Jeff Barnett: "Take a Chance and See What Happens"

Image

“I take inspiration from the business world to help my music and from the music world to help my career,” says Jeff Barnett, cofounding partner of Dorsal Capital.

Jeff Barnett is a cofounding partner of Dorsal Capital, a hedge fund based in Redwood Shores, Calif. He is also a professional tenor, singing Bach, Schubert, and Schumann, among other works, for audiences around the country. He is on tour this fall, appearing in multiple states including California, Ohio, and Texas. He received his MBA from Stanford Graduate School of Business in 1995. Barnett talks with us about the similarities between building your own business and being a professional musician, as well as the value of having empathy for the people who work for you.

In 10 words or fewer, what is the big idea behind your business?

Push yourself to the limit and you’ll surprise yourself.

What is the best advice you’ve ever received?

The best advice I ever received came from Bill Duhamel, a Stanford GSB graduate and a founder of a successful hedge fund called Route One. Back when I was a young musician, I met Bill through a family friend. After talking with me for an hour, he said, “So what are you going to do for a living?” I was 24 years old and professionally lost. I answered maybe music or politics. He said, “Well, I’ve talked to you for an hour and I think you are an ideal candidate for business school and think you should go to Stanford.” I knew nothing about an MBA curriculum and I had no idea why he thought that was a good idea. But it’s not often you get unsolicited advice from someone who is that smart and successful. The more I learned about it, the more I realized it appealed to qualities in my worldview and personality that were not being fully utilized by a career in music. The power of analytical and organizational thinking was transformative to me during business school.

What was the most difficult lesson you have learned on the job?

I managed a group of people at a software startup in the early 2000s after the dot-com crash. The company had done some layoffs and people were worried they would be next. I thought I was doing an OK job and I couldn’t understand why morale was so low. I made a lot of poor assumptions and didn’t demonstrate empathy for where they were professionally and financially. I grew up with very little, was young and single and had no fear of being poor. In contrast, working for a startup was a big risk for some of them: They had mortgages to pay and careers to protect. It took a few years before I matured enough to realize I should have done more listening and less talking.

What advice would you give other entrepreneurs on how to build a great business?

Don’t forget how important it is to block and tackle. Entrepreneurs often overlook the basics of getting a job done when they are caught up in the vision. Hedge fund entrepreneurs are usually money managers first, not business managers, so they often don’t have the slightest idea how to run a business. Tom Steyer, the retired founder of Farallon Capital Management, was a great investor but also a great business builder. He listened carefully to his clients and built a business that served their needs.

If there was one thing that has enabled you to be successful as an entrepreneur, what would it be?

Not allowing myself to be paralyzed by fear. Professional classical musicians don’t usually do something unless they believe they can do it perfectly. The standard is, if you stand up to play a piece or sing an aria, you’d better slay it, otherwise you shouldn’t be on stage. I think that attitude is destructive in music and in business because it causes people to take fewer risks and have a greater fear of failure. That sometimes makes classical music sound stale and safe. I’m singing an aria at the Berkeley Music Festival that is really difficult. I have worked really hard at it but I won’t know whether I can pull it off until after it’s over. Maybe they’ll clap, or maybe they won’t. That’s the thrill of it – take a chance and see what happens.

What inspires you?

I take inspiration from the business world to help my music and from the music world to help my career. For example, most classical musicians today, myself included, are entrepreneurs: You are the one who has to go out and get gigs for yourself. If you want to be a professional musician, you’d better understand marketing and finance to manage your life. In fact, conservatories such as Juilliard have begun to teach entrepreneurship.

What is your greatest achievement?

I feel blessed to have achieved some special things in music and a modicum of success in finance while having a wonderfully rich family life – it’s my personal trifecta.

What do you consider your biggest failure?

Having a terrible memory about my failures is unbelievably freeing.

Why are you an entrepreneur?

The thought of going to work for a big company makes me sick to my stomach.

What was your first paying job?

I grew up in South Dakota and beginning at the age of 10, I shoveled the driveways of neighbors after snow storms. It was oftentimes backbreaking work in terrible cold. Looking at a long driveway, with the wind blowing hard in my face at 20 below zero, sometimes it felt like I’d never be able to finish. The only choice is to start. You just throw that first shovel-full of snow and work until it’s done. Sometimes it took more than a day but I was tenacious as hell.

What is the best business book you have read?

First Nights by Thomas Forrest Kelly. The book tells of the first performances of important pieces of music; for instance, Handel’s Messiah. It provides a context to help you understand the genius of each of the composers. How does that relate to business? Because it demonstrates that genius should be seen through the context of time and place. The question is, if those people had been born in a different era, what would they have achieved? How can you do something special in your life right now, with your personal dynamics at play?

What businessperson do you most admire?

David Einhorn at Greenlight Capital. He shows that you should not be afraid to form your own viewpoint and go against conventional thinking, even if it costs you money for long periods of time.