• Felt unemployable as a "Carter White House aide."
• Drew parallels to the challenges faced by Biden administration alumni.

  "So I struggled for a while to find a law firm that would take me because nobody really wanted a junior White House aide who was a Carter person."

The Path to Investment [00:00:00]

• Practiced law but realized he wasn't a great lawyer and didn't enjoy it.
• Started an investment firm a couple of years later.
• Believed success comes from studying how others achieved it.

  "Eventually, I got a job practicing law, and I realized I wasn't that great a lawyer. I didn't really like it."

The Success Database [00:00:00]

• Created a spreadsheet at age 24 tracking about 50 highly successful individuals.
• Collected data on birth year, apprenticeship start, first successful venture, and breakthrough year.
• HubSpot later found and enhanced this database, making it available for free download.

  "And I created a spreadsheet where I tracked roughly 50 people who were uber successful."

The Entrepreneurial Age Window [00:00:00]

• Started Carlisle at 37, within the typical age range of 28-37 for first-time entrepreneurs.
• Felt a strong imperative to act at 37, believing it was his last chance.

• "I said, geez, if I don't do it now, I'll never do it."

Early Hires and Strategy [00:00:00]

• Recruited partners and key personnel, including the former CFO of MCI and a senior officer from Marriott.
• Bill Conway, former CFO of MCI, became co-CEO for 30 years.
• The initial team consisted of four people.

  "Well, I had a couple partners. I hired a person who had been the chief financial officer of a company called MCI, which was a long-distance telephone company."

Differentiating Investment Funds [00:00:00]

• Introduced the concept of multiple funds (buyout, growth, real estate, debt) within private equity.
• Pioneered globalization by establishing funds in Europe, Asia, and Japan.
• This strategy required extensive travel for fundraising and recruitment.

  "What we did that was different was we had multiple funds."

The "Deal by Deal" Beginning [00:00:00]

• Initially funded ventures "deal by deal" rather than through a large fund.
• Founding a deal and then raising money for it, repeating the process if successful.
• This method was challenging, especially when buying publicly traded stocks due to insider trading regulations.

  "So we'd find a deal and then go raise money for that deal. And if it worked out, then we'd go raise money for another deal."

Humble Office Origins [00:00:00]

• Started in a 5,000-square-foot office space in a new building in Washington, D.C.
• Declined an option for an additional 5,000 free square feet, fearing it would tempt rapid, unsustainable growth.
• The space had previously been used for filming the movie "Broadcast News."

  "I said I would take the space. It was 5,000 square feet. And the leasing agent said, look, you can have another 5,000 if you want. You can have an option for 5,000."

The Weight of Power [00:00:00]

• Hired Glenn Youngkin, who later became Governor of Virginia, from McKinsey after Harvard Business School.
• Was surprised by Youngkin's election victory, having never been in politics before.
• Observed how power can change individuals, leading to discussions of potential presidential runs.

  "And Glenn Youngkin, I hired him pretty much out of McKinsey, right out of Harvard Business School."

The Unpredictability of Success [00:00:00]

• It's impossible to predict which individuals will achieve great success.
• Attributes success to a combination of talent, drive, and luck.
• Cites Bill Gates and Steve Jobs as examples of unpredictable success stories.

  "You know, you just have lucky breaks. I mean, who would have predicted Bill Gates dropping out of Harvard and is going to build a company that became Microsoft?"

Collecting American History [00:00:00]

• Acquired historical documents including the Magna Carta, Declaration of Independence, and Emancipation Proclamation.
• Restored historical buildings like the Washington Monument and Lincoln Memorial.
• Motivation is to increase public knowledge and appreciation of American history.

  "And then I started getting other historic documents, the Emancipation Proclamation, Declaration of Independence."

Founding Fathers' Vision [00:00:00]

• The Founding Fathers likely did not anticipate the future value or preservation of documents like the Declaration of Independence.
• Documents were treated casually initially, with early copies made due to fading.
• Thomas Jefferson believed the country might not survive beyond 20 years.

  "Well, they didn't treat the document that well. When the Declaration of Independence, after it was drafted and signed, they basically folded it."

Enduring Worries and Giving Back [00:00:00]

• Continues to worry about potential negative events, even as the principal owner of the Baltimore Orioles.
• Feels pressure to perform well and avoid public criticism.
• Committed to philanthropy, signing the Giving Pledge and intending to give away the bulk of his wealth.

  "And I'm always worried that I didn't do a good enough job in helping the team."

Maintaining Humility [00:00:00]

• Views himself as from a blue-collar Baltimore family, with parents who didn't graduate high school.
• Maintains a low-key lifestyle, still using the same barber and wearing suits for over a decade.
• Attributes his approach to his upbringing and a desire to give back.

  "Well, I always view myself as being from a blue-collar family in Baltimore."