[{"_1":2,"_3":-5,"_4":-5},"loaderData",{"_5":6,"_7":8},"actionData","errors","root",{"_137":-5,"_138":-5,"_139":140,"_141":142,"_143":144},"routes/clips.$id.$slug",{"_9":10,"_11":12},"clip",{"_13":14,"_15":16,"_17":-5,"_18":19,"_20":-5,"_21":22,"_23":24,"_25":26,"_27":28,"_29":30,"_31":32,"_33":34,"_35":36,"_37":38,"_39":40,"_41":-5,"_42":-5,"_43":-5,"_44":45,"_46":-5,"_47":48,"_49":50,"_51":-5},"canonicalUrl","https://howleaderslead.com/clips/2306/experience-is-an-excellent-teacher","id",2306,"title","Experience is an excellent teacher","subtitle","transcript","WEBVTT\n\n1\n00:00:00.000 --> 00:00:03.680\nOne of the great things about horse racing is,\n\n2\n00:00:03.680 --> 00:00:05.760\nand this is what drew me to it in the first instance,\n\n3\n00:00:05.760 --> 00:00:07.760\nis if you open a racing form,\n\n4\n00:00:07.760 --> 00:00:09.560\nevery page of the racing form probably has\n\n5\n00:00:09.560 --> 00:00:11.520\n50,000 bits of data.\n\n6\n00:00:11.520 --> 00:00:15.120\nAnd so you can analyze that data and make a decision.\n\n7\n00:00:15.120 --> 00:00:16.320\nAnd then once a race is run,\n\n8\n00:00:16.320 --> 00:00:18.480\nyou know if your decision was right or wrong.\n\n9\n00:00:18.480 --> 00:00:20.800\nAnd so one thing about horse racing,\n\n10\n00:00:20.800 --> 00:00:23.200\nit's very, very data-heavy.\n\n11\n00:00:23.200 --> 00:00:26.480\nAnd so like anything else, like picking a stock,\n\n12\n00:00:26.480 --> 00:00:29.760\nyou can pick a horse, you can pick who you're gonna bet on,\n\n13\n00:00:29.760 --> 00:00:31.160\nyou can pick who the trainer is,\n\n14\n00:00:31.160 --> 00:00:33.320\nyou can pick what the strategy is.\n\n15\n00:00:33.320 --> 00:00:35.480\nAnd once again, experience is a big teacher.\n\n16\n00:00:35.480 --> 00:00:37.440\nI ended up doing it for a long time,\n\n17\n00:00:37.440 --> 00:00:38.800\nstudying it for a long time,\n\n18\n00:00:38.800 --> 00:00:40.880\nreading all the books that you can read,\n\n19\n00:00:40.880 --> 00:00:45.080\nand got me to the place at which I found myself.\n","pretty_transcript","start_time",551139,"end_time",594799,"keywords","Horse racing, NYRA, experience, data, analysis, decision, learning","slug","experience-is-an-excellent-teacher","origin","cms","mux_playback_id","uEQ2yIOoPJDdd1021kQv7ft3soDUbaschySZJpoo02lY4","mux_asset_id","0002cRsMOaMg00AYlQIa6EnmipfpWKhh4OZiGukIuxCQ3c","leader_id",181,"episode_id",332,"updated_at","2025-02-26T20:11:03.000000Z","meta_title","meta_description","og_image_media_id","web_url","https://www.howleaderslead.com/clips/2306/experience-is-an-excellent-teacher","og_image_url","leader",{"_13":36,"_101":102,"_103":104,"_105":106,"_25":107,"_108":109,"_62":110,"_59":110,"_111":112,"_69":113,"_39":114,"_115":-5,"_41":-5,"_42":-5,"_43":-5,"_116":117,"_89":118,"_44":119,"_120":121,"_122":123,"_46":-5,"_124":125,"_126":127,"_93":128,"_51":-5},"episode",{"_13":38,"_15":52,"_27":53,"_17":54,"_55":56,"_18":57,"_20":58,"_59":60,"_61":-5,"_62":60,"_63":-5,"_64":65,"_66":67,"_68":-5,"_69":-5,"_70":71,"_72":73,"_74":-5,"_35":36,"_39":75,"_41":-5,"_42":-5,"_43":-5,"_76":77,"_78":79,"_80":81,"_82":83,"_84":-5,"_85":-5,"_86":87,"_88":-5,"_89":-5,"_46":-5,"_90":91,"_92":-5,"_93":-5,"_51":-5},"og_image_media","One size doesn’t fit all","one-size-doesnt-fit-all","Learn the importance of adapting your leadership style as the situations and people around you change. Discover how to embed your cultural values in everything you do. Plus, get must-hear advice for making big career decisions.","summary","

Every leader has their own style and their own way of leading.

And that’s true – but sometimes, you have to adapt that style, depending on who and where you’re leading.

If you want to learn how it’s done, listen to this episode with Steve Duncker.

He’s a former partner at Goldman Sachs and the former Chairman of the New York Racing Association, which operates the three largest thoroughbred horse racing tracks in the state of New York.

You’ll also learn:

Practical ways to drive culture at every level of your organization
What to pay attention to when you make big career decisions
Why your words matter
How he won a horse playing backgammon

","WEBVTT\n\n1\n00:00:00.000 --> 00:00:06.000\nWelcome to How leaders lead.\n\n2\n00:00:06.000 --> 00:00:09.600\nEvery week you get to listen in while I interview some of the very best leaders\n\n3\n00:00:09.600 --> 00:00:10.560\nin the world.\n\n4\n00:00:10.560 --> 00:00:13.590\nI break down the key learning so that by the end of the episode you'll have\n\n5\n00:00:13.590 --> 00:00:14.160\nsomething\n\n6\n00:00:14.160 --> 00:00:18.000\nsimple you can apply as you develop into a better leader.\n\n7\n00:00:18.000 --> 00:00:20.400\nThat's what this podcast is all about.\n\n8\n00:00:20.400 --> 00:00:22.280\nMy guest today is Steve Dunkert.\n\n9\n00:00:22.280 --> 00:00:26.960\nHe's a former partner at Goldman Sachs and the former chairman of Naira, the\n\n10\n00:00:26.960 --> 00:00:27.400\nNew York\n\n11\n00:00:27.400 --> 00:00:32.240\nRacing Association, which operates the three largest thoroughbred horse racing\n\n12\n00:00:32.240 --> 00:00:32.880\ntracks in\n\n13\n00:00:32.880 --> 00:00:34.840\nthe state of New York.\n\n14\n00:00:34.840 --> 00:00:39.020\nAnd that includes Saratoga, where they'll be running the prestigious Belmont St\n\n15\n00:00:39.020 --> 00:00:39.680\nakes this\n\n16\n00:00:39.680 --> 00:00:40.840\nSaturday.\n\n17\n00:00:40.840 --> 00:00:45.080\nNow let me tell you, Steve's had quite the varied and successful career, in\n\n18\n00:00:45.080 --> 00:00:45.760\nlarge part\n\n19\n00:00:45.760 --> 00:00:50.000\nbecause he's got this uncanny ability to learn quickly and make smart\n\n20\n00:00:50.000 --> 00:00:51.080\ninvestments and\n\n21\n00:00:51.080 --> 00:00:53.000\nsmart decisions.\n\n22\n00:00:53.000 --> 00:00:57.620\nBut in all those various situations, he's learned that you can't rely on just\n\n23\n00:00:57.620 --> 00:00:58.480\none leadership\n\n24\n00:00:58.480 --> 00:00:59.480\nplaybook.\n\n25\n00:00:59.480 --> 00:01:03.530\nYou've got to be able to adapt your style to suit the situation and the people\n\n26\n00:01:03.530 --> 00:01:04.000\nyou're\n\n27\n00:01:04.000 --> 00:01:05.000\nleading.\n\n28\n00:01:05.000 --> 00:01:09.320\nAnd Steve's got a lot of great insights into how you can do just that.\n\n29\n00:01:09.320 --> 00:01:13.200\nHe's also got some amazing stories you have to hear to believe.\n\n30\n00:01:13.200 --> 00:01:17.580\nSo here's my conversation with my good friend and soon to be yours, Steve Dunk\n\n31\n00:01:17.580 --> 00:01:18.120\nert.\n\n32\n00:01:18.120 --> 00:01:29.480\nYou know, I can't wait to talk about your career at Goldman Sachs and Naira.\n\n33\n00:01:29.480 --> 00:01:33.560\nBut first, I want to take you back to the beginning.\n\n34\n00:01:33.560 --> 00:01:38.490\nWhat's a story from your childhood that shaped the kind of leader that you are\n\n35\n00:01:38.490 --> 00:01:39.160\ntoday?\n\n36\n00:01:39.160 --> 00:01:40.160\nThat's a good question.\n\n37\n00:01:40.160 --> 00:01:45.120\nI think to some extent it was the first business that I was involved in.\n\n38\n00:01:45.120 --> 00:01:47.720\nAnd it happened with my lifelong friend Ted Levison.\n\n39\n00:01:47.720 --> 00:01:53.120\nI started a business resurfacing driveways, Taring Driveways in St. Louis.\n\n40\n00:01:53.120 --> 00:01:56.950\nAnd one of the things that happened is when we decided to go into that business\n\n41\n00:01:56.950 --> 00:01:57.400\nthat we\n\n42\n00:01:57.400 --> 00:02:00.240\nhad to do a lot of things that took capital.\n\n43\n00:02:00.240 --> 00:02:06.200\nWe had to be able to go buy a truck that would carry 55 gallon drums of tar.\n\n44\n00:02:06.200 --> 00:02:10.960\nAnd what I did realize early on is that nobody's going to do that for you.\n\n45\n00:02:10.960 --> 00:02:14.760\nYou're going to have to go find the truck, find the money for the truck, find\n\n46\n00:02:14.760 --> 00:02:15.080\nthe company\n\n47\n00:02:15.080 --> 00:02:17.400\nthat will sell you the tar.\n\n48\n00:02:17.400 --> 00:02:20.280\nAnd that now is a good time to do it, not tomorrow.\n\n49\n00:02:20.280 --> 00:02:22.440\nI think that would be an early life lesson.\n\n50\n00:02:22.440 --> 00:02:23.440\nYou're quite an entrepreneur.\n\n51\n00:02:23.440 --> 00:02:25.640\nI mean, you did that at 17 years old.\n\n52\n00:02:25.640 --> 00:02:27.280\nNot many people do that.\n\n53\n00:02:27.280 --> 00:02:29.240\nBut then I understand no pun intended.\n\n54\n00:02:29.240 --> 00:02:34.120\nThis really paved the way to you getting a start in horse racing.\n\n55\n00:02:34.120 --> 00:02:35.600\nTell us about that.\n\n56\n00:02:35.600 --> 00:02:39.620\nThe summer before we set up our company, I was making a dollar, 50 an hour of\n\n57\n00:02:39.620 --> 00:02:40.120\nmanaging\n\n58\n00:02:40.120 --> 00:02:41.520\na miniature golf course.\n\n59\n00:02:41.520 --> 00:02:46.020\nAnd Ted was a bus boy at a local restaurant and you're not going to buy horses\n\n60\n00:02:46.020 --> 00:02:46.560\nwith that\n\n61\n00:02:46.560 --> 00:02:47.560\nkind of wages.\n\n62\n00:02:47.560 --> 00:02:51.280\nSo when we did start our company, we found that it was lucrative.\n\n63\n00:02:51.280 --> 00:02:54.200\nWe probably made 20 or $25 an hour.\n\n64\n00:02:54.200 --> 00:02:56.990\nAnd at the end of the summer, we had a couple thousand dollars each and we\n\n65\n00:02:56.990 --> 00:02:57.880\ntalked some older\n\n66\n00:02:57.880 --> 00:03:00.840\nfriends in to buying a racehorse.\n\n67\n00:03:00.840 --> 00:03:05.220\nAnd we had a whole theory behind this, which was that horses from Kentucky\n\n68\n00:03:05.220 --> 00:03:06.240\nwould dominate\n\n69\n00:03:06.240 --> 00:03:11.510\non the Eastern Southern Illinois circuit and that it cost less than half to\n\n70\n00:03:11.510 --> 00:03:12.400\nkeep them.\n\n71\n00:03:12.400 --> 00:03:16.630\nAnd so we did it and brought the horse up and it was probably the most\n\n72\n00:03:16.630 --> 00:03:17.840\nexpensive horse\n\n73\n00:03:17.840 --> 00:03:21.620\nrace I ever had because we had probably half the high school there and the\n\n74\n00:03:21.620 --> 00:03:22.280\nhorse won by\n\n75\n00:03:22.280 --> 00:03:23.280\nfive lengths.\n\n76\n00:03:23.280 --> 00:03:24.720\nAnd I thought, Oh my God, this is easy.\n\n77\n00:03:24.720 --> 00:03:26.080\nLook at how much fun this is.\n\n78\n00:03:26.080 --> 00:03:28.560\nAnd that's cost me a lot of money over the years.\n\n79\n00:03:28.560 --> 00:03:30.240\nBut it certainly was a lot of fun, David.\n\n80\n00:03:30.240 --> 00:03:33.200\nSo you get this horse and he wins his first race.\n\n81\n00:03:33.200 --> 00:03:34.920\nYou know, who was your horse trainer?\n\n82\n00:03:34.920 --> 00:03:35.920\nHow'd you do that?\n\n83\n00:03:35.920 --> 00:03:38.840\nYou didn't have a clue about how to do it, did you?\n\n84\n00:03:38.840 --> 00:03:40.040\nSo we didn't.\n\n85\n00:03:40.040 --> 00:03:43.280\nWe didn't have a clue how to do it and we didn't have a trainer.\n\n86\n00:03:43.280 --> 00:03:46.570\nSo we used to go to that track all the time and in the program, they'd list the\n\n87\n00:03:46.570 --> 00:03:47.080\nleading\n\n88\n00:03:47.080 --> 00:03:51.380\ntrainers and we decided that we wanted a good trainer, but we didn't want the\n\n89\n00:03:51.380 --> 00:03:52.520\ntop three\n\n90\n00:03:52.520 --> 00:03:55.680\nbecause we didn't think they'd pay attention to two 17 year old kids.\n\n91\n00:03:55.680 --> 00:03:57.080\nSo we run our finger down our list.\n\n92\n00:03:57.080 --> 00:03:59.880\nWe get to the fourth trainer, got a mic finger hut.\n\n93\n00:03:59.880 --> 00:04:04.080\nWe go to the racing secretary office and say, could you page Mike finger hut?\n\n94\n00:04:04.080 --> 00:04:05.680\nThey look at us like, what do you mean?\n\n95\n00:04:05.680 --> 00:04:07.600\nOkay, we'll page Mike finger hut.\n\n96\n00:04:07.600 --> 00:04:11.800\nMike finger hut walks in and we say, we'd love you to train a horse for us.\n\n97\n00:04:11.800 --> 00:04:13.440\nSkeptical is not the word.\n\n98\n00:04:13.440 --> 00:04:16.200\nHe looked at us, but the horse showed up and he trained him.\n\n99\n00:04:16.200 --> 00:04:17.720\nSo, so there you go.\n\n100\n00:04:17.720 --> 00:04:18.720\nI love it.\n\n101\n00:04:18.720 --> 00:04:24.640\nYou know, in your story, it's almost unfathomable, but it even gets better.\n\n102\n00:04:24.640 --> 00:04:29.010\nI understand that while you were at Duke, one of the finest schools in the\n\n103\n00:04:29.010 --> 00:04:29.760\ncountry, you\n\n104\n00:04:29.760 --> 00:04:33.120\ntaught a course on horse race handicapping.\n\n105\n00:04:33.120 --> 00:04:34.880\nNow you got to be kidding me.\n\n106\n00:04:34.880 --> 00:04:36.400\nHow'd that happen?\n\n107\n00:04:36.400 --> 00:04:40.980\nThat came about because I played JV basketball at Duke and in the tryouts, I\n\n108\n00:04:40.980 --> 00:04:41.640\nwore a shirt\n\n109\n00:04:41.640 --> 00:04:46.010\nthat said Saratoga race course and another student that was trying out saw that\n\n110\n00:04:46.010 --> 00:04:46.440\nand said,\n\n111\n00:04:46.440 --> 00:04:47.440\noh, you like the horses.\n\n112\n00:04:47.440 --> 00:04:49.120\nI said, yeah, like the horses.\n\n113\n00:04:49.120 --> 00:04:54.920\nDo you like so anyway, after a few minutes of conversation, I found a kindred\n\n114\n00:04:54.920 --> 00:04:55.120\nspirit and\n\n115\n00:04:55.120 --> 00:04:59.830\nwe had found that if you've taught a course at Duke in what they call free\n\n116\n00:04:59.830 --> 00:05:00.880\nuniversity,\n\n117\n00:05:00.880 --> 00:05:02.440\nyou got half a credit.\n\n118\n00:05:02.440 --> 00:05:04.840\nSo we said, oh my goodness, we're going to get half a credit.\n\n119\n00:05:04.840 --> 00:05:06.800\nFor talking about horse racing.\n\n120\n00:05:06.800 --> 00:05:09.040\nSo we did it and it was a lot of fun.\n\n121\n00:05:09.040 --> 00:05:13.240\nI got to ask you, how hard was it to get a A in that course?\n\n122\n00:05:13.240 --> 00:05:16.240\nThe good thing about free university courses is they weren't graded.\n\n123\n00:05:16.240 --> 00:05:18.840\nSo, but we did a lot of work to put it together.\n\n124\n00:05:18.840 --> 00:05:21.560\nI'm proud of the job we did in teaching that course.\n\n125\n00:05:21.560 --> 00:05:25.920\nYou know, what's something you learned, Steve, about leadership from teaching\n\n126\n00:05:25.920 --> 00:05:26.600\nothers?\n\n127\n00:05:26.600 --> 00:05:30.890\nOne thing is that you can't assume they have any knowledge base that you have,\n\n128\n00:05:30.890 --> 00:05:31.160\nthat you\n\n129\n00:05:31.160 --> 00:05:35.700\nhave to not to talk down to them, but not to talk over them and that you need\n\n130\n00:05:35.700 --> 00:05:36.320\nto probe\n\n131\n00:05:36.320 --> 00:05:40.080\nin the first instance to find where that happy medium is.\n\n132\n00:05:40.080 --> 00:05:42.520\nAnd then you can go forward to teach.\n\n133\n00:05:42.520 --> 00:05:46.550\nYou know, skipping ahead for just a second, when you were a Goldman, did you\n\n134\n00:05:46.550 --> 00:05:47.000\ncarry that\n\n135\n00:05:47.000 --> 00:05:49.200\nteaching piece with you?\n\n136\n00:05:49.200 --> 00:05:53.600\nEventually, when you first start at a firm like that, you're the person\n\n137\n00:05:53.600 --> 00:05:54.480\nlearning.\n\n138\n00:05:54.480 --> 00:05:57.390\nAnd then as you get older and more senior and you've seen things, you\n\n139\n00:05:57.390 --> 00:05:58.240\ndefinitely have\n\n140\n00:05:58.240 --> 00:06:02.780\nto teach and experience, especially when you're dealing with the markets is the\n\n141\n00:06:02.780 --> 00:06:04.080\nbest teacher.\n\n142\n00:06:04.080 --> 00:06:07.240\nSo the more you experience, the more you can hand down.\n\n143\n00:06:07.240 --> 00:06:10.690\nAnd I think that you had to experience a lot of it before you could be good at\n\n144\n00:06:10.690 --> 00:06:11.160\nteaching\n\n145\n00:06:11.160 --> 00:06:12.160\nit.\n\n146\n00:06:12.160 --> 00:06:16.240\nHow did you decide who you really wanted to take an interest in and mentor?\n\n147\n00:06:16.240 --> 00:06:25.800\nReally, it was who showed the most people skills combined with enthusiasm.\n\n148\n00:06:25.800 --> 00:06:29.760\nSo you didn't have many of these, but you could tell people that were looking\n\n149\n00:06:29.760 --> 00:06:29.800\nfor a\n\n150\n00:06:29.800 --> 00:06:35.020\nreason to go home and you could tell people that really wanted to stay and keep\n\n151\n00:06:35.020 --> 00:06:35.920\ngrinding.\n\n152\n00:06:35.920 --> 00:06:39.690\nAnd then if you found someone like that and they had great people skills, that\n\n153\n00:06:39.690 --> 00:06:40.320\n's the person\n\n154\n00:06:40.320 --> 00:06:42.200\nyou wanted to mentor.\n\n155\n00:06:42.200 --> 00:06:46.670\nYou know, I want to take you back now back to college and you own one racehorse\n\n156\n00:06:46.670 --> 00:06:47.120\n, you\n\n157\n00:06:47.120 --> 00:06:49.680\nknow, you win right out of the box.\n\n158\n00:06:49.680 --> 00:06:55.040\nBut I understand you have this incredible backgammon prowess, which led to you\n\n159\n00:06:55.040 --> 00:06:56.240\nowning your second\n\n160\n00:06:56.240 --> 00:06:57.240\nhorse.\n\n161\n00:06:57.240 --> 00:06:58.240\nTell us that story.\n\n162\n00:06:58.240 --> 00:07:00.560\nI'm not sure if I had backgammon prowess.\n\n163\n00:07:00.560 --> 00:07:03.200\nI had more prowess than the person I was playing against.\n\n164\n00:07:03.200 --> 00:07:05.440\nSo that would be the bar that was set.\n\n165\n00:07:05.440 --> 00:07:08.490\nBut one of my fraternity brothers and I, he liked to play backgammon for money\n\n166\n00:07:08.490 --> 00:07:08.920\nand so\n\n167\n00:07:08.920 --> 00:07:10.160\ndid I.\n\n168\n00:07:10.160 --> 00:07:15.280\nAnd at the end of the semester, he owed me $2,000 and he couldn't pay.\n\n169\n00:07:15.280 --> 00:07:19.250\nAnd he went home for Christmas break and his parents were in the horse racing\n\n170\n00:07:19.250 --> 00:07:19.840\nbusiness\n\n171\n00:07:19.840 --> 00:07:26.360\nby happenstance and gave him 10% of a horse, a yearling horse for Christmas.\n\n172\n00:07:26.360 --> 00:07:30.060\nHe came back to me and he said, look, I can't pay the $2,000, but would you\n\n173\n00:07:30.060 --> 00:07:31.040\ntake the 10%\n\n174\n00:07:31.040 --> 00:07:32.040\nof the horse?\n\n175\n00:07:32.040 --> 00:07:34.920\nI said, okay, let me look at the breeding, let me see.\n\n176\n00:07:34.920 --> 00:07:37.920\nAnd I called my friend Ted that I talked about earlier and I said, Ted, if you\n\n177\n00:07:37.920 --> 00:07:38.360\n'll send\n\n178\n00:07:38.360 --> 00:07:43.420\nme a thousand, so at least I have some money, you and I'll take the 10% of the\n\n179\n00:07:43.420 --> 00:07:44.160\nhorse.\n\n180\n00:07:44.160 --> 00:07:47.060\nThe whole plan that they had was they're going to take this horse and sell it\n\n181\n00:07:47.060 --> 00:07:47.600\nin February\n\n182\n00:07:47.600 --> 00:07:50.760\nat a big sale in London called the Tattersell sale.\n\n183\n00:07:50.760 --> 00:07:53.560\nWe get to the Tattersell sale, Ted and I are looking for the result.\n\n184\n00:07:53.560 --> 00:07:55.400\nOkay, how much did we make?\n\n185\n00:07:55.400 --> 00:07:57.520\nNobody bid on the horse, nobody.\n\n186\n00:07:57.520 --> 00:08:00.840\nSo now we've got bills coming in and we can't pay them.\n\n187\n00:08:00.840 --> 00:08:04.580\nWe recut the deal, we said, okay, we'll take 5% of the terminal value of the\n\n188\n00:08:04.580 --> 00:08:05.200\nhorse and\n\n189\n00:08:05.200 --> 00:08:06.880\nyou pay all the bills.\n\n190\n00:08:06.880 --> 00:08:10.970\nAnd to make a long story a little shorter, the horse starts winning, winning,\n\n191\n00:08:10.970 --> 00:08:11.680\nwinning,\n\n192\n00:08:11.680 --> 00:08:16.240\nhe was named the top older male horse in America.\n\n193\n00:08:16.240 --> 00:08:21.120\nWe sold him to Sheik Makatouma Makatoum for $17 million.\n\n194\n00:08:21.120 --> 00:08:23.920\nYou got to love the horse racing business.\n\n195\n00:08:23.920 --> 00:08:26.720\nAt this point now you're going nuts, right?\n\n196\n00:08:26.720 --> 00:08:29.870\nSo I'm going nuts, but this is the part because I've told that story a number\n\n197\n00:08:29.870 --> 00:08:30.480\nof times where\n\n198\n00:08:30.480 --> 00:08:34.660\nI always have to say, okay, you hear about all the winners, nobody talks about\n\n199\n00:08:34.660 --> 00:08:36.120\nthe losers.\n\n200\n00:08:36.120 --> 00:08:39.080\nAnd I've had my share plus some of that.\n\n201\n00:08:39.080 --> 00:08:42.860\nAnd in general, it's like anything else, you pay for your fun and horse racing\n\n202\n00:08:42.860 --> 00:08:43.640\nis a tremendous\n\n203\n00:08:43.640 --> 00:08:47.340\namount of fun, but I can't leave it out there like, oh, look, you just,\n\n204\n00:08:47.340 --> 00:08:48.240\neverything works\n\n205\n00:08:48.240 --> 00:08:49.480\nbecause it has not worked.\n\n206\n00:08:49.480 --> 00:08:52.640\nThat's not what the case is.\n\n207\n00:08:52.640 --> 00:08:57.440\nSo Steve, you're almost miraculously thrust into these owning horses.\n\n208\n00:08:57.440 --> 00:09:00.440\nYour stories are amazing how you did it.\n\n209\n00:09:00.440 --> 00:09:01.600\nYou're a serious guy though.\n\n210\n00:09:01.600 --> 00:09:05.440\nI mean, when you get into something, you really want to understand it.\n\n211\n00:09:05.440 --> 00:09:10.930\nHow do you go about building your know-how and becoming a real expert in all\n\n212\n00:09:10.930 --> 00:09:11.320\nthis?\n\n213\n00:09:11.320 --> 00:09:14.490\nOne of the great things about horse racing is, and this is what drew me to it\n\n214\n00:09:14.490 --> 00:09:15.160\nin the first\n\n215\n00:09:15.160 --> 00:09:19.040\ninstance, is if you open a racing form, every page of the racing form probably\n\n216\n00:09:19.040 --> 00:09:20.280\nhas 50,000\n\n217\n00:09:20.280 --> 00:09:21.520\nbits of data.\n\n218\n00:09:21.520 --> 00:09:25.120\nAnd so you can analyze that data and make a decision.\n\n219\n00:09:25.120 --> 00:09:28.520\nAnd then once a race is run, you know if your decision was right or wrong.\n\n220\n00:09:28.520 --> 00:09:33.240\nAnd so one thing about horse racing, it's very, very data heavy.\n\n221\n00:09:33.240 --> 00:09:38.230\nAnd so like anything else, like picking a stock, you can pick a horse, you can\n\n222\n00:09:38.230 --> 00:09:38.960\npick who you're\n\n223\n00:09:38.960 --> 00:09:42.440\ngoing to bet on, you can pick who the trainer is, you can pick what the\n\n224\n00:09:42.440 --> 00:09:43.320\nstrategy is.\n\n225\n00:09:43.320 --> 00:09:45.320\nAnd once again, experience is a big teacher.\n\n226\n00:09:45.320 --> 00:09:48.820\nI ended up doing it for a long time, studying it for a long time, reading all\n\n227\n00:09:48.820 --> 00:09:49.560\nthe books that\n\n228\n00:09:49.560 --> 00:09:55.080\nyou can read and got me to the place at which I found myself.\n\n229\n00:09:55.080 --> 00:09:59.700\nDid you have any mentors as you were learning the industry that really you\n\n230\n00:09:59.700 --> 00:10:00.480\ncould tap into\n\n231\n00:10:00.480 --> 00:10:03.600\nfor some good coaching or was it pretty much on your own?\n\n232\n00:10:03.600 --> 00:10:08.850\nI had a great mentor named Dr. Gary Lavon, who was the preeminent vet at\n\n233\n00:10:08.850 --> 00:10:10.200\nChurchill Downs\n\n234\n00:10:10.200 --> 00:10:12.520\nfor 40 years, 50 years.\n\n235\n00:10:12.520 --> 00:10:14.920\nAnd he was a family friend.\n\n236\n00:10:14.920 --> 00:10:18.680\nAnd that was like sitting at the foot of the mountaintop when he would talk.\n\n237\n00:10:18.680 --> 00:10:22.640\nHe was just so wise, so direct.\n\n238\n00:10:22.640 --> 00:10:26.800\nHe was the first person going back to the horse story from the backgammon match\n\n239\n00:10:26.800 --> 00:10:27.200\nwas a\n\n240\n00:10:27.200 --> 00:10:28.680\nhorse named Bates Motel.\n\n241\n00:10:28.680 --> 00:10:32.920\nWell, after this all happened with Bates Motel, all we had was a piece of\n\n242\n00:10:32.920 --> 00:10:34.120\nnotebook paper from\n\n243\n00:10:34.120 --> 00:10:38.120\nDuke University with, okay, we owe this and you own this.\n\n244\n00:10:38.120 --> 00:10:39.120\nI called Dr. Lavon.\n\n245\n00:10:39.120 --> 00:10:40.120\nI called Dr. Lavon.\n\n246\n00:10:40.120 --> 00:10:41.120\nI said, what do I do?\n\n247\n00:10:41.120 --> 00:10:44.440\nHe goes, look, you better, whatever you're going to do, do it fast.\n\n248\n00:10:44.440 --> 00:10:49.550\nSo yes, Dr. Lavon and Charlie Sella, who was a great friend of my family, was\n\n249\n00:10:49.550 --> 00:10:50.240\nanother\n\n250\n00:10:50.240 --> 00:10:51.720\nmentor and my dad.\n\n251\n00:10:51.720 --> 00:10:53.680\nMy dad knew a lot about horse racing.\n\n252\n00:10:53.680 --> 00:10:55.400\nThat sounds like a trifecta to me.\n\n253\n00:10:55.400 --> 00:10:56.400\nYes, let's try.\n\n254\n00:10:56.400 --> 00:10:57.600\nThere you go.\n\n255\n00:10:57.600 --> 00:11:02.350\nYou go from Duke to Northwestern for business school and looking back, Steve,\n\n256\n00:11:02.350 --> 00:11:03.080\nyou know,\n\n257\n00:11:03.080 --> 00:11:07.740\nhow important was that move as it relates to you preparing for your future\n\n258\n00:11:07.740 --> 00:11:08.040\nroles?\n\n259\n00:11:08.040 --> 00:11:14.240\nTo be honest, I probably wasn't in a place at that point to have gotten as much\n\n260\n00:11:14.240 --> 00:11:14.720\nout of\n\n261\n00:11:14.720 --> 00:11:16.600\nthe NBA as I could have.\n\n262\n00:11:16.600 --> 00:11:18.560\nAnd I think that's why I went straight from Duke.\n\n263\n00:11:18.560 --> 00:11:20.360\nI didn't have any work experience.\n\n264\n00:11:20.360 --> 00:11:25.180\nAnd so to me, it was an extension of college and to all the people that went to\n\n265\n00:11:25.180 --> 00:11:25.760\nwork for\n\n266\n00:11:25.760 --> 00:11:29.760\ntwo or three years and then came back to business school, it was, okay, I know\n\n267\n00:11:29.760 --> 00:11:30.120\nwhat\n\n268\n00:11:30.120 --> 00:11:32.160\nI need to learn in business school.\n\n269\n00:11:32.160 --> 00:11:33.760\nLet me learn that.\n\n270\n00:11:33.760 --> 00:11:37.220\nAnd so it was great because I wouldn't have gotten a job at Goldman Sachs if I\n\n271\n00:11:37.220 --> 00:11:37.600\nhadn't\n\n272\n00:11:37.600 --> 00:11:40.360\ngone and gotten my MBA at Northwestern.\n\n273\n00:11:40.360 --> 00:11:46.680\nBut I wish I had had a few years of work experience so that I could have known\n\n274\n00:11:46.680 --> 00:11:47.040\nhow\n\n275\n00:11:47.040 --> 00:11:49.080\nto use it better.\n\n276\n00:11:49.080 --> 00:11:53.600\nYou joined Goldman Sachs, as you just mentioned, and you became a partner.\n\n277\n00:11:53.600 --> 00:11:56.840\nYou really climbed the ladder very quickly.\n\n278\n00:11:56.840 --> 00:12:01.490\nHow did you differentiate yourself in a company like Goldman that has so many\n\n279\n00:12:01.490 --> 00:12:02.440\ntalented people\n\n280\n00:12:02.440 --> 00:12:05.200\nand competitive people?\n\n281\n00:12:05.200 --> 00:12:09.470\nI think that if I had to point to one thing, it would be that early on, I took\n\n282\n00:12:09.470 --> 00:12:10.240\nan interest\n\n283\n00:12:10.240 --> 00:12:15.770\nin the younger people and that Goldman has a culture of if you are a mentor, if\n\n284\n00:12:15.770 --> 00:12:16.320\nyou do\n\n285\n00:12:16.320 --> 00:12:20.590\ntake an interest in other people, if you are what we like to call a culture\n\n286\n00:12:20.590 --> 00:12:21.280\ncarrier that\n\n287\n00:12:21.280 --> 00:12:22.600\nyou can move up.\n\n288\n00:12:22.600 --> 00:12:24.520\nAnd I think that helped me quite a bit.\n\n289\n00:12:24.520 --> 00:12:28.320\nIt was natural for me to be able to help younger people.\n\n290\n00:12:28.320 --> 00:12:31.760\nThat was something I enjoyed, not something that was a burden.\n\n291\n00:12:31.760 --> 00:12:33.200\nAnd also, I was productive.\n\n292\n00:12:33.200 --> 00:12:34.960\nYou have to produce at Goldman Sachs too.\n\n293\n00:12:34.960 --> 00:12:37.520\nSo there was that part of it also.\n\n294\n00:12:37.520 --> 00:12:40.420\nI don't know if you know this, and I think I mentioned to you once, but John\n\n295\n00:12:40.420 --> 00:12:41.120\nWeinberg,\n\n296\n00:12:41.120 --> 00:12:45.610\nSr., the head of Goldman Sachs, I think when you were there was on the Yum\n\n297\n00:12:45.610 --> 00:12:46.320\nboard.\n\n298\n00:12:46.320 --> 00:12:51.820\nAnd the one thing he told me that he was most proud of was the culture at\n\n299\n00:12:51.820 --> 00:12:52.880\nGoldman.\n\n300\n00:12:52.880 --> 00:12:55.640\nDid you see it that way yourself when you were there?\n\n301\n00:12:55.640 --> 00:12:57.000\nYes, I did.\n\n302\n00:12:57.000 --> 00:13:00.410\nAnd I will say that when you're at Goldman and you are a leader, if you're\n\n303\n00:13:00.410 --> 00:13:01.040\nrunning a\n\n304\n00:13:01.040 --> 00:13:05.920\ndivision or an area at Goldman, and there are things you have to do to lead.\n\n305\n00:13:05.920 --> 00:13:10.240\nYou have to make sure the teamwork remains accentuated.\n\n306\n00:13:10.240 --> 00:13:14.800\nYou have to definitely make sure that one of our mantras at Goldman was, \"We\n\n307\n00:13:14.800 --> 00:13:15.120\nwant to\n\n308\n00:13:15.120 --> 00:13:17.200\nbe long-term greedy.\"\n\n309\n00:13:17.200 --> 00:13:20.600\nAnd what that meant was focus on the customer.\n\n310\n00:13:20.600 --> 00:13:24.680\nAnd if you focus on the customer in the long run, you will make the most money.\n\n311\n00:13:24.680 --> 00:13:29.040\nAnd it's sometimes in investment banking, it's easy to focus on the short run.\n\n312\n00:13:29.040 --> 00:13:31.040\nSo we would work on that.\n\n313\n00:13:31.040 --> 00:13:33.800\nI think that the culture really helped with that.\n\n314\n00:13:33.800 --> 00:13:38.180\nThat if you were running a department and it was you saying that, \"Okay, that's\n\n315\n00:13:38.180 --> 00:13:38.440\none\n\n316\n00:13:38.440 --> 00:13:39.440\nthing.\"\n\n317\n00:13:39.440 --> 00:13:43.340\nBut if that's the ethos of the entire firm, it's much easier to get that across\n\n318\n00:13:43.340 --> 00:13:43.600\n.\n\n319\n00:13:43.600 --> 00:13:48.520\nNow, you were at Goldman was privately held, and then it goes public.\n\n320\n00:13:48.520 --> 00:13:54.080\nAnd a lot of the naysayers, at least internally, as I recall back in those days\n\n321\n00:13:54.080 --> 00:13:55.080\n, thought that\n\n322\n00:13:55.080 --> 00:14:00.040\nthe culture would absolutely disintegrate as the company would public.\n\n323\n00:14:00.040 --> 00:14:02.360\nHow did you look at it?\n\n324\n00:14:02.360 --> 00:14:07.080\nThe decision to go public in the end was something that it just had to happen\n\n325\n00:14:07.080 --> 00:14:07.680\nbecause\n\n326\n00:14:07.680 --> 00:14:11.130\nthe balance sheet of Goldman Sachs was just too big for it to be a partnership\n\n327\n00:14:11.130 --> 00:14:11.800\nanymore.\n\n328\n00:14:11.800 --> 00:14:15.370\nAnd so once you knew that it had to happen, then you could focus on making sure\n\n329\n00:14:15.370 --> 00:14:16.000\nthe culture\n\n330\n00:14:16.000 --> 00:14:17.360\nstayed the same.\n\n331\n00:14:17.360 --> 00:14:22.070\nAnd one important way that we did that, when we went public, every single\n\n332\n00:14:22.070 --> 00:14:22.960\nemployee got\n\n333\n00:14:22.960 --> 00:14:24.960\nstock in the company.\n\n334\n00:14:24.960 --> 00:14:28.680\nSo it wasn't as if, \"Okay, the partners are taking all the stock.\"\n\n335\n00:14:28.680 --> 00:14:29.840\nA lot of it.\n\n336\n00:14:29.840 --> 00:14:32.480\nBut everybody was rowing the same boat.\n\n337\n00:14:32.480 --> 00:14:34.920\nEverybody wanted the company to do well.\n\n338\n00:14:34.920 --> 00:14:37.730\nAnd then when you go into your review as a partner, the first thing they talk\n\n339\n00:14:37.730 --> 00:14:38.960\nabout is,\n\n340\n00:14:38.960 --> 00:14:41.080\nwhat have you done to keep the culture going?\n\n341\n00:14:41.080 --> 00:14:44.230\nNot how much money did your department make, but what did you do to keep the\n\n342\n00:14:44.230 --> 00:14:45.000\nculture going?\n\n343\n00:14:45.000 --> 00:14:50.200\nSo I think there was a strong focus on it and that really helped.\n\n344\n00:14:50.200 --> 00:14:54.360\nHey, everyone.\n\n345\n00:14:54.360 --> 00:14:55.960\nIt's Kula from Three More Questions.\n\n346\n00:14:55.960 --> 00:15:01.380\nI am so excited to announce that David's new book, How Leaders Learn is now\n\n347\n00:15:01.380 --> 00:15:02.600\navailable.\n\n348\n00:15:02.600 --> 00:15:05.970\nThe book is all about helping you master the habit of active learning, which is\n\n349\n00:15:05.970 --> 00:15:06.560\nthe number\n\n350\n00:15:06.560 --> 00:15:10.120\none skill of the world's most successful leaders.\n\n351\n00:15:10.120 --> 00:15:13.360\nHow Leaders Learn will help you become an active learner so that you too can\n\n352\n00:15:13.360 --> 00:15:14.080\nexperience the\n\n353\n00:15:14.080 --> 00:15:18.400\nsuccess you really want in your life and in your career.\n\n354\n00:15:18.400 --> 00:15:22.570\nAnd if you forward your receipt to book@howleaderslead.com, you'll get\n\n355\n00:15:22.570 --> 00:15:24.400\nimmediate access to exclusive\n\n356\n00:15:24.400 --> 00:15:25.960\nbonus content.\n\n357\n00:15:25.960 --> 00:15:28.680\nForward your receipt to book@howleaderslead.com.\n\n358\n00:15:28.680 --> 00:15:38.120\nAnd I promise you're going to love it.\n\n359\n00:15:38.120 --> 00:15:41.270\nLike you said, you were an outstanding producer and you were well known for\n\n360\n00:15:41.270 --> 00:15:42.040\nthat and you were\n\n361\n00:15:42.040 --> 00:15:47.240\nin charge of managing a risk position for derivatives as I understand it.\n\n362\n00:15:47.240 --> 00:15:51.520\nAnd you had exposure and excess of $20 billion.\n\n363\n00:15:51.520 --> 00:15:53.480\nThat's a lot of pressure.\n\n364\n00:15:53.480 --> 00:15:55.520\nHow do you handle that kind of pressure?\n\n365\n00:15:55.520 --> 00:15:56.680\nThat's daily intensity.\n\n366\n00:15:56.680 --> 00:15:59.760\nI mean, you mentioned grinding a little bit earlier.\n\n367\n00:15:59.760 --> 00:16:02.680\nYou got to be grinding a little bit when you're doing that.\n\n368\n00:16:02.680 --> 00:16:05.400\nYou're right about that, but I really enjoyed that part of it.\n\n369\n00:16:05.400 --> 00:16:07.480\nI enjoyed it when I became a risk manager.\n\n370\n00:16:07.480 --> 00:16:12.120\nThat to me was adrenaline, which is a part of stress, but more adrenaline than\n\n371\n00:16:12.120 --> 00:16:13.000\nstress.\n\n372\n00:16:13.000 --> 00:16:16.630\nAnd one of the things that also happens at Goldman is your colleagues are there\n\n373\n00:16:16.630 --> 00:16:17.480\nwith you.\n\n374\n00:16:17.480 --> 00:16:19.680\nI had a co-head of global credit derivatives.\n\n375\n00:16:19.680 --> 00:16:23.960\nSo a lot of when John Weinberg was running the firm, he had a co-head.\n\n376\n00:16:23.960 --> 00:16:25.120\nThat's a lot of what Goldman does.\n\n377\n00:16:25.120 --> 00:16:28.320\nSo the burden doesn't fall only on you.\n\n378\n00:16:28.320 --> 00:16:30.080\nIt falls on you and your colleagues.\n\n379\n00:16:30.080 --> 00:16:33.040\nAnd I really felt a lot of support because of that.\n\n380\n00:16:33.040 --> 00:16:35.800\nYou really knock it out of the park, obviously at Goldman.\n\n381\n00:16:35.800 --> 00:16:41.150\nI don't know too many people who retire from their first career at 43 years old\n\n382\n00:16:41.150 --> 00:16:41.280\n.\n\n383\n00:16:41.280 --> 00:16:42.280\nExplain.\n\n384\n00:16:42.280 --> 00:16:45.200\nWell, it was a big event when we went public.\n\n385\n00:16:45.200 --> 00:16:49.610\nAnd the other thing that happened is when you work on a trading floor, it's\n\n386\n00:16:49.610 --> 00:16:50.080\nreally a\n\n387\n00:16:50.080 --> 00:16:51.240\nyoung person's game.\n\n388\n00:16:51.240 --> 00:16:52.240\nAnd I was still young.\n\n389\n00:16:52.240 --> 00:16:55.980\nBut what happens is the higher up you go in the organization, the more you\n\n390\n00:16:55.980 --> 00:16:56.600\ntravel, the\n\n391\n00:16:56.600 --> 00:17:00.320\nmore your job becomes doing reviews of people.\n\n392\n00:17:00.320 --> 00:17:03.800\nIt's more personnel management than it is the actual trading or the actual\n\n393\n00:17:03.800 --> 00:17:04.880\nposition management\n\n394\n00:17:04.880 --> 00:17:06.800\nor client focus.\n\n395\n00:17:06.800 --> 00:17:08.280\nI just had enough.\n\n396\n00:17:08.280 --> 00:17:10.280\nSo I was on to the next challenge.\n\n397\n00:17:10.280 --> 00:17:12.560\nAnd I loved working Goldman Sachs.\n\n398\n00:17:12.560 --> 00:17:15.160\nI'm super proud that I was there.\n\n399\n00:17:15.160 --> 00:17:19.760\nAnd I look back on all of it with very fond memories.\n\n400\n00:17:19.760 --> 00:17:23.970\nSo you go from Goldman Sachs, which is one of the most venerable firms on Wall\n\n401\n00:17:23.970 --> 00:17:24.520\nStreet,\n\n402\n00:17:24.520 --> 00:17:28.770\nto a business that is an absolute mess on the verge of bankruptcy when you\n\n403\n00:17:28.770 --> 00:17:29.720\nstart working\n\n404\n00:17:29.720 --> 00:17:32.840\nwith the New York Racing Association.\n\n405\n00:17:32.840 --> 00:17:38.950\nDid your leadership style have to shift going from such a blue chip environment\n\n406\n00:17:38.950 --> 00:17:39.640\nto a crisis\n\n407\n00:17:39.640 --> 00:17:40.840\nsituation?\n\n408\n00:17:40.840 --> 00:17:45.840\nThis is the most jarring change you can imagine.\n\n409\n00:17:45.840 --> 00:17:49.560\nAnd my leadership style had to change almost instantly.\n\n410\n00:17:49.560 --> 00:17:54.060\nAnd the good news was, is some of the things I tried to do there failed so\n\n411\n00:17:54.060 --> 00:17:55.880\nmiserably that\n\n412\n00:17:55.880 --> 00:17:58.240\nI didn't have to think, oh gee, should I change?\n\n413\n00:17:58.240 --> 00:17:59.840\nNo, I had to change.\n\n414\n00:17:59.840 --> 00:18:04.040\nSo one of the things who did at Goldman is the person would have to rank the\n\n415\n00:18:04.040 --> 00:18:05.760\npeople that\n\n416\n00:18:05.760 --> 00:18:08.400\nwork for them numerically.\n\n417\n00:18:08.400 --> 00:18:13.280\nAnd almost in every instance, you had to let go the bottom 10%.\n\n418\n00:18:13.280 --> 00:18:15.520\nAnd so you had a great year.\n\n419\n00:18:15.520 --> 00:18:17.440\nYou have to let go the bottom 10%.\n\n420\n00:18:17.440 --> 00:18:18.440\nYou have a bad year.\n\n421\n00:18:18.440 --> 00:18:21.880\nYou let go the bottom 10, not rigidly, but basically.\n\n422\n00:18:21.880 --> 00:18:25.600\nSo I get to Naira and I say, okay, everybody, I'd like you to rank your people.\n\n423\n00:18:25.600 --> 00:18:28.000\nAnd I think we're going to have to let the bottom 10% go.\n\n424\n00:18:28.000 --> 00:18:29.560\nIt was a mutiny.\n\n425\n00:18:29.560 --> 00:18:33.320\nIt was just no way, no way that was going to work.\n\n426\n00:18:33.320 --> 00:18:36.720\nAnd I quickly realized just not what that organization needed.\n\n427\n00:18:36.720 --> 00:18:38.280\nI'll give you one more at Goldman.\n\n428\n00:18:38.280 --> 00:18:45.340\nWe spent so much time on personnel reviews, 360 personnel reviews, the analyst\n\n429\n00:18:45.340 --> 00:18:45.760\nreviews,\n\n430\n00:18:45.760 --> 00:18:47.240\nthe partner, all of that.\n\n431\n00:18:47.240 --> 00:18:49.000\nAnd then we have books and reams.\n\n432\n00:18:49.000 --> 00:18:53.480\nAnd so I think we need a 360 review process.\n\n433\n00:18:53.480 --> 00:18:54.480\nComplete disaster.\n\n434\n00:18:54.480 --> 00:18:56.240\nComplete disaster.\n\n435\n00:18:56.240 --> 00:18:58.920\nBut anyway, we got through it.\n\n436\n00:18:58.920 --> 00:19:03.920\nHow did you go about learning what you needed at Naira?\n\n437\n00:19:03.920 --> 00:19:08.740\nOne of the other interesting facets of Naira's leadership wasn't one size fits\n\n438\n00:19:08.740 --> 00:19:09.680\nall, meaning\n\n439\n00:19:09.680 --> 00:19:14.890\nhow I led eventually when Peter Karchus and I, when I started this, I was co-\n\n440\n00:19:14.890 --> 00:19:15.440\nCEO and then\n\n441\n00:19:15.440 --> 00:19:19.040\nco-chairman with Peter Karchus, who was a great, great friend of mine.\n\n442\n00:19:19.040 --> 00:19:21.040\nHe was the president of Morgan Stanley.\n\n443\n00:19:21.040 --> 00:19:22.800\nI learned so much from Peter.\n\n444\n00:19:22.800 --> 00:19:24.320\nI learned so much from him.\n\n445\n00:19:24.320 --> 00:19:29.990\nAnd that one size doesn't fit all, how we ran the board, which was half\n\n446\n00:19:29.990 --> 00:19:32.080\npolitical appointees,\n\n447\n00:19:32.080 --> 00:19:36.730\nhalf private members, is different than how we led the administrative staff,\n\n448\n00:19:36.730 --> 00:19:36.960\ndifferent\n\n449\n00:19:36.960 --> 00:19:39.320\nthan how we led the union staff.\n\n450\n00:19:39.320 --> 00:19:45.060\nAnd so we really had to think about what specific constituency we were dealing\n\n451\n00:19:45.060 --> 00:19:45.840\nwith in terms\n\n452\n00:19:45.840 --> 00:19:48.040\nof the style we used.\n\n453\n00:19:48.040 --> 00:19:53.790\nSo give me sort of the cliff notes version of what you really had to deal with\n\n454\n00:19:53.790 --> 00:19:54.440\nwhen you\n\n455\n00:19:54.440 --> 00:19:57.680\nwere at Naira and you were the co-CEO and co-chairman.\n\n456\n00:19:57.680 --> 00:19:59.160\nI have to go back.\n\n457\n00:19:59.160 --> 00:20:02.390\nOne step is that when Peter and I decided to take this on, we had been at a\n\n458\n00:20:02.390 --> 00:20:03.160\nboard meeting\n\n459\n00:20:03.160 --> 00:20:08.980\nwhere it was announced that Naira had been indicted for money laundering and\n\n460\n00:20:08.980 --> 00:20:09.800\nfraud.\n\n461\n00:20:09.800 --> 00:20:13.520\nAnd so we met after the meeting and we said, look, I think Naira's going to\n\n462\n00:20:13.520 --> 00:20:14.520\ncease to exist.\n\n463\n00:20:14.520 --> 00:20:16.320\nWe should try and help.\n\n464\n00:20:16.320 --> 00:20:19.200\nSo that was how we got into this.\n\n465\n00:20:19.200 --> 00:20:22.990\nAnd then the backdrop that was also going on was that Naira was given a\n\n466\n00:20:22.990 --> 00:20:23.800\nfranchise to\n\n467\n00:20:23.800 --> 00:20:25.560\nrun racing in New York.\n\n468\n00:20:25.560 --> 00:20:27.720\nThat ran out in 2008.\n\n469\n00:20:27.720 --> 00:20:31.680\nSo they could have given that franchise to someone that wasn't Naira.\n\n470\n00:20:31.680 --> 00:20:37.230\nAt the same time, they'd authorized slot machines to be brought into racetracks\n\n471\n00:20:37.230 --> 00:20:37.280\n.\n\n472\n00:20:37.280 --> 00:20:41.720\nSo the outside world saw that as a huge profit opportunity.\n\n473\n00:20:41.720 --> 00:20:44.550\nSo what we were dealing with was we were having to deal with the indictment,\n\n474\n00:20:44.550 --> 00:20:45.200\nwhich meant we\n\n475\n00:20:45.200 --> 00:20:48.440\nhad a federal monitor embedded at Naira.\n\n476\n00:20:48.440 --> 00:20:53.400\nAnd we had to think about how we were going to rehabilitate Naira such that the\n\n477\n00:20:53.400 --> 00:20:53.840\nstate would\n\n478\n00:20:53.840 --> 00:20:58.160\ngive us the franchise to run racing again when it ran out in '08.\n\n479\n00:20:58.160 --> 00:21:02.350\nAnd at the same time, we had to fend off quite a few powerful organizations\n\n480\n00:21:02.350 --> 00:21:03.240\nthat because\n\n481\n00:21:03.240 --> 00:21:06.720\nof the slot machine money wanted to come in and take over.\n\n482\n00:21:06.720 --> 00:21:09.200\nSo how did you rehabilitate Naira?\n\n483\n00:21:09.200 --> 00:21:13.620\nYou've just described a job that I'm not sure I would have wanted to jump into\n\n484\n00:21:13.620 --> 00:21:13.960\nthat\n\n485\n00:21:13.960 --> 00:21:16.560\nbriar patch.\n\n486\n00:21:16.560 --> 00:21:19.680\nWe were rehabilitated Naira one step at a time.\n\n487\n00:21:19.680 --> 00:21:24.160\nAnd a lot of that was meeting with state government.\n\n488\n00:21:24.160 --> 00:21:26.080\nWe did have a federally imposed monitor.\n\n489\n00:21:26.080 --> 00:21:27.080\nSo they were there every day.\n\n490\n00:21:27.080 --> 00:21:29.760\nThey had two or three people there every day.\n\n491\n00:21:29.760 --> 00:21:33.560\nAnd they would see the decisions you made, how you handled yourself.\n\n492\n00:21:33.560 --> 00:21:38.750\nAnd so if we weren't really walking the walk, going into these meetings and\n\n493\n00:21:38.750 --> 00:21:39.680\ntalking about\n\n494\n00:21:39.680 --> 00:21:42.440\nwhat a great job we were doing really wasn't going to make a difference.\n\n495\n00:21:42.440 --> 00:21:46.920\nSo the main way we did it was impressing the federal monitor that we really had\n\n496\n00:21:46.920 --> 00:21:47.520\nchanged\n\n497\n00:21:47.520 --> 00:21:48.520\nthe organization.\n\n498\n00:21:48.520 --> 00:21:53.750\nYou know, I understand that you had to deal with Governor Elliot Spitzer in all\n\n499\n00:21:53.750 --> 00:21:54.280\nof this\n\n500\n00:21:54.280 --> 00:21:55.320\nor a lot of it.\n\n501\n00:21:55.320 --> 00:22:00.480\nAnd as we all know, he's a very controversial character these days.\n\n502\n00:22:00.480 --> 00:22:04.400\nIs there a behind the scenes story from your dealings with him that you could\n\n503\n00:22:04.400 --> 00:22:05.080\nshare?\n\n504\n00:22:05.080 --> 00:22:07.920\nIt's interesting because we dealt, we ended up dealing with a number of\n\n505\n00:22:07.920 --> 00:22:08.600\ngovernors.\n\n506\n00:22:08.600 --> 00:22:14.360\nWe started with Governor Pataki and I dealt with Governor Spitzer tangentially\n\n507\n00:22:14.360 --> 00:22:14.880\nwhen I\n\n508\n00:22:14.880 --> 00:22:16.000\nwas on Wall Street.\n\n509\n00:22:16.000 --> 00:22:20.400\nAnd when he was made governor, I thought, Oh my goodness, now what?\n\n510\n00:22:20.400 --> 00:22:21.500\nHe's the hanging judge.\n\n511\n00:22:21.500 --> 00:22:23.120\nYou know, we've got the hanging judge now.\n\n512\n00:22:23.120 --> 00:22:28.700\nSo what I really found was that he was extremely reasonable and that when you\n\n513\n00:22:28.700 --> 00:22:30.120\nwere negotiating\n\n514\n00:22:30.120 --> 00:22:32.160\nwith him, he was a straight up guy.\n\n515\n00:22:32.160 --> 00:22:34.200\nHe was a straight up negotiator.\n\n516\n00:22:34.200 --> 00:22:38.830\nAnd it was really Elliot that we convinced in the end result to give us the\n\n517\n00:22:38.830 --> 00:22:39.640\nfranchise\n\n518\n00:22:39.640 --> 00:22:40.640\nback.\n\n519\n00:22:40.640 --> 00:22:41.640\nIt was interesting.\n\n520\n00:22:41.640 --> 00:22:44.660\nI was walking across the paddock at Saratoga actually and I got a phone call\n\n521\n00:22:44.660 --> 00:22:45.040\nand it said\n\n522\n00:22:45.040 --> 00:22:47.080\nno number, but I picked it up anyway.\n\n523\n00:22:47.080 --> 00:22:50.720\nAnd it was Governor Spitzer saying we're going to give the franchise to Naira.\n\n524\n00:22:50.720 --> 00:22:54.910\nNow, I will say that him saying that the legislature still had to approve it,\n\n525\n00:22:54.910 --> 00:22:55.440\nbut that\n\n526\n00:22:55.440 --> 00:22:58.160\nwas a monstrous step for us.\n\n527\n00:22:58.160 --> 00:23:02.810\nWhat do you think it was about you guys that really turned him around into\n\n528\n00:23:02.810 --> 00:23:03.840\nbelieving so\n\n529\n00:23:03.840 --> 00:23:06.240\nmuch that that was the right thing to do?\n\n530\n00:23:06.240 --> 00:23:07.760\nI think there was a number of things.\n\n531\n00:23:07.760 --> 00:23:11.280\nOne, we did change a lot of things within the organization.\n\n532\n00:23:11.280 --> 00:23:16.070\nBut the other very important point here that I'll try to be brief on is that\n\n533\n00:23:16.070 --> 00:23:16.360\none of the\n\n534\n00:23:16.360 --> 00:23:20.280\nstrategies that we had as we were running Naira is we did go into bankruptcy.\n\n535\n00:23:20.280 --> 00:23:24.080\nWe did declare bankruptcy and we did that as a strategy.\n\n536\n00:23:24.080 --> 00:23:29.100\nAnd we did it because there had always been a dispute over who owns the land\n\n537\n00:23:29.100 --> 00:23:30.000\nunderneath\n\n538\n00:23:30.000 --> 00:23:31.880\nthe Naira tracks.\n\n539\n00:23:31.880 --> 00:23:35.600\nSo we said we owned it, the state said they owned it, the state said over my\n\n540\n00:23:35.600 --> 00:23:36.120\ndead body\n\n541\n00:23:36.120 --> 00:23:37.920\ndoes Naira own it.\n\n542\n00:23:37.920 --> 00:23:41.760\nWe didn't want that dispute to play out in state court.\n\n543\n00:23:41.760 --> 00:23:44.200\nWe wanted it to play out in federal court.\n\n544\n00:23:44.200 --> 00:23:49.370\nSo once we got into the bankruptcy court, we actually, not to get too technical\n\n545\n00:23:49.370 --> 00:23:49.880\n, but\n\n546\n00:23:49.880 --> 00:23:54.120\nwe had the state giving Naira the debtor in possession loan.\n\n547\n00:23:54.120 --> 00:23:59.080\nSo now the state is giving us the money during which we're prosecuting our land\n\n548\n00:23:59.080 --> 00:24:00.080\nclaim against\n\n549\n00:24:00.080 --> 00:24:01.080\nthem.\n\n550\n00:24:01.080 --> 00:24:02.560\nSo I think two things happened.\n\n551\n00:24:02.560 --> 00:24:07.620\nOne, we did change the organization and two, our strategy of being in federal\n\n552\n00:24:07.620 --> 00:24:08.480\nbankruptcy\n\n553\n00:24:08.480 --> 00:24:11.680\ncourt with the land claim also helped.\n\n554\n00:24:11.680 --> 00:24:14.520\nSo Steve, I want to dive deeper into that phone call.\n\n555\n00:24:14.520 --> 00:24:16.840\nTell me about a little bit of the dynamics there.\n\n556\n00:24:16.840 --> 00:24:19.990\nIt was a little bit of an out of body experience for me when after I heard that\n\n557\n00:24:19.990 --> 00:24:20.760\nwe were getting\n\n558\n00:24:20.760 --> 00:24:24.440\nthe franchise, but Elliot then said, look, we need to have one more meeting.\n\n559\n00:24:24.440 --> 00:24:26.400\nThere's just a few things we have to wrap up.\n\n560\n00:24:26.400 --> 00:24:28.680\nSo could you come to my office on Wednesday?\n\n561\n00:24:28.680 --> 00:24:30.520\nI said, great, I'll be there.\n\n562\n00:24:30.520 --> 00:24:35.720\nI went to his office, few minor points, shook hands, the whole thing.\n\n563\n00:24:35.720 --> 00:24:40.640\nHe left and he got on a plane and went to Washington, D.C.\n\n564\n00:24:40.640 --> 00:24:45.750\nAnd two days later, he was client nine and on Monday, he wasn't governor\n\n565\n00:24:45.750 --> 00:24:46.680\nanymore.\n\n566\n00:24:46.680 --> 00:24:51.330\nSo the handshake deal that we had on a Wednesday, I had to basically redo with\n\n567\n00:24:51.330 --> 00:24:52.680\nGovernor Patterson\n\n568\n00:24:52.680 --> 00:24:54.480\nafter that.\n\n569\n00:24:54.480 --> 00:24:57.920\nDid you have a cocktail that night?\n\n570\n00:24:57.920 --> 00:24:58.920\nIt was unbelievable.\n\n571\n00:24:58.920 --> 00:25:00.360\nI mean, it's unbelievable.\n\n572\n00:25:00.360 --> 00:25:01.360\nHe's not governor anymore.\n\n573\n00:25:01.360 --> 00:25:07.760\nAnd he got tossed and it was gone and we've been working for sick for three\n\n574\n00:25:07.760 --> 00:25:08.680\nyears.\n\n575\n00:25:08.680 --> 00:25:13.390\nWhat would you say, Steve, it was the biggest leadership lesson you learned\n\n576\n00:25:13.390 --> 00:25:14.320\nfrom Naira?\n\n577\n00:25:14.320 --> 00:25:17.340\nI think it goes back to what I was talking about a little bit earlier, which is\n\n578\n00:25:17.340 --> 00:25:17.640\nthat\n\n579\n00:25:17.640 --> 00:25:20.400\nyou can't have just one playbook to be a leader.\n\n580\n00:25:20.400 --> 00:25:25.500\nYou have to be able to be adaptive to what your surroundings are and to who you\n\n581\n00:25:25.500 --> 00:25:26.880\n're leading.\n\n582\n00:25:26.880 --> 00:25:31.360\nBut what we would talk about with union employees, what we talk about with\n\n583\n00:25:31.360 --> 00:25:33.520\nadministrative staff,\n\n584\n00:25:33.520 --> 00:25:36.860\nand what we talk about with the board, they weren't diametrically opposed, but\n\n585\n00:25:36.860 --> 00:25:37.520\nthe messaging\n\n586\n00:25:37.520 --> 00:25:41.440\nand the motivation have got to be a lot different.\n\n587\n00:25:41.440 --> 00:25:45.200\nNow how would you answer that very same question about Goldman Sachs?\n\n588\n00:25:45.200 --> 00:25:49.000\nWhat was the biggest leadership lesson you learned working there?\n\n589\n00:25:49.000 --> 00:25:54.390\nThe biggest leadership lesson that I learned there was to be brutally honest\n\n590\n00:25:54.390 --> 00:25:55.400\nwith the people\n\n591\n00:25:55.400 --> 00:26:00.560\nthat work for you, because it didn't work with type A personalities.\n\n592\n00:26:00.560 --> 00:26:05.680\nIf something was going wrong to say, gee, I think you have to do this a little\n\n593\n00:26:05.680 --> 00:26:06.840\ndifferently.\n\n594\n00:26:06.840 --> 00:26:11.150\nYou'd have to say to them, this has got to change or you're going to lose your\n\n595\n00:26:11.150 --> 00:26:11.440\njob.\n\n596\n00:26:11.440 --> 00:26:13.440\nNow you couldn't do that at Naira.\n\n597\n00:26:13.440 --> 00:26:14.760\nThat would not work.\n\n598\n00:26:14.760 --> 00:26:17.760\nBut you almost had to do that at Goldman Sachs.\n\n599\n00:26:17.760 --> 00:26:19.480\nOne size does not fit all.\n\n600\n00:26:19.480 --> 00:26:21.440\nOne size does not fit all.\n\n601\n00:26:21.440 --> 00:26:24.520\nYou go to Naira, it's a complete mess.\n\n602\n00:26:24.520 --> 00:26:26.680\nIt turn it around.\n\n603\n00:26:26.680 --> 00:26:28.880\nHow do you view the state of Naira today?\n\n604\n00:26:28.880 --> 00:26:30.360\nHow do you feel about it?\n\n605\n00:26:30.360 --> 00:26:33.360\nI couldn't be more optimistic about Naira.\n\n606\n00:26:33.360 --> 00:26:37.560\nThat in the landscape of a horse racing business than in general has been\n\n607\n00:26:37.560 --> 00:26:38.560\ncontracting.\n\n608\n00:26:38.560 --> 00:26:41.950\nWhat the current management and the current board has done in Mark Holiday, our\n\n609\n00:26:41.950 --> 00:26:42.560\nchairman,\n\n610\n00:26:42.560 --> 00:26:46.740\nwas got the state of New York to give Naira a half a billion dollar loan to\n\n611\n00:26:46.740 --> 00:26:48.080\ncompletely rebuild\n\n612\n00:26:48.080 --> 00:26:53.670\nBelmont Park. Instead of 50 year old, drafty, way too big Belmont Park, in two\n\n613\n00:26:53.670 --> 00:26:53.760\nand a half\n\n614\n00:26:53.760 --> 00:26:59.640\nyears, we're going to have a brand new state of the art, modern facility.\n\n615\n00:26:59.640 --> 00:27:02.000\nPeople are going to rediscover horse racing when that happens.\n\n616\n00:27:02.000 --> 00:27:03.760\nIt's going to be fantastic.\n\n617\n00:27:03.760 --> 00:27:06.800\nWhat kind of satisfaction do you take from that?\n\n618\n00:27:06.800 --> 00:27:11.780\nI take a tremendous amount of satisfaction because the odds were against us for\n\n619\n00:27:11.780 --> 00:27:12.240\nmuch of\n\n620\n00:27:12.240 --> 00:27:13.400\nthis journey.\n\n621\n00:27:13.400 --> 00:27:19.290\nThere was one article that had Naira as a 500 to 1 underdog back in '06, '07 to\n\n622\n00:27:19.290 --> 00:27:19.720\nget the\n\n623\n00:27:19.720 --> 00:27:21.760\nfranchise in '08.\n\n624\n00:27:21.760 --> 00:27:26.620\nWe've gone as a group from being a 500 to 1 underdog to having half a billion\n\n625\n00:27:26.620 --> 00:27:27.200\ndollars\n\n626\n00:27:27.200 --> 00:27:31.680\nfor a brand new state of the art, modern Belmont Park.\n\n627\n00:27:31.680 --> 00:27:34.120\nHow can we as a group not be proud of that?\n\n628\n00:27:34.120 --> 00:27:43.160\nI think in Australia they'd be saying, \"Good on you.\"\n\n629\n00:27:43.160 --> 00:27:46.960\nWe'll be back with the rest of my conversation with Steve Dunker in just a\n\n630\n00:27:46.960 --> 00:27:47.520\nmoment.\n\n631\n00:27:47.520 --> 00:27:51.730\nAs you've heard Steve say, one of his horse racing partners is Kevin Warsh, who\n\n632\n00:27:51.730 --> 00:27:52.120\nserved\n\n633\n00:27:52.120 --> 00:27:54.480\nfor years on the Federal Reserve Board.\n\n634\n00:27:54.480 --> 00:27:59.010\nI've known Kevin for a long time and in our episode of How Leaders Lead, Kevin\n\n635\n00:27:59.010 --> 00:27:59.840\ntalks about\n\n636\n00:27:59.840 --> 00:28:03.280\nthe importance of studying the leaders around you.\n\n637\n00:28:03.280 --> 00:28:07.790\nDuring my career, there's nothing but borrowed valor from bosses that I had up\n\n638\n00:28:07.790 --> 00:28:08.400\nand down the\n\n639\n00:28:08.400 --> 00:28:12.200\nranks.\n\n640\n00:28:12.200 --> 00:28:19.600\nI've been most lucky, mostly serendipity, to be exposed to great leaders.\n\n641\n00:28:19.600 --> 00:28:24.270\nMy experience is you see leaders around you and they have qualities that are\n\n642\n00:28:24.270 --> 00:28:25.000\nqualities\n\n643\n00:28:25.000 --> 00:28:30.000\nyou admire, you steal from them, you borrow.\n\n644\n00:28:30.000 --> 00:28:33.390\nThis is all an apprenticeship business that we're leading, whether it be in\n\n645\n00:28:33.390 --> 00:28:34.120\nbanking or\n\n646\n00:28:34.120 --> 00:28:36.920\nin government or anything else.\n\n647\n00:28:36.920 --> 00:28:40.920\nWhen you see qualities, you try to imitate them, make them your own, try to\n\n648\n00:28:40.920 --> 00:28:41.600\nfollow good\n\n649\n00:28:41.600 --> 00:28:45.600\nbehaviors, and when you see qualities you don't like because they don't treat\n\n650\n00:28:45.600 --> 00:28:46.080\nyou well\n\n651\n00:28:46.080 --> 00:28:50.490\nwhen you're their associate or you see how they treat others, there might be a\n\n652\n00:28:50.490 --> 00:28:51.040\nlittle\n\n653\n00:28:51.040 --> 00:28:54.250\nbit of that in you too, where you're rushing around and not treating people\n\n654\n00:28:54.250 --> 00:28:55.520\nlike you should.\n\n655\n00:28:55.520 --> 00:28:57.560\nYou see it and you don't like it.\n\n656\n00:28:57.560 --> 00:29:03.640\nI would say from my early career in investment banking and mergers where I had\n\n657\n00:29:03.640 --> 00:29:05.080\nsome incredibly\n\n658\n00:29:05.080 --> 00:29:09.880\ntalented bosses and I had some bosses that were more difficult.\n\n659\n00:29:09.880 --> 00:29:14.010\nI started to pick up skills that I thought were successful and that I wanted to\n\n660\n00:29:14.010 --> 00:29:14.800\nincorporate\n\n661\n00:29:14.800 --> 00:29:16.720\nand reject others.\n\n662\n00:29:16.720 --> 00:29:22.360\nGo back and listen to my entire conversation with Kevin, episode 144 here on\n\n663\n00:29:22.360 --> 00:29:23.000\nHow Leaders\n\n664\n00:29:23.000 --> 00:29:26.000\nLead.\n\n665\n00:29:26.000 --> 00:29:33.560\nSo, Steve, now you're the co-owner of Jump Sucker Stable.\n\n666\n00:29:33.560 --> 00:29:36.040\nI mean, how'd you come up with that name first of all?\n\n667\n00:29:36.040 --> 00:29:38.200\nThat's our good friend George Walker.\n\n668\n00:29:38.200 --> 00:29:43.920\nHe came up with that name and it has something to do with being on a boat and\n\n669\n00:29:43.920 --> 00:29:44.600\nyou have to\n\n670\n00:29:44.600 --> 00:29:51.240\njump sucker, but that I can't claim as my handiwork.\n\n671\n00:29:51.240 --> 00:29:54.160\nI love these names in the horse business.\n\n672\n00:29:54.160 --> 00:29:59.520\nYou own a lot of horses and how does this business model work?\n\n673\n00:29:59.520 --> 00:30:05.080\nI think calling it a business model is a little bit of gilding the lily because\n\n674\n00:30:05.080 --> 00:30:05.320\nwhat you're\n\n675\n00:30:05.320 --> 00:30:10.300\ntrying to do in most instances is have the most fun you can have for the least\n\n676\n00:30:10.300 --> 00:30:11.480\nmoney.\n\n677\n00:30:11.480 --> 00:30:16.570\nWhat you have to do is decide what you get joy from in the horse business and\n\n678\n00:30:16.570 --> 00:30:17.200\ngo after\n\n679\n00:30:17.200 --> 00:30:21.120\nthat and then try and do it the most efficiently that you can.\n\n680\n00:30:21.120 --> 00:30:24.590\nIf what you really want to do is run on a lot of races, have a lot of horses\n\n681\n00:30:24.590 --> 00:30:25.080\nrunning\n\n682\n00:30:25.080 --> 00:30:29.080\nall the time, then you probably buy cheaper horses and run in cheaper races.\n\n683\n00:30:29.080 --> 00:30:33.170\nIf you're trying to win the Derby, what you got to do is you got to get hooked\n\n684\n00:30:33.170 --> 00:30:33.400\nup with\n\n685\n00:30:33.400 --> 00:30:39.800\nany Viola and let him use his magic so that you can succeed.\n\n686\n00:30:39.800 --> 00:30:43.760\nYour partner is in that business with Kevin Walsh and you just mentioned George\n\n687\n00:30:43.760 --> 00:30:45.640\nWalker.\n\n688\n00:30:45.640 --> 00:30:48.920\nWhat do you do to stay aligned as a group?\n\n689\n00:30:48.920 --> 00:30:50.840\nYou're all Titans in your own respect.\n\n690\n00:30:50.840 --> 00:30:53.000\nYou all have strong points of views.\n\n691\n00:30:53.000 --> 00:30:55.200\nHow do you get on the same page?\n\n692\n00:30:55.200 --> 00:30:59.670\nIn JumpSucker, we've usually had a yearly or maybe sometimes it's 18 months,\n\n693\n00:30:59.670 --> 00:31:00.160\nsometimes\n\n694\n00:31:00.160 --> 00:31:04.040\na year where we have a dinner and we talk about strategy and what we want to do\n\n695\n00:31:04.040 --> 00:31:04.360\n.\n\n696\n00:31:04.360 --> 00:31:09.130\nOnce the grand strategy is set, then we depend on our trainer, Christoph Klaman\n\n697\n00:31:09.130 --> 00:31:09.920\n, who's just\n\n698\n00:31:09.920 --> 00:31:15.050\nbeen fantastic for a lot of how we implement that strategy and then what the\n\n699\n00:31:15.050 --> 00:31:16.360\ntactics are\n\n700\n00:31:16.360 --> 00:31:18.240\nonce we've implemented it.\n\n701\n00:31:18.240 --> 00:31:22.760\nIf something comes up during the year where there's really a decision to make,\n\n702\n00:31:22.760 --> 00:31:22.960\nthen we\n\n703\n00:31:22.960 --> 00:31:25.200\nall get on the phone and hash it out.\n\n704\n00:31:25.200 --> 00:31:30.240\nI would say that the main strategy doesn't change every three to six months.\n\n705\n00:31:30.240 --> 00:31:32.200\nIt changes year to year.\n\n706\n00:31:32.200 --> 00:31:34.560\nWe've done a good job of staying aligned.\n\n707\n00:31:34.560 --> 00:31:38.710\nAs I understand you also now on quite a few horses in your partnership with Ken\n\n708\n00:31:38.710 --> 00:31:39.320\nLangone,\n\n709\n00:31:39.320 --> 00:31:42.040\na great friend of ours, co-founder of Home Depot.\n\n710\n00:31:42.040 --> 00:31:48.200\nThen you mentioned Beni Viola and who owns the Florida Panthers hockey team.\n\n711\n00:31:48.200 --> 00:31:52.280\nWhat have you picked up about leadership working with those two?\n\n712\n00:31:52.280 --> 00:31:55.570\nI know Ken very well, but I haven't really spent much time talking about the\n\n713\n00:31:55.570 --> 00:31:56.280\nhorse industry\n\n714\n00:31:56.280 --> 00:31:57.280\nwith him.\n\n715\n00:31:57.280 --> 00:32:01.720\nHe was up at Saratoga and we sat next to each other in boxes and talked for a\n\n716\n00:32:01.720 --> 00:32:02.360\ncouple of\n\n717\n00:32:02.360 --> 00:32:05.360\ndays, but I haven't had a real conversation with him since then.\n\n718\n00:32:05.360 --> 00:32:12.120\nWith Vinny, what I've learned is Vinny leads with just being a gentleman.\n\n719\n00:32:12.120 --> 00:32:16.530\nHe's the one that knows what we should be doing in the horse business and\n\n720\n00:32:16.530 --> 00:32:17.160\nsomehow he\n\n721\n00:32:17.160 --> 00:32:20.400\nfinds a way to make it sound like it was Kevin and my idea.\n\n722\n00:32:20.400 --> 00:32:21.400\nIt wasn't.\n\n723\n00:32:21.400 --> 00:32:23.000\nIt was Vinny's idea.\n\n724\n00:32:23.000 --> 00:32:25.160\nVinny's got the magic.\n\n725\n00:32:25.160 --> 00:32:28.640\nI've really learned that you can lead by being gracious.\n\n726\n00:32:28.640 --> 00:32:31.520\nThat's one of the great ways he's led with us.\n\n727\n00:32:31.520 --> 00:32:37.000\nYou say, and I quote, \"Horse racing is a very inefficient form of gambling.\"\n\n728\n00:32:37.000 --> 00:32:41.960\nNow, at least you're honest enough to admit it, but what keeps you in it?\n\n729\n00:32:41.960 --> 00:32:43.640\nI love the camaraderie.\n\n730\n00:32:43.640 --> 00:32:46.560\nI love the thrill of having a horse run.\n\n731\n00:32:46.560 --> 00:32:52.250\nI can tell you that the anticipation when you have a horse that's on the right\n\n732\n00:32:52.250 --> 00:32:52.800\npath,\n\n733\n00:32:52.800 --> 00:32:56.760\nthat the days and weeks leading up to the race are almost more fun than the\n\n734\n00:32:56.760 --> 00:32:57.320\nrace.\n\n735\n00:32:57.320 --> 00:32:59.520\nYou think about it, you talk about it.\n\n736\n00:32:59.520 --> 00:33:03.400\nKevin especially, Kevin and I met Kevin at Saratoga.\n\n737\n00:33:03.400 --> 00:33:07.330\nIt's just been such a great friendship, but a huge amount of the fun that I\n\n738\n00:33:07.330 --> 00:33:08.120\nhave in horse\n\n739\n00:33:08.120 --> 00:33:11.740\nracing is because I own him with Kevin or I own him with Vinny or I own him\n\n740\n00:33:11.740 --> 00:33:12.600\nwith George,\n\n741\n00:33:12.600 --> 00:33:16.400\nand we get to talk about it and obsess over it.\n\n742\n00:33:16.400 --> 00:33:21.920\nThen, you've got another business interest which I'm totally fascinated by,\n\n743\n00:33:21.920 --> 00:33:23.040\nwhich is called\n\n744\n00:33:23.040 --> 00:33:25.520\nBig League Advantage.\n\n745\n00:33:25.520 --> 00:33:29.240\nTell us about Big League Advantage and all you're doing there.\n\n746\n00:33:29.240 --> 00:33:30.480\nIt is a fascinating business.\n\n747\n00:33:30.480 --> 00:33:33.760\nIt was started by a gentleman named Michael Schwimmer.\n\n748\n00:33:33.760 --> 00:33:39.560\nMichael is a genius and he was a major league baseball player and he tore his\n\n749\n00:33:39.560 --> 00:33:40.440\nlabrum, and\n\n750\n00:33:40.440 --> 00:33:43.080\nwhen he tore his labrum, he started coding.\n\n751\n00:33:43.080 --> 00:33:48.750\nHis goal was to figure out predictive algorithms to pick which baseball players\n\n752\n00:33:48.750 --> 00:33:49.720\nwill succeed\n\n753\n00:33:49.720 --> 00:33:52.440\nin the major leagues.\n\n754\n00:33:52.440 --> 00:33:55.720\nHe coded and coded and back tested and everything.\n\n755\n00:33:55.720 --> 00:34:01.750\nHe came up with the idea that you could buy equity income shares, pieces of the\n\n756\n00:34:01.750 --> 00:34:02.440\ncareer\n\n757\n00:34:02.440 --> 00:34:07.320\nof minor league baseball players, and basically have a win-win situation where\n\n758\n00:34:07.320 --> 00:34:08.280\nthey get money\n\n759\n00:34:08.280 --> 00:34:11.750\nwhen they're in the minors and they're broke and they can use the money to help\n\n760\n00:34:11.750 --> 00:34:13.040\ntheir career\n\n761\n00:34:13.040 --> 00:34:16.840\nand you can make money when they make it because you get 10% of their lifetime\n\n762\n00:34:16.840 --> 00:34:18.480\nearnings.\n\n763\n00:34:18.480 --> 00:34:21.680\nWhen he was raising a second fund, one of my bosses at Golden Gary's Whirling\n\n764\n00:34:21.680 --> 00:34:22.000\ncalled\n\n765\n00:34:22.000 --> 00:34:24.720\nup and said, \"You've got to talk to this guy Schwimmer.\"\n\n766\n00:34:24.720 --> 00:34:28.200\nI said, \"This is the dumbest idea I've ever heard, but I love Gary.\n\n767\n00:34:28.200 --> 00:34:29.200\nHe's a smart guy.\n\n768\n00:34:29.200 --> 00:34:30.760\nI call Schwimmer.\"\n\n769\n00:34:30.760 --> 00:34:34.220\nEvery 30 seconds he's talking, the amount that I'm going to invest with him\n\n770\n00:34:34.220 --> 00:34:34.880\ngoes up because\n\n771\n00:34:34.880 --> 00:34:38.840\nhe's so good at explaining this business model.\n\n772\n00:34:38.840 --> 00:34:40.440\nThat was the beginning of that business.\n\n773\n00:34:40.440 --> 00:34:41.440\nIt's branched out.\n\n774\n00:34:41.440 --> 00:34:46.880\nWe have over 550 baseball players that we have a piece of their career going\n\n775\n00:34:46.880 --> 00:34:47.720\nforward.\n\n776\n00:34:47.720 --> 00:34:52.190\nIt's turned out that the algorithms, we now have 35 PhD level data scientists\n\n777\n00:34:52.190 --> 00:34:53.000\nand computer\n\n778\n00:34:53.000 --> 00:34:58.760\nscientists, but the algorithms that Michael started are incredibly predictive.\n\n779\n00:34:58.760 --> 00:34:59.840\nIt's been a great business.\n\n780\n00:34:59.840 --> 00:35:00.840\nWe've expanded it.\n\n781\n00:35:00.840 --> 00:35:04.600\nWe do deep analytics now for some sports teams.\n\n782\n00:35:04.600 --> 00:35:09.170\nWe do Duke Basketball, Alabama Basketball, Leeds United pays us to be their\n\n783\n00:35:09.170 --> 00:35:10.160\ngeneral manager\n\n784\n00:35:10.160 --> 00:35:13.600\nover in European soccer.\n\n785\n00:35:13.600 --> 00:35:14.800\nThe business has branched out.\n\n786\n00:35:14.800 --> 00:35:16.040\nIt's been a lot of fun.\n\n787\n00:35:16.040 --> 00:35:21.000\nDo you have a major league baseball player that's your biggest success story?\n\n788\n00:35:21.000 --> 00:35:22.640\nWe have several of those.\n\n789\n00:35:22.640 --> 00:35:26.020\nI guess the one that's gotten the most publicity, it's been in the Wall Street\n\n790\n00:35:26.020 --> 00:35:26.760\nJournal and it's\n\n791\n00:35:26.760 --> 00:35:31.310\nbeen publicized is that we bought a piece of Fernando Tatiz when he was in the\n\n792\n00:35:31.310 --> 00:35:31.840\nsingle\n\n793\n00:35:31.840 --> 00:35:32.840\nA baseball.\n\n794\n00:35:32.840 --> 00:35:35.800\nBefore he was, \"Oh my God, this guy's going to be a huge star.\"\n\n795\n00:35:35.800 --> 00:35:41.350\nWe bought a piece early and he signed a contract for $340 million with the San\n\n796\n00:35:41.350 --> 00:35:43.080\nDiego Padres.\n\n797\n00:35:43.080 --> 00:35:46.660\nThe entire fund that he was in fund one, Michael, I wasn't involved then,\n\n798\n00:35:46.660 --> 00:35:48.040\nMichael raised $26\n\n799\n00:35:48.040 --> 00:35:51.960\nmillion and just that one player will pay back the whole fund plus.\n\n800\n00:35:51.960 --> 00:35:53.600\nThere you go.\n\n801\n00:35:53.600 --> 00:35:54.600\nNot bad.\n\n802\n00:35:54.600 --> 00:35:55.600\nPretty smart guy.\n\n803\n00:35:55.600 --> 00:35:59.080\nI could see why you got a drink.\n\n804\n00:35:59.080 --> 00:36:04.780\nI read a New York Times article about you saying that you're addicted to action\n\n805\n00:36:04.780 --> 00:36:04.920\n.\n\n806\n00:36:04.920 --> 00:36:07.000\nIs there a real truth to that?\n\n807\n00:36:07.000 --> 00:36:10.520\nAt the time that that article was written, I would say that was accurate.\n\n808\n00:36:10.520 --> 00:36:11.520\nYes.\n\n809\n00:36:11.520 --> 00:36:14.720\nNow that article was probably written 20 years ago.\n\n810\n00:36:14.720 --> 00:36:19.410\nI would say that that addiction has faded, but at that time, I think that was\n\n811\n00:36:19.410 --> 00:36:19.720\nfair.\n\n812\n00:36:19.720 --> 00:36:22.480\nWhy do you think it's faded?\n\n813\n00:36:22.480 --> 00:36:23.520\nMaybe I just hope it's faded.\n\n814\n00:36:23.520 --> 00:36:25.480\nI'm not sure.\n\n815\n00:36:25.480 --> 00:36:29.740\nI think that one thing that changed quite a bit is I didn't get married to late\n\n816\n00:36:29.740 --> 00:36:30.240\nin life\n\n817\n00:36:30.240 --> 00:36:32.880\nand I wasn't a father then.\n\n818\n00:36:32.880 --> 00:36:39.270\nOnce you have kids chasing the next poker tournament or the next horse race\n\n819\n00:36:39.270 --> 00:36:40.160\ntakes a back seat\n\n820\n00:36:40.160 --> 00:36:41.960\nto being a dad.\n\n821\n00:36:41.960 --> 00:36:43.160\nThat's great.\n\n822\n00:36:43.160 --> 00:36:48.580\nWhat would you say has been the motivation for you pursuing all the things that\n\n823\n00:36:48.580 --> 00:36:49.080\nyou have\n\n824\n00:36:49.080 --> 00:36:50.080\ndone in your career?\n\n825\n00:36:50.080 --> 00:36:52.600\nI mean, we really think about it.\n\n826\n00:36:52.600 --> 00:36:57.720\nWhat is it that really motivates you to make a decision?\n\n827\n00:36:57.720 --> 00:37:02.360\nIn terms of what I do with my personal time, what motivates me to make a\n\n828\n00:37:02.360 --> 00:37:03.680\ndecision, is it\n\n829\n00:37:03.680 --> 00:37:04.880\ninteresting?\n\n830\n00:37:04.880 --> 00:37:06.400\nIs it exciting?\n\n831\n00:37:06.400 --> 00:37:11.790\nAnd then probably the third level, at least early on, was can I make a living\n\n832\n00:37:11.790 --> 00:37:12.760\ndoing it?\n\n833\n00:37:12.760 --> 00:37:13.760\nThat changed.\n\n834\n00:37:13.760 --> 00:37:16.440\nObviously, Naira was a pro bono job.\n\n835\n00:37:16.440 --> 00:37:19.560\nAnd then it was just something that I loved horse racing.\n\n836\n00:37:19.560 --> 00:37:22.570\nI won't get into this story, but at one point I had to testify in front of a\n\n837\n00:37:22.570 --> 00:37:23.240\ngrand jury as\n\n838\n00:37:23.240 --> 00:37:26.520\na prosecution witness against someone.\n\n839\n00:37:26.520 --> 00:37:28.880\nAnd somebody asked me, \"Why did you do this?\n\n840\n00:37:28.880 --> 00:37:30.920\nWhy did you do this for no money?\"\n\n841\n00:37:30.920 --> 00:37:34.880\nAnd my answer was, \"If the St. Louis Cardinals were to let me be their general\n\n842\n00:37:34.880 --> 00:37:35.440\nmanager,\n\n843\n00:37:35.440 --> 00:37:36.800\nI wouldn't have done it.\"\n\n844\n00:37:36.800 --> 00:37:37.800\nBut they didn't.\n\n845\n00:37:37.800 --> 00:37:42.430\nSo this was a passion of mine and I got to run something that was involved in a\n\n846\n00:37:42.430 --> 00:37:43.200\npassion.\n\n847\n00:37:43.200 --> 00:37:44.880\nAnd now it's the same thing.\n\n848\n00:37:44.880 --> 00:37:48.050\nWould I want to be on the board of Big League Advantage if it wasn't\n\n849\n00:37:48.050 --> 00:37:48.880\ninteresting?\n\n850\n00:37:48.880 --> 00:37:49.880\nI really wouldn't.\n\n851\n00:37:49.880 --> 00:37:51.200\nBut it's fascinating to me.\n\n852\n00:37:51.200 --> 00:37:52.920\nThat makes so much sense.\n\n853\n00:37:52.920 --> 00:37:57.490\nAnd I hope everybody really takes that in because you pursue your passions and\n\n854\n00:37:57.490 --> 00:37:58.480\neverything else\n\n855\n00:37:58.480 --> 00:38:01.920\nkind of takes care of itself if you're good at what you do.\n\n856\n00:38:01.920 --> 00:38:03.520\nThis has been so much fun, Steve.\n\n857\n00:38:03.520 --> 00:38:06.120\nAnd I want to have some more with my lightning round of questions.\n\n858\n00:38:06.120 --> 00:38:07.120\nAre you ready for this?\n\n859\n00:38:07.120 --> 00:38:08.120\nSure.\n\n860\n00:38:08.120 --> 00:38:09.120\nOkay.\n\n861\n00:38:09.120 --> 00:38:11.800\nWhat three words best describe you?\n\n862\n00:38:11.800 --> 00:38:14.640\nPassionate action loyal.\n\n863\n00:38:14.640 --> 00:38:18.120\nSee, I knew you were still chasing that action.\n\n864\n00:38:18.120 --> 00:38:21.920\nIf you could be one person for a day beside yourself, who would it be?\n\n865\n00:38:21.920 --> 00:38:23.440\nAbraham Lincoln.\n\n866\n00:38:23.440 --> 00:38:25.680\nWhat's your biggest pet peeve?\n\n867\n00:38:25.680 --> 00:38:27.400\nEntitlement.\n\n868\n00:38:27.400 --> 00:38:29.120\nWho would play you in a movie?\n\n869\n00:38:29.120 --> 00:38:33.160\nI've had people say I'd look like Kevin Bacon, so I'm going with Kevin Bacon.\n\n870\n00:38:33.160 --> 00:38:34.440\nThat's a good one.\n\n871\n00:38:34.440 --> 00:38:37.000\nWhat's your favorite name of a racehorse?\n\n872\n00:38:37.000 --> 00:38:38.000\nSecretariat.\n\n873\n00:38:38.000 --> 00:38:39.480\nThat's why I fell in love with the whole rabbit.\n\n874\n00:38:39.480 --> 00:38:41.920\nI mean, if you think about it, it's not a great name.\n\n875\n00:38:41.920 --> 00:38:45.840\nBut once you know the horse, how can it not be your favorite name?\n\n876\n00:38:45.840 --> 00:38:49.480\nWhat's a horse race that everyone needs to add to their bucket list?\n\n877\n00:38:49.480 --> 00:38:51.880\nWell, the Derby for sure.\n\n878\n00:38:51.880 --> 00:38:55.440\nAnd if that's to try to answer, I would say Royal Ascot.\n\n879\n00:38:55.440 --> 00:38:57.120\nWhat's one of your daily rituals?\n\n880\n00:38:57.120 --> 00:38:59.160\nSomething that you never miss?\n\n881\n00:38:59.160 --> 00:39:01.960\nMorning coffee and reading the paper.\n\n882\n00:39:01.960 --> 00:39:05.280\nWhat's something about you a few people would know?\n\n883\n00:39:05.280 --> 00:39:10.300\nThat I played Junior Varsity Basketball at Duke, or maybe that I played in\n\n884\n00:39:10.300 --> 00:39:11.240\nWorld Series\n\n885\n00:39:11.240 --> 00:39:13.800\nof Poker or made events several times.\n\n886\n00:39:13.800 --> 00:39:15.520\nThat's the end of the lightning round.\n\n887\n00:39:15.520 --> 00:39:17.400\nAnd you did a terrific job.\n\n888\n00:39:17.400 --> 00:39:20.760\nAnd I want to go back to that last point that you just made.\n\n889\n00:39:20.760 --> 00:39:24.080\nIt's something that I didn't know about you until recently.\n\n890\n00:39:24.080 --> 00:39:26.560\nYou have played a lot of tournament poker.\n\n891\n00:39:26.560 --> 00:39:31.420\nAnd even in the World Series of Poker, main events you've done three times,\n\n892\n00:39:31.420 --> 00:39:32.240\nwhat leadership\n\n893\n00:39:32.240 --> 00:39:36.760\ntrait is essential for any successful poker player?\n\n894\n00:39:36.760 --> 00:39:37.760\nPatience.\n\n895\n00:39:37.760 --> 00:39:38.800\nYou have got to be patient.\n\n896\n00:39:38.800 --> 00:39:43.390\nWhen you're in these poker tournaments and hand after hand after hand is unplay\n\n897\n00:39:43.390 --> 00:39:43.880\nable, you\n\n898\n00:39:43.880 --> 00:39:48.250\nhave to throw them in the muck and you cannot act until you have the right two\n\n899\n00:39:48.250 --> 00:39:48.800\ncards in\n\n900\n00:39:48.800 --> 00:39:50.040\nfront of you.\n\n901\n00:39:50.040 --> 00:39:54.190\nSo Steve, patience is a great leadership trait that you obviously had be a\n\n902\n00:39:54.190 --> 00:39:55.280\nworld class poker\n\n903\n00:39:55.280 --> 00:39:56.280\nplayer.\n\n904\n00:39:56.280 --> 00:40:00.620\nCan you give us an example where you think you did the best job of exercising\n\n905\n00:40:00.620 --> 00:40:01.160\nsimilar\n\n906\n00:40:01.160 --> 00:40:04.000\npatience in a leadership situation?\n\n907\n00:40:04.000 --> 00:40:06.120\nThat would definitely be with Naira.\n\n908\n00:40:06.120 --> 00:40:10.630\nWhen we started going to different meetings with state leaders and Peter Karch\n\n909\n00:40:10.630 --> 00:40:11.040\nus and I\n\n910\n00:40:11.040 --> 00:40:12.040\nwould go in.\n\n911\n00:40:12.040 --> 00:40:16.360\nIn our minds, we were the white knights that were taking our time to help the\n\n912\n00:40:16.360 --> 00:40:17.960\nracing industry.\n\n913\n00:40:17.960 --> 00:40:22.240\nAnd what they saw were, \"Oh, it's these guys from Naira that got indicted.\"\n\n914\n00:40:22.240 --> 00:40:27.280\nAnd so you couldn't really try to change their mind in the first instance.\n\n915\n00:40:27.280 --> 00:40:29.040\nYou had to just be consistent.\n\n916\n00:40:29.040 --> 00:40:30.400\nYou had to be patient.\n\n917\n00:40:30.400 --> 00:40:32.320\nYou had to keep walking the walk.\n\n918\n00:40:32.320 --> 00:40:34.400\nYou couldn't just say, \"Wait a second.\"\n\n919\n00:40:34.400 --> 00:40:37.200\nPeter Karchus was president Morgan Stanley.\n\n920\n00:40:37.200 --> 00:40:38.200\nWhat do you mean?\n\n921\n00:40:38.200 --> 00:40:39.480\nYou had to do it over time.\n\n922\n00:40:39.480 --> 00:40:41.920\nSo then I believe it's where patience really came in.\n\n923\n00:40:41.920 --> 00:40:43.400\nI can see that.\n\n924\n00:40:43.400 --> 00:40:46.390\nWhat happens as a leader when you get blamed for something you had nothing to\n\n925\n00:40:46.390 --> 00:40:46.920\ndo with?\n\n926\n00:40:46.920 --> 00:40:49.080\nI went, \"How do you handle that?\"\n\n927\n00:40:49.080 --> 00:40:52.400\nOne of the best parts of doing it with Peter is we'd go out of these meetings\n\n928\n00:40:52.400 --> 00:40:52.720\nand we'd\n\n929\n00:40:52.720 --> 00:40:55.400\nlook at each other and he had a great expression.\n\n930\n00:40:55.400 --> 00:40:57.320\nHe said, \"You can't make them understand.\n\n931\n00:40:57.320 --> 00:40:59.120\nYou can't make them understand.\"\n\n932\n00:40:59.120 --> 00:41:02.840\nAnd so, okay, we can't make them understand in that meeting, but we can make\n\n933\n00:41:02.840 --> 00:41:03.840\nthem understand\n\n934\n00:41:03.840 --> 00:41:04.920\nover time.\n\n935\n00:41:04.920 --> 00:41:05.920\nSo that's what we did.\n\n936\n00:41:05.920 --> 00:41:08.120\nAnd I really, that was due to Peter.\n\n937\n00:41:08.120 --> 00:41:09.720\nPeter had great insight there.\n\n938\n00:41:09.720 --> 00:41:13.410\nNow, in this air, we're going to be just a couple of days away from the Belmont\n\n939\n00:41:13.410 --> 00:41:13.880\nstakes\n\n940\n00:41:13.880 --> 00:41:15.840\nat Saratoga.\n\n941\n00:41:15.840 --> 00:41:18.990\nGive us a little something we should be paying attention to that most people\n\n942\n00:41:18.990 --> 00:41:20.280\ndon't know about.\n\n943\n00:41:20.280 --> 00:41:24.070\nWell, especially this year, for the first time in history, the Belmont stakes\n\n944\n00:41:24.070 --> 00:41:24.520\nis going\n\n945\n00:41:24.520 --> 00:41:26.200\nto be at Saratoga.\n\n946\n00:41:26.200 --> 00:41:29.440\nAnd the reason for that is we're completely redoing Belmont Park, tearing it\n\n947\n00:41:29.440 --> 00:41:29.760\ndown to\n\n948\n00:41:29.760 --> 00:41:32.280\nthe ground and building a brand new track.\n\n949\n00:41:32.280 --> 00:41:36.290\nSo what you have to think about now is that Belmont stakes has been a mile and\n\n950\n00:41:36.290 --> 00:41:36.720\na half\n\n951\n00:41:36.720 --> 00:41:38.080\nfor its whole history.\n\n952\n00:41:38.080 --> 00:41:40.410\nThis year, it's going to be a mile and a quarter because that's the only race\n\n953\n00:41:40.410 --> 00:41:41.000\nwe can run at\n\n954\n00:41:41.000 --> 00:41:42.320\nSaratoga.\n\n955\n00:41:42.320 --> 00:41:44.560\nSo don't handicap it like it's a mile and a half.\n\n956\n00:41:44.560 --> 00:41:47.440\nHandicap it like it's a mile and a quarter.\n\n957\n00:41:47.440 --> 00:41:52.160\nSteve, when you look forward and you're so excited about what you're into and\n\n958\n00:41:52.160 --> 00:41:52.640\ntaking\n\n959\n00:41:52.640 --> 00:41:57.440\njoy in all of it, what do you see as your unfinished business?\n\n960\n00:41:57.440 --> 00:42:03.960\nMy unfinished business is never stop looking for what's next.\n\n961\n00:42:03.960 --> 00:42:07.290\nAnd so I didn't know Big League Advantage would come in or some of the other\n\n962\n00:42:07.290 --> 00:42:08.040\ncompanies I'm\n\n963\n00:42:08.040 --> 00:42:09.040\ninvolved in.\n\n964\n00:42:09.040 --> 00:42:10.520\nBut you got to find them.\n\n965\n00:42:10.520 --> 00:42:11.760\nYou got to keep looking.\n\n966\n00:42:11.760 --> 00:42:15.520\nAnd so the unfinished business is finding the next one.\n\n967\n00:42:15.520 --> 00:42:17.040\nLast question.\n\n968\n00:42:17.040 --> 00:42:20.390\nWhat's one piece of advice you'd give to someone who wants to be a better\n\n969\n00:42:20.390 --> 00:42:21.040\nleader?\n\n970\n00:42:21.040 --> 00:42:27.360\nI would say that continually realize that everything you say has an effect on\n\n971\n00:42:27.360 --> 00:42:28.200\nthe person\n\n972\n00:42:28.200 --> 00:42:31.810\nyou're saying it to and that you need to think about what that effect is going\n\n973\n00:42:31.810 --> 00:42:32.520\nto be before\n\n974\n00:42:32.520 --> 00:42:34.240\nyou say it.\n\n975\n00:42:34.240 --> 00:42:39.080\nBecause the words, sometimes at least for me, the words came out too fast.\n\n976\n00:42:39.080 --> 00:42:42.060\nAnd if you take half a second and think that last step through, I think you're\n\n977\n00:42:42.060 --> 00:42:42.440\ngoing to\n\n978\n00:42:42.440 --> 00:42:43.960\nbe more effective.\n\n979\n00:42:43.960 --> 00:42:47.280\nSteve, this has been an incredible conversation.\n\n980\n00:42:47.280 --> 00:42:49.400\nI've loved every bit of it.\n\n981\n00:42:49.400 --> 00:42:50.760\nYou're an amazing guy.\n\n982\n00:42:50.760 --> 00:42:52.040\nI love your passion.\n\n983\n00:42:52.040 --> 00:42:55.240\nI love your drive and I love your pursuit of joy.\n\n984\n00:42:55.240 --> 00:42:58.360\nAnd I thank you so much for taking time to be on this podcast.\n\n985\n00:42:58.360 --> 00:43:00.200\nDavid, I can't thank you enough.\n\n986\n00:43:00.200 --> 00:43:01.800\nI listen to all your podcasts.\n\n987\n00:43:01.800 --> 00:43:03.800\nI think you're the best in the business.\n\n988\n00:43:03.800 --> 00:43:06.240\nAnd it is absolutely my honor to have done this.\n\n989\n00:43:06.240 --> 00:43:17.840\nThank you so much.\n\n990\n00:43:17.840 --> 00:43:20.880\nLet me tell you, Steve is one heck of a guy, isn't he?\n\n991\n00:43:20.880 --> 00:43:25.070\nI mean, you know, you're talking to someone really special when playing in the\n\n992\n00:43:25.070 --> 00:43:25.880\nmain event\n\n993\n00:43:25.880 --> 00:43:30.350\nof the World Series of Poker is actually one of the least interesting things\n\n994\n00:43:30.350 --> 00:43:31.760\nabout him.\n\n995\n00:43:31.760 --> 00:43:36.170\nAnd listening to Steve today is a great reminder that when it comes to leading\n\n996\n00:43:36.170 --> 00:43:36.440\nothers, one\n\n997\n00:43:36.440 --> 00:43:39.440\nsize just doesn't fit all.\n\n998\n00:43:39.440 --> 00:43:43.160\nNow, obviously, you've got to be authentic and be yourself.\n\n999\n00:43:43.160 --> 00:43:47.500\nBut as your career evolves, you've also got to understand that the leadership\n\n1000\n00:43:47.500 --> 00:43:48.040\ntactics\n\n1001\n00:43:48.040 --> 00:43:52.240\nthat work well in one place may not work somewhere else.\n\n1002\n00:43:52.240 --> 00:43:56.520\nThere's just not a one size fits all approach to leadership.\n\n1003\n00:43:56.520 --> 00:44:00.480\nYou got to constantly be listening, learning and adjusting to the people and\n\n1004\n00:44:00.480 --> 00:44:01.360\ncircumstances\n\n1005\n00:44:01.360 --> 00:44:02.480\naround you.\n\n1006\n00:44:02.480 --> 00:44:06.830\nThis week, think about an individual or group that you're just not really\n\n1007\n00:44:06.830 --> 00:44:07.920\npenetrating.\n\n1008\n00:44:07.920 --> 00:44:12.320\nYou're just not relating to them and they're not relating to you.\n\n1009\n00:44:12.320 --> 00:44:15.550\nAsk yourself, is there something about your leadership style that might be\n\n1010\n00:44:15.550 --> 00:44:16.120\nholding you\n\n1011\n00:44:16.120 --> 00:44:17.520\nback?\n\n1012\n00:44:17.520 --> 00:44:21.790\nConsider what you might need to adapt or adjust for this group and then give it\n\n1013\n00:44:21.790 --> 00:44:23.280\na try.\n\n1014\n00:44:23.280 --> 00:44:25.400\nSo do you want to know how leaders lead?\n\n1015\n00:44:25.400 --> 00:44:30.540\nWhat we learned today is the great leaders understand that one size just doesn\n\n1016\n00:44:30.540 --> 00:44:31.000\n't fit\n\n1017\n00:44:31.000 --> 00:44:32.760\nall.\n\n1018\n00:44:32.760 --> 00:44:38.010\nComing up next on How Leaders Lead is Irina Novoselski, the CEO of the social\n\n1019\n00:44:38.010 --> 00:44:38.920\nmedia management\n\n1020\n00:44:38.920 --> 00:44:43.480\nsoftware company, Lutzweet, and the former CEO of Career Builder.\n\n1021\n00:44:43.480 --> 00:44:46.200\nI'm not a big believer in no.\n\n1022\n00:44:46.200 --> 00:44:50.450\nAnd I see that with entrepreneurs and new time leaders, just it's so easy to\n\n1023\n00:44:50.450 --> 00:44:53.160\nget marred\n\n1024\n00:44:53.160 --> 00:44:54.160\nin the no.\n\n1025\n00:44:54.160 --> 00:44:57.690\nYou're either asking the wrong question or you're asking the wrong person and\n\n1026\n00:44:57.690 --> 00:44:58.040\nit's a\n\n1027\n00:44:58.040 --> 00:44:59.520\nstate of mind.\n\n1028\n00:44:59.520 --> 00:45:01.120\nAnd so, okay, there's a door.\n\n1029\n00:45:01.120 --> 00:45:02.120\nGo knock.\n\n1030\n00:45:02.120 --> 00:45:03.120\nSomeone will open something.\n\n1031\n00:45:03.120 --> 00:45:07.810\nIt'll give you some opportunity and if you do nothing, you 100% will get\n\n1032\n00:45:07.810 --> 00:45:08.080\nnothing.\n\n1033\n00:45:08.080 --> 00:45:12.760\nSo be sure to come back again next week to hear our entire conversation.\n\n1034\n00:45:12.760 --> 00:45:16.480\nThanks again for tuning in to another episode of How Leaders Lead, where every\n\n1035\n00:45:16.480 --> 00:45:17.240\nThursday you\n\n1036\n00:45:17.240 --> 00:45:21.600\nget to listen in while I interview some of the very best leaders in the world.\n\n1037\n00:45:21.600 --> 00:45:25.620\nI make it a point to give you something simple on each episode that you can\n\n1038\n00:45:25.620 --> 00:45:26.440\napply to your\n\n1039\n00:45:26.440 --> 00:45:29.960\nbusiness so that you will become the best leader you can be.\n\n1040\n00:45:29.960 --> 00:45:39.960\n[BLANK_AUDIO]\n\n1041\n00:45:39.960 --> 00:45:59.960\n[ Silence ]\n","

David Novak 0:04

Welcome to How leaders lead where every week you get to listen in while I interview some of the very best leaders in the world, I break down the key learnings so that by the end of the episode, you'll have something simple you can apply as you develop into a better leader. That's what this podcast is all about. My guest today is Steve Dunker. He's a former partner at Goldman Sachs and the former chairman of Naira, the New York Racing Association, which operates the three largest thoroughbred horse racing tracks in the state of New York. And that includes Saratoga, where they'll be running the prestigious Belmont Stakes this Saturday. Now, let me tell you, Steve's had quite a varied and successful career, in large part because he's got this uncanny ability to learn quickly and make smart investments and smart decisions. But in all those various situations, he's learned that you can't rely on just one leadership playbook. You got to be able to adapt your style to suit the situation and the people you're leading. And Steve's got a lot of great insights into how you can do just that. He's also got some amazing stories you have to hear to believe. So here's my conversation with my good friend and soon to be yours, Steve Dunker.

Steve Duncker 1:25

You know, I can't wait to talk about your career at Goldman Sachs and NY IRA. But first, I want to take you back to the beginning. What's the story from your childhood that shaped the kind of leader that you are today? That's a good question. I think to some extent, it was the first business that I was involved in. And it happened with my lifelong friend Ted Leveson. i We started a business resurfacing driveways, touring driveways in St. Louis. And one of the things that happened is when we decided to go into that business that we had to do a lot of things that took capital, we had to be able to go buy a truck that would carry 55 gallon drums of tar. And what I did realize early on is that nobody's going to do that for you. You're going to have to go find the truck, find the money for the truck, find the company that will sell you the tar. And that now is a good time to do it. Not tomorrow. I think that would be an early life lesson. You're quite an entrepreneur. I mean, you did that at 17 years old. Not many people do that. But then I understand no pun intended, this really paved the way. Do you getting a start in horse racing? Tell us about that. The summer before we set up our company, I was making $1.50 an hour of managing a miniature golf course. And Ted was a busboy at a local restaurant, and you're not going to buy horses with that kind of wages. So when we did start our company, we found that it was lucrative we probably made 20 or $25 an hour. And at the end of the summer, we had a couple $1,000 each. And we taught some older friends into buying a racehorse. And we had a whole theory behind this, which was that horses from Kentucky would dominate on the eastern Southern Illinois circuit, and that it cost less than half to keep them. And so we did it and brought the horse up. And it was probably the most expensive horse race I ever had. Because we had probably half the high school there and the horse one by five lengths. And I thought oh my god, this is easy. Look at how much fun this is. And that's cost me a lot of money over the years. But it certainly was a lot of fun, David, so you get this horse and he wins his first race. You know, who's your horse trainer? How'd you do that? I mean, you didn't you didn't have a clue about how to do a digit. So we didn't we didn't have a clue how to do it. And we didn't have a trainer. So we used to go to that track all the time. And in the program, they'd list the leading trainers. And we decided that we wanted a good trainer but we didn't want the top three, because we didn't think they pay attention to to 17 year old kids. So we run our finger donor list. We get to the fourth trainer. Got a mic Fingerhut we go into the racing Secretary office signature page Mike Fingerhut. They look at us like What do you mean? Can we Okay, well page my finger Hi, Mike Fingerhut walks in and we say we'd love you to train a horse for us. Skeptical is not the word he looked at us but the horse showed up but he trained me so so there you go. I love it. You know and your story. It's almost unfathomable but it gives gives it even gets better. I understand that while you're at Duke one of the finest schools in the country. You taught a course on horse race handicapping you got to be kidding me. I'm gonna have that happen. That came about because I played JV basketball at Duke and I'm tryouts I wore a shirt that said Saratoga Racecourse. And another student that was trying out southern said oh, you liked the horses? I said Yeah, I like the horses do you like so? Anyway, after a few minutes of conversation, I found a kindred spirit. And we had found that if you've taught a course at Duke, in what they call free universe

City, you got half a credit. So we said, oh my goodness, we're gonna get half a credit for talking about horse racing. So we did it and it was a lot of fun. I got to ask you, how hard was it to get a in that course. The good thing about free university courses is they weren't graded. So, but we did a lot of work to put it together. I'm proud of the job we did in teaching that course. You know, what's something you've learned Steve, about leadership from teaching others. One thing is that you can't assume they have any knowledge base that you have, that you have to not to talk down to them, but not to talk over them. And that you need to probe in the first instance, to find where that happy medium is. And then you can go forward to teach, you know, skipping ahead for just a second, when you were a Goldman, did you carry that teaching piece with you?

Eventually, it when you first start at a firm like that, you're the person learning. And then as you get older and more senior, and you've seen things, you definitely have to teach, and experience, especially when you're dealing with the markets is the best teacher. So the more you experience, the more you can hand down. And I think that you had to experience a lot of it before you could be good at teaching it. How do you decide who you really wanted to take an interest in and mentor? Really, it was who showed the most people skills combined with enthusiasm. So you didn't have many of these, but you could tell people that were looking for a reason to go home. And you can tell people that really wanted to stay and keep grinding. And then if you found someone like that, and they had great people skills, that's the person you wanted to mentor. You know, I want to take you back now back to college and you own one racehorse, you know, you win right out of the box. But I understand you have this incredible backgammon prowess which led to you owning your your second horse. Tell us that story. I'm not sure if I had backgammon prowess, I had more prowess than the person I was playing against. That would be the bar that was set, but one of my fraternity brothers and if you'd like to play backgammon for money, and so did I, and at the end of the semester, he owed me $2,000, and he couldn't pay. And he went home for Christmas break. And his parents were in the horse racing business by happenstance, and gave him 10% of a horse, a yearling horse for Christmas. He came back to me and he said, Look, I can't pay the $2,000. But would you take the 10% of the horse? I said, Okay, let me look at the breeding. Let me see. And I called my friend Ted that I talked about earlier. And I said, Ted, if you'll send me 1000. So at least I have some money, you and I'll take the 10% of the horse. The whole plans they had was they're going to take this horse and sell it in February at a big sale in London called the tattersalls. Sale. We get to the tattersalls sale, Ted and I are looking for the result. Okay, how much did we make? Nobody bid on the horse? Nobody. So now we've got bills coming in, and we can't pay it. We recut the deal. We said okay, we'll take 5% of the terminal value of the horse and you pay all the bills. And to make a long story a little shorter, the horse starts winning when a winning and he was named the top older male horse in America. We sold them to Sheikh maca to my maca tomb for $17 million.

You gotta love the horse racing business. You know, if this point now you're going nuts, right? So I'm going nuts. But this is the part because I've told that story a number of times, I always have to say, Okay, you hear about all the winners, nobody talks about the losers. And I've had my share plus some of that. And in general, it's like anything else you pay for your fun. And horse racing is a tremendous amount of fun, but I can't leave it out there like, oh, look, you just everything works, because it has not worked it that's not what the case is.

David Novak 8:52

So, Steve, you're you're almost miraculously thrust into these owning horses. Your stories are amazing. Now. Yeah, you did it. You're a serious guy, though. I mean, you're when you get into something, you really want to understand it. How do you go about building your know how and becoming a real expert in all this.

Steve Duncker 9:10

One of the great things about horse racing is and this is what drew me to it in the first instance is, if you open a racing form, every page of the racing form probably has 50,000 bits of data. And so you can analyze that data and make a decision. And then once the race is run, you know if your decision was right or wrong. And so one thing about horse racing gets very, very data heavy. And so like anything else, like picking a stock, you can pick a horse, you can pick who you're going to bet on, you can pick who the trainer is you can pick what the strategy is. And once again, experience is a big teacher. I ended up doing it for a long time studying it for a long time reading all the books that you can read and got me to the place at which I found myself. Did you have any mentors? As you were learning the industry that really you could

tap into for some good coaching or was it pretty much on your own? I had a great mentor named Dr. Gary Lavin, who was the preeminent vet at Churchill Downs for 40 years, 50 years and he was a family friend. And that was like sitting at the foot of the mountain top when he would talk, he was just so wise. So direct, he was the first person going back to the horse story from the backgammon matches a horseman and Bates Motel. Well, after this all happened with Bates Motel, all we had was a piece of notebook paper from Duke University with Okay, will we owe this? You own this? I called Dr. Lamb and I called doc lamina. So what do I do?

You better? Whatever you're going to do do it fast. So yes, Doctor lab, and Charlie Sela, who was a great friend of my family was another mentor. And my dad, my dad knew a lot about horse racing. That sounds like a trifecta to me. You know, try, there you go. You know, you go from Duke to Northwestern for Business School. And looking back, Steve, you know, how important was that move as it relates to you preparing for your future roles. To be honest, I probably wasn't in a place at that point to have gotten as much out of the NBA as I could have. And I think that's why I went straight from Duke, I didn't have any work experience. And so to me, it was an extension of college, and to all the people that went to work for two or three years, and then came back to business school, it was okay, I know what I need to learn in business school, let me learn that. And so it was great, because I wouldn't have gotten a job at Goldman Sachs if I hadn't gone and gotten my MBA at Northwestern. But I wish I had had a few years of work experience so that I could have known how to use it better. You joined Goldman Sachs, as you just mentioned, and you became a partner, you really, you know, climb the ladder very quickly. How would you differentiate yourself in a company like Goldman that, that has so many talented people and competitive people? I think that if I had to point to one thing, it would be that early on, I took an interest in the younger people, and that Goldman has, you know, a culture of if you are a mentor, if you do take an interest in other people, if you are what we like to call a culture carrier, that you can move up. And I think that helped me quite a bit. It was natural for me to be able to help younger people, that was something I enjoyed, not something that was a burden. And also, you know, I was productive. You have to produce it Goldman Sachs too. So there was that part of it. Also, I don't know if you know this, and I think I mentioned to you once, but John Weinberg senior, the head of Goldman Sachs, I think when you were there was on the young board. And the one thing he told me, that he was most proud of, was the culture at Goldman, did you see it that way yourself when you were there? Yes, I did. And I will say that when you're at Goldman, and you are a leader, if you're running a division or an area at Goldman, and there are things you have to do to lead, you have to make sure the teamwork remains accentuated, you have to definitely make sure that one of our mantras at Goldman was we want to be long term greedy. And what that meant was focused on the customer. And if you focus on the customer, in the long run, you will make the most money. And it's sometimes in investment banking, it's easy to focus on the short run. So we would work on that. I think that the culture really helped with that, that if you were running a department, and it was us saying that, okay, that's one thing. But if that's the ethos of the entire firm, it's much easier to get that across. Now you were at Goldman was privately held, and then it goes public. And, you know, a lot of the naysayers, at least internally, as I recall, back in those days, thought that the culture would absolutely disintegrate as the company went public. How did you look at it,

the decision to go to go public, in the end was something that it just had to happen, because the balance sheet of Goldman Sachs was just too big for it to be a partnership anymore. And so once you knew that it had to happen, then you could focus on making sure the culture stayed the same. And one important way that we did that, when we went public, every single employee got stock in the company. So it wasn't as if Okay, the partners are taking all the stock, you know, a lot of it, but everybody was rowing the same boat, everybody wanted the company to do well. And then when you go into your review as a partner, the first thing they talk about is what have you done to keep the culture going? Not how much money did you department make, but what did you do to keep the culture going? So I think there was a strong focus on it and that really helped.

Koula Callahan 14:53

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Steve Duncker 15:37

like you said, you were an outstanding producer, and you were well known for that. And you were in charge of managing a risk position for derivatives as I understand it, and you had exposure in excess of $20 billion. That's a lot of pressure. How do you handle that kind of pressure? That's daily intensity. I mean, you mentioned grinding a little bit earlier, you got to be grinding a little bit when you're doing that. You're right about that. But I really enjoyed that part of it. I enjoyed it. When I became a risk manager. That to me, was adrenaline, which is a part of stress, but more adrenaline than stress. And one of the things that also happens at Goldman is your colleagues are there with you, I had a co Head of Global credit derivatives. So a lot of when John Weinberg was running the firm, he had a co-head. That's a lot of what Goldman does. So the burden doesn't fall only on you, it follows it falls on you and your colleagues. And I really felt a lot of support because of that. You really knock it out of the park, obviously, at Goldman. And I don't know too many people who retire from their first career at 43 years old. Explain. Well, it was a big event when we went public. And the other thing that happened is when you work on a trading floor, it's really a young person's game, and I was still young. But what happens is, the higher up you go in the organization, the more you travel, the more your job becomes doing reviews of people, it's more personnel management than it is the actual trading or the actual position management or client focus. I just had had enough. So I was on to the next challenge. And I loved working at Goldman Sachs. I'm super proud that I was there. And I look back on all of it with very fond memories. So you go from Goldman Sachs, which is one of the most venerable firms on Wall Street to a business that is an absolute mess on the verge of bankruptcy, when you start working with the New York Racing Association, did your leadership style have to shift going from such a blue chip environment to a crisis situation? This is the most jarring change you can imagine. And my leadership style had to change almost instantly. And the good news was, is some of the things I tried to do there failed so miserably that I didn't have to think oh, gee, should I change? No, I had to change. So one of the things you did at Goldman is the person would have to rank the people that worked for them numerically. And almost in every instance you had to let go the bottom 10% And so you had a great year, you have to let go the bottom 10% You have a bad year, you let go the bottom, not rigidly but basically. So I get to Naira and I say okay, everybody, I'd like you to rank your people. And I think we're gonna have to let the bottom 10% though, it was a mutiny. There was just no way. No way that was gonna work. And I quickly realized that's not what that organization needed. I'll give you one more at Goldman. We spent so much time on personnel reviews, 360 personnel reviews, the the analyst, reviews, the partner, all of that. And then we have books and reams of signs that we need a 360 review process. complete disaster disaster, but anyway, we got through it.

David Novak 18:58

How did you go about learning what you needed it naira.

Steve Duncker 19:03

One of the other interesting facets of Naira is leadership wasn't one size fits all meaning how I led eventually when Peter Cardenas and I, when I started this, I was co CEO, and then co Chairman with Peter cartus, who was a great great friend of mine, he was the president of Morgan Stanley, I learned so much from Peter, I learned so much from him, and that one size doesn't fit all how we ran the board, which was half political appointees have private members is different than how we lead the administrative staff different than how we lead the union staff. And so we really had to think about what specific constituency we were dealing with in terms of the style used. So give me sort of the Cliff's Notes version of what you really had to deal with when you were at an IRA and you were the CO CEO and CO chairman. I have to go back one step is that when

Peter and I decided to take this on, we had been at a board meeting where it was announced that Nyra had been indicted for money laundering and fraud. And so we met after the meeting and we said, look, I think Naira is gonna cease to exist, we should try and help. So that was how we got into this. And then the backdrop that was also going on was that Naira was given a franchise to run racing in New York, that ran out in 2008. So they could have given that franchise to someone that wasn't naira. At the same time, they authorized slot machines to be brought into racetracks. So the outside world saw that as a huge profit opportunity. So what we were dealing with those were having to deal with the indictment, which meant we had a federal monitor embedded at naira. And we had to think about how we were going to rehabilitate Naira, such that the state would give us the franchise to run racing again, when it ran out in Oh, eight. And at the same time, we had to fend off quite a few powerful organizations that because of the slot machine money, wanted to come in and take over. So how did you rehabilitate Naira, you've just described the job, but I'm not sure I wouldn't want to jump into that Briar Patch.

We rehabilitated Naira one step at a time. And a lot of that was meeting with state government. We did have a federally imposed monitor. So they were there every day, they had two or three people there every day. And they would see the decisions you made how you handled yourself. And so if we weren't really walking the walk, going into these meetings and talking about what a great job we were doing really wasn't going to make a difference. So the main way we did it was impressing the federal monitor that we really had changed the organization. You know, I understand that you had to deal with Governor Eliot Spitzer. And all of this are a lot of it. And as we all know, he's a very controversial character these days. Is there a behind the scenes story from your dealings with him that you could share? It's interesting, because we dealt, we ended up dealing with a number of governors. We started with Governor Pataki, and I dealt with Governor Spitzer tangentially when I was on Wall Street. And when he was made governor, I thought, Oh, my goodness, now what? He's the hanging judge, you know, we've got the hanging judge now. So what I really found was that he was extremely reasonable. And that when you're negotiating with him, he was a straight up guy. He was a straight up negotiator. And it was really Elliott that we convinced him in the end result, to give us the franchise back. It was interesting. I was walking across the paddock at Saratoga, actually, and I got a phone call and it said no number, but I picked it up anyway. And it was Governor Spitzer saying we're going to give the franchise to naira. Now. I will say that him saying that the legislature still had to approve it. But that was a monstrous step for us. What do you think it was about you guys that really turned him around into believing so much that that was the right thing to do? I think there was a number of things. One, we did change a lot of things within the organization. But the other very important point here that I'll try to be brief on is that one of the strategies that we had, as we were running an IRA is we did go into bankruptcy, we did declare bankruptcy. And we did that as a strategy. And we did it because there had always been a dispute over who owns the land underneath the naira tracks. So we said we owned it, the state said they owned it, the state said over my dead body does in our own it. We didn't want that dispute to play out in state court. We want it to to play out in federal court. So once we got into the bankruptcy court, we actually not to get too technical, but we had the state giving Naira the debtor in possession loan. So now the state is giving us the money during which we're prosecuting our land claim against them. So I think two things happened. One, we did change the organization and to our strategy of being in federal bankruptcy court with the land claim also helped. So Steve, I want to dive deeper to that phone call to tell me about a little bit of the dynamics there. It was a little bit of an out of body experience for me when after I heard that we were getting the franchise but Elliott then said, Look, we need to have one more meeting. There's just a few things. We have to wrap up. So could you come to my office on Wednesday? I said, Great. I'll be there. I went to his office a few minor points, shook hands whole thing. He left and he he got on a plane and went to Washington DC. And two days later, he was client nine. And on Monday he wasn't Governor anymore. So the handshake deal that we had on a Wednesday. I had to basically redo with Governor Paterson after that.

Did you have a cocktail that night? It was unbelievable. I'm in the assembly.

Well, she's not Governor anymore. And he got tossed and it was gone. And we've been working for sick for three years.

What would you say Steve was the biggest leadership lesson you learn from naira? I think it goes back to what I was talking about a little bit earlier, which is that you can't have just one playbook to be a leader, you have to be able to be adaptive to what your surroundings are, and to who you're leading. And what we would talk about with union employees, what we talk about with administrative staff, and what we talk about with the board. They weren't diametrically opposed, but the messaging and the motivation have got to be a lot different. Now, how would you answer that very same question about Goldman Sachs, what what was the biggest leadership lesson you learned? working there? The biggest leadership lessons in there was to be brutally honest with the people that work for you. Because it didn't work with Type A personalities. If something was going wrong to say, Gee, I think you have to do this a little differently. You'd have to say to them, this has got to change or you're going to lose your job. Now, you couldn't do that in an IRA. That would not work. But you almost had to do that at Goldman Sachs. One size does not fit all one size does not fit all. You go to naira. It's a complete mess. It turn it around. How do you view the state of Naira today? How do you feel about it? I couldn't be more optimistic about naira. And that in the landscape of a horse racing business than in general has been contracting. But what the current management and the current board has done and Mark Holliday, our chairman was got the state of New York to give Naira a half a billion dollar loan to completely rebuild belmont park. So instead of 50 year old, drafty way, too big belmont park in two and a half years, we're gonna have a brand new state of the art modern facility. People are going to rediscover horse racing, when that happens, it's going to be fantastic. What kind of satisfaction do you take from that? I take a tremendous amount of satisfaction because the odds were against us for much of this journey. I mean, there was one article that that had Naira as a 500 to one underdog back in Oh 607 to get the franchise and oh eight. And so we've gone as a group from being a 500 to one underdog to having half a billion dollars for a brand new state of the art modern Belmont Park. How can we as a group not be proud of that? I think in Australia, they'd be saying Good on you.

Speaker 1 27:42

We'll be back with the rest of my conversation with Steve donker in just a moment. As you've heard Steve say one of his horse racing partners is Kevin Warsh, who served for years on the Federal Reserve Board. I've known Kevin for a long time. And in our episode of how leaders lead, Kevin talks about the importance of studying the leaders around you, you know, during my career, there's nothing but borrowed valor from bosses that I had up and down the ranks. You know, I I've been most lucky, mostly serendipity to be exposed to great leaders. And, you know, my, my experience is you see leaders around you when they have qualities that that are qualities you admire, you steal from them, you borrow, you know, this is all an apprenticeship business that that we're leading, whether it be in banking, or in government or anything else. And see, when you see qualities, you try to imitate them, make them your own, try to follow good behaviors. And when you see qualities you don't like, because they don't treat you well, when you're their associate or you see how they treat others. You know, there might be a little bit of that in YouTube where you're rushing around and not treating people like you should you see it you don't like it. So I would say from my my early career in investment banking and mergers where I had some incredibly talented bosses, and I had some bosses that were more difficult. And I started to pick up skills that I thought were successful and that I want to incorporate and reject others. Go back and listen to my entire conversation with Kevin episode 144 here on how leaders lead

Steve Duncker 29:29

So Steve, now you're the co owner of jump sucker stable, I mean, how did you come up with that name, first of all, so that's our good friend George Walker, he came up with that name and it has something to do with being on a boat and you have to jump sucker but that I can't claim as my handiwork.

David Novak 29:51

I love these names in the horse business, you know, they and you own a lot of horses and you know, how does this business model work? I think call

Steve Duncker 30:00

Don't get a business model is a little bit of gilding the lily because what you're trying to do in most instances is have the most fun you can have for the least money. And so what you have to do is decide what you get joy from in the horse business and go after that. And then try and do it the most efficiently that you can, if what you really want to do is run and a lot of races have a lot of horses running all the time, then you probably buy cheaper horses and run and cheaper races. If you're trying to win the derby. What you got to do is you got to get you gotta get hooked up with the the viola and let him use his magic so that you can succeed. So

you know, you're partners in that business with Kevin Walsh, and you just mentioned George Walker. And what do you do to stay aligned as a group? You know, you're all Titans in your own respect. You all have strong points of views. How do you get on the same page, and jump second week, we've usually had a yearly or maybe sometimes it's 18 months, sometimes a year, we have a dinner, and we talk about strategy and what we want to do. And once the grand strategy is set, then we depend on our trainer, Christophe Clemont, has just been fantastic for a lot of how we implement that strategy, and then what the tactics are, once we've implemented it, and if something comes up during the year where there's really a decision to make, then we all get on the phone and hash it out. But I would say that the main strategy doesn't change every three to six months, it changes year to year. So we've done a good job of staying aligned. As I understand it, you also now have quite a few horses in your partnership with Ken Langone a great friend of ours, co founder of Home Depot. And then you mentioned Vinnie Viola, and who owns the Florida Panthers hockey team, you know, what have you picked up about leadership, working with those who I know can very well, but I haven't really spent much time talking about the horse industry with him. He was up at Saratoga and we sat next to each other in boxes and talk for a couple of days. But I haven't had a real conversation with him since then, with Vinnie, what I've learned is that he leads with just being a gentleman, and he's the one that knows what we should be doing in the horse business. And somehow he finds a way to make it sound like it was Kevin and my idea what it really wasn't. It was his idea that he's got the magic. And so I've really learned that you can lead by being gracious. That's one of the great ways he's led with us. You say and I quote, horse racing is a very inefficient form of gambling. Now at least you're honest enough to admit it. But what keeps you in it? I love the camaraderie. I love the thrill of having a horse run. And I can tell you that the anticipation when you have a horse that's on the right path, that the days and weeks leading up to the race are almost more fun than the race. You think about it, you talk about it. You know, Kevin, especially Kevin and I, I met Kevin at Saratoga, it's just been such a great friendship. But a huge amount of the fun that I have in horse racing is because I own him with Kevin, or owner with Vinnie, or I want to with George, and we get to talk about it and obsess over

it. And then you've got another business interests, which I'm totally fascinated by which is called Big League advantage. Tell us about big league advantage. And all you're doing there. It is a fascinating business. It was started by a gentleman named Michael Schwimmer. And Michael is a genius. And he was a major league baseball player, and he tore his labrum. And when he tore his labrum, he started coding. And his goal was to figure out predictive algorithms to pick which baseball players will succeed in the major leagues. And so he coded and coded and back tested and everything. And he came up with the idea that you could buy equity income shares, pieces of the career of minor league baseball players, and basically have a win win situation where they get money when they're in the minors and they're broke, and they can use the money to help their career. And you can make money when they make it because you get 10% of their lifetime earnings. And when he was raising a second fun, one of my bosses at Goldman Karis Orlin, called up and said, You got to talk to this guy Schwimmer. I said, this is the dumbest idea I've ever heard. But I love Gary, he's a smart guy I call schwimer. Every 30 seconds he's talking the amount that I'm going to invest with him goes up because he's so good at explaining this business model. So that was the beginning of that business. It's branched out, we have over 550 baseball players that we have a piece of their career going forward. It's turned out that the algorithms we now have 35 PhD level data scientists and computer scientists, but the algorithms that that Michael started, are incredibly predictive. So it's been a great business we've it's

Standard we do deep analytics. Now for some sports teams. We do Duke basketball, Alabama basketball, VG United pays us to be their general manager over in European soccer. And so the business has branched out, it's been a lot of fun. Do you have a major league baseball player that your biggest success story? So we have several of those. And I guess the one that's gotten the most publicity, it's been in the Wall Street Journal, and it's been publicized is that we bought a piece of Fernando tees. When he was in the single a baseball before he was, Oh, my God, this guy's going to be a huge star. We bought a piece early. And he signed a contract for $340 million with the San Diego Padres. So the entire fund that was in fun one, Michael, I wasn't involved and Michael raise $26 million. And just that one player will pay back the whole fund Plus, there you go. Now fan, pretty smart guy, I can see why you got a drink. You know. Now, I read a New York Times article about you saying that you're addicted to action. Is there real truth to that, at the time that that article was written? I would say that was accurate. Yes. Now that article was probably written 20 years ago. So I would say that that addiction has faded. But at that time, I think that was fair. Why do you think it's faded?

Maybe I just hope it's faded. I'm not sure. But I think that, you know, one thing that changed quite a bit is I didn't get married till late in life, and I wasn't a father then. So once you have kids chasing the next poker tournament, or the next, you know, horse race takes a backseat to being a dad. That's great. What would you say has been the motivation for you pursuing all the things that you have done in your career? And when you really think about it? What is it that really motivates you to make a decision?

In terms of what I do with my personal time, what motivates me to make a decision is, is it interesting? Is it exciting? And then probably the third level, at least early on was, Can I make a living doing it, that changed? Obviously, naira was a pro bono job, and then it was just something that I loved horse racing, I won't get into the story. But at one point, I had to testify in front of a grand jury as a prosecution witness against someone. And somebody asked me, why did you do this? Why did you do this for no money? And my answer was, if the St. Louis Cardinals would have let me be their general manager, I wouldn't have done it. But they didn't. So this was a passion of mine. And I got to run something that was involved in a passion. And now it's the same thing would I want to be on the board of big league advantage? If it wasn't interesting? I really wouldn't. But it's fascinating to me. That makes so much sense. And I hope everybody really takes that in because you know, you're you pursue your passions and everything else kind of takes care of itself. If you're good at what you do. You know, this has been so much fun, Steve, and I want to have some more with my lightning round of questions. Are you ready for this? Sure. Okay. What three words best describe you? Passionate, action, loyal. See, I knew you're still chasing that action. If you could be one person for a day besides yourself. Who would it be? Abraham Lincoln? What's your biggest pet peeve? entitlement? Who would play you in a movie? I've had people say I look like Kevin Bacon. So I'm going with Kevin Bacon. That's a good one. What's your favorite name of a racehorse Secretariat? That's why I fell in love with the rabbit. I mean, if you think about it, it's not a great name. But once you know the horse, how can it not be your favorite?

What's a horse race that everyone needs to add to their bucket list? Well, the derby for sure. And if that's to try to answer I would say Royal Ascot. What's one of your daily rituals, something that you never miss morning coffee and reading the paper.

Speaker 1 39:01

What's something about you a few people would know that I played junior varsity basketball at Duke. Or maybe that I played in World Series of Poker made events several times. That's the end of the lightning round. And you did a terrific job. And I want to go back to that last point that you just made. You know, it's something that I didn't know about you until recently, you have played a lot of tournament poker and even in the World Series of Poker main event you've done three times. What leadership trait is essential for any successful poker player? Patience, you have got to be patient when you're in these poker tournaments. And hand after hand after hand is unplayable. You have to throw them in the muck and you cannot act until you have the right two cards in front of you. So Steve, patience is a great leadership trait that you obviously had being a world class poker player. You know, can you give us an example where you think you did the best job of X

Steve Duncker 40:00

Just realizing similar patients in a leadership situation, that would definitely be with Naira when we started going to different meetings with state leaders and peer coaches. And I would go in and in our minds, we were the white knights that were taking our time to help the racing industry. And what they saw were, oh, it's these guys from Naira that got indicted. And so you couldn't really try to change their mind. In the first instance, you had to just be consistent. You had to be patient, you had to keep walking the walk, you couldn't just say, Wait a second. Peter Curtis was President Morgan Stanley, what do you mean, you had to do it over time. So that I believe is where patients really came in? I can see that. And what happens as a leader when you get blamed for something GE had nothing to do with? How do you handle that? One of the best parts of doing it with Peter is we go out of these meetings, and we look at each other. And he had a great expression that said, you can't make them understand, you can't make them understand. And so, okay, we can't make them understand and that meeting, but we can make them understand over time. So that's what we did. And I really, that was due to Peter, Peter had great insight there. Now, when this airs, we're going to be just a couple days away from the Belmont Stakes at Saratoga, give us a little something we should be paying attention to that most people don't know about. Well, especially this year, for the first time in history, the Belmont Stakes is going to be at Saratoga. And the reason for that is we're completely redoing Belmont Park tearing it down to the ground and building a brand new track. So what you have to think about now is the Belmont Stakes has been a mile and a half for its whole history. This year, it's going to be a mile and a quarter because that's the only race we can run at Saratoga. So don't handicap it. Like it's a mile and a half handicap at like it's a mile and a quarter.

See, when you look forward, and you're so excited about what you're into and taking joy in all of it. What do you see as your unfinished business? My unfinished business is never stopped looking for what's next. And so I didn't know big league advantage would come in are some of the other companies I'm involved in. But you got to find them, you got to keep looking. And so the unfinished business is finding the next one.

Last question, what's one piece of advice you'd give to someone who wants to be a better leader? I would say that continually realize that everything you say has an effect on the person you're saying it to. And that you need to think about what that effect is going to be before you say it. Because the words, sometimes at least for me, the words came out too fast. And if you take half a second and think that last step through, I think you're gonna be more effective. Steve, this has been an incredible conversation. I've loved every bit of it. You're an amazing guy. I love your passion. I love your drive. And I love your pursuit of joy. And I thank you so much for taking time to be on this podcast. David, I can't thank you enough. I listen to all your podcasts. I think you're the best in the business. And it is absolutely my honor to have done this. Thank you so much.

David Novak 43:17

Let me tell you, Steve is one heck of a guy isn't he? I mean, you know you're talking to someone really special when playing in the main event of the World Series of Poker is actually one of the least interesting things about him. And listening to Steve today is a great reminder that when it comes to leading others, one size just doesn't fit all. Now, obviously, you've got to be authentic and be yourself. But as your career evolves, you've also got to understand that the leadership tactics that work well in one place may not work somewhere else. There's just not a one size fits all approach to leadership. You got to constantly be listening, learning and adjusting to the people and circumstances around you. This week, think about an individual or group that you're just not really penetrating. You're just not relating to them and they're not relating to you. Ask yourself, is there something about your leadership style that might be holding you back? Consider what you might need to adapt or adjust for this group and then give it a try. So do you want to know how leaders lead? Well, we learned today is the great leaders understand that one size just doesn't fit all. Coming up next on how leaders lead is Irina Nova Celski, the CEO of the social media management software company, Hootsuite and the former CEO of CareerBuilder. I'm not a big believer in no. And I see that with entrepreneurs and new time leaders. Just it's so easy to get mired in the No, you're either asking the wrong question or you're asking the wrong person and it's a state of mind. And so

Okay, there's a door go knock, someone will open something. It'll give you some opportunity and if you do nothing 100% will get nothing. So be sure to come back again next week to hear our entire conversation. Thanks again for tuning in to another episode of how leaders lead where every Thursday you get to listen in while I interview some of the very best leaders in the world. I make it a point to give you something simple on each episode that you can apply to your business so that you will become the best leader you can be

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