Ken Griffin's High School Obsession
Long before the Citadel billions, there was 'EDCOM'...
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Good morning, everyone.
I’m writing this sat in the cafe of Daylesford. The crowd is a mix of patriarchs paying, and influencers hoping not to pay. There are groups of New Yorkers downing £5.50 ‘immunity’ shots, out-of-town Londoners talking about how Annabels is now awful and middle-eastern families with more hired help than parents.
This week’s newsletter: Ken Griffin cold calling college professors, the banker botox trend, Goldman’s secret IPO sauce and Steve Schwarzman’s new $400m super yacht.
The Origin Story of Ken Griffin
At 17, Ken Griffin had built a real company - but there was one problem that could destroy it instantly if customers discovered the truth…
Back in 1985, Ken Griffin was President of the Math Club at Boca Raton Community High School. In his spare time between playing soccer and the Atari, he and some friends used to meet up to create computer programs on the school’s IBM PC.
Computing came easily to Ken.
Business didn’t.
He became obsessed with one question: how could this skill become a business?
So, during his senior year he founded “EDCOM” - a software company.
Working with his high school guidance counsellor, Ken created educational programs from scratch, and miraculously managed to get them verified by the United States National Education Association, meaning professors across America could legally use them in classrooms.
Suddenly, he had a real product. But - there was a big problem…
Ken was only 17, and he had no idea how to sell.
A high school kid who created computer programs for fun had to somehow convince tenured college professors that he was a mature, credible, businessman with a legitimate product.
To overcome this, Ken threw himself into sales.
Ken would cold call professors relentlessly, pitch them his discount software and try to get a sale. After countless rejections, it became a crash-course in selling - transforming him from computer expert to closer. All while being careful to avoid revealing his age. Ken joked: “Do you think anyone would trust their entire product line to a 17-year-old kid?!”
The EDCOM business grew, and he carried it over to his freshman year at Harvard right up until the point where his interest shifted to trading and markets. And the $50 billion dollar Citadel empire followed soon after.
But Ken never forgot this initiation in sales, and regularly repeats his mantra to Citadel staff across the world:
“If we're all going to eat, someone has to sell.”
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Finance Culture
The trend of finance exec’s getting lunchtime ‘tweakments’ like botox is now so big the FT is writing about it. I was surprised to read that men account for around 40% of clientele. The FT blames the trend on a slow jobs market and a fear of ‘looking too old’ for your role. This is partly true, but not the full picture. If we assume that AI will scoop up a meaningful percentage of back office white collar roles, combined with the accessibility of tweakments, then how you look will - whether we like it or not - probably become significantly more important. I know for a fact that this hunger games of looksmaxxing (ask your intern…) has already begun in some major finance firms.
Steve Schwarzman has a bought a new super yacht, reportedly costing $400m. To date, it’s unnamed (“Project 1014”), which is traditionally bad luck. Some potential names: ‘Too Big To Sail’ or ‘Blackfoam’, but he’ll probably go down the obvious route and name it after his wife.
Ultra secretive hedge fund DE Shaw (Jeff Bezos ex-employer) have created a new equity fund exclusively for employees. The catch? There’s a 45% performance fee, and a 4.5% management fee. Citadel insist that staff invest 50% of their bonus above a pre-set threshold into the firms flagship Wellington fund, but charge a measly 20% performance fee. Ken is known within the industry as being incredibly generous, and crazy with it. One afternoon he had thousands of specialty high end milkshakes delivered to his employees…from 200 miles away.
The SpaceX IPO is pinging around group chats this week. What you might not know, is that banks are redecorating their entire lobbies to make a good first impression. It’s been too long since we’ve had genuinely interesting competition for IPOs. Goldman has historically been the master of this dark art. For Lululemon’s IPO in 2007, a senior GS banker had the entire team (including David Solomon) join the pitch in sweat pants and head bands. I wrote about it here. Surprise, surprise - they won the deal.
Last week I asked you why you attend big finance conferences, results below. Are you at Super Return this week? Was it Super? Did it bring you Returns? Reply to this email with one word that summed the conference up.
All replies to this newsletter are confidential, so let me know what you think. I’m not interested in doxxing anyone. Unless they slag off West Ham.
Recommendation
Interesting recent interview with Ken Griffin here, where he spoke with NBIM at their annual conference. Aside from an insane ability to make money, Ken is an easy watch because of how direct he is.
The Investors Hiring Reporters Trend
Big finance firms like Blackstone and Apollo are suddenly rushing to hire news reporters. And I think I know why…
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Joseph Cass