Blackstone CEO Stephen Schwarzman said his firm's rough early days taught him why every entrepreneur should be prepared to be in 'psychological pain in a way you haven't before'

• Blackstone CEO and cofounder Stephen Schwarzman spoke with Business Insider for an episode of the podcast "This Is Success" ahead of the launch of his new book, "What It Takes."
• He and Pete Peterson, former US secretary of commerce and Lehman Brothers CEO, founded Blackstone in 1985 as a private equity firm. Today, it manages $500 billion in a variety of investments.
• When they set out to build the firm, they were Wall Street power players who had fallen out of the circle of power, and they struggled to find clients.
• Schwarzman said that all entrepreneurs must be prepared for emotional pain and failure, and that they have to devote themselves fully to a unique project in order to make it worthwhile.
• Visit Business Insider's homepage for more stories.

The following is a transcript of the video:

Richard Feloni: So when you, when you did leave Lehman, you and a former CEO of Lehman, Pete Peterson, you decided that you were going to create your own firm, which, that's Blackstone. And when you were starting off, you didn't have any clients, you say you were waiting for the phone to ring. No one was calling. I mean, what were you thinking at this time? Did you regret all of the decisions that you had made that got you to that point?

Stephen Schwarzman: It does cross your mind.

So we spent a few weeks calling everybody and they were very polite, "Thanks for the phone call. Wish you well - don't have anything for you to do. If something develops, I might give you a call." So then we finished that and we had no business.

So I went back into his office, Pete's office, and I said, Pete, "What do we do?" And he said, "Well, let's wait two weeks and call them all again. We'll get lucky." This goes down as great strategy, right? And we actually got someone to hire us.

Feloni: So that ended up working.

If someone's listening, maybe they want to build their business or they're starting something and they don't even have what you and Peterson were starting with, which is you're well known, well connected, had financial stability personally. If they're in that situation, what would you recommend to them as kind of like a lifeline to them?

Schwarzman: What I'd say is, you first of all have to have enormous emotional stability because you're going to have a lot of setbacks. Secondly, you have to accept the fact that you're going to be in psychological pain in a way you haven't before. And it can extend for some time. Third, you should only do it if you've thought of something that is really extraordinary. Replicating what somebody else does because you can "do it better" is a tough way to be successful, particularly if there's more than just one other organization doing it.