Blackstone CEO Stephen Schwarzman Says Early Investment Failure Nearly Made Him Cry

Blackstone Founder Reflects on Early Career Failure

Blackstone Inc. CEO and co-founder Stephen Schwarzman has shared how a major investment loss early in his career nearly left him in tears and became one of the defining moments of his business journey.

Speaking during Blackstone’s “Life Lessons” series, Schwarzman recalled a failed investment involving Edgcomb Steel during the early years of the company in the mid-1980s.

The investment turned into a complete loss for the firm, wiping out its original equity stake and leading to an intense confrontation with one of Blackstone’s investors.

‘I Almost Cried’: Schwarzman Opens Up About the Experience

Schwarzman admitted the experience was emotionally overwhelming, particularly because Blackstone was still in its early stages and he had limited experience managing large investments at the time.

He described being confronted by an angry investor who blamed him directly for the financial loss.

Rather than avoiding responsibility, Schwarzman said he accepted the criticism and used the setback as motivation to improve decision-making processes inside the company.

The Blackstone founder explained that the experience permanently changed how the firm evaluates and debates investment opportunities.

Failure Became a Turning Point for Blackstone

Following the failed deal, Blackstone reportedly redesigned its internal investment review processes and strengthened decision-making frameworks for complex transactions.

Schwarzman said the experience taught him that setbacks, while painful, can become valuable lessons that improve leadership and long-term business performance.

Today, Blackstone has grown into one of the world’s largest investment management firms, while Schwarzman’s personal net worth has risen into the tens of billions of dollars.

Business Leaders Increasingly Open About Mistakes

Schwarzman’s comments reflect a broader trend of major business leaders publicly discussing failure and resilience.

Amazon.com, Inc. founder Jeff Bezos previously admitted Amazon experienced “billions of dollars of failures” while experimenting with products and business models.

Similarly, OpenAI CEO Sam Altman acknowledged mistakes during the rollout of GPT-5 and emphasized the importance of learning from large-scale product challenges.

Former Intuit Inc. CEO Brad Smith also shared how a failed $40 million investment taught him the value of taking ownership of mistakes.

Entrepreneurs Embrace Failure as Part of Growth

Industry experts say openness around business setbacks has become increasingly common among founders and executives as companies operate in faster-moving and higher-risk markets.

Entrepreneurs are often encouraged to:

• Experiment aggressively
• Accept calculated risks
• Learn from failed strategies
• Adapt quickly to setbacks
• Build stronger decision-making systems

Business analysts note that resilience, accountability, and long-term thinking remain essential leadership traits in highly competitive industries.

Leadership Lessons Continue Influencing New Entrepreneurs

Schwarzman’s story continues resonating with startup founders, investors, and executives navigating uncertain economic conditions and high-pressure business environments.

The Blackstone founder said the painful experience ultimately reinforced one of the most important lessons of his career: “Setbacks are terrible, but they also are great teachers.”

Key Highlights

• Stephen Schwarzman says an early investment failure nearly made him cry
• Blackstone lost its entire investment in Edgcomb Steel
• The experience reshaped Blackstone’s investment processes
• Schwarzman emphasized accountability and resilience
• Business leaders increasingly discuss failure publicly
• Entrepreneurs continue viewing setbacks as growth opportunities