The biggest concern for any entrepreneur is finding the right talent. Your business is nothing without the right team around you.
I had very little idea how difficult it was to find the right people until I actually started trying to find the right people for Radiate. When you're at a big company, a lot of hiring is inbound - people are often coming to you because of the established platform.
When you're starting a new thing, you're out there searching for people. And not only are you searching for people, you're also trying to get them to sign onto something that's largely in your head. I must admit if I were in their shoes, I might hesitate for a moment before jumping onboard.
So no surprise the subject of hiring is something I've been very curious about when talking to CEOs and entrepreneurs. How do they hire? What do they look for in candidates?
Steve Schwarzman says he likes to have a casual conversation with prospective candidates. How fast they react to him in conversation is a good indicator of how well they'll do at his firm, Blackstone. Sir Martin Sorrell of WPP once told me he likes to hire MBAs and Ivy League college grads - essentially, people who have already been put through "filters." Some might disagree, but it's a valid point: if Harvard has already screened this person as a smart, young student, surely he or she would make a good job candidate.
Meanwhile, Mario Gabelli, the legendary value investor and a Wall Street titan, recently told me he likes to hire "PhDs"-poor, hungry and driven. Some of that is because of his own upbringing in the Bronx, where he learned to be independent from an early age and began investing in stocks by the time he was 12.
"I would like to have individuals that are motivated rather than me motivating them. We have a simple culture: make money for the client and then make money for the teammates and then make money for the shareholders. That's the culture and sometimes people lose sight of that and that's a challenge," he said in the latest podcast episode of Radiate. "We don't like to motivate people. We like them self-motivated because that's the nature of the business."
Gabelli calls himself a "terrible manager" despite having built a firm that now has just under $40 billion in assets under management. When I asked him if it's every okay to yell at people, he replied, "all the time."
"It is basically coming out of a trading room culture and if they don't understand that then they really should not be in the investment business," he said. "To understand that there's a great deal of intensity, a great deal of pressure and that's what makes the business that we're part of."
I liked Gabelli's realness. I imagine despite being a "terrible manager," Gabelli continues to attract talent because 1) he must compensate well and 2) he has a singular vision of what GAMCO is about and people sign up for it. Having that singular vision is a part of being a good manager and an essential part of recruitment and retainment.
As for my own efforts, luckily I have found some good teammates. But finding the right people is step 1 of a hundred different steps you need to take before you can even call yourself a true manager. Stay tuned for more on this.