5 Leadership Lessons from Michael Bloomberg

I recently had the good fortune to attend a talk by Michael Bloomberg, the former mayor of NYC and founder and CEO of Bloomberg, LP.

Mike spoke extensively about his philanthropic efforts, his views on media, and some important leadership and business lessons.

Here are some of the key lessons I learned from Mike Bloomberg’s talk:

  1. Build, monetize, and defend
  2. Don’t listen to what customers tell you they want
  3. Embrace failure
  4. Hire people smarter than yourself
  5. Don’t give detractors what they want

1. Build, monetize, and defend

Mike discussed how he built Bloomberg into a successful enterprise. He had this to say:

“You need to do three things in business. First, you have to build a product that people need. Two, you need a way to monetize the product. And three, you need a way to defend the product. That’s it.”
“This is what we did with Bloomberg. The product that people need is immediate news and analysis about business. We monetize the product by making our content only available on our terminals, and you have to pay in advance. And how did we defend our product? We were the first mover, so we started to build up an installed base. Then, as we generated more profit, we invested that back into the business to increase the breadth and depth of our content. And we also invested in globalization and providing access to content from around the world. It was hard for someone else to replicate that.”

It’s such simple advice: build a product that people need, monetize it, and defend it. I find that entrepreneurs and product managers sometimes don’t think through new opportunities using this framework. Of course, the most important thing is to build a product that customers need — or, as Sam Altman says, “Your job is to build something that users love.” If you can get this right, you are in much better shape than most startups. I’ve written before about the importance of customer research, and how to use the Jobs to be Done framework to build products that customers actually need.

But you also need to think about your business model (how you will monetize), and your differentiation and competitive advantages (how you will defend).

2. Don’t listen to what customers tell you they want

When figuring out the product that your customers need, Mike had a sound piece of advice.

“There are two groups of people you shouldn’t listen to when you are building products for the future: your customers and your salespeople. Now I’m not saying you should ignore your customers. Hear them, but don’t listen to them.
“Your customers and salespeople are married to what they know today. They may not even know what’s possible in the future.
“Rather than ask your customers what they want and follow what they tell you to do, understand where they want to go and lead them there.”

This is incredibly important. Hear your customers, but don’t blindly listen to them.

In my post “What You Can Do to Simplify Your Products,” I wrote about the danger of over-relying on what your customers tell you that they want.

Customers will often look at what they’re currently getting from your competitors, and tell you to build those same features. If you over-rely on what customers tell you they want, you end up building products that have long lists of features that try to address every single competitive parity gap — and end up with a “kitchen sink” of undifferentiated features.

Instead, you should try to understand the “why” rather than the “what.” When talking to customers, go beyond explicit needs (“what customers tell you that they want”) to uncover implicit needs (“what customers need, but that they don’t tell you”).

Focusing on implicit needs will uncover the underlying problems customers are facing, and then you can propose solutions. This is much better than relying on customers to tell you what they want.

The same advice holds for listening to salespeople, as well as customers. Hear them, but don’t blindly listen to what they say customers want. Especially when you are thinking about what to build for the market’s future needs. Otherwise, as Mike Bloomberg said, “By the time you get to where your customers are, they’ve already left.”

3. Embrace failure

Bloomberg discussed how he approaches failure in his organization.

“If someone tries something and it doesn’t work, I walk down the aisle with them. They get the message that they’re not in the dog house for failing. And everyone else does as well.
“I want everyone coming together whenever any of us encounters a failure. I want people to say, ‘We’re all in this together’ — not point fingers.”
“I want people to ask forgiveness, not permission. You may not get it right every time, but I would rather that we try for it than people don’t try for the next big thing.”

Bloomberg discusses a number of important points about how he builds a culture of risk-taking and embracing failure.

First, he makes it a point to visibly show his support for people who tried something important but failed. That sends the signal to the organization that it’s ok (and expected) to fail.

Second, he doesn’t tolerate the blame game around failures. Rather than vilify the person who took the risk and failed, he wants the organization to come together as a team. It’s not one person’s failure, it’s the team’s failure. (Conversely, I believe that it’s important for leaders to behave the same way with success. It’s not one person’s success or victory — it’s the whole team’s.)

Finally, he clearly understands that there will be some failures and setbacks if you’re trying “for the next big thing.” Failure is a necessary ingredient of innovation.

As Ed Catmull wrote in Creativity, Inc:

“Mistakes aren’t a necessary evil. They aren’t evil at all. They are an inevitable consequence of doing something new (and, as such, should be seen as valuable; without them, we’d have no originality).”

4. Hire people smarter than yourself

Many leaders talk about the need to hire people smarter than yourself. Here’s what Mike Bloomberg had to say on this topic.

“I want people who are smart and inquisitive. They may not be smarter than you in all areas, but they should be smarter than you in at least one area. That’s how you raise the overall performance of the team.”
“You want to see how they reason. In interviews, I always ask them about an unrelated subject that I know something about. Can they engage in a discussion, can they reason and argue a point of view? How do they think? It doesn’t really matter what their point of view or answer is — what matters more is how they got there.”

Here Bloomberg provides some practical advice about how to recruit people who are smarter than you. A former mentor once told me that you’re want to hire people that are generally strong in a few areas, but who have a “spike” in one particular area. That spike is the area that they may be smarter than you — indeed, potentially smarter than anyone else on the team. If you can assemble a team of strong “general athletes,” each of whom also has a different and complementary spike, then you have the recipe for a winning team.

He also provides some great advice for how to recruit smart people in general. Focus on how they think. How do they analyze and break down problems, how do they synthesize a point of view? Do they follow a logical and coherent structure when they argue a point? Are they willing to engage in a robust discussion and debate? Can they think on their feet, and adapt to new information or perspectives?

5. Don’t give detractors what they want

Mike Bloomberg had some great advice about how to deal with negative comments about you from the press, or from your competitors.

“How do you deal with negative comments or questions from the press? Don’t give them what they want. If they try to bait you with a nasty question, just say, ‘I haven’t heard that’ and move on.”

What about when your competitors say bad things about you to the press, to analysts, or to you directly?

“Your competitors want you to be depressed and despondent. That’s why they say those things. Well, when someone comes up and slaps you in the face, the one thing you can’t do is let them see that it hurt you. Because then they’ve won twice.”

When someone else says something negative about you (whether it’s the press or your competitors), find that within you that gives you confidence, hope, and strength. Don’t believe the detractors. Otherwise you’re just giving them what they want. As the author Jane Roberts has said, “You should tell yourself frequently ‘I will only react to constructive suggestions.’ This gives you positive ammunition against your own negative thoughts and those of others.”

Mike Bloomberg discussed a wide range of topics in his talk, but these five lessons resonated the most with me:

  1. Build, monetize, and defend
  2. Don’t listen to what customers tell you they want
  3. Embrace failure
  4. Hire people smarter than yourself
  5. Don’t give detractors what they want

Mike provided a simple framework for how to be successful in business (“build, monetize, defend”); advice on how to innovate (“don’t listen to what customers tell you they want” and “embrace failure”); tips for hiring talented people; and an inspiring call to refuse to give in to detractors. Mike Bloomberg is such an amazing business and political leader — I felt honored to hear him speak, and I learned so many valuable lessons. Hope you will benefit from these lessons as well!

If you enjoyed this article, please click “recommend” and check out additional posts in my publication “Leadership, Motivation, and Impact