- Player: David Rubenstein
- Company: The Carlyle Group, one of the world’s largest private equity firms, launched by Rubenstein and his partners in 1987.
- Claim to Fame: David Rubenstein is currently number 257 on the Forbes 400 Richest People in America list. His personal wealth is valued at $2,6 billion, and his Forbes self-made score is 9 out of 10, due to his lower middle-class upbringing. He is one of 140 signatories of the Giving Pledge, a commitment by the world’s wealthiest individuals and families to dedicate the majority of their wealth to philanthropy, spearheaded by Warren Buffet and Bill and Melinda Gates.
David Rubenstein knows a thing or two about the mindset of a successful entrepreneur. He’s not only built one of the largest private equity firms in the world, but he’s done so from the base of a blue-collar background, working hard to become the first person in his family to get a degree, to practising as a lawyer, and finally finding his entrepreneurial feet.
We recommend: 7 Life Hacks From Rebel Billionaires
Through both the Giving Pledge and his role at The Carlyle Group, he regularly interacts with some of the most successful entrepreneurs in the world. Here are the five characteristics that he believes ultimately lead to success.
Great businesses are never just about a good idea, working hard, and then success comes easily. Most entrepreneurs face a multitude of struggles before achieving success. The tenacity to overcome those challenges is a real determining factor in what a business and the founder ultimately achieves.
Entrepreneurs don’t take no for an answer. By definition, if you’re starting a new company and selling a new product, it’s a product that doesn’t exist, but that doesn’t mean that someone didn’t already think of the idea, and didn’t think it would work.
Most entrepreneurs are trying to push against the grain and convince the naysayers that their take on the concept has merit. If you easily take no for an answer, you won’t be a good entrepreneur.
2. The drive to succeed
Entrepreneurs are driven people. It’s rare to meet an entrepreneur who says, ‘You know, I’m going to go into work today at about 10am, and I think I’ll leave at around 4pm because I want to play golf.’ It’s a rare entrepreneur who says, ‘I don’t work on weekends’. It’s a rare entrepreneur who comes from a wealthy family.
Generally, entrepreneurs are driven people who are more interested in proving their ideas work than making a lot of money. When I interact with other members of the Forbes 400 who built their companies, virtually none of them say, ‘I wanted to make money’. They say: ‘I had an idea and I wanted to prove it would work’.
In most cases, being a genius isn’t a determining factor of business success. Einstein was a genius, but there’s no evidence he was a good businessman. It takes a certain amount of intelligence to be a successful entrepreneur, but drive is a far more important determining factor: The drive to improve yourself; the conviction that you’re doing something that’s going to prove you’re correct; and the ability to work with other people, and get them to see the world the way you do are essential.
3. They’re not in it for the money
Obviously when you make a lot of money you’ll find people accumulating the trappings of wealth, but I don’t think most entrepreneurs are as pleased with having a yacht or a plane or multiple homes as they are with proving that the company they thought was a good idea when no-one else did is a success.
A key driver that I see over and over again is the joy entrepreneurs take in the fact that they were right and others were wrong.
4. The desire to change the world for the better
In many ways entrepreneurship is like parenthood. As a parent you have a great deal of pride for how your child develops. You will sacrifice everything for your child, and do anything to try and make their life better.
This is how entrepreneurs feel about their companies. They create them, nurture them in the early years, and see them grow and mature into an adult form. There’s an incredible sense of purpose to both parenthood and entrepreneurship.
Entrepreneurs want to make the world a better place. Businesses create jobs, help others earn a living and give them dignity and self-worth.
Entrepreneurs create wealth for themselves, their employees and society through taxes and hopefully offering a product or service that adds value to society and other businesses as well. There’s a massive sense of pride in a business that really adds value.
The interesting entrepreneurial conundrum occurs when the business matures, though. Some entrepreneurs want to keep creating, others can also be managers. Business owners often need to figure out which they are. Jeff Bezos, Bill Gates, Steve Jobs and Mike Bloomberg all created companies and ran them for many years, but this isn’t always the case. Many entrepreneurs are great at creating companies, but they aren’t good at running what they created.
The problem of course is that the personality of a successful entrepreneur comes with a sizeable ego.
We recommend: The Top 25 Self-Made Billionaires In the World
The trick is to also have enough humility to understand where and when you’re adding value, and when it’s better to step down for the good of the company. The truth is, you don’t need an entrepreneur to run mature companies, you need a manager.
5. They want to give back
When I signed the Giving Pledge, it was because of a deeply held belief that those who have been fortunate and lucky in business have an obligation to give back and help make society a better place, whether it’s by helping people to get educated, medical treatments, or supporting charitable organisations.
When I grew up, I never saw myself as disadvantaged. I didn’t know about wealth.
Looking back I can say, okay, I didn’t have the wealth that other people had, some people might have said I was slightly disadvantaged because I didn’t have a wealthy family and contacts to propel me into success, but in hindsight it was a very advantaged upbringing. The most advantaged thing you can have, as Warren Buffet has said, is the unconditional love of two parents.
If you’re fortunate to have two parents, and they give you unconditional love and support in what you are doing, that’s worth a lot more than the money you might have gotten.
We recommend: 6 Success Secrets of the World’s Billionaires
The hardest thing in life is to achieve personal happiness. The people who achieve it are not the wealthiest people. If you’ve created wealth, put it to good use.
6. The Role of Luck
Luck is the most important thing in life. Most successful entrepreneurs have had a fair amount of luck in their business endeavours. Bill Gates is a very smart person, but it was IBM’s mistake in not buying the operating system that he developed, and letting him license it to them instead, which helped propel his success.
Steve Jobs was thrown out of his company, and only later brought back as CEO. If that hadn’t happened, he probably wouldn’t have been heard from again.
I owe a lot of my own success to luck. It was not preordained that I would be a successful businessman. I came from a modest background; my parents did not graduate from high school, and my father worked at a post office and earned a modest salary. I worked hard to earn the grades that would secure me the bursaries I needed to study law.
My goal was to work at the White House, which I had achieved as a lawyer under the Carter administration by the time I was 27. Had Carter won the 1980 election, I would have stayed at the White House, and my career would have progressed in the political sphere, as a lawyer or lobbyist for successive administrations.
Carter didn’t win though, which meant I went back to the private sector, where I soon realised I actually wasn’t a good lawyer. Had I been a good lawyer, I’d probably still be practising law today.
What seemed like bad luck — working for a single-term President and then realising I wasn’t suited to my chosen profession, actually turned out to be incredible strokes of luck, because they gave me the opportunity to pursue something I was very good at, namely private equity.
Even more fortuitous was the fact that I was based in Washington DC. I didn’t have a Wall Street background, which meant there was no way I could have launched a PE firm in New York. Washington DC was different.
No one was doing this there. People laughed at me and what I was trying to do, but they also had no one else to compare me to. This meant I could convince people to join the firm who had more financial skills than I had, although they also had no Wall Street experience.
In 1987 I started the first private equity firm in Washington DC, and thanks to luck and good fortune, it became a highly successful global company.
There’s an art to using luck though, and that starts with the understanding that luck comes and goes. Spot it and use it when it comes, but let go of missed opportunities. They happen. Fixating on them doesn’t help you find the next opportunity.
I’ve personally missed more opportunities than I’ve probably taken. I had a chance to invest in Facebook at the beginning; I turned it down. I had an opportunity to be a big shareholder in Amazon; I turned that down. I had a chance to be an initial investor in Netscape and walked away from that too. We all make mistakes.
7. Entrepreneurial DNA
Over the years, I’ve noticed that many of the most successful entrepreneurs in the world share similar characteristics: They come from modest backgrounds, often lower-middle class; they’re driven, intelligent people, but not geniuses; they’re people that know how to motivate other people, and lead either by communicating very well or leading by example; they don’t take no for an answer; and they’re more interested in the success of their company and showing people that they are right in what they thought than the trappings of wealth.