Caryn Seidman-Becker: Becoming Indefatigable | E23
01:14:16 Share

If you think of yourself as something different or lesser than, it's hard to overcome that. I never have thought that. Anybody who looked at me different, I was like, "I'll show you." And to me, if you have a great idea and can demonstrate all the characteristics of success, nothing is beyond your grasp.

Welcome to In Search of Excellence, which is about our quest for greatness and our desire to be the very best we can be, to learn, educate, and motivate ourselves to live up to our highest potential. It's about planning for excellence and how we achieve excellence through incredibly hard work, dedication, and perseverance. It's about believing in ourselves and the ability to overcome the many obstacles we all face on our way there.

Achieving excellence is our goal, and it's never easy to do. We all have different backgrounds, personalities, and surroundings, and we all have different routes on how we hope and want to get there. My guest today is Karen Seidman-Becker. Karen is the chair and CEO of the amazing airport service Clear, which earned $254 million in revenue last year and has a current market value of $4.7 billion. From 2002 to 2009, Karen was the founder and managing partner of her own hedge fund,

an asset management firm that at its peak had $1.5 billion in assets under management. She is a graduate of the great University of Michigan and serves on the boards of Home Depot and Lemonade, a company that sells different types of insurance online. In 2021, Forbes magazine named Karen the 27th wealthiest self-made woman in the United States. Karen is also a dedicated philanthropist. She created the Happy Elephant Foundation, which supports education, child wellness,

and the New York City community. She serves on the board of trustees of the 9-11 Memorial and Museum and serves on the board of the Department of Pediatrics at Mount Sinai Hospital in New York. Last but not least, Karen and I have been friends for 28 years. Karen, welcome to In Search of Excellence.

Great to be here. I'm honored. I always start my podcast with our family because from the moment we're born, our family helps shape our personalities, our values, and the preparation for our future. You grew up in Rockville, Maryland, a well-to-do suburb that's a 30-minute drive from Washington, D.C. Your dad worked at the Department of Transportation. Your mom, Lori, worked for the Immigration Naturalization Service, who you have described as a super mom and a super worker who put her kids first.

Can you tell us more about what your parents were like and what kind of values they instilled in you? Yeah. I should also mention I'm a crier, so I'm going to try not to cry as I get through this stuff. My parents and my grandparents put forth education and hard work as a huge value. My grandparents were immigrants. Actually, my mom's mom was a principal at a New York City school way back when.

And so work ethic and education as the great equalizer were the real value that my family pushed. I also think building community, being a part of your community, giving back and being accountable and responsible for your community. And there's different kinds of communities right in your neighborhood. And so we saw that from a very young age and it was instilled in us that you work hard

that gender didn't matter, which I don't know was a value that I understood at the time, except to say that my sister and I were not treated any differently by our family because we were girls. We were held to the same expectation. And that expectation could be cleaning the gutters or mowing the lawn or helping around the house. And so it was, you can do anything. You have to work hard. Failure is not an option. Keep moving forward. It was definitely the mantra in our household.

Let's talk about your early life growing up. You were born with a triple A personality and with a tremendous amount of ambition. That's awesome, but not everyone is born with those genes. Can you tell us how cleaning the gutters, mowing the lawn, raking the leaves, and helping your parents with the dishes contributed to your future success? And as part of this, what's your advice to those who want to be successful but may not be born with that same ambition?

I don't know that everybody would say it was a triple A personality. It was a view that I wanted what I wanted and I was willing to work hard and run through walls to get it. That could be as simple as I wanted a dog and my parents didn't want to get us a dog. So I protested. I was an activist in sixth grade. I had my parents sign a contract. I, you know, I went at it and then I was responsible for the dog. And so I saw the

word I use often to describe myself was indefatigable, persistent and tireless, and how when you can try to turn every no into a yes by coming at things from different angles, you just keep going. And so that was who I was at a very young age. I also think I had no fear of failure. I think we grew up, I would say, very middle class and my parents worked incredibly hard. And

everything that they did, they did for us to further us. And that could be anything from summer camp to different things. And we knew how hard they worked and we took nothing for granted. And so it was just an appreciation and a feeling accountable and a looking around and saying, if you want things, you are accountable for going to get them. Nobody is going to hand them to you. That's how we grew up because those were our circumstances.

And so it was that mindset of like, work hard, keep your head down, keep going. I don't know what child doesn't want more than what they had growing up. And that could be material or non-material things. And so it was just always wanting more and always striving. And I'm very competitive. So maybe that is part of the AAA. And so like, if I was mowing the lawn, it was like, how do I do it faster? Right? How am I stronger? Right?

Can I beat my own time? It was turning cleaning the gutters into a fun thing. So I would drop the soot on my sister's head from the top of the ladder. That was fun. You were so responsible and accountable for the outcomes. Nobody was doing it for you. You didn't have any options. I also was a voracious reader. I didn't leave the country till I was 13. My uncle took us to Mexico for the first time. Otherwise, it was kind of the auto train or Eastern Airlines to Florida to visit our grandparents.

And so this world around us and reading the books and the stories, and I was a big collector of Sports Illustrated magazines and Time magazine and seeing what the opportunities were and saying, well, why can't I get them? And so I think when you have little to lose, you have no fear of failure. And that fired up with the don't take no for an answer probably was foundational to who I am. You've talked a

about the chores you had around the house. What were you like as a kid? Were you popular? Were you a leader? And what did you do for fun? I never know what the word popular means. So I'll put it in perspective. I was one of the last people asked to the ninth grade prom. So that doesn't seem in line with how that traditional definition is. But thank you, Mark Fryman, for taking me. I was probably at the time, maybe a foot taller than him. So I was 5'8".

eight, probably in eighth grade. So as a girl, that was sort of tall and awkward. And then for superlatives in ninth grade, because I went to a junior high that was seventh, eighth and ninth grade, lots of people got like best dressed or most likely to succeed. I got straightest. So again, that doesn't seem aligned with award winning, quote, popularity as people historically have thought of that. But I was really happy. I had a great group of friends.

more guy friends than friends who were girls. And I love my guy friends. They are still lifelong friends of mine. Were there at my wedding and still

on my text chain very closely and great supporters and buddies. So the answer is I was happy. I was fulfilled. I was hungry. I wanted to win. I was a nonconformist growing up in Maryland. I think a lot of my friends made fun of me for what I wore. So maybe I always knew I should come to New York City where there was more fashion freedom. My mother would say I marched to the beat of my own drum. I just kind of lived in my own world and

you know, was happy in it. But clearly I was perceived as straight, gawky, tall, and maybe not that much fun. As we went into high school, I was a pommy, which in Maryland was a big thing. It's like a dance line. And I wrote for the newspaper, the school newspaper, because I thought I wanted to be a journalist and thought it was a great childhood.

I think education is one of the most important ingredients to our future success. Your parents, as you mentioned, were very grade-focused, academic-focused. As I mentioned also, you went to the great University of Michigan where you majored in political science and wrote for the Michigan Daily. Can you tell us how your experience at Michigan helped shape your future? And as part of that, can you tell us about Ralph Williams' class, The History of Primo Levi, and why you still have books from the Ulrich's Bookstore in your house?

As I said, I'm a voracious reader and maybe a little pack rat with books. It doesn't feel right to throw away books because they're like a little part of your history. So I applied, shocking to my children who I have one in college and one going to apply to college next year, I applied to four schools, the University of Michigan, University of Texas at Austin, UCLA, and Northwestern. I thought I wanted to go to UCLA. I wanted to go to a big school with

with sports where I could write for the paper that had strong academics. Indefatigable was actually one of the words that I used in my college essay. That was for Northwestern, who rejected me. But I got into UCLA, went to visit, was so excited, and then realized I was so type A, I didn't think I would belong out there, and loved Michigan, loved the spirit, loved the academics. I got into the honors program, loved the great books class.

and loved the diversity of the programs. I don't think I necessarily visited in January, which is an authentic time to visit from a weather perspective. So there were winter days that I was like, I could have been in LA, but neither here nor there. Michigan was another part of

my foundation in that it's a big school. You got to find your own way. You can be anybody that you want to be there. You can do anything that you want to do there. There's a club for everybody. There's people from not only around the country, but around the world. So you can find your people and your different groups, but nobody's going to spoon feed it to you. You got to go get it.

And so, again, just pushing yourself forward and making your way and learning from others and building communities. And that spirit, that passion for that community is so contagious. And you feel so embraced and supported by it, even though it's big, it feels small. It was a very special four years.

I grew up in Michigan. I knew I wanted to go to Michigan. It was the only school I applied to. Oh, wow. I did well academically at a private school in Detroit, Detroit Country Day. And I pretty much knew I was going to get in there. And it was a good thing I did. I didn't know where else I would go, but I had the greatest four years ever. Going back a step, how important is education to our future success and path to excellence? And

Is what you learn outside the classroom, is it important as what you learn inside the classroom? So I think two points on that. I think education is the great equalizer. I think education also doesn't stop after school, whether it be undergrad or graduate or vocational school. I think being a lifelong learner is crucial, right? Like look

look where the world is today. There was barely an internet when I graduated Michigan in 1994. My first class was a simulation and I was Les Aspin, the Secretary of Defense, senior year of college, right? Like that was a big thing at the time that everyone could join together in this group. And so I think being a lifelong learner and being obsessively curious is an enormous path to success. And I don't think that that is just a degree. That's a life skill. And

And that's actually something that we really hire for here at Clear and something that I would tell anybody. The world is evolving. And whether that be about politics, whether that be about health, whether that be about science, technology, medical, being intellectually curious, obsessively curious and asking why and wanting to get to the bottom of it. And there's more resources today than ever is crucial to success, number one, and

And I do think that education, experiential learning is everything. When I was at Michigan, I went abroad. I spent a semester in Madrid. That really was the first time I lived outside the country. Again, as I said, beyond my brief trip to the Yucatan Peninsula when I was 13. And when I got to Spain, I was like, wow, I am just a dot on the map.

in Maryland or in Michigan or now here in Madrid and look at this world and look at the history and the art and the culture and the people and the need to adapt and embrace change. And so I think that experiential learning, hands-on learning is even more powerful than the classroom. I do think the two go hand in hand because teachers, I don't know if I answered your question last time on Ralph Williams, incredible teachers,

are transformational. Their passion, their knowledge, bringing books to life, bringing history to life in an interesting way. You always thought when you were little, like history is boring. When you have teachers like Ralph Williams bringing the life of Primo Levi and his journey through the Holocaust and his writings to life,

is mesmerizing. It's something that you keep with you forever. There's pieces of it that you incorporate into your life. That is the reason why I keep those books, because they were a really important part of my life of building who I am, right? There's all these building blocks to who you are. I just believe that education is crucial.

We just talked about it for a second, but I do want to focus again on the importance that a great teacher can have on our lives, something that many of us have had along the way. I had an amazing teacher myself for a year of high school named Don Corr when he taught econ, and I lived for that class. I loved Don, and I knew then that I was going to pursue a career in business and own a company one day.

On a similar note, my daughter goes to Cornell and I was visiting her in New York a month ago. We had an amazing weekend, which included going to see Billy Joel at Madison Square Garden for

For my millennium viewers and listeners who don't know, Billy Joel sold more than 150 albums and is one of the most successful musicians of all time. So Billy's an hour into the show playing hit after hit. And when he told the audience, my music teacher at high school is turning 90 years old today. And he was the best teacher I ever had. When you're 15 years old and somebody says, this is what you should think about doing for the rest of your life. You really think about it. Told the crowd, his music teacher's name was Chuck. And he had...

All of us, 20,000 of us, saying happy birthday to him. And he said he was taping this. He was going to send it to Chuck, which is really special.

We talked about it a little bit, but on our path to excellence, how important is it to have a teacher or mentor who takes an interest in you and gives you the encouragement to succeed or pursue whatever it is that interests you? And then on the flip side, we didn't talk about this. If someone doesn't proactively give you this encouragement, what's the best way to find a mentor who will take an interest in you in your future? So for me, it was my sixth grade teacher, Elaine Cutler, who recently passed away.

And Elaine Cutler gave me extra spelling words, probably partially because my father told her to. But it was always, you can do more, Karen. You're capable of more. And pushing me and encouraging me. Maybe I shouldn't say this aloud. Supported me when I brought my cabbage patch kid to school and wanted to house her in the coat room or whatever, because...

My Cabbage Patch Kid needed a good place to be for the day. And so, right, supportive and embracing who you are and being your best self, but having people outside of your parents tell you that you can do more and they believe in you, but also inspiring and caring. I think that's massive. And not everyone has incredibly supportive homes, right? And so teachers are that support system, network, inspiration, motivation, care, and

And so I do think that it is transformational. Again, a teacher doesn't just have to be an academic teacher. We talk about mentorship now in business and seeking those people out is crucial. I've been lucky enough to have people who believed in me in my career when nobody else did. Two people specifically, Harold Levy and Bill Miller, who Harold really gave me my first job. And Bill has been an investor and a backer of mine and a strategic partner.

Those people are incredible. So it's teachers, it's non-teachers. And when you find those people, you learn from them, you stick with them. You're fortunate to have them. But I think mentorship, I think teachers are so important. I know a lot of people talk today about Zoom and virtual. There's nothing better than being in person with someone who believes in you and building that relationship and that trust. And it lasts for Billy Joel.

for 65 years or whatever it is. - Amazing. Someone told me a long time ago when I was younger, the four most important words in the English language are I believe in you. And it's something that really made a difference in my life when I had nothing, when I was in school as a young person, then in college I had a great mentor.

David Page, who did the same for me. So for everybody out there who wants to inspire, make a difference in people's lives, that's a very important message that will go a long way and maybe life-changing for people. Absolutely. Paying it forward, right? Paying it forward. Let's talk about the start of your career. And to do that, we'll go back to what you did in the summers in college. You were an

avid Washington Redskins fan growing up. The team is now called the Washington Commanders. At some point, you thought you may go into sports journalism. During college, you worked at a radio station, then a TV station. And while you were logging baseball tapes, you also worked on the 1992 presidential campaign. And by doing these things,

You started to understand the power of economics and politics and how the two are connected. From that, you really became interested in business and finance. When you went back to Michigan, you did a big research project on the bottled water industry, which was not a big thing back then. You loved doing the report and learning the finance aspects of companies and love understanding who ran them, what their future was, then how the dollars and their business models

reflected their vision. So you graduate, you moved to New York because you loved it there, but you moved without a job and your parents were not so happy about that. Can you tell us about your first job, why you took a job in risk arbitrage, which you didn't even know what it was when you applied? And as part of that, can you tell us what you said to yourself once you got there, which is something I preach to my interns and my mentees, which I call philo, F-I-L-O,

So I did move to New York City without a job. I had a job offer, a consulting company in Chicago, and I turned it down and my parents went bananas. But I loved New York. I loved the energy and I loved the movie Working Girl, right? Melanie Griffith with her, what seemed like a coach bag at the time and her coffee and her Wall Street Journal and Let the River Run playing as she came out of the subway. And that's what I wanted to be. I had an interest in stocks. My dad was an investment advisor.

And so I used to put the value line sheets in a binder for him and I would look at them and I would hear him talk about stocks and companies. And my uncle was an investment banker in New York. And so I had an interest because I think everything is qualitative and quantitative, even in sports. It's like your skills, but also your attitude and your leadership and things of that nature. Well, those are companies. It's qualitative. Like what's going to happen with the bottled water industry and what's going on with health and wellness and

and hydration and whatever. And then what could that business look like and how does it scale? And so I knew I wanted to come to Wall Street. And so I pounded the pavement, again, got a lot of no's and was just like, oh, all right. And kept on going and got a job offer from Arnhold and Bleichroeder.

Because Harold Levy, I guess, saw something in me. And I literally said to him, I will be the first one in and the last one out and your lowest cost employee. And I'll do whatever is asked to make this happen. And so they found a job and they needed a junior analyst in risk arbitrage. I think they made a seat for me in the corner, like facing the wall by the hole punching machine. And off I went and everything changed.

I learned and I asked questions and I had people willing to answer. And when you make de minimis money and you have de minimis money, you can get to work early and you get free coffee. And if you stay late enough, someone will pay for your dinner and your car home. And so it was a great place to start.

You worked at Bly Schroeder for four years. Then you spent four years at Iridian Asset Management. Then you joined Glenview Capital Management as a partner. Then on September 3rd, 2002, right after you had your first daughter, Olivia, you started your own money management firm with Ken Kornick, where you managed a hedge fund that focused on value-oriented long-term equities.

We'll talk about what the name means in a second, but I want to go back to what you said before. There were not that many people who wanted to invest at first, but one individual, Bill Miller, like Mason did, $50 million. For our listeners and viewers who don't know about Bill, he's a legendary money manager who famously beat the S&P 500 every year from 1991 to 2005. We're going to talk more about your firm in a minute, but before we do, can you take us through the thought process of why you started your own firm?

You said you weren't fearless, but you had to be a little scared to start your own fund and the pressures you were feeling. And I want to know about your green sweater and our path to excellence. What's your advice to others who want to start their own business but are too afraid to try? We'll go with the name first. So named the firm Ariance because my view of investing was always it's part art, part science. And so put those two words together, going back to qualitative and quantitative, my experience...

When you looked at companies that were growing, yes, it was about the numbers, but it was about the secular trend. It was about the management team. It was about the leadership. It was about the values. And so it's not just the numbers. It's a lot of qualitative factors that go into business. And so investing is absolutely part art and part science. And I used to love reading proxies because it really told the story of the business and the management team and how they were incented and what the relationships were.

So you got to really put all the pieces of the puzzle together in order to be a strong long-term investor. And it's interesting, from 1994 till 2002, I had seen incredible management teams and stories and disastrous ones. And you would see people like Craig McCaw gobbling up wireless spectrum. And that was a new industry in the 90s. Or Brian Roberts building his company, Small Cable Company, into something much bigger, both through M&A.

through product development and through organic growth. You saw Jeff Bezos start Amazon in 1997 as a trader out of D.E. Shaw. I could go on and on with these stories of the incredible people that I had a front row seat to, and also some disastrous ones who either made their company go bankrupt or went to prison. But point being, you saw it all. And so I guess I had this view of like, well, I don't know if he can, I can. If Jeff Bezos can go from D.E. Shaw to starting this book company, like I can do this.

And so I think it was seeing enough and having both the combination of a belief in yourself and a lack of fear of failure that I believed I could. And then there were supporters who said you could. The beautiful thing about Wall Street is that you have a report card. It's not sort of theoretical. Were you responsible for this product? Did you come up with it? But the other people built it like...

You have a report card and those are your returns. Data doesn't lie. And my data was great. And it was confidence inspiring to me, maybe not to enough others at the beginning, but to at least to Bill. I wanted to do things my way. I wanted to build a culture and a process that represented how I looked at the world. And at the bright age of 29, I was like, now's my time. And in fact, I would complain and Bill would say to me, stop complaining and just go do it. So

If you want it done, you want it done your way. You can't just complain about it. You have to take action. And by owning it and being accountable and responsible for all of it, that was my action. What about the green sweater? I am very superstitious. And green was the color of money and green means go. So I wore a green sweater. It was a lovely green sweater for the first day of when we started investing at Ariens Capital.

And we lost money that day and I never wore that sweater again. It's a shame. It was a lovely sweater. It's interesting you mentioned reading about people. I did the same thing. I was working at Sun America. I had a great job. I was the assistant to the chairman. Eli Broad was my boss at the time. He was one of only three people who started two Fortune 500 companies. The others were Wayne Huizenga and Jim Clark. And I remember thinking, I want to do more. I want to make an impact.

I remember the business we cover in 1996. They had all these tech guys, Jeff Bezos and the founders of Yahoo. And I remember looking at this cover saying, I got to go do that. I either got to go back to business school where I want to just start my own company or join a younger company. I remember going to my boss, worried I was going to get fired and just

telling him I want to do something more. I want to make a difference. And it really is one of these things where you start to think about it. Do I give up what I have? Do I be truthful with my boss? And then do I go pursue my passion? And I decided to be truthful. It was my big break. I was very lucky. The job I had a front row seat to everybody. All the CEOs of investment banks would come see us.

It really was motivational for me to read about people who gave me the inspiration. That's one of the goals of my podcast, to hear stories like you and other successful people, to inspire and motivate them to pursue something that they love.

It's interesting. I tell my kids, everyone puts their pants on one leg at a time. When you meet people up close, whether it be Steve Jobs, as he came back to Apple, and nobody wanted to meet him in the basement of the Javits Center for Macworld, or you saw Amazon and would go visit the hospital headquarters that they had, and, you know, the whiteboards and the elevators and the energy and the passion.

Or you go and I used to think you get a lot of information as an investor by going and hanging out in the ladies room for some period of time because people have, you know, authentic conversations there. And you'd go to some interesting biotech companies and hear people talking. And it was just everybody are just people. And you got to be willing to put yourself out there and you have to be willing to take risk. And if you also believe that what's the worst thing that can happen, you will fail. You will have options. You can go do something else, but you can't just talk about it.

It's about action and execution. Again, I go back to my childhood. I don't know that anybody was betting on me from last girl or one of the last girls asked to prom to straightest. So it was like, all right, might as well just bet on myself and keep moving forward. And I think I've always had that attitude.

But it's hard. People shouldn't just drop everything and go follow their passion. They should really be thoughtful about it. They should think about what's plan B. You didn't apply to any other colleges. So apparently there wasn't a lot of plan B thinking there. I applied to three more. What's plan B? What's plan C? But why not me? Jeff Bezos or Steve Jobs or Tom Brady, they didn't wake up as the anointed one when they were, you know, young, right? They all had a story. And look at Tom Brady's story. Another fine Wolverine, right? He

He wasn't number one in the draft. Not everybody was betting on him. And I think a lot of it's been written about that chip on his shoulder motivating him. I always say, let the haters be your motivators. But everybody, they're just people. Why not you? I spread it out a bit when I applied to law school. I applied, I think, to 14 law schools. I did very well in Michigan. I was Phi Beta Kappa my junior year, but I didn't test well. And so I thought, oh, geez, this is going to be a problem. My friends who had similar grades, they went to Harvard.

and Northwestern was my backup school. So I did spread it a little around. Thankfully, I got in. I didn't know what my plan F or G or Y would be, but I did spread it out a bit after I went to law school. Now you have your own firm, and it goes well for a while. Your returns were excellent. It's just two examples. You were up 17.57% in 2005. You were up 12.78% in 2006. At your peak, you had 20 employees.

You were managing $1.5 billion in assets. And then came 2008. You started off pretty well. At the end of February, you were up 7.77% for the year. And then disaster strikes. The market crashed, losing 38.49% for the year. There was carnage everywhere on Wall Street. 770 hedge funds closed down and liquidated their funds.

that year or the following year after they posted huge losses. And then on December 12th, 2008, you announced that you were also closing your fund at the end of that year. You wrote a letter to your investors that said, we do not currently see a clear path to employ our discipline process and gain the necessary conviction to become reinvested. The decision stems from our belief that the current market environment is incompatible

with our investment style and process. For the last two months, we've been deeply underinvested and we do not feel it is appropriate to sit with cash and collect management fees. At this point, you're managing around a billion dollars and you returned 95% of your investors' money by the end of January 2009. I loved reading your letter, which to me had two central themes.

acknowledging the realities of what you were doing and could accomplish and doing the right thing, not for yourself, but your investors as a fiduciary of their capital. On our path to excellence, most of us are taught to keep fighting when the going gets rough and to never give up. What's your advice here? And is your advice different for money managers than people who start their own company, entrepreneurs? And as part of this,

How important is it to leave your ego at the door when deciding what to do in situations like this where the master of the universe syndrome is not going to cut it? I guess, lucky for me, I've never had the master of the universe syndrome. I've had the nervous, anxious dog wagging its tail very quickly, trying to run fast. Look, we went to cash in September of 2008, late, but not too late. And so I

We went from that up eight to I think we were probably down 20, 22 percent at that. We just said we take concentrated positions looking out five years, nine, 10 percent positions, what the opportunities can be. And we didn't see it. We didn't. And the shorts were not working the longs. We didn't have the conviction. And we just said, let's sit for a while and see what happens. We can redeploy. And that was a big decision we'd never made. You're always saying, what's the next thing I want to invest in? Not I want to sit in cash.

market went down further. And it was at that moment that I said, what do I want to do? Do I want to do this? I've been doing this almost 24-7 for 14 plus years. I don't know if I want to do this going forward. And I've seen people build incredible companies. And I kept saying I didn't want to die and have people say I pick good stocks. I wanted to build something that made the world a better place. And I thought that there could be interesting opportunities shaking out from the downturn. And so

people kept saying, well, when are you going to reinvest? And I finally thought, I don't know if I want to. I don't think I want to. I think I want to go do something different. I want to buy a company and control the cash flows. When people were liquidity starved, we gave it back to them. We didn't want to collect management fees for sitting on people's cash. And it's not something that we want to do anymore. We did want to make sure that everyone found new jobs and help them do that. It was a difficult decision to deconstruct a company who had become like a little family. But

I don't know that money management is any different than anything else. It's like, are you passionate about it? Can you give it your all? Do you think you can be excellent at it? And I had a little bit of a change of heart, both opportunity and passion for what I was doing. And so that's really what drove that decision. And it felt like the right decision. So the fund goes down and essentially it fails. When you start a new business, the

That's really the main worry, that it goes out of business. For most people, it's embarrassing. If you raise money like we both have, your investors are not very happy. And then, of course, there's your mental state. When you close your fund, you said you had moments where you felt like a failure. You'd be at dinner and someone would say, what do you do? You didn't have the right answer. They literally pass right over you and then talk to your husband, Mark, who works at one of the most prestigious private equity firms in the world, Apollo.

And that really bothered you, that you were being defined by what you did as opposed to who you were, because you're obviously the same person. I lost my job when I came to Los Angeles. There was, after law school, I had $3,000 in the bank. I knew nobody here. And I would walk around, I would go out to places myself, which is really weird. And I would meet a woman who I wanted to

see if she wanted to go out with me on a date. And the first question was, what do you do? And I said, nothing. It was very embarrassing. And I didn't even know what to say. I felt really lost. We're going to talk about Clear in a minute. But before we do, I want to talk about the very important flip side to failure, which goes against conventional wisdom that

failure can be a good thing or even a great thing. When I look at my own career, I've learned a lot more from my failures, of which there are too many, from which I'd like to forget, than my successive. And I have a saying that sometimes our biggest disappointments lead to our best opportunities. On our path to excellence, how important is it to fail?

Yeah, look, I think failure is incredibly instructive and humbling, motivating. I will also say that I didn't look at Ariens as a failure. If you looked at the returns from the beginning, they were very strong. But if you invested at the beginning of 2008, they definitely sucked. I thought there was a lot that we achieved in 2008 sucked and I made a decision. But I think failure, you hear all these stories on failure.

It's humbling. It makes you fear it less. It makes you believe in yourself more. It makes you thicker skinned, right? I think that failure is defining and there's lots of failures every day and every year and learning from them and motivating to do better, but also not fearing it because you strengthen and you move forward. It's crucial. They talk a lot about resilience and grit these days.

with kids and as a parent. Failure is highly instructional. It's very motivating.

We've talked about the change of heart you had when you're thinking about leaving your hedge fund. You're 36 years old at the time. You have three kids. You've been working 24-7 for a long time. You're saying to yourself, I love Wall Street. I love the chaos. I love being busy. And then you had this what the fuck moment where you said to yourself, what am I doing? You didn't want to manage money anymore. You wanted to do something materially different. And then you have this moment. It's

It's a scary place. You're in your daughter's kindergarten class. They're cutting scissors, patterns. You can't really focus. You're not so good on the scissors. Wall Street is melting down. And here you are, that people are trying to save the world and Wall Street. What's your advice to others who want to start over and do something they're passionate about, but they don't have the confidence you had? You were motivated by Jeff Bezos, Steve Jobs, Mike Bloomberg.

And they were a huge factor in your life. But what does someone do to get that confidence in order to make the change, do something that they're passionate about? Yeah, I would say reading other people's stories is very instructive, right? And understanding other people's path to success and history, I guess that's one of the reasons you're doing this podcast, I think is very motivating. I don't know, it was me in that moment. I'm sort of an N of one.

I wanted to do something that made the world a better place. I felt a moral obligation to be part of solutions, to give back to communities, to find meaning every day. Life is short. And are you using your time the way you want to? Do you get up every day excited and passionate? And you know that feeling when you want to go out and slay the dragons, when you want to go out and you have a vision.

And I don't know, I guess I always said, if not me, then who? 9-11 was defining for me. I looked at our country and safety differently. I wanted to be part of a solution. I never wanted to be a cog in the wheel. Never wanted to be a number. That's just what drove me. But I think people have to figure out what they want to look back on and with no regrets say that they left it all on the field. What is that all for somebody?

We're going to talk about the origins of Clear in a minute, but before we talk about what happened next, I think most of our listeners and viewers know what Clear is, which I think is one of the greatest things ever. I travel a lot, but for those who aren't familiar, please tell us what it is.

Clear is a biometric secure identity platform. And so this whole concept of your face, your fingerprint, your eyes, your voice, QR codes represent your identity and identity enables frictionless experiences. We started in airports, which means that you do not have to take out your ID and have unpredictable experiences, but you use your fingerprints or your eyes today, more your eyes.

as your ID to have a predictable and frictionless experience in airports. And then we've taken it beyond airports into sports stadiums and other mobile products. But this whole concept of all you have in life is time and you shouldn't spend your time waiting in line or unpredictable experiences is really the driver to Clear.

I travel a lot. I've been a Clear member, I think, for four or five years now. I've been a TSA member before that. TSA costs $79 a year for five years. Clear is $179 per year. If you just factor in your time, I go to the airport, the TSA line, sometimes it can take you 30 minutes. The Clear line, I've measured this since I knew we were going to do the podcast, which is a while ago.

I think eight months ago, we said, all right, we're going to do this. And thank you for this very, very much. I went up to, and I always like to tell my guests how we got here today. I went up to, I saw you at the Milking Conference back in May. We gave each other a big hug. How are you? How are the kids? Et cetera, et cetera. And then I said, hey, Karen, I've got this podcast. I told you. And I said, would you be kind enough to do it? You didn't even hesitate. You said, of course I would. So I thank you for that. And I was a huge fan of Clear.

as well. But you look at the TSA line, and it can be very long. And I've measured now the average time it takes me to get to the front of the line, where I'm always greeted by someone who's super friendly, is less than two minutes. And over half the time, it's less than a minute. You walk up there, you look into a screen, they look at your eyes, it clicks, you get a little pass, you walk up to the TSA at the front of the line. That and global entry are the two greatest things

in the travel world. So I'm giving you a huge plug here. I love what you're doing. You've got an awesome company that you're running. Oh, thank you. But I want to go back to the beginning and we'll go to your predecessor company that was called Verified Identity Pass, which was founded in 2003 by a journalist, author, entrepreneur named Stephen Brill, who had previously founded Core TV. The premise of VIP, as it was known,

It was the same lettuce members bypassed security lines that used the smart card that was reinforced by biometric data. Brill started VIP to shorten the long lines after 9-11. Over the next five years, he raised $90 million in funding, had 200,000 users, and was in 17 different airports. He was making a good amount of progress, but burning a ton of cash on July 26, 2008.

The TSA suspended it from enrolling travelers in its pre-screening program after a laptop containing the records of 33,000 people went missing from San Francisco airport. The laptop contained unencrypted pre-enrollment records of individuals interested in joining the VIP program, including names, addresses, driver's license, and passport numbers. It was a massive reputational blow to the company. In addition to that,

The company had a bloated cost structure, and then it missed payments on a $32 million loan. And then it filed for bankruptcy in December 2009, and it shut down. So we'll fast forward to April 16, 2010. And that was the day you and Ken Kornick formed a company called All Clear Holdings. And you bought the company out of bankruptcy for $5.87 million, much of which was your own money. And you outbid a company named Henry Inc. by nearly $2 million. When you're

When your fund closed, you said you didn't want to die and have people say you picked good stocks. And I can assure you, Karen, nobody is saying that today. Can you take us back to the day you won the bankruptcy?

the auction. What did you see that others didn't see? And as part of that, can you tell us what was happening in Brazil and Asia and how you valued goodwill in the relationships with the government and major airlines? Yeah. So we actually started doing due diligence on Clear in August of 2009 and looked at it like we looked at any other investment. What could this business be? And even though it went away in a very non-glorious way, which is

bankrupt and it took people's money and people didn't know where their data was. And when you called the call center, there was nobody there to answer. People missed it. Something resonated with the experience, with the technology. And so we knew there was something there. And we looked at it and said, again, no different than Amazon or Apple, that we could build this platform company. You started off in computers or you started off in books. We started in airports. But this whole concept

of making experiences safer and easier, of giving people back their time, of giving people control, of using technology for the and, for frictionless experiences and trust and security. We thought that this platform could do and starting in the place where identity and security were paramount. With that confidence and with that research and with that data and with our own capital and some outside investors that we went in in February of 2010 to buy it in a bankruptcy auction. If you haven't been part of a bankruptcy auction,

It's an experience where you go to your little room, you formulate a bid, you come together, they kind of unwrap the bids, you go back. It was going back and forth. When we won that day for about $6 million, as you said, and as I say, a million dollars of legal fees. When we won that day, you went home like you did with your first child.

And it was like, oh my God, now what do we do? I remember my knees were shaking. I think we also didn't eat from like 8 a.m. to 8 p.m. I wish I had pictures of that day. I did not. And then we started with a five-page to-do list, double-sided, split between...

Ken and myself, and we went at it. And every day you're just learning. And it's, again, humbling. And you take the lessons that you had from the companies that you used to invest in and everything that brought you to this point. But it was like a holy shit moment of what did we just do? You know, it's a very large purchase price when it's your own money. But we went at it. And rebuilding trust, we had hit the road before we bought the company.

asking stakeholders from the TSA to airlines and airports, hey, what do you think if we bought this? And we shared our vision. We kept going back. I can look at the emails we sent the night we won it, letting all the people who we had been talking to know that we had won the auction and we were the new owners of the company. Actually, the deal fell apart once before it closed. So somebody once told me bankruptcies happen on the steps of the courthouse. And that is true. There's

There's always a lot of back and forth and a lot of stakeholders. But it was about those relationships and those consistent conversations, which took years because there was a lot of angry feelings to what happened the first time. And I signed every email myself to members, to partners, to just really drive accountability and ownership and transparency.

You built a brand and it's still built around today trust and our search for excellence. How important is it to be very transparent in what you're doing and for people to trust you? It's everything. If I look at our 2010 member pledge, and again, we were doing everything ourselves. I was the email person, Kenza doing technology and engineering, finance, the whole thing. We did a

customer pledge to members in June of 2010. And in it, it talks about what we will do. And one of those points is we will guard your privacy, right? That is crucial. Starting in 2010, that was not some trendy thing because people are talking about privacy or data security. It was like, this is who we are. This is what we do. And we're going to sign our name to it. And you're going to hold us accountable to it. And so I think trust and transparency is

not only with your members, but with your team members and doing what you say you're going to do and continuing to go back. And oh, by the way, doesn't mean you don't make a ton of mistakes along the way. So when you make those mistakes saying my bad and I'm sorry, and we own it, and here's what we're going to do differently. We changed a compensation program here at Clear probably in 2014 with our amazing ambassadors, and it was not met with a lot of happiness. We changed it back. And I'm

And I went on an apology tour to every airport, to every break room at 4.30 in the morning saying, I did this, I'm sorry. And we changed it back. And that actually buys you more trust. It's everything. Look at brands today. You must have trust digitally, physically, with your employees and with your customers and with your partners. It's everything. And by the way,

Somebody once said to us, it is the staircase up and the elevator down. It takes a really long time to build it and you can destroy it immediately. And so living that as part of your ethos and your culture every day as you scale is massively important. Let's talk about the importance of customer experience and the success of any business. If your customers like the experience, they'll be a customer for life. And as an added bonus,

They'll tell their friends, which will lead to more customers, which is also great because there's no new cost to acquire these new members. In 2021, you had a lifetime value of customer acquisition cost ratio of approximately 18 times for members who joined that year. That's really good. So it's working on the flip side.

If your customers don't like the experience, they'll stop paying your $179 a year. And worse, they may tell their friends it's not worth the money, which would likely lead to some potential customers not becoming customers. When I've had a bad experience as a customer, which happens at times with large companies like Verizon, where in some cases I've had to spend hours waiting on hold, then speaking to an entry-level employee in a phone center, often not located in another country,

who can't solve my problem. When this happens, I get the CEO's email address or a paid service that we use. I email the CEO directly, which works more than 99% of the time. But nearly all CEOs of public companies, I'm guessing 99% hide their emails. They sit in an ivy tower. They don't want to be bothered getting emails from customers. You do not do that. You do something that most CEOs would cringe at. Your email is public. Karen at clearme.com.

So when customers have a bad experience with Clear, you're inviting them to email you directly. And rather than have somebody else who says they're calling from the executive team, but in reality, they're often sitting 1,000 miles from the office, you often get back to people yourself, not in a day, but very quickly. You've done it on a Saturday at 2 p.m. when you're at your son's soccer game. And our search for excellence on a scale of 1 to 10,000

How important is it to be in direct contact with your customers and to listen and learn from them when you're building a company, regardless of the size of the company? 12,000. I can't remember whether it was Crate & Barrel or Williams-Sonoma. I read one of those CEOs who spends a few hours a week reading hundreds of customer emails. And we are here because of the trust of our members. We are here because of the trust of our team members.

and the passion. We would not be here without them. I tell every single team member at Clear That, every engineer, every product manager, people in legal and finance and ops. And that's where we learned. This morning, we had a leadership team meeting and we had a focus group and about 14 different ambassadors from around the country zoomed in to tell us about what we could be doing better from a product perspective. They see it first. And so I have gone to the lanes and

and filmed our members' feedback to share with other team members here. It's everything. Feedback matters. And whether it's something we could be doing better or let me explain to you why you experienced that and be transparent about it. I think it's crucial. You can learn so much. I'm not a heavy participant in social media, but I am humbled by it. 20 years ago, if you didn't like, let's just say New Coke, for instance, right? Like that took a while to brew. That would be,

instantaneous today. And whatever the brouhaha was, however many decades ago that was, it would be 10x today. The real-time feedback, I can see that we are having a problem this morning at Newark at 6.20 in the morning on Twitter. I can call over to that manager and say, what's going on? That keeps everybody on their toes. That kind of transparency, I think, is really powerful. Sometimes it's also wrong, and it's important to correct it.

But it is a very viral, transparent, real-time feedback world. And you better be prepared for it. And you better be in the business of getting better every day and responding and understanding. And there is no hiding from it. Specifically, we are out in the middle of airports where two and a half million people around today are going through every day. You can see what we're doing well. You can see what we're not doing well. You can see rock star ambassadors or somebody who potentially needs more training or feedback.

And to not act on that, to not want to get better every day is to die. And so you got to want to get better every day. You got to want to win. And customer feedback is the best way to do that.

On our path to excellence, we all face challenges. And you had a monster one called the coronavirus. At the peak of the pandemic, passenger traffic was down 90% and airports became ghost towns. And just to put some numbers on this, on April 13th, 2020, the TSA screened 87,534 people versus screening on average more than 2 million people a day before the pandemic. Through

January 2021, air travel was down 60% and airline industry losses topped $370 billion. As passenger volumes plunged 60%, you cut your marketing spend, you tighten your budget. And in March 2021, you created something called Health Pass, an app that tracks COVID test results and vaccination status. Thankfully, despite the massive decrease in the number of people flying, the pandemic only had a temporary impact on your business.

In our search for excellence, how important is it to overcome challenges, especially those that may seem insurmountable? So going back to learning, I learned a lot in the 2008-2009 market downturn. And you could map that market downturn back to what was happening in 2007. And burying your head in the sand is a sure way to not win.

And so on February 25th, Ken and I were on a train down to DC. I believe the stock market was down foreign change percent. You were reading what was happening in Asia and in Italy. And it was like, hmm, there were a few cases in Seattle, right? Just a few. And we thought that there was a big problem. You could read a lot of tea leaves. We talked to a lot of people. We put together a lot of data and we started taking action on February 25th. So being proactive and not reactive

is massively important. And your job as a leader is to look around corners and to make predictions and to act on them, not to wait till it hits you in the face with a two by four. And so we did start taking action that day, taking our marketing budget to zero. You could always, what's the worst thing that happened? You're wrong and you turn it back on. We did start to put our team members on a leave of absence plan and make sure we were taking care of them

And we also took our salaries to zero, just mine and Ken, zero. And we contributed that to a clear one, one clear fund where we could take care of team members around the country. And so it was that action that allowed us to both communicate it to our company in aggregate on March 16th, and then move on to Health Pass to see what was coming around the corner and leverage our assets. Again, our mission is to make experiences safer and easier. And

We believe that there would be another card in your wallet and we're all about digitizing those and connecting people to all the things that make them them. Well, your vaccine or your test results are part of that. And so we were able to move quickly because we were proactive, because we had learned a lot from the markets for a few decades.

And you've got to act and you've got to look around corners and you've got to put yourself in a position to lead and be proactive. And by the way, your teams,

want stability. Your teams want leadership. Your teams want to know that someone has a plan, that we're not making it up as we go along. And so we did those things. And by the way, traffic wasn't down 90. It was down 98. If you ever want to stress test a model and you are a subscription travel business, take it down to borderline zero and see what happens to your business. And I think because we built trust...

And because we took care of our members and we were still there for them, for the few who showed up every day, it went a long way to coming out of it with even greater strength. Let's switch gears and talk about the challenges of women and money managers and as entrepreneurs. And we'll start with a few stats on the hedge fund front. According to IBIS World, there are currently 3,841 hedge funds in the United States of these.

Only about 80 are led by women today, 2.1%. Back in 2002, you were 29 years old when you started your hedge fund and the number of women managers was much lower than 80. I'm guessing it was less than 25. And you were not only one of the few women who ran a hedge fund, you grew it to $1.5 billion in assets, which at the time was probably a record for a woman hedge fund manager and which is still ridiculously impressive today by today's standards for women or men. I think today there are only 10,000

female hedge fund managers who manage over a billion dollars. Now let's talk about some stats on the venture capital side. In 2021, venture capital investments totaled the record $330 billion. And of this amount, only 6.4 billion went to women. It was an all-time high by dollars.

but it was only 1.8% of the total, which was down from 2% in 2020 and 2.8% in 2019. And it was the smallest share since 2016. In addition to getting only 1.8% of all VC dollars, women raised smaller rounds of financing than men. Women...

on average raised $5 million per round, while men averaged $12 million. You were a pioneer here as well. You raised $150 million over six rounds in the seven years before you went public. And now let's talk about public companies. In the United States, there are approximately 6,000 public companies at the New York Stock Exchange and NASDAQ. The first stock exchange in the US is the Philadelphia Stock Exchange, which was created in 1790.

And in the 231 years, three months, and 29 days since then, there have only been 37 public companies founded by women ever. You probably don't think of yourself this way, but you're one of the greatest pioneers for women in finance of all time and one of the OGs. And not only a role model for women, millions of women, but for men as well, millions of men. And I want to talk about women for a second. Huh.

How do we change all of this? And what can we do to reverse this trend? And what's your advice to women entrepreneurs trying to get funding for their businesses?

So thanks for saying all that. I didn't know those stats. I don't feel like an OG. I just feel like a person who wants to make a difference. And I got to be very honest. I think it starts way earlier. You can't just wake up. If I go back to the mowing of the lawn or the cleaning of the gutters, you can't just wake up at the age of 22 or 30 and decide that you want to do things and that you're going to be strong and tough and rough and tumble and that you're going to

Whether it be a man or a woman, be indefatigable, turn the no's into yes's, pursue your vision, not be afraid. I think that starts young in how we raise our children. I can't stand when women say, I can't, I don't understand the stock market or I don't understand finance. It ain't rocket science, right? There are some very basic things. And so instilling that at a young age in

In everyone, financial literacy and responsibility, right? 16% credit card debt is not good for anybody. You shouldn't pay that. It's not good. And so I never felt like a woman pioneer. I felt like a person who was overcoming the odds. People didn't believe in Clear Silicon Valley, certainly didn't believe in Clear, or people didn't want to invest in Ariens Capital. I didn't take it as because I'm Karen, I'm a woman.

Except for one guy who said something when I was raising capital and pregnant, I was like, oh, that's sexist. Screw you. I'll show you. And then when he came back in to invest later, I wouldn't take his money. I think it starts with not thinking of yourself different. Race, religion, ethnicity, sexual orientation. I think it goes much broader today. It's just I'm a person and I want to do this. I'm sure that when I walk into people's offices, maybe more years ago than today or maybe today,

It doesn't strike people that I have the same strength or resilience or grit or network. You know what? I don't play golf. I'm kind of not that good at tennis, but I'm okay. I'm a mom of three. I'm a hardworking human. I'm all about the outcomes. And that's how I want to be judged. I'm a person with high integrity, creativity, financial responsibility. And I actually think if you look at the data that women actually...

can course correct faster than men, things of that nature. But I don't think of myself as an OG. I think of myself as a person, kind of how we started. A girl from Maryland to girl with a dream, as I say to our folks here, SFGM or SGFM, I'm a simple girl from Maryland and just continuing to execute. And I think if you think of yourself as something different or lesser than...

It's hard to overcome that. I never have thought that. And I do understand that lots of people today from all different backgrounds are raised to feel lesser than, and that's not just gender, that's socioeconomic, that's race, that's sexual orientation. And I think therein lies the problem going back to education and how we started this. You can't think of yourself as lesser than. I think diversity yields better outcomes, greater critical thinking. I believe in that.

at my very core. And anybody who looked at me different, I was like, I'll show you. And I think that it starts with how we raise our daughters and our sons, raising our sons to look at people as equal. And I have a 14-year-old son. It's just as important as how we raise our daughters. And I have two of those. Nothing is beyond your grasp. And the more people that people can look at, I guess that's better because it's confidence inspiring for them. And it shows the art of the possible.

But to me, if you have a great idea and can demonstrate all the characteristics of success or that drives success, whether it be first in, last out, or obsessive curiosity or an unbelievable work ethic and a lack of entitlement, I think those are big drivers today. And it never occurred to me that I was a girl. It wasn't part of my construct. It was, I'm a winner. You are definitely...

a winner. As I've told people, I said, I have an amazing podcast with this amazing woman who's done more for women. They're shocked at the stats. And I wish people knew more about the story and what you've done because, and they will on this podcast. I hope there's a million people who eventually listen to this podcast, especially the women who don't know the stats and they're afraid and they want to go forward. So I think you're an inspiration to

many, both women and to men. That's nice. I want to switch to one of my favorite topics, what it takes to be successful. And I want to start about the importance of preparation on our path to excellence. One of the main ingredients that got me to where I am today is that I am always the most prepared person in the room. How important has preparation been to your success? And going a step further,

How important is extreme preparation, going way above and beyond of what would be considered great preparation? I'm talking about the kind of preparation that you spend 30 to 40 hours on for a single event or meeting.

So I love that you said that. And that was evident because I didn't remember what I was up in February of 2008. So I was like, oh, that was impressive, Randy. It's everything. So I think if you read the book Grit by Angela Duckworth, it talks about Kevin Durant and the practice time that Kevin Durant puts in before games. The game is an hour. That is just the showtime of the tens and hundreds and thousands of hours of preparation. And it's not just practice, right?

It's diet, it's mental, it's all sorts of things. I always say in a meeting that I want to know you better than you know yourself when I go in.

And by the way, Google, incredibly powerful. That wasn't there 20 and change years ago when you were going into meetings, or at least not to what it is today. And so I think preparation is crucial. The meeting, the conversation, the game is just the showtime of the preparation. And it is the gritty hard work. I remember when I was an intern at WRC TV and we would go out for the 11 o'clock p.m. news to some sort of

seen something usually terrible, like a murder or something like that. And I was like, this is not a glamorous job. This is a hard, gritty job. But you see the reporter on television, you know, giving their report for 120 seconds at

But it is all the people behind that. It is all the work behind that. It is gritty. It is not glamorous. And I think people just see the glamour, the glamour of the actor or actress on the TV show or the movie. Well, I live here in New York City. You watch them shooting a scene on the streets at midnight. It is tons of people and tons of work. And it is

really hard. And I think people today perhaps look at the shiny stuff and not the hard work that it takes. And winning is in the research, is in the data, right? The half a page discussion when I ask someone to come have with me, you better have all the data behind it. Why do you want to do this thing? Here's the 25 pages of research behind it, but you need to synthesize that to a half page to make your case. You

You think about the hard work and research when lawyers go into court to defend people, to get something changed or turned over on death row. I saw Bryan Stevenson speak a few weeks ago and what he's done at the Equal Justice Initiative. That is years of work, years. We just launched the San Diego airport at Clear. I tell people, depending on when you want to start the start clock,

It took us seven to nine years to do, right? It is the hard, gritty work. It is the research. It is the data analysis. It is the synthesis of it. It is coming up with plan A through F. It is the pivoting. If you're in the stock market and you buy something and the stock goes down 30%,

You can't start your research then to decide whether or not you were right or wrong. You had to have had a thesis. And maybe at that moment, the right thing to do is to not just double down, but quadruple down. Dollar cost averaging. But you had to have done the work. You can't just wake up and be like, I don't know, let me start doing some work here. Obviously, there's incremental work to do. Well, it's the same thing in business and in sports and in life. It is absolutely the research and the work and the grit.

We've talked a little bit about some ingredients for success. Indefatigable is one word that describes you. It's also a reporter named Benjamin Mark Cole wrote a piece about me when I started a charity event when I was 27 years old called The Justice Ball.

in terms of me raising money. And he used that word. And that word has also been one of the hallmarks of my career as well, as has work ethic and preparation. We've talked about some of this before. What are the other ingredients to success and to achieving excellence?

As I said before, I do think obsessive curiosity and one of the big words that I'm known for here at Clear is why, right? Why? Keep peeling that onion. There's got to be root cause. There's got to be learnings. The why, the why, the why. I do think teamwork and collaboration is no politics. My least favorite saying, I don't want to step on anyone's toes. I don't even know what that means. Can't we work together for great outcomes?

I do a lot of sports analogies. Like if you're on a football team, are you stepping on somebody's toes if you get the catch, but you know, somebody else kind of had it, but you get the touchdown. Like, is that stepping on somebody's toes? I don't think so. We all wear one jersey, offense, defense, special teams, whatever the case may be. And so-

having that mentality of teamwork, of collaboration, of all for one, of it's just as good to get the assist as it is the score. It's just as good to be on defense as it is on offense. Aiden Hutchinson, number two in the draft, just saying, right? Like he's a star. He's not necessarily scoring touchdowns and he's still incredibly important. And so I think teamwork and collaboration is

obsessive curiosity, being a lifelong learner. I do think no ego is incredibly important. Life is humbling. Business is humbling. You can have a great day of business. You go home and your kids think you're like the dumbest human being on the face of the planet. That's very humbling. And life throws you a lot of curve balls and you better be prepared to deal with them. And you play the hand you're dealt.

Hutchinson was standing next to me. We were in line for a Delta flight going to New York. This was the Heisman Trophy weekend. And I said, hey, Aiden, I'm Randy. I went to Michigan. Love you. Please let the Lions draft you, I hope. He was supposed to go number one. I was praying. And he was excited at the possibilities from the Oscars of Detroit. Obviously, he played at Michigan. He's such a nice guy, by the way. His sister was there. His mom was there.

He was so humble about the whole thing. Hey, you think you win? He said, if I do, I do. I don't, I don't. There's a lot of great players out there. I thought that was phenomenal. Let's switch topics. You're 48 years old. You've made a tremendous amount of money. You're number 52 on the Forbes list of America's richest self-made women and worth many hundreds of millions of dollars. Was that part of the dream growing up when you started the business? And where did money...

ranked to you when you started your career? And what are you going to tell people where money is the most important factor of what they want to do? When I talk to my intern class, I have 36 kids every summer. We have about a thousand applications now each summer has become a thing. And they always talk about, yeah, I want the experience, but I want to make a lot of money. Yeah. So my first job was $24,000 at Arnhold and Bleicher with a $12,000 bonus.

My first car was a Nissan Stanza, I guess. And it was a hand-me-down from my sister. So when I think about what I aspired to, money wasn't it. Like, did I think it was cool that people had Jeep Cherokees? You know, definitely. Did I think it was cool that someone had a, you know, convertible Ford Mustang? Totally. But that's like small increments on material goods.

I wanted to win and I didn't know necessarily how to define winning. If you are a teacher, if you are a nurse, if you're a doctor, if you're a lawyer, if you're, you know, an entrepreneur, like I just wanted to win and be the best. And I wanted to keep moving forward and whatever,

I would see. So in college, there was a guy and he got a job at Goldman Sachs. And I was like, OK, everyone's celebrating him. Like, what's that? And I didn't know much about Goldman Sachs, but I was like, is that that's winning? So I got to do better than that. What does that look like? And hedge funds, that person's doing that. How do I do better than that? So it's I think it's about finding people who are bar raisers for you and winning. I think money is absolutely the wrong measurement stick. And I think it's about finding people who are bar raisers for you and winning.

And it's interesting because I didn't really grow up with it. It doesn't bring happiness. It brings toys. And the best feeling is giving it to others and making the world a better place and using it for good. And I think my grandfather, who started a hardware store in Brooklyn, first came over as an employee with nothing and then

hardware store in Brooklyn and work six days a week. And that's one of the joys of being on the Home Depot board is really kind of completing that circle. He gave most of his money to his siblings, one of whom still lived in Israel and friends and family who needed money. He kept very little for himself and he had very little and he was happy. And so it's not to me the measure of success.

It is the opportunity to make a difference and toys and shoes and incremental shoes that those don't bring happiness. It's the wrong measurement stick. Difference making, passion. It is a measure of success in some businesses, but in lots of businesses, it's not. It should be outcome driven. It happens to be in asset management that it is a huge measurement of success because that's all you're dealing with.

and clear how many members we have, the difference we can make in our communities. And yes, that needs to drive financial equations of free cash flow. And that's how we measure success, revenue growth and free cash flow. But on a personal level, toys are wonderful, but they don't drive happiness. And if you think that they will, it's a disconnect. They drive fun. Look at the outcomes. It doesn't drive happiness. Passion drives

achievement, accomplishment, and most importantly, making a difference for others. Nothing feels better than that. Before we finish today, I want to go ahead and ask some more open-ended questions. I call this part of my podcast, Fill in the Blank to Excellence. Are you ready to play? Ready. When I started my career, I wish I had known that taxes take a lot of your money. The biggest lesson I've learned in my life is turn every no into a yes.

My number one professional goal is... My number one professional goal is to have 100 million members who love what we are doing. My number one personal goal is... To make sure that my family achieves all of their dreams and makes a difference in the world. My biggest regret in life is... My biggest regret in life is...

Is not yet running a marathon. The person in the world that I admire the most is... My husband. If you could meet one person in the world, who would it be? Neil Diamond. If I were the president of the United States, the first thing I would do is...

Fix our education system. The one question you wish I had asked you but didn't is? Randy, you ask excellent questions. I can't think of one. Do you have any last advice for those listening today?

Anybody can really do anything and you have to believe and bet on yourself and you have to be willing to put in the work to make it happen. It is hard. I think people think success comes easily because they focus on the few success stories as a percentage of them. They are small and this is hard and you have to be willing to do the incredible work to make it happen.

Karen, I've had the incredibly good fortune of meeting some of the most talented people in the world, and you're one of the most impressive of all of them. You've had an amazing career. You're an amazing role model, as I've said, to hundreds of thousands of women and men, and there's no doubt you sharing your story today

is going to influence and motivate thousands of others to achieve greatness in their life. Thank you for being a guest today on The Church of Excellence. I'm very grateful to you for sharing your story today. Randy, you are a one-of-a-kind host. Your heart and your mind and your experience and your research and preparation for this interview is truly the best that I have ever experienced.

and a standard that I hold myself to. So I am deeply impressed with all the hard work and preparation you did for this podcast. And it was really meaningful to me personally and professionally. Well, I'm humbled by that. Thank you. Karen, we'll talk soon, all right? All right. Thanks, Randy. I hope to see you at the next conference or even some other time. Okay. Thanks. Bye.