#384 Ken Griffin: Founder of Citadel and Citadel Securities

**David Senra** (0:00)
There's a book that Ken Griffin recommends reading, it's called Hardball, and the subtitle of that book is Are You Playing to Play, Are You Playing to Win? It is a book about extreme winners and some of the best operators in business, and there's a line in that book that sounds like it could have been written by any of the almost 400 historically great founders that you and I have studied on this podcast so far. It says, if you have not examined your costs in detail, it is very likely that there exists, lurking somewhere in your cost structure, a major opportunity to improve your profits, weaken your competitors, and expand your influence. The first move is to drive down your costs faster than your competitors can and use that savings to upset their strategies. Two weeks ago, I told you about Todd Graves, who owns 90% of his business, over 90% of his business. That is a business that's worth at least $10 billion and is still growing at 30% a year. Todd Graves is obsessed about staying in the details of his business, just like Ken Griffin is obsessed about staying in the details of his business. Todd said that some of the most successful or all of the most successful people he knows stays in the detail of their business. He mentioned learning from one of his friends who runs a multi-billion dollar shipping company and how that friend would even pay attention to how much his business was spending on bottled water. When I read that section, I thought it would be a lot easier to do that if that shipping company was running on ramp, something a lot of history's greatest founders have in common. They know their business from A to Z and their costs down to the penny. Ramp makes doing this effortless. Ramp gives you easy to use corporate cards for your entire team, automated expense reporting and cost control. These corporate cards are fully programmable. You can set limits so the spending of your team never gets out of hand. Most companies only find out about excessive spending after the fact, just like that shipping company with the rampant spending on water. With ramp, you stop it before it happens. Matt Paulson, who listens to founders and is the founder of this company called MarketBeat, recently switched to ramp and this is what he said about it. Ramp is the best. The amount of money you will save from unwanted renewals and employees who think company credit card equals I can buy whatever I want, will far exceed the best credit card rewards program. Matt is talking about the importance of cost control. There is a line in Andrew Carnegie's autobiography that says cost control became nearly an obsession. All of history's greatest founders were the same way. Ramp helps you make this an obsession. If Andrew Carnegie was alive today, he'd run his business on Ramp. Make history's greatest entrepreneurs proud by going to ramp.com, and you will see why many of the world's top founders are running their business on ramp. Go to ramp.com to learn how they can help your business today. That is ramp.com. I had a lot of fun making this episode, and I hope you enjoy it. As head trader at Enron when it filed for bankruptcy, I received many calls from firms that were recruiting. I was busy trying to close out the trading book and wanted to take some time to decide my future, so I didn't take any meetings. But Citadel was by far the most aggressive. Other companies set up a few interviews with Enron's senior people. Citadel interviewed everyone in the trading operation, at all functions and all levels. Citadel's team called me twice, but I declined to meet. It was apparent to me that their intent was to reverse-engineer their business and I wasn't going to help them. They knew that people looking for a job, particularly if they didn't have a fiduciary responsibility to a current employer, would be very free with info. Interview everyone and you get a 360-degree perspective of the industry, how the business makes money, its competitive edge, who the best employees are, etc. Citadel probably interviewed several hundred Enron employees.
Much more importantly, they built the framework for how to enter the energy business, which as Ken has said has been an enormous success. I did eventually talk with Citadel. On their third call to me, they asked if I would talk to Ken directly. I was at that point heading to Aspen for a quick industry event. I didn't know Ken personally, but I had great respect for what he had built, so I told his rep that he could call me when I got back to Houston the following week. She said, great, but then she called back a few minutes later with a question. If Ken flew to Aspen to meet me in person the next day, would I? Out of respect, I said, of course. The next day, I had a great meeting with him, and later that week, he offered me a job as head gas trader. I wanted to fully run an operation and thought there was more upside if I could have my own fund, so I declined. I ended up building my own firm starting with traders and hiring deep fundamentals expertise. Citadel started with research, as is their DNA, and built up a trading operation around it. Both models worked fabulously well. I came away from the experience with an even deeper respect for both Ken and Citadel and remain friends with him to this day. I started with a niche, gas trading, built a niche fund and burnt out after 17 years.