No matter how high someone climbs the corporate ladder or how many millions they earn, every business leader is still human. They’re bound to stumble and make mistakes—even when steering some of the world’s largest companies. Blackstone cofounder and CEO Stephen A. Schwarzman, for instance, once admitted he was nearly brought to tears after flubbing a major deal with Edgcomb Steel in the mid-1980s.
“It was the third investment in the firm’s history…I had never made investments. And I didn’t even know there were things like investment committees,” Schwarzman recently recalled in Blackstone’s “Life Lessons” series. “I made a mistake, and we basically lost our original investment value.”
In the aftermath of the expensive blunder, Schwarzman was quickly pulled aside by an investor. It was a meeting that stuck with him for five decades.
“I sat down, and he started screaming at me…I was shocked,” Schwarzman continued. “But then I said, ‘That’s completely fair.’ It was his money that was lost, and I was responsible. His teeing off on me was horrible, and I almost cried at the meeting. But I sucked it up, and I said, ‘I’ve just got to take these beatings.’”
Blackstone had lost all of its equity in Edgcomb shortly after the incident. It was a career-altering moment—clients “expect good things to happen” when working with the $190 billion business, Schwarzman said, but he had missed the mark. And the cofounder took it personally; Blackstone was his brainchild, scaled up with a $400,000 investment after Schwarzman walked away from a high-powered job at Lehman Brothers. But instead of wallowing in the hurt from the “miserable, grisly experience,” the businessman repositioned himself for success. He took a walk outside, watching fall leaves trickle down and sun bounce off the water, and talked himself through the mess up. In the years since, Schwarzman has become a self-made billionaire, amassing a $52.6 billion fortune in leading the global asset management titan.
“I said, ‘This can never happen again,’” Schwarzman said, adding that Blackstone has since changed all of its processes, and vigorously debates all complex deals. “Setbacks are terrible, but they also are great teachers.”
Jeff Bezos to Sam Altman: owning mistakes and getting on track
Making a mistake worth millions of dollars—or even billions—is a rite of passage for every entrepreneur striving to make waves.
Even the biggest business leaders openly fess up to their faults; over a decade ago, Amazon founder Jeff Bezossaid it was still “really early” for the $2.4 trillion tech giant to release a phone, as it tried to improve upon its first fledgling mobile rollout. It was a misstep that seemed to stick, as to this day Amazon still hasn’t broken into the smartphone market. Other Amazon offerings have fallen flat over the years, including an auction site that failed through multiple iterations.
“I’ve made billions of dollars of failures at Amazon.com,” Bezos said in 2014 at the Business Insider Ignition conference. “Literally billions…Companies that don’t embrace failure and continue to experiment eventually get in the desperate position where the only thing they can do is make a Hail Mary bet at the end of their corporate existence.“
Even today’s tech pioneers aren’t doing everything perfectly. OpenAI CEO Sam Altman is known for helming one of the 21st century’s biggest tech products: ChatGPT. It’s an AI chatbot with 800 million weekly active users worldwide, processing 6 billion tokens per minute. Riding the high of its GPT-4 success, the company decided to up the ante with a new-and-improved model, GPT-5. But the rollout was anything but an innovative whirlwind; the launch was so bad that OpenAI was forced to restore access to GPT-4 while the problems got smoothed out.
“I think we totally screwed up some things on the rollout,” Altman admitted in August, according to The Verge. “We’ve learned a lesson about what it means to upgrade a product for hundreds of millions of people in one day.”
Some mistakes come with a hefty price. The former CEO of $190 billion fintech company Intuit, Brad Smith, once made a $40 million error because he was “convinced [he] had a winner.” He went all-in on a new e-commerce business model, convincing Intuit’s board to make two investments of $20 million to get his vision off the ground. But the eye-watering stake only led to 18 sales, averaging out at $1,500 each, surmounting to only $27,000. Smith was sure he was going to get sacked, but wound up learning a bit of wisdom he carried with him leading the business for a decade.
“My only thought was ‘I am going to be fired,’” Smith wrote forFortune in 2015. “I decided to own my mistake…As you might imagine, it was not a fun meeting. However, one director pulled me aside following the meeting and shared a piece of advice that has stayed with me ever since…He looked me in the eye and said that he ‘preferred the errors of enthusiasm to the indifference of wisdom.’”