Bill Murphy - CTO at Blackstone

(Joel Beasley at 00:00:00) Hello, my friends. Today we are talking to Bill Murphy, the CTO at Blackstone. And we discuss instigating positive change, pushing past your own hypothetical limits, and how having a journalistic mindset can help you ask better questions. All of this right here, right now on the Modern CTO Podcast. Here we go.

(Joel Beasley at 00:00:24) This is the Modern CTO Podcast.

(Bill Murphy at 00:00:34) Hello? Hello, sir. How are you?

(Joel Beasley at 00:00:38) Hey, it's you. How you doing? I'm good. You having a good day?

(Bill Murphy at 00:00:43) You know, not too bad. I wish I was outside. It's beautiful.

(Joel Beasley at 00:00:47) Here it's raining.

(Bill Murphy at 00:00:48) Where are you?

(Joel Beasley at 00:00:49) We're down in Florida.

(Bill Murphy at 00:00:51) Okay. Well, Florida, now is not the time of the year to be outside.

(Joel Beasley at 00:00:54) No. Now is the time of the year to go to New York.

(Bill Murphy at 00:00:57) Right. Exactly. Exactly.

(Joel Beasley at 00:00:59) So are you in Manhattan?

(Bill Murphy at 00:01:01) Yep. You can probably see out the back window a little bit here. You know, all the tall buildings. So yeah, 54th Street.

(Joel Beasley at 00:01:08) Nice. You know, more and more as I get involved with business, I end up going to all these big cities, and I think it's pretty cool.

(Bill Murphy at 00:01:16) Yep. Absolutely.

(Joel Beasley at 00:01:17) So were you born in a big city?

(Bill Murphy at 00:01:20) I grew up outside New York. So I'm a New York area native and have been here most of my life. I went to Philadelphia for college at Penn and lived in Boston for a few years after college, but almost always within probably ten miles of New York City. So it goes.

(Joel Beasley at 00:01:41) Did you live up like, I've got family in Westchester area.

(Bill Murphy at 00:01:45) Yeah. Long Island right outside Queens.

(Joel Beasley at 00:01:48) Okay. So that's where you grew up?

(Bill Murphy at 00:01:49) Yeah.

(Joel Beasley at 00:01:50) Okay. Cool. Yeah. The visiting I did was all in Westchester because that's where I've got family up there.

(Bill Murphy at 00:01:56) Yeah. You know, I mean, it's not all that different. People are similarly driven and fast moving and so on than New York. I think New York is a lot more friendly than people give it credit for. The movies and such portray it a little bit differently than it really is. People want to move fast, but they tend to be very friendly regardless of whether it's Westchester, Long Island, Manhattan, so on.

(Joel Beasley at 00:02:22) I found that traveling, there's pretty much the same types of people everywhere you go. There's nice people. There's mean people. There's rich people. There's poor people. There's just like, it's really localized to whatever environment, like whatever smaller subset you're in, like whatever neighborhood you're in.

(Bill Murphy at 00:02:39) Right. Absolutely. Yeah.

(Joel Beasley at 00:02:41) So alright. So I'm building this mental picture of you. And I'm very excited because I get to talk to leaders all the time. But you're a special breed of leader because you're a CTO at a company that invests in other companies. And so that means you get this amazing variety, this wide array of different companies and different technologies. And so I think the question I'm most excited to ask is, what are you most excited about right now?

(Bill Murphy at 00:03:11) Wow. That's interesting. Well, I mean, our next step, I think, for us and as well as across our portfolio. So, you know, my job is, you know, Blackstone manages $500 billion plus, and we own tens, if not upwards of almost 200 companies if you count broadly the ones that we have stakes in. So we are constantly buying and then divesting companies after we fix them. So you're trying to look for what are the patterns of ways to fix them most effectively. And both for Blackstone ourselves and our companies, the cloud transformation is clearly a way to do that at scale. So we are in a major push to move our infrastructure all to the cloud. And, you know, while people have been talking about the cloud for a long time, I think that there is a misconception that that's been done mostly already. I'd say somewhere between 10 to 20% of the workloads of the world have actually been moved to cloud. So you would think it would be like 80% with the way that the media covers it. Whereas most enterprises have so much legacy technology that it's not that easy to pick it up and move it. So when you're building from scratch, sure, you can be 100% cloud. I'm hopeful that when we get there in, you know, twelve, eighteen, twenty-four months, however long it's going to take to move most of our infrastructure to the cloud, we will be probably one of the oldest, most cloud companies, some combination of the two of those things, because we weren't born digital. And it's a hard transition for most. And then when we look across our portfolio, every company that we've invested in is somewhere along that journey as well. And by helping accelerate that journey, we think we can add significant value to the company. And it's not always, it's usually not about cost. It's about how do you use it to become more nimble, to be able to roll out solutions faster than you could yesterday, and that's what we're most excited about. So everyone thinks it's because you're going to save a whole bunch of money. And in certain cases you can, but that pales in comparison to the value of being able to turn over solutions and enable our business leaders with new tools faster.

(Joel Beasley at 00:05:37) Yeah. If you can deliver value faster to the stakeholders, there's a significant value to that speed.

(Bill Murphy at 00:05:45) Yeah. Yeah. Absolutely. Velocity, I think is under, the value of velocity is underappreciated because everybody is focused on what you can measure. And, you know, it's easiest to measure the cost side of the equation rather than the value side.

(Joel Beasley at 00:06:01) Well, today, we're going to value velocity. That'll be the theme of the episode. Giving velocity the credit it deserves.

(Bill Murphy at 00:06:08) Yeah. Exactly. I wish it was a better measurement. I mean, one of your questions around what measurements are most useful, it's like quality measurements. You can really fixate on, you know, number of bugs in your system, number of projects, you know, throughput metrics, number of projects that are completed. You can measure the turnover of your staff. You can measure the effectiveness of your hiring. And, you know, all of that stuff is stuff that we value. What I'm still kind of, that elusive measurement is trying to measure some sort of elegance and throughput of the technology that's actually delivered at the code level. And, you know, I've searched far and wide, and we're still kind of continuing to search, and there's a bunch of new entrants in that as new startups who are trying to do it. And, you know, we're engaged with them, but we haven't, I haven't found the silver bullet yet that I'm continuing to search for. Because whatever you measure is what you optimize for usually. So I'm trying to figure out how we can optimize for that true kind of elegance and excellence of the technology implementation because that's where you really benefit outsized rewards from that over the long haul.

(Joel Beasley at 00:07:19) So I was looking at your past. Right? That's one of the things I like to do, see, learn about people, see who they are. You seem pretty entrepreneurial.

(Bill Murphy at 00:07:29) Yeah. I guess, you know, I was one of the founding team at Capital IQ. I was there for eleven years, came to Blackstone. And really, you know, the reason I came to Blackstone after that was because I felt like it was an opportunity to build something entrepreneurial here. And the way that our leaders and myself now, hopefully, and others approach any problem is to try to take it down to the essence of the problem and then come up with a creative solution instead of just managing inside of parameters that may or may not be real. Right? A lot of times, I was just with a bunch of other technology leaders, and I was to some degree glad that we think kind of creatively and entrepreneurially about the different problems, whereas some other companies where it was all about kind of managing inside of some fictional set of parameters that were set by upper management or a budget that was unchangeable or whatever, where we like to take much more of a common sense approach to every problem. And I think that's what being entrepreneurial is. When you are managing payroll for a small company and you know you have to sell a certain amount, so you can invest a certain amount, so you can pay people, so you can hire more people, it gets real really fast about operating creatively to stretch all of those parameters as far as you absolutely can. So I think we do that at Blackstone even though Blackstone's been around, Steve and Pete Peterson founded it thirty plus years ago, but it still operates that way across all of our businesses. And there's a decision by decision entrepreneurial attitude, and we try to get rid of all bureaucracy. So that's what sort of led me to this, which was sort of a weird path for somebody from a tech company to head to Blackstone was not necessarily a common path.

(Joel Beasley at 00:09:22) So I've got some more questions about seeing the problem through the eyes of an entrepreneur, how you get your team to think that way, to look that way. But I'm curious to know there's such a variety of structure between the different CTOs that I meet at funds, and I'm curious to know, what does your structure look like? Do you, the first question would be, do you build, one of them that was really interesting was Georgian Partners. I talked to Mads. It's their CTO over there just a couple weeks ago. Really, really cool guy. One of the things that they do is they invest a lot in conversational AI, and that's one of their investment theses. And so they ended up building some, like, they have an internal development team that they'll build tools and libraries that are for use of only their portfolio companies, which was pretty cool for me to learn.

(Bill Murphy at 00:10:12) It's great.

(Joel Beasley at 00:10:13) Are you guys doing any of that, or what does your team structure look like?

(Bill Murphy at 00:10:16) You know, so my team structure, for internal Blackstone technology is approximately 400 resources between offshore and onshore and a variety of different teams, and we try to operate as much as we can as a single team. We have an engagement function that are really the folks that are on the front lines, understanding the business problems in their entirety such that we can then solution things that solve the business problem but also fit into our technology infrastructure and architecture well. Most of this, you know, what I do see is firms that are much more like order takers where the technologists just implement solutions because someone told them to, end up with a real mess of an architecture. So by embedding our engagement function with the folks that they're trying, that we're trying to serve, they get a better sense of, okay, this is specifically what I have to achieve with a solution, and then we can go back to the engine room and decide how to build a system that achieves said requirement. Like, an example would be, you know, sometimes people ask for a report. I need something that shows X. And if you just go run back and build X, you deliver X and the person says, well, this doesn't solve my problem. And then you realize the problem was that they need to communicate with their clients a certain way. They just happen to think that the report was the way to do that. And only when they saw the finished product did they realize that that wasn't going to work. Well, I want to short circuit all that trial and error and have the engagement folks really understand, okay, the problem that that person is solving is that they need to communicate certain information to their clients. And then once we know that, we can go back and say, okay, does it make sense to have a portal that enables us to communicate with them directly? Does it make sense to have a report? Does it make sense to do something completely different? So I'd say focusing on the problem is far and away the biggest challenge. Now in terms of our portfolio, we do not build technology for the portfolio, but we do coalesce a community of the portfolio to meet regularly to discuss all the problems that everybody has and share solutions with each other in a much more kind of peer-to-peer style sharing environment that is very healthy. I'd say, you know, the companies we buy are large companies. So each of them have their own tech ecosystem, and they're across a lot of different industries. So given that we're not necessarily focused in one or two verticals, the amount that you can leverage cross companies sometimes is limited by the fact that their use cases are very diverse. Although, you know, some of the stuff like cloud enablement and otherwise cuts horizontally across every one of the companies.

(Joel Beasley at 00:13:05) But it is a value add. It's somewhat attractive for companies because that'll allow business to occur within the portfolio companies naturally.

(Bill Murphy at 00:13:13) Yeah. I'm not necessarily against it. I'm just saying it is certainly, you know, a lot of work in order to accomplish that and the complexities of building technologies that scale across tens and hundreds of companies cannot be understated. There's a reason why there's a reason why these startups raise, you know, five, ten, twenty, you know, $100 million in venture funding in order to get to viable. So, you know, you just have to be, I think you've got to go in with your eyes wide open and not try to eat the elephant and die of indigestion by building some sort of monster technology that does everything for everybody. So I'd say we're very good, hopefully we're good curators of technology that can be helpful to our portfolio by basically taking all the best ideas and just making sure people hear about them so that they can pick and choose what makes the most sense for them.

(Joel Beasley at 00:14:07) So primarily, your team, you said you have about 400 resources. Their primary objective is Blackstone's technology as an operating venture firm.

(Bill Murphy at 00:14:17) Correct. I mean, we have, you know, we're over $510 billion as of last quarter under management with, you know, many businesses contained inside that $510 billion. So it is not insignificant, the amount of information and different strategies and all the different systems that are required to make those professionals as efficient as possible. And we really pride ourselves on the scale that we can achieve as a business with a relatively small amount of people. So that kind of leverage per employee is something that we're really thinking about, and the way to leverage employees is give them the best tools possible. Right? If you have a sharper ax, you can cut down more trees. Right? So we're constantly trying to create tools that enable us to have sharper axes and be more productive.

(Joel Beasley at 00:15:08) Nice. And then you have a special team who's building a chainsaw.

(Bill Murphy at 00:15:12) Right. Exactly. Yeah. Exactly. And then maybe what the next one will be will be, you know, a bigger machine that harvests the trees too. Right? Like, you've got to be constantly understanding what you're trying to achieve, but also purpose build it. Right? If you're only cutting, you know, take to continue the analogy, if you know you're always going to, you're only going to build one cabin, then the time spent designing a machine to harvest, you know, many hundreds of logs is not really that important. Whereas if you know you're going to build a whole town of structures, you obviously need to harvest that much more wood. So we're constantly prioritizing and trying to only bite off what we know we can get done, and that kind of maximizes the value to our firm.

(Joel Beasley at 00:15:59)
Yeah. Getting lost in the weeds is so easy. I've been writing code for over seventeen years, and it's very frustrating when you figure out that the time you spent was building something cool and not something that actually brought value. And so I learned that within the first five or six years of my career, luckily. And yeah, I read one of your interviews, and you were talking about the difference between building something cool and building something of value too.

(Bill Murphy at 00:16:23)
Right. Yeah. I think we have a unique combination where Blackstone is an interesting set of problems, and the use of technology is extremely broad. And, you know, where are we going to develop the latest, most aggressive conversational AI or something? You know, I'm just trying to come up with an example of deep tech. Probably not. But we are gonna stitch together lots of different technology to create a plethora of different tools and add a lot of value in doing that. So you have to, you know, different strokes for different folks in terms of who we're recruiting, but I think it's a very nice combination of broad experience, deep technology, but not necessarily the deepest, but the ability to have value, be a part of value creation right from the beginning. And we try to have all of our interns. They're here right now. They're shipping code into production almost immediately, and that's adding value to Blackstone. I think it's a really cool experience to have when you're an intern to think that you influenced a pretty big, influential company during a very short internship. Whereas a lot of the bigger companies, I think it's much less tangible, the value that's added.

(Joel Beasley at 00:17:44)
Yeah. It's like work on this hello world project and send it a query.

(Bill Murphy at 00:17:48)
Or something. And there's nothing against that, but we're trying to create something unique.

(Joel Beasley at 00:17:54)
I like that. And you're getting the culture of shipping frequently right at the beginning.

(Bill Murphy at 00:17:58)
Right. Yeah. Absolutely.

(Joel Beasley at 00:18:00)
So because we're talking about people and engineers and newer people, I guess one of the things that I'm always interested in is you've got this group of people that work with you, your managers below you or directors below you, and they all have behaviors that they display normally. But I'm curious, what behavior stands out to you as someone who has potential?

(Bill Murphy at 00:18:28)
Yeah. It's some combination of aptitude and energy and grit with the humility to know that they don't know everything. So I'd say those are my three most important things. They gotta be willing to fight through it because, you know, success isn't built in a day. Right? It's built over a long, long period of time. And, obviously, you have to have a certain amount of aptitude and skill, be it from experience or from school or otherwise in order to give you the tools to do it. But that grit and curiosity is just so important. So I like to talk about what people have read recently and how they approach learning overall because that's usually a very, very good separator to the people that succeed big in life is that kind of consistent learning all the time, reading and just feeling a passion for getting better. So you need energy in order to fuel that passion.

(Joel Beasley at 00:19:31)
Do you know about Leaderbits? Is that why you brought that up or no?

(Bill Murphy at 00:19:36)
No.

(Joel Beasley at 00:19:36)
Oh, man. Yeah. So we started the podcast, and then a leadership company came out of it because we saw that the industry was broken. It was like, let's go to a conference. Let's do a workshop, teach you 80 great things, and then you go back and you forget it all. And I said, that's not how leaders become great. I don't know how that's a multibillion dollar industry. And we were talking here at the podcast. We're like, well, how do leaders become great? Because I was interviewing all of these people. And it's slow, small, consistent improvements over time. That's all they do. And then so we said, alright. Well, let's go look in the market to see what leadership program is set up for that. And there was none. It was like, people just figure it out themselves. Like, you probably have Audible and you listen to some stuff and you're just in this habit. So we ended up making a ton of leadership content that is just these small weekly habits. People do something ten minutes every week.

(Bill Murphy at 00:20:23)
That sounds great. I mean, I'm a big believer in, a big part of excellence is showing up every day and working hard and then understanding that that's what it takes. And don't try to fool yourself when, you know, deep down inside, you know if you've given a 100%. So, you know, figure out how to give that a 100%. And if you only wanna give 90 that day, don't try to tell people you gave a 100. Right? And just every single day, I sort of think about Shawshank Redemption where he's breaking out by scraping at the wall every day for whatever it was twelve years. Sometimes that's what technology is about. Right? It's about hard work, sustained effort over time, and, eventually, you break through, and you do and you get to where you wanna go. And, you know, I'm a huge believer in consistency, and The Power of Habit is a book that I always recommend to everybody because it's just something people have to learn. And, you know, I have two kids, 11 and 13, and I'm trying to teach them that. Right? Because I think it's interesting to watch how distracted everybody can be. Now we all have more resources than we could ever imagine. Right? When I was growing up, you go to the library and you had the business book section, and it was one shelf. And you were like, oh, this is amazing. And you go to a bookstore once in a while, and you know, and now it's just everything everywhere, podcasts, free content on the Internet, paid content on the Internet, books everywhere. You know, it's just it's overwhelming to the point where it can take away from your ability to make that sustained. And activity doesn't mean progress either.

(Joel Beasley at 00:22:01)
I know.

(Bill Murphy at 00:22:02)
Right? So people are always measuring activity. Everyone is so busy, but they're not necessarily moving towards the goal. So we're constantly trying to keep track of that so that we don't, we're not just turning a perpetual motion machine. We're actually moving forward. It's not easy. There's just so much distraction in the modern enterprise and the modern world overall. So, you know, we're trying to be vigilant and figure out ways to clear that for people so they can focus on what's important, not just what's seemingly urgent.

(Joel Beasley at 00:22:32)
Right. That is super important skill. So your kids, just curious. I've got two kids too. Are they boys, girls, what do you have?

(Bill Murphy at 00:22:40)
A boy and a girl. Boy 13 and a girl 11. So they're getting to the point of being fully fledged adults now and, you know, watching that has been just one of the most amazing things and trying to prepare them to be happy, successful, contented people is a major focus.

(Joel Beasley at 00:22:59)
I have a boy who is four months old and a girl who's two years old.

(Bill Murphy at 00:23:04)
Oh, gosh. So you've got it all ahead of you. It goes fast. It goes, people say that and, and it's always amazing how true it is once you've been through it. Whereas, when you're a kid listening to it, you're like, your parents don't know anything, you know. It's taking, it's going so slow, but when you're on the other side, man, it goes fast. So enjoy it.

(Joel Beasley at 00:23:22)
When we get both of them crying at the same time, that's when I remind my wife that it goes fast. I don't know what everybody says. This goes really fast.

(Bill Murphy at 00:23:29)
And I have to tell you, it only, so far, so good in terms of for me and, obviously, everyone's different. But it only gets better too because they start to interact with you in ways that are more exciting for you and engaging and that sort of thing. So sharing all of the great lessons, all of the great content, all the great movies, everything with the kids as they grow up is just, you know, super fun. So I'm sure you'll enjoy it.

(Joel Beasley at 00:23:54)
Yes. I'm already very excited. I actually just bought her, she's turning two in a month, and I just bought her a child guitar, like house size guitar because she's really into my guitars and likes to strum them and everything. And so she tries to hold them, but they're too big.

(Bill Murphy at 00:24:07)
So, fantastic.

(Joel Beasley at 00:24:07)
I was like, I know.

(Bill Murphy at 00:24:08)
They're growing early. They learn once they learn early, they're so much better than we could possibly be.

(Joel Beasley at 00:24:13)
Right. And it's a good lesson on a couple things. First thing is, you're a byproduct of your environment for sure. So it's like whatever objects are in your environment are the things that are available to you until you get the ability to swap things in and out of your environment. Right? So you put good things in their environment, and then that increases the odds of good things happening.

(Bill Murphy at 00:24:33)
Yep. So I do think that the one thing and this kind of dovetails as to a belief is, I do believe that the hardest thing for me, at least, so I grew up. My dad was a police officer, and, you know, I got to go to Penn, which was amazing, and so on. But I don't think I felt like the world was changeable until after I joined the two founders at Capital IQ when we started building the company. And I felt like I wish I had had a belief that the world was changeable by my effort earlier. I always felt like I could deliver inside of parameters that the world was, you know, there were certain rules and you just abide by the rules and you move forward inside of some well defined paradigm of success. And what you learn over time is that that's just made up by other people, and there's no reason why that paradigm can't be changed. And, you know, that's entrepreneurial thinking is that you can actually change that. And it took me a while to realize that, and I'm trying to give that back to my kids that while, obviously, you have to abide by the rules of being a good citizen and all of that stuff. But you can really, you should always be asking why, and you should sort of be annoying towards changing for the right reasons to the right way and not just putting up with a suboptimal solution to almost anything, whether it be at home, at work, and so on. So those are the type of people we recruit, and that's also, you know, what I'm trying to teach the lessons for the kids is, you know, be an agitator in a positive way around change for the better. And the more you can push, I think, the more progress you make.

(Joel Beasley at 00:26:25)
It seems to me that you have a high level of discipline. I'm curious, where do you think that came from? Do you think it came from your dad being a police officer and raising you with that? Or did you, is it something you had to work hard and learn? Or...

(Bill Murphy at 00:26:36)
I don't know. I mean, we always, you know, I can't remember. I started working when I was 12 when I was 13 years old. I started caddying, and then I worked twenty to thirty hours a week during high school as well as ran. I'm also a distance runner, which, you know, in order to be a successful distance runner, discipline is sort of important. So I ran in high school and college. And I don't know. It was always sort of the person I was, and I wanted to finish things to the end and keep going. I don't know if I, I don't remember a moment where I realized that that was important. I sort of always knew that that was important, which I think is lucky. You know, one of the things that you emailed about was falling in love with technology or knowing what you wanted to do. And, other than, you know, every kid, I think, who plays sports always dreams about becoming some sort of professional athlete. But once that was proven to be inaccessible, I always knew that technology was like, building things with technology was what I wanted to do. So I got a real gift on that front. And maybe because that was so clear in my mind that I didn't, I knew that just working towards that would be would be a positive, I guess. Not, I'm not sure, but it was a good set of events that kind of, I felt, put me on the right path and at least knowing what I wanted to do. I remember in college talking to other folks, and they were like, I have no idea what I wanna do when I wanna get out. And I was like, what are you talking about? I felt like from nine years old or eight years old, I knew what I wanted, and that was looking back, I didn't appreciate how, you know, lucky that was, and I do now. So...

(Joel Beasley at 00:28:22)
Nice. Yeah. I've known what I wanted to do for a long time. I've had that sense of knowing, it can change, but you can, that certainty of, I'm gonna do this. Computers, right from the beginning, right as I wrote this first line of code, I just felt like a caveman that had just created fire. I was just so pumped up. I was like, this is amazing. I wanna do this forever.

(Bill Murphy at 00:28:45)
Do you think it's the is it the act of doing it, or is it the watching the fire light up that is what makes you wanna do it?

(Joel Beasley at 00:28:53)
Watching the fire light up.

(Bill Murphy at 00:28:54)
Yeah. Totally. Me too. So I think that, and the technology was just the most tangible way to see that those results fastest. So, you know, perhaps something else would have hit on that same gene, I guess, but technology is just so fast. Right? I mean, even, you build a house, right, or you do tangible buildings of things, and they just take so much longer than anything you can do with code. So I think that's what's addictive. It sort of fuels that dopamine hit every time you get something working, and then you assemble systems in the bigger systems, which are bigger excitement. And it's a fun cycle to get or flywheel to get turning there.

(Joel Beasley at 00:29:40)
And then you realize what you can do with people. And you're like, oh, wow. I can only do so much code, mathematically for the rest of my life. I could only create this much impact. But if I learn to lead a team of people and then teams of teams and then organizations, and then I can actually create significantly larger scale change. And that's really the fire that I'm excited about. It was the fact that I did something. I made it happen and yeah.

(Bill Murphy at 00:30:04)
Yes. And that's what, people actually ask me all the time about, what are you most proud of? And it's always just the team that we've been able to build both at Capital IQ before and Blackstone now where that engine, right? If you make a car analogy. Right? You can drive your car a lot of different places. So getting to one destination or another, not that it's not exciting and fun to see that happen, but the fact that the car ran and that, you know, you built the car is far and away more exciting than getting to any specific destination. So that team is, you know, great to be a part of. And I just take great pride in in building it and feeding it and keeping it running as well as we can.

(Joel Beasley at 00:30:54)
So you get to, your core responsibilities there. Do you get to look at new companies that are being acquired, or do you just

(Bill Murphy at 00:31:02) So, you know, to some degree, but it's episodic. We do do some strategic investing that I get very involved in. So if there's a firm that we're working with, oftentimes we'll partner with them and give them an investment in addition to working with them to deploy their product and gain strategic value on both sides. So in those, I get deeply involved. I mean, there's only so many hours in the day, and Blackstone Technology is a broad responsibility just to keep it running here.

(Bill Murphy at 00:31:31) So then across our portfolio, we have a separate portfolio operations group that spend more time working on that, and we work with third parties all the time. Deals are extremely intensive and sometimes episodic. And so, you know, staffing them with permanent resources is almost impossible. Like, you need to bring in experts at a moment's notice to work for a month in Europe on a deal. You just can't have just a permanent staff to do that.

(Bill Murphy at 00:32:03) So we work with a lot of partners, and we work on developing those great partnerships so they understand what we need. They understand what we need on every deal and so on. So I do less of that, and frankly, I think that's good with my personality to some degree. Being somebody who's a habit person who wants to keep chipping away at that wall, sometimes deals are very much peaks and valleys. And so we like to bring in partners to help us with that.

(Joel Beasley at 00:32:32) I see. You have your routine and it's articulated, designed. You like that. And when something comes in that's like a peak, you bring in third-party people to help out.

(Bill Murphy at 00:32:44) Yeah, when we need to. You know, we try not to be super religious around, like, we have to do it this way every time. We're very much like, what are the facts on the ground at this current situation, and what are the best tools for the job right now?

(Bill Murphy at 00:33:00) And then make good decisions every time. And I'd say what's the core skill set of Blackstone is probably decision-making. We're just over and over again, each decision is analyzed and made, and we all work together to develop that muscle, that decision-making muscle, so that we can consistently make them in the right way going forward. Investment decisions, technology decisions, internal decisions, people decisions. You know, that gives us the most flexibility to kind of go in a lot of different directions.

(Joel Beasley at 00:33:32) Do you have a strategy that you can deploy across all your different types of decisions?

(Bill Murphy at 00:33:37) Well, I believe in—I'll talk a little bit about technology design process because I think that's a type of decision. And it dovetails very well with our investment committee process where there is a team that is deep in the problem. Right? Whether it be acquiring a company, investing in a company, buying debt, whatever the case may be, or designing a different system. Somebody's understanding what are we talking about here.

(Bill Murphy at 00:34:02) And then we're writing down exactly the problem and the proposed solution to the problem. In technology, it happens to be, this is what the screens are going to look like, and this is how people are going to interact with the solution, or this is the solution we're going to buy and how we're going to integrate it with the current systems we have. And then on the deal side, it's, you know, what do the financials look like? What's the management team? How do we make sure that it's going to be successful in the future?

(Bill Murphy at 00:34:27) How is the industry? And we write all that down. And then we have group meetings where we're discussing all the parts of that technology solution with people with all different types of backgrounds. So the folks that are really focused on the business problem, the people who are the technology designers, the people who are the technology implementers, get as many of them in the room as you can and flush out the solution. And in the investment committee process, same thing.

(Bill Murphy at 00:34:58) Like, you know, they talk about the investment and sometimes it moves forward exactly as was on the page. But most of the time, there's some tweaks to it. Right? Like, oh, maybe we should have explored this. Maybe we should explore that.

(Bill Murphy at 00:35:07) Same thing with the technology. You know, we tweak it and we rewrite it. We go back to our design meeting. We have another one, and we just do that as many times as possible, that iteration, in order to get it right, which I think is a little bit different than pure—you're probably going to say, oh, iteration, agile, that is, you know, one of the key foundational elements of a lot of technology now.

(Bill Murphy at 00:35:34) I'm a believer in sort of a modified agile approach where you constantly want to iterate, but you want to think through the problem upfront too. Like, you don't want to just use iteration as an excuse to just haphazardly move forward. So we do a lot of design work upfront, and then we iterate quickly through implementation, trying to learn, and then, obviously, modifying the design if we need to. But, hopefully, we've thought through the design enough such that the modifications are not that significant.

(Joel Beasley at 00:36:05) While keeping the problem at the front. Right?

(Bill Murphy at 00:36:08) Always problem first, and questioning everything. Right? Why are you—I was just with another group and we're talking about automating bad process and how a lot of people wind up just doing that because they're just making the way that they currently do it better instead of saying, wait a second. Why are we doing this in the first place? And I think there's a ton of waste in the technology industry because people are doing that.

(Joel Beasley at 00:36:35) So you meet with a lot of leaders often. You go to different groups. Like, give me some insight on that.

(Bill Murphy at 00:36:42) Well, I think that, you know, it's interesting to me, and it's something that I've learned that I should have learned earlier. When you are a tech company like we were at Capital IQ, you can sometimes get very insular where, you know, it's us against the world. You're building a product, and you're trying to—and you would never talk to your competitors. Right? Because they're the enemy, and let's just build something great so we can win.

(Bill Murphy at 00:37:06) And I think it's a very powerful motivator, but oftentimes can kind of put you in the cave instead of make you empathetic to all of the different sensibilities out there. So my position here has really been a breath of fresh air on that front, and I've been able to develop a lot of great relationships with technologists across the spectrum of our peers and others in the financial industry and, you know, just people that you meet and that you like. And you can learn a lot by just learning from others' mistakes so you don't have to make the same ones. And I think I've kind of tried to lean much more forward on that than I did when I was 25. I think maybe I thought I knew everything, and now, hopefully, I realized that learning from others is probably a much more effective way to actually learn everything than figure it out with trial and error.

(Joel Beasley at 00:37:58) Yes. You've got to surround yourself with a lot of smart people, learn from them.

(Bill Murphy at 00:38:02) And you could learn something from every person. Right? It doesn't—just because, you know, it doesn't have to be, you know, Bill Gates that you're talking to in order to learn something. Because every person is bringing, you know, interesting data to the—you just have to draw it out of them. So trying to—I mean, I guess this is what you're doing. Right?

(Bill Murphy at 00:38:18) Is trying to ask the right questions to draw out the knowledge that you can learn from every person is a skill. And it's actually what we—the number one thing we try to teach our engagement folks is, like, how can you be like a journalist where you're consistently asking questions and drawing everything you need out of the person so that you can do your job without having to rely on them because they're busy and they got lots of other stuff to do. So the more knowledge you can suck out of them, the better.

(Joel Beasley at 00:38:53) Yeah. I also like to let people talk about what they want to talk about. So we do the questions. You know, you've got some of the pre-done questions. But usually, I just take it with, you know, what are they passionate and excited to talk about?

(Joel Beasley at 00:39:05) Because that's what's going to bring them the most value. It's what's going to bring the audience the most value.

(Bill Murphy at 00:39:10) Right. Absolutely. It's great.

(Joel Beasley at 00:39:13) So we've got some questions from the audience. People write in, they ask us questions. Is that okay?

(Bill Murphy at 00:39:19) Sure.

(Joel Beasley at 00:39:20) Alright. So one of the questions is how do you perform your one-on-ones? The cadence, motivation, context.

(Bill Murphy at 00:39:29) That's a good question. I do not have a specific methodology for that. I mean, I've been really lucky that my direct reports—I think the person, my direct report with the least tenure with working with me is at, I think, seven years or six years right now. So there's a real—once you get into a cadence with somebody, I think you can tailor your interactions with them individually. And I think it's just important to have a lot of them, a lot of interaction.

(Bill Murphy at 00:40:05) But if you are familiar with each other and you understand the best way to communicate, you can shortcut a lot of the formality, which I think kind of creates a lot of throughput. So I would say there's no formula there. Just make sure you believe it's important and then craft a solution for each individual, you know, slightly differently. There are people who are much more formal who like to give me a written report and review it and do it biweekly, and that's it. There are other people who, you know, walk into my office twice a day for a minute and a half each time to move things forward.

(Bill Murphy at 00:40:41) And, you know, I'm okay with either of those things. I don't think that there's one right answer.

(Joel Beasley at 00:40:46) So you tailor it based on the individual's style?

(Bill Murphy at 00:40:51) Try to.

(Joel Beasley at 00:40:52) Nice. I like that. I haven't heard that one before. I've actually asked this question quite a bit. That's actually pretty cool.

(Joel Beasley at 00:40:59) I like that one. So when it comes—so did you say—I just want to dive a little bit deeper here. Did you say the average, your team member's average duration of being a team member is like six years? Is that what you said?

(Bill Murphy at 00:41:10) No. The shortest. So I have eight direct reports-ish, something like that. And they've all worked for me for the minimum of six years.

(Joel Beasley at 00:41:23) Oh, wow.

(Bill Murphy at 00:41:23) Long as nineteen. So, almost my whole career. So I've—you know, I really am super lucky to have a team that is that cohesive and works together so well and can work together with me. And, you know, just like I kind of tailor stuff to them, I'm sure they're doing the same thing to me to make sure we're doing it as fast as we can.

(Joel Beasley at 00:41:47) Usually, this isn't the case. Right? So I'm personally just more interested in you. Like, what do you think is the driving force of that?

(Bill Murphy at 00:42:01) I think we like each other. I think we like to work with each other. I think we treat each other really fairly, and, you know, and there's a certain loyalty both to the company and to the people that we all try to live every day, I guess. You know? So I would say it's the thing that I'm most proud of.

(Bill Murphy at 00:42:23) If I was going to be perfectly honest, is the fact that so many great people continue to want to work with me. That's a gift.

(Joel Beasley at 00:42:31) Yeah. It's something to be super proud of. It's unique, and I have an enormous amount of respect for that. So let's talk about—have you ever gotten to meet Elon Musk?

(Bill Murphy at 00:42:43) I have not. Even though we overlapped at Penn for a few years, but I never met him back then either.

(Joel Beasley at 00:42:48) There you go. Nice. I'm curious to know, like, if we're at the SpaceX facility—like, let's say you and I are at the SpaceX facility, and Elon Musk gives us a private tour. Right? He's like, hey, come on.

(Joel Beasley at 00:42:58) Let's private tour. And he shows us—he brings us into this room. There's no rockets around. We're like, what? And he's got this special device behind the curtain.

(Joel Beasley at 00:43:07) He opens the curtain, and it's a time machine. And we flip a coin, and you win.

(Bill Murphy at 00:43:13) You get heads.

(Joel Beasley at 00:43:16) Follow me here. Come on.

(Bill Murphy at 00:43:20) So we're in the time machine. Okay. We have the time machine.

(Joel Beasley at 00:43:22) No, no, no, no. Oh, wait. Alright. Yeah. I'll let you drive. Okay.

(Bill Murphy at 00:43:25) We are in the—

(Joel Beasley at 00:43:27) time machine. Hopefully it's not like a Fly situation when we merge. But okay. So we go back to the first week that you had a job, your first job.

(Bill Murphy at 00:43:37) Yep.

(Joel Beasley at 00:43:38) And we're watching you work third-person style, and you get to go over there and whisper one piece of advice into your ear. What would that be?

(Bill Murphy at 00:43:47) Yeah. I'd say—I'll do two things just because it's like—because I already said one of them. The first one would have been like—I mean, whatever you can think of you can do, or you can change, or you can—and this is certainly like—I mean, Elon Musk is a great example of, like, I mean, man, talk about can-do attitude. Right? The guy has done some things that I'm sure everyone would have felt were crazy, but he tried to do them and he accomplished a lot.

(Bill Murphy at 00:44:15) And I think that's something to learn from. And I certainly was probably too risk-averse or just too much of a follow-the-rules guy. So I wish I would tell myself, like, put yourself out there, take some more risk, or at least realize that you have the ability to go after some big dreams. So I would say that. And the second thing was actually one of the most important pieces of advice that I got was actually from somebody that I didn't even have a real good relationship with, but I felt—when I started working, my first job at a consulting firm was doing support.

(Bill Murphy at 00:44:52) And during recruiting, they had told me specifically, you're not going to have to do support. Because I had asked the question, because I knew I wasn't going to like that. I wanted to build something new. And literally, the first day, they put me on exactly opposite of what they told me I was going to work on. So I felt very aggrieved by this.

(Bill Murphy at 00:45:08) And I'm not a quiet person, so I was, you know, letting everybody know about how unfair this was and this is—you know? And I felt lied to or at least deceived a little bit. But it was the nature of the business that everything was changing all the time, so they couldn't know. And looking back now, I was acting incredibly immaturely. But this individual who wasn't even a friend or a mentor or anything, but he came over and gave me some real straight talk about stop complaining and, you know, do your job and do it excellently.

(Bill Murphy at 00:45:40) And the people who run towards the fire or who do the crappiest job are the ones that get the most opportunity. And it was game-changing. It was like the first two months, I was really unhappy. And after he told me that, I was like, alright. I'm going to take a different approach.

(Bill Murphy at 00:45:56) And I'm glad I did that, and I don't know what made me do that. Maybe I was just so unhappy I was looking for any out, or maybe he was so persuasive. I can't totally remember. But I probably would say that to myself as well. Just be like, you know, if life throws you lemons, like, make lemonade and then, you know, figure out how to grow from there.

(Bill Murphy at 00:46:15) So I probably should've done that more.

(Joel Beasley at 00:46:19) Yeah. Make the best lemonade on Earth.

(Bill Murphy at 00:46:21) Yeah. Exactly.

(Joel Beasley at 00:46:21) With excellence. Yeah. I like that. That is super excellent advice. That straight talk, that wake up, that realization, the realization of there's an—every most things are average.

(Joel Beasley at 00:46:39) Right? Most people will do average work. So to find people that will do excellent work because they've set that level of quality personally for themselves, those are the people you'll surround yourself with. That's a good culture.

(Bill Murphy at 00:46:52) Absolutely. Yeah. I think the other thing that was interesting around advice, you know, now you got me thinking about the past is around testing your limits. And I think oftentimes people don't understand, and fear is a very powerful motivator. Right?

(Bill Murphy at 00:47:10) So when we founded Capital IQ, we had to meet certain deadlines or we were not going to raise more money, and then, you know, we were going to basically fail. And I really didn't want to fail. So you wind up working seven days a week, sixteen hours a day. And before I did it, I'm not sure if I knew I could do it. But I don't know any other way to figure that out.

(Bill Murphy at 00:47:34) And it's sort of like people who, you know, I run and so I'm confident that I could finish just about any distance race. But a lot of people say, oh, I could never do a marathon. Well, they absolutely can do a marathon. It's a skill that most humans have because we evolved to be able to run, to hunt, and so on. But they, in their minds, they say I could never do it, and that's what's preventing them from doing it.

(Bill Murphy at 00:48:02) So having some experiences that kind of push you past what your hypothetical limits are is always extremely valuable in business too. Because I think all these extreme races and stuff, I think help push people through some of their physical limits or perceived limits, but I think in business, it's the same thing. And only after you make yourself try do you realize, wow, that wasn't so bad. Your perception of how bad it will be and the reality are always vastly different. So push yourself, and then you realize that the second time you have to do it, it's much easier, and third time is easier than that.

(Bill Murphy at 00:48:42) So you build up muscle memory.

(Joel Beasley at 00:48:45) Yeah. I like that you run. I run every morning. I'm an early person. I get up at like five, 5:30.

(Joel Beasley at 00:48:50) I go for a run. And I typically ride—

(Bill Murphy at 00:48:53) In Florida, you need to get up immediately. You need to do it at 5:00 in Florida. It's too hot.

(Joel Beasley at 00:48:59) Are you an early person or no?

(Bill Murphy at 00:49:01) Yeah. Relatively. I wouldn't say I'm crack of dawn, but yeah, I would classify myself as a morning person. So I also think people misunderstand the need for sleep. Like, you know, sleep is extremely important to me and I'd rather do an hour of great work than three hours of mediocre work, and, you know, being ready physically is very important to be able to do that both fitness and and just, you know, sleep and energy.

(Joel Beasley at 00:49:34) Yeah. I sleep like nine, nine and a half hours a night. Like, I sleep—

(Bill Murphy at 00:49:39) That's on the extreme end for somebody I know with two young children. So I think you're going to make everybody jealous who's listening to this.

(Joel Beasley at 00:49:47) But I go to bed very early.

(Bill Murphy at 00:49:49) So I—

(Joel Beasley at 00:49:49) I put them to bed at like 7:30 and then I go to bed. Right? And then I just keep waking up early. And people are like, I don't know how you go to bed that early. I'm like, have two kids under two and wake up at 5 AM, and you will want to go to sleep all the time.

(Bill Murphy at 00:50:01) Definitely.

(Joel Beasley at 00:50:02) Yeah. But I did get into testing myself. So I started the company right at the same time as having my first kid. And so I started to push those boundaries, and I was like, I can't believe how much more efficient I am with all of these little improvements. And so then I started tracking it, and that's when I got into running because I have to run because if I run, my body physically performs better.

(Joel Beasley at 00:50:22) Like, my mind I can think better. I'm in a better mood. I can deal with stress better. Like, it's just sort of—

(Bill Murphy at 00:50:27) I track every day my moods and whether I did exercise and a whole bunch of other questions. And there's definitely correlation, direct correlation, with exercise. It was the number one most correlated thing to mood and my perceived level of output that day, whether that's, you know, whether that's totally true because it's a little qualitative, but at least over time it held up, just rating myself. So I completely agree.

(Joel Beasley at 00:50:57) Yeah. And you go back to the why. The why you're doing it is just to know that this is a good thing to be in my schedule that I'm spending time on.

(Bill Murphy at 00:51:04) Yeah. Absolutely.

(Joel Beasley at 00:51:05) Awesome. Anything else you want to get out there into the world?

(Bill Murphy at 00:51:07) No. I mean, I'm glad we got to talk about this. I really think, you know, we're continually trying to build great teams here and find great people who want to go on a fun journey with us. And, you know, it's not always obvious. Like, I think it's important for everybody to learn deeply about any opportunities that they have.

(Bill Murphy at 00:51:32) So, you know, there's always a perception and then a reality of every situation. And I think, you know, we're always working to try to learn and make ours the best it can be and get that message out there and continue to build a great team and hopefully people who can be with us for many, many years like the current team has been. So that's really the always the message for us is how do we build that brand so that people understand that Blackstone is, you know, a great investment company, but also a very innovative technology culture as well.

(Joel Beasley at 00:52:05) So let's say we've got some listening and they're interested. They've got some skills. Are you looking for specific skill sets, DevOps machine learning? Are you just looking for great technologists that have—

(Bill Murphy at 00:52:16) Yeah. I'm a big believer in hiring the best available talent, and we'll figure out the right way to use them. So I'd say we have a very wide aperture for what we would consider. If you consider yourself checking all those boxes in terms of grit and aptitude and desire and you want to be part of something great, you know, go to our website, apply. You'll get plenty of attention, and, you know, we'd love to find great people.

(Joel Beasley at 00:52:45) Nice. So they'll go to the website, apply, name drop you, say I was listening to this—

(Bill Murphy at 00:52:50) Absolutely.

(Joel Beasley at 00:52:51) Amazing guy.

(Bill Murphy at 00:52:52) Believe me, I read them all. So, you know, it's the easiest way to get into the whole flow, but I hope it doesn't come off as impersonal, but, you know, we read them all. We're constantly looking for great team members.

(Joel Beasley at 00:53:05) Fantastic. Well, Bill, we did it, man. We made a podcast.

(Bill Murphy at 00:53:09) Oh, thank you so much.

(Joel Beasley at 00:53:11) Thank you so much. You have a fantastic day, and Chloe and Jake will let you know when the episode's released and all of that.

(Bill Murphy at 00:53:15) Great. Thank you so much.

(Joel Beasley at 00:53:16) Alright. Talk soon. See you. Bye.