Stephen Schwarzman's What It Takes: Lessons in the Pursuit of Excellence is encapsulated in one principle: "It takes as much energy to do small things as it does to do big things—so aim big." This memoir traces the complete trajectory of a boy raised above a Philadelphia linen store who built Blackstone—one of the world's largest investment firms—from $400,000 in seed capital, presenting 25 principles for work and life. This is not merely a success story. It's a philosophy forged through 600+ investor rejections, catastrophic early losses, and decisions made amid financial crises—adversity and failure form its true core. The 2020 Japanese edition went into immediate reprinting, and in 2025, an expanded edition was published featuring a foreword by Masayoshi Son and Schwarzman's own preface declaring "Without Japan, Blackstone Would Not Exist."
"Think Big"—The Foundation of Ambition
Schwarzman's philosophy begins with one conviction he repeatedly articulates: "Starting a small business is just as hard as starting a big one." The difficulty of fundraising, securing talent, and the mental and financial toll—all assault entrepreneurs regardless of scale. Therefore, he insists, choose goals worthy of your life.
This thinking translated directly into action. When co-founder Pete Peterson proposed an initial $50 million fund, Schwarzman countered with $1 billion—an unprecedented size for a debut fund. "We'd be pitching to the same investors either way, so we should go big." They pitched 488 investors and secured commitments from 33.
Before starting any new venture, Schwarzman applies three tests. First: Is it big enough to merit your life? Second: Is it unique?—will people say "this is exactly what I needed"? Third: Is the timing right? "The world doesn't love pioneers. Too early, and failure risk skyrockets." Unless all three are met, he'll pass on even the most attractive ideas.
When an MIT dean told him "we like to fly under the radar," Schwarzman replied: "I like to live above the radar." This wasn't rhetoric—it's the behavioral principle that has guided his entire career.
25 Rules—A System of Principles for Work and Life
The "25 Rules for Work and Life" appended at the book's end distills decades of Schwarzman's experience into actionable guidelines, included as an appendix in the Japanese edition. Here's the comprehensive framework:
Principles of Thought and Aspiration: Rule 1 "Think big," Rule 11 "Believe in something larger than yourself," and Rule 16 "When you see a giant opportunity no one else is pursuing, don't hesitate" set the direction of ambition.
Principles of Learning and Growth: Rule 2 "The best executives are made, not born. Never stop learning," Rule 7 "In your youth, choose steep learning curves over prestige," and Rule 22 "Failure is the best teacher. Discuss failures openly and analyze them objectively" form the core.
Principles of Decision-Making and Action are particularly vital: Rule 13 "Be bold. Take risks when others are cautious, act when everyone is frozen—but do so wisely," Rule 17 "Success comes from seizing rare moments of opportunity. Stay open, alert, and ready," Rule 18 "Time wounds all deals. Keep everyone at the table during negotiations," Rule 19 "Don't lose money!!! Assess risk objectively," and Rule 20 "Make decisions when you're ready, not when others pressure you."
Principles of Relationships: Rule 3 "Write to people you admire. Go meet them," Rule 4 "People are most interested in their own problems. Think about solving others' problems," Rule 10 "People in distress focus on their own issues, but the answer lies in solving others' problems," Rule 24 "Stand by good people, even when everyone else walks away," and Rule 25 "Everyone has dreams. Help others realize theirs."
Principles of Organization and Talent: Rule 5 "Every business is a closed, integrated system. Understand how each part functions and interrelates," Rule 6 "Information is your most valuable business asset. Spot patterns and anomalies before competitors," Rule 9 "One smart person can't solve everything. But a group of smart people discussing openly can," Rule 14 "Never be satisfied with the status quo. Organizations are more fragile than you think," and Rule 23 "Hire 10s. They sense problems, design solutions, and steer the business in new directions without being told."
Finally, Rule 12 "Never deviate from your sense of right and wrong. Integrity is non-negotiable" and Rule 21 "Worrying is an active, liberating activity. Channeled properly, it articulates risk and drives avoidance"—these two reveal the core of Schwarzman's character.
Confronting Risk—The Edgcomb Steel Lesson
Schwarzman's risk philosophy was born from what he calls Blackstone's "most important deal"—a catastrophic failure. In 1989, as Blackstone's third investment, they executed a $330 million leveraged buyout of steel distributor Edgcomb Metals. Two partners clashed head-on. The proponent promised large profits; the opponent, David Stockman, warned "it's just inventory profits—you'll be destroyed." The 38-year-old Schwarzman "thought I was Solomon"—but he wasn't. Siding with the proponent, steel prices collapsed, and they lost 100% of invested capital.
One investor summoned Schwarzman to his Nyack, NY office and screamed: "You're the stupidest person I've ever met." Schwarzman felt his face flush, tears welling. But he told himself: "It's completely justified. I lost his money—that's on me." Climbing into a taxi, he vowed: "I'll never be in this position again."
This experience fundamentally transformed Blackstone's investment process. Schwarzman built Wall Street's most rigorous investment committee system. First: Investment proposals must be distributed to everyone two days before the meeting. "Finance is full of people who dazzle with rapid chart flips. We had to stop that show." Second: Everyone from the most junior analyst to the most senior partner must speak. Third: they assign probabilities to risk factors and analyze correlations. "If one worsens, another might cascade."
By his office window sits a commemorative plaque from the Edgcomb deal—a "tombstone" with black background instead of the usual white. He deliberately placed it within daily view. "You don't learn much from success. But from failure—if you rigorously analyze why—you gain the power to change your organization's direction."
On reading market cycles, Schwarzman developed his own laws through seven recessions. Signs of market peaks: buyers believing "this time is different," cheap debt capital flooding in with leverage exceeding 10x, and "everyone you know suddenly getting rich." On bottom-fishing, he warns "most investors buy too early and underestimate recession severity," recommending buying only after 10% recovery from the bottom.
Leadership Philosophy—"Systems Beat Heroes"
Schwarzman's leadership philosophy rests on the conviction that "not individual heroism, but institutions and systems generate sustained results." After Edgcomb, he thoroughly "depersonalized" decision-making. Rather than deal teams "pitching" to the investment committee, everyone shares "collective responsibility for identifying a deal's critical drivers."
On talent, he has a clear grading system. 6s and 7s have "stone hands"—balls bounce off them. Keeping them means managers do all the work. 8s "do what they're told." 9s "execute well and craft excellent strategies. You can build a winning organization with 9s." But 10s "sense problems without being told, design solutions, and steer the business in new directions. 10s make it rain constantly." Schwarzman gives 10s 50-50 partnerships and entrusts them with building new businesses. This mechanism powered Blackstone's expansion from M&A advisory into private equity, real estate, credit, and infrastructure.
He obsessed over culture-building. Weekly Monday 8:30 AM all-hands meetings share economic updates, politics, and deal progress. Even the most junior employees can attend—a demonstration of "commitment to transparency, equality, and intellectual honesty." COO Tony James introduced 360-degree reviews, physically tore down walls for glass-walled open offices, and brought "discipline and order." Schwarzman chose James because he was "the only person I remembered who risked his own money to defend the firm's position."
His definition of excellence is distinctive. "At Blackstone, 100% is everything. Errors are unacceptable. In school, 95% earns an A. Here, that 5% shortfall means massive losses for investors." Speaking to new analysts, he emphasizes building long-term credibility. "To earn great credibility, you must think long-term. From growing up in suburban Philadelphia—staying true to middle-class values of honesty, hard work, respect for others, keeping promises—I've built credibility."
Failure and Adversity—Blackstone's Founding Trials
Beyond Edgcomb's disaster, Blackstone's founding itself was a brutal succession of adversities. When Schwarzman and Peterson left Lehman Brothers to start Blackstone in 1985 with $400,000 in personal capital, they were at the pinnacle of investment banking. But the response was silence. Schwarzman sent 400+ personalized letters to every contact. The phone barely rang, and when it did, it was just "good luck" greetings.
The Wall Street Journal planned a front-page story on Blackstone's launch, but the day before publication, their former firm Shearson pressured them to kill it. Schwarzman sat alone in a Japanese restaurant, dizzy with fear that "I'm failing at everything." First advisory fee: a mere $50,000 from pharmaceutical company Squibb. Their first meaningful fee was $3.5 million from advising E.F. Hutton's merger.
Fundraising brought "terribly humiliating rejections." He'd fly cross-country for appointments where no one showed. Powerful acquaintances turned him away. Peterson's presence was salvation. "He was 60, hated failure. But simultaneously, he had patience and calm. He supported me, kept saying—'If you believe in what you're doing, even when overwhelmed, you must keep moving forward, even when it feels hopeless.'" The breakthrough came when Prudential's investment head committed $100 million.
Another crucial "failure": declining Michael Bloomberg's request for capital partnership. It didn't fit Blackstone's investment paradigm then, but Bloomberg's wealth later reached ~$48 billion. Yet Schwarzman learned from this painful missed opportunity, creating a "Tactical Opportunities" fund pursuing special investments outside existing categories. This fund grew to $27+ billion. Failure became innovation's catalyst—a quintessential example.
Philosophy of Relationships—"Become a Switchboard"
Schwarzman likens his ideal self to "a switchboard flooded with multiple inputs." Becoming an essential node connecting different worlds, people, ideas, and opportunities—this is his networking philosophy's core. Reflecting on decades of this approach: "As my separate worlds grew larger, they began overlapping. Having spent a lifetime listening to others, building relationships, constantly asking how I could help, the biggest challenges and best ideas now come to me."
The foundation: thorough listening and altruism. "I didn't try selling what I had. I listened. Waited to hear what they wanted and thought, then worked to make it happen." In meetings, he takes almost no notes, concentrating entirely on their words and delivery. "Many fail because they start from self-interest: 'What's in it for me?' Such people never reach the most interesting, rewarding work."
The Nikko Securities partnership crystallizes this philosophy. In the late 1980s, as Blackstone's fundraising stalled, Schwarzman visited Nikko. They understood neither English nor M&A well. But Schwarzman started by solving their problem. Sensing Nikko wanted US M&A market entry, he proposed a creative joint venture: Nikko brings Japanese companies, Blackstone handles M&A, revenues split 50-50. In return, he asked Nikko to invest in Blackstone's fund. Nikko committed $100 million, catalyzing total Japanese investment exceeding $300 million. At a 2025 Tokyo event, Schwarzman declared: "Without Japan, Blackstone would not exist." Those early Japan-funded LBOs generated 26x returns over 15 years.
Young Schwarzman's visit to Harvard treasurer George Putnam for Sallie Mae's IPO is memorable. As Schwarzman nervously began an elaborate presentation, Putnam said "Let's start over." "Say this: 'Mr. Putnam, you're Harvard's treasurer. I'm starting America's largest student loan business. Your investment is $20 million.' Go ahead, say it." When Schwarzman complied, Putnam instantly replied: "Excellent idea. I'll do $20 million." "Investors constantly seek good investments. Make it easy for them, and everyone wins"—this fundamental sales principle Schwarzman honored for life.
Episodes and Quotes Revealing Character
Concrete episodes shaping Schwarzman's life appear vividly throughout the book.
Shortly after joining Lehman Brothers, Schwarzman completed his first major assignment—a lengthy report—and submitted it to partner Herman Kahn. Three hours later, the phone rang. "Herman Kahn here. Steve Schwarzman?" "Yes, Mr. Kahn." "I read your report. Page 43 has a typo." Click. That was Kahn's only feedback. In finance, nothing less than 100% accuracy is acceptable—the moment this lesson was hammered in.
At 29, after closing Tropicana's $4.88 billion acquisition (then the world's 2nd largest M&A), renowned banker Felix Rohatyn called: "Steve, congratulations. You've entered the adult world. From here, your obligation—when you see something wrong, speak up. Write something. Don't be afraid."
At his first job at DLJ (Donaldson, Lufkin & Jenrette), offered $10,000 salary, he negotiated: "I need $10,500 because I heard someone in my class is getting $10,000, and I want to be the highest-paid." He got the $500 raise. Six months later, at his exit interview, Bill Donaldson said: "I hired you because I had a gut feeling you'd one day run this firm."
In Army Reserve, noticing his unit's terrible food, he directly confronted the colonel. Investigation revealed young officers embezzling supplies—they were removed. "Speaking truth to power"—a consistent behavioral pattern. As an HBS student trying to suggest improvements to the dean but getting dismissed, he vowed: "If I ever lead an organization, anyone can meet me, and I'll always tell the truth, no matter how difficult."
Among the book's many memorable quotes, these resonate powerfully: "To succeed, you must place yourself where you don't belong. Shake your head at your own foolishness. But through sheer force of will, wear down the world, and it gives you what you seek." And: "The resilience you show when facing adversity—not the adversity itself—defines you as a human being."
Conclusion—What "Being Made" Means
The book opens with the declaration: "The best executives are made, not born." This process of "being made" is the key integrating Schwarzman's entire philosophy. He treats failure as raw material for institutional design, forging the investment committee system from Edgcomb's total loss, Tactical Opportunities from missing Bloomberg, and unwavering sales philosophy from 600 rejections. For Japanese readers, a crucial historical fact stands out: Nikko Securities' $100 million investment determined Blackstone's survival, and Schwarzman himself explicitly states "Without Japan, Blackstone Would Not Exist." The 25 Rules aren't abstract maxims but behavioral norms distilled from concrete failures and successes, teaching the most vital lesson—excellence isn't a destination but an endless process of learning from failure.