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Santangels Investor Forum

October 17, 2013
New York City
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Jorge Paulo Lemann:

What I Learned at Harvard
This transcript has been translated from Portuguese and edited for clarity.

Jorge Paulo Lemann:
Since today is Harvard Day, I was
asked to talk a little bit about my
experience at Harvard. I dont know if
my experience serves as an example to
anyone. I think everyone has to find
their own way and do things their own
way, but either way Ill tell you about
my experience in the hope that more
young people out there will learn from
my mistakes and also from my tips.
At age 17, I was accepted at Harvard,
which was much easier than today. In
my day it was one or two [accepted]
every two or three years. I can imagine
that someone back then would have
said: Wow, there are never any
Brazilians here; lets be friends with
this one. Who knows, he might
improve our tennis team.
My academic record was nothing
special. I studied, but very little, and
I played a lot of tennis and surfed. I
was one of the best surfers in Rio de
Janeiro so this was what I was known
for. I arrived at Harvard and the first
year was horrible. I had never been
to the U.S. before, I was freezing to
death, I missed the beach, I was not
used to studying, and I was not used
to writing either. I had to write a lot so
my grades were extremely poor.
At the end of the first year, on the last
day of the year, I decided to celebrate.
I had some cabeas de negro --
Brazilian fireworks -- and I decided
to drop the fireworks in the Harvard
Yard. It was a hit with the students,
but I was caught throwing a firework
out of the window, and when I went
back to Brazil on holidays, there was a
letter from the school, recommending
that I take a year off to mature a bit;
get a bit older.
Well, at that time I was deciding if I
should or should not continue college.
I really didnt like it. I was willing to go
to work, go out into the real world as I
saw things at the time. However, after
looking at the letter, I saw that the
letter recommended that I take time
off, but did not demand that I take
time off, so I said: Okay, Ill go back
there, and Ill finish the next three
years in two, Ill resolve the matter,
and do my best.
This was because there was tremendous
pressure from my family for me to
have a degree. I had to graduate, and
it was an opportunity - that sort of
thing. Well, I returned, and I really --
it was obviously the wrong decision, as
I will tell later on, but I concentrated
entirely in finishing the next three
years in two. And I developed a
system where I chose courses after
interviewing students who had done
the courses and I found Columbus
gold as well. I discovered that all the
tests from the courses were archived
in the library, all the previous exams,
which is to say that it was something

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available to everyone.
So, I developed a system to search all
previous exams, interview students
who had done the courses and some
teachers, choose those courses, and
have in detail what the focus of the
course was -- the main objectives. I
also quickly discovered that teachers
generally repeated the questions. I was
actually one of the worst students, and
I took six or seven courses per semester
instead of four or five which was the
norm, but I went from one of the
worst students to one of the best. I was
on the Deans List which is more or
less the top students and I graduated
in over two years -- I graduated at age
20.
Back then I did not give much value
to anything I had learned in Harvard
and I really could have learned more.
Harvard is an experience that you
absorb, not necessarily learn specific
things, and I, as I wanted to leave, I
didnt have a lot of time for all the
relationships that you can have at
Harvard - access to teachers. In my
time Kissinger was a professor there.
Samuelson, the Nobel Prize winner in
Economics, had been a teacher there,
too. So I did not benefit from it the
way I could have benefited. The focus
was to do my best and leave, and I had
no idea how all that I had seen there
would transform my life and would
affect all the principles that after,
moved me in business as well as in life.
Im going to mention to you some
of these principles and these things
in which Harvard actually had a
significant effect and that changed
my life. Well, the first thing, I was a
surfer, a tennis player, had never really
left Rio de Janeiro. Suddenly I went to
this place that was full of great ideas,
I had to take a philosophy course in
Jorge Paulo Lemann: What I Learned at Harvard | 2
the first year -- I started reading Plato, then, but I started to learn right there.
Socrates, things I had never thought
The other thing I learned at Harvard
about or even seen before. So my view
was the power of ideas and culture.
of the world transformed from that of
I was limited to making short-term
a surfer to someone who actually saw
decisions and at Harvard I saw how
the world and had a greater sense of
good and important ideas had a much
history. My dreams were to win the
greater effect than any temporary
tennis championship, or catch some
fact or the like. And because of
bigger waves - ones much bigger than
that experience at Harvard, I also
before. And most people who know
developed with my partners the basic
me and know of my businesses, know
principles that have guided us in our
that I always say to have a big dream
business, both in the bank and later
is the same amount of work as having
in Brahma, and at Lojas Americanas.
a little dream. So, I started to have big
These basic principles that today are
dreams, meaning, I always thought
part of the larger companies we began
about things, and doing bigger and
30 years ago, in Banco Garantia, when
better.
my partners and I designed the basic
The other thing I learned at ideas that would guide us in business,
Harvard that is part of [my work and that today are part -- are still part
now] was choosing people. There of the businesses we have today.
I was at Harvard in the middle of,
These basic ideas as well as the power
theoretically, the best people in the
of ideas, was something I learned
world. There was excellence all around,
at Harvard. Besides this, Harvard
you know? I think excellence in people
gave me a much longer term vision.
is something that you learn, too, and
Meaning you are there and you have
obviously when you live with all this
a vision that the things you do today
human excellence you get to know
will have an effect on a period far
which are the most excellent. Its like
longer than I was used to as a surfer or
if you are involved with art and live
tennis player. Today, I look back and
with a lot art, you begin to have a taste
see, I mean, some of my main partners
for what is the best, and what is not so
are people with whom I have been
good and so on.
working with for almost 40 years now.
So those three short years that I Some of the decisions we made to buy
spent at Harvard, but that found me -- get out of the financial companies
alongside the most excellent people in and buy commercial or industrial
the world, I think had a great influence companies or whatever, were taken 30
on my choice of people -- which was years ago and today play an important
one of the main characteristics in my part in what we do.
career and in business. This experience
So Harvard gave me a vision of a
of choosing people is what made me
much longer term than I would
choose partners like Beto, who is here;
have ever had, had I not attended
Marcel, Claudio Haddad, who now
Harvard. Moreover, Harvard is a
runs Insper; Carlos Brito who is the
place where everyone is willing to do
CEO of ABI today; Joo Castro Neves
better, everyone is looking to improve
and many others, so its something
something or learn more or improve.
that I dont think I obviously practiced
This is Harvards environment, and
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this environment of wanting to
improve, to always do better, it was
something that affected me all these
years after, and always affected the
business we did and things that we
tried to build.
Harvard, as I also said, gave me a focus
and method of obtaining results. To
finish at Harvard in the time span I
wanted to, I was forced to develop a
system to focus a lot and everything
I saw -- to see which are the four or
five essential things -- that was part
of my thinking. I always tried to
reduce everything to what is essential.
This helped us a lot then, also in the
formation of our business, and most
of our companies have five goals, and
each person has five goals. This was
another thing that started at Harvard
as well.
Other things that affected me: I
discovered at Harvard that simple
is always better than complicated.
When you see a lot of theory, you
end up discovering that everything
good is generally simpler than the
more complicated things, and this also
affected me for the rest of my life.
Ethically speaking at Harvard,
Harvard is an extremely ethical place.
Everyone is looking to improve. It
is basically a spirit of building and
ethical issues are considered part of
the system. Later, when I entered
the capital markets, the ethics of the
capital markets were not necessarily
that of Harvard, and you often were
stimulated to, or tempted to do things
that were not totally ethical. But that
experience of Harvard always kept
me in line to try and be as ethical as
possible -- and companies as well. And
in the long run this always works out
better than being crafty, or a trickster,
or the like. So I also thank Harvard for
Jorge Paulo Lemann: What I Learned at Harvard | 3
having taught me that part of ethics
and to maintain an ethical line.
Other things that were part of my
principle: meritocracy and the sense of
ownership, of property or partnership.
I didnt learn that only at Harvard,
but the fact of being at Harvard gave
me much more access to the U.S.
financial markets, where I learned
the importance of meritocracy, of
Goldman Sachs, and the importance
of a partnership system, of having
partners with you, of having other
people who are also owners. That was
also instrumental in my career and
with our businesses.
Well, as you can see, Harvard was
short but it was transforming in my
life and gave me the basic principles
that have guided my life and our
business. Although when I graduated,
I didnt give the necessary value to all
this, today I give all of this tremendous
value, and I am very grateful to
Harvard.
But Ill tell you another little story that
has to do with the rest of my education
and that I think is important for
you to understand why I dont think
only studying or only the Harvard
experience was important.
When I was on holidays at Harvard,
during the American summer, I went
to Brazil, and basically I was still
thinking about surfing and playing
tennis. I was a good surfer and I used
to surf at the edge of Leblon and every
time I would slightly increase the size
of the waves. Any wave that was on
the edge of Arpoador I wasnt afraid to
face. So once every two or three years,
there was a storm, and these colossal
waves formed on Copacabana beach. I
considered myself a good surfer and so
did my group, and we decided that we
would go surfing on these huge waves
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in Copacabana beach. The waves we
[usually] took on were 9 feet or so.
These waves were 30 to 36 feet, and
so we went there and to get to a place
where we could ride the waves was
difficult; they were so big that to swim
beneath them was almost impossible.
But I managed to get there and a big
wave came and I decided Id ride it.
There was another problem - these
waves boxed up in the end, meaning,
almost to the sand. Meaning, you had
to catch the wave but get out before
reaching to the end. I caught the
wave, I felt like all my blood seemed
to rush to the feet. It was much faster
than anything I was used to, and the
height was much higher, but I went
and I managed to get out of the wave
before it boxed in. l came out from
one side and my friends said, Lets
go again. I said, Im good, its okay.
Honestly, my adrenaline had reached
its maximum, and I liked to feel that
danger, but I not want to repeat that
again.
I mention this story because I think
one important thing in life is to take
some risks as well, and something that
I always thought college doesnt give
is the ability to assess and take risks.
It will teach you how to assess risks
mathematically or theoretically, but
hardly. And in general, it teaches you
not to take risks, which is to say, to be
careful. And I think in life, you have
to take risks. Sometimes you have to
take risks, and I think the only way
you learn to take risks is practicing,
practicing. So, I practiced on the
waves, playing tennis tournaments,
later in business, etc. I only mention
this because I think a lot of people
study hard and think that will solve
everything, and I think in order to do
more, or do exceptional, you have to
take risks.
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Often in my life, after I left Harvard possible to go to Harvard. I have

and I started my business, in many supported many students studying
situations that I had to face, I more there today. In fact, any person
often remembered that wave that I accepted into Harvard I am ready to
caught in Copacabana than in reality lend a hand in some way or another, so
what I had learned in college, but it anyone out there who is willing to go
gave me a certain confidence to take or has been accepted, you can count on
some risks as well. the support of my familys foundation,
and for applicants of Harvard College
I mention this to say that Harvard
this year, I wish much luck. I hope
was transforming. It was essential
that some of these 90 are here and
for me, but I think that my story in
are accepted because Harvard is a
having taken some risks, especially
truly significant and transforming
in sport, also contributed later to my
experience.
being able to do everything I tried
to do. I also mention the history of Thank you.
surfing because I think in my career,
I think in any career, a person needs
to know themselves well -- what are
their special characteristics to do
something well. Everyone is different,
and only when you know how you
are, and what you do well, and what
you can do well, can you succeed and
achieve excellence. I think for those
who are there studying, studying,
studying is extremely important. Now
the practice of life, taking some risks,
and doing things that you really have
the ability and skill to do are also
important things in order to later have
excellence.
I think Harvard was a spectacle, and
my way of acknowledging that today
is trying to help as many people as

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