Gary Cohn on Goldman Sachs, The White House, and Venture Capital
An interview on The Bottom Line podcast by Harvard Ventures
Harvard Ventures had the opportunity to interview Gary Cohn, the former President and COO of Goldman Sachs and Chief Economic Advisor to President Trump on The Bottom Line podcast. As the Director of the National Economic Council, Mr. Cohn managed the coordination of the President’s domestic and global economic policy agenda. Since leaving The White House, Mr. Cohn has been highly involved with venture capital, focusing on cybersecurity and cryptocurrency investments. Below are the highlights of our interview covering Goldman Sachs, The White House, and venture capital done by Georgia Messinger ’22, Virginia Tiernan ’22, and Jessica DeVilla, ’21. The interview has several takeaways: it takes followers to be a great leader, the private and public sector are diametrically opposed in various ways, and future venture capital investments will likely be focused on the workplace environment and telecommuting.
Georgia: You were President and COO of Goldman Sachs, which is a lot of responsibility. What leadership style did you implement and what was the inspiration behind it?
Gary Cohn: I think my leadership style is pretty simple. I always believe that a good leader requires you to have followers. In fact, I don’t believe you can be a great leader unless people follow you. So my style was always to surround myself with the best people, and when I mean the best people, people that I always felt were smarter, better, more talented, and knew more about the topic than I did. I would always try and get as many of those people around me, as many of those people in the room, as many of those people involved in the decision-making process. I would ultimately act as, I guess, the referee or the umpire, if there was a referee or umpire needed.
Virginia: As you transitioned from being the President and COO of Goldman Sachs to Chief Economic Advisor to the President, you went from operating a for-profit enterprise to serving the American people. What similarities and differences between these roles stood out the most to you?
Gary Cohn: As you said, sitting on top of Goldman Sachs, which is a highly motivated, very customer-facing organization that lives and dies on the success of its clients, and in many respects gets financially rewarded by successfully executing transactions for their clients, the motivation is to have great relationship with your clients and be able to get things done, come up with clever ideas and get them executed. That’s no different for anyone in the service industry, whether you’re in a legal firm, an accounting firm, or a financial services firm. You really get paid upon completion and execution, and the better job you do, the more repeat business you get from your clients. That’s a pretty simple-to-understand business model.
When you go into the government, the motivation is almost to make no mistake. Remember, to get anything done, you’ve got to get the House, the Senate and the President to agree to legislation. So you need 235 House members, 50 or 60 senators to vote on it, and the President to agree to something. So in a sort of complete opposite of trying to get things done to serve your client, the path of least resistance in Washington is to not do something. I’m not criticizing the government. In many respects, it was designed to be slow.
Georgia: Our team at Harvard Ventures works mostly with founders and aspiring founders. So what advice do you have for these early stage entrepreneurs when it comes to building out their own teams?
Gary Cohn: There are thousands of great ideas in the world. There really are, so it comes down to really, I’ll say, two things. Sometimes it really is one and the same thing. It really comes down to surrounding yourself with the best people, because the best people will tell you the truth. They’ll stop you from making mistakes. They’ll be very candid with you. They’ll be very forthright with you. They’ll be part of a team that wants to work together and wants to solve problems. Most companies start out going down one path and end up in a different place. Either they turn 180 degrees because they realize going down path A is completely wrong, but it opens their eyes to a path that goes the other direction, or they keep making adjustments as they’re going down the path.
Jessica: When you were at the White House, were you inspired to pursue any other investment opportunities?
Gary Cohn: Not really. It’s interesting. You spend 25-plus years at Goldman Sachs, and you see the way one of the premier investment banks does things from a technology standpoint, from a security standpoint, from a cyber standpoint, from all of the different aspects that they have. You assume that their systems are pretty good, but you always assume, “Hey, maybe there’s a better way to do this, or someone else is doing it better.” So when I went into the government side and I got my security clearances and all that, and I started getting involved in very secure, high-level communications, I said, “Okay, I’m going to really learn how, you know, the best country in the world protects the most important, most secure data in the world.” I guess I was shocked to learn, in many respects, that the private sector in the United States, and around the world in many respects, actually does as good a job and maybe even a better job in thinking about data security and protection of data, and security rights, and who and how can see data.
Jessica: In general, how do you think the venture capital landscape will change over the next 10 years?
Gary Cohn: I can say something that I know is true: it’s going to change. Everything is going to change in the next 10 years. There will be a whole new wave now, I assume, of personal security, personal hygiene, environmental security companies. By the way, I’m investing in one of those as well. I clearly got into that one too early, but again, great management team with great execution. Now, they’re having their day in the sun. Hopefully, their day in the sun lasts a long time, because they’re in the right business. But I think there’ll be a lot more money being spent in those areas. There’ll also be a lot more money being spent in the whole workplace environment, telecommuting, how we work, how we work together, how we share data. Which it’s not new, it’s not new at all. We’re just evolving it at a very fast speed. So as venture capitalists start looking at new businesses and new opportunities, they’re going to need to… and they’re doing this already… they’re going to need to evaluate what they think the economy looks like 5, 10, 15, and 20 years from now, and how the new business opportunity they’re looking at fits into the new landscape.
Listen here for the full interview: https://anchor.fm/harvard-ventures/episodes/Episode-6-Gary-Cohn-on-Goldman-Sachs--The-White-House--and-Venture-Capital-ee6k4s
