What It Takes: Lessons in the Pursuit of Excellence

This book from Blackstone’s CEO is so inspiring. These were my favorite takeaways from the book.

“Morgan Stanley was a buttoned-down, hierarchical culture. I couldn’t be my opinionated, proactive self. Bob said I had the talent to work there; I just had to adapt. I thanked him for the offer but said I couldn’t take it. I would rather work somewhere where my personality was a natural fit. He should rescind my offer and give it to someone more suitable. But Bob refused. If Morgan Stanley makes you an offer, he said, it’s yours to do with what you will. His firm would always keep its word. I was impressed. Over the next decade, Bob would transform the culture at Morgan Stanley, modernizing it and shedding many of its old traditions.”

“the approach was to be generous and friendly with my partner, a woman my own age. It turned out I was right: the firm rejected the people who fought and competed during their interviews. Those who cooperated received offers.”

“Decades after we navigated that treacherous day of interviews, we serve together on the board of the Frick Collection, an art museum on the Upper East Side of Manhattan, where she became chairperson. Those early encounters and friendships have a way of reappearing throughout your life.”

“We talked in his office for an hour or so. At the end, he said, “Steve, you’re an interesting guy. If you want to work at Lazard, I’ll make you a job offer right here on the spot. But I advise you not to take it.” “Why?” “Because at Lazard, there are two types of people: masters like me and slaves like you would be. I don’t think you’d be happy being a slave. You should go work at Lehman Brothers, let them train you, and then come here to Lazard as a master.” When I flew back to Boston, Ellen asked me how it had gone. “Rohatyn made me a job offer. Then he told me not to take it. It’s crazy down there.” So I went to Lehman to be trained, to sit in the middle of Wall Street with feeds running in from around the world, to be a telephone switchboard.”

“Being a strong and accurate assessor of talent is perhaps one of the most critical skills required of any entrepreneur. I’ve been thinking about how to do this well since those early interviews on Wall Street. Finance is a field that is filled with capable, ambitious individuals looking to leave their mark. But being capable isn’t always sufficient. When I interview people for Blackstone, I’m looking to understand whether an individual will fit our culture. At a minimum, this includes the airport test: Would I want to be stuck waiting at the airport with you if our flight were delayed?”

“but in every case, my goal is to get into candidates’ heads to assess how they think, who they are, and whether they are right for Blackstone.”

“The more I can get candidates out of interview mode and into a natural conversation, the easier it becomes for me to evaluate how they think, react, and might adapt to change.”

“Even if it’s a topic or experience they know nothing about, are they able to find common ground and enjoy the conversation?”

“In reality, this is all an exercise in evaluating their ability to deal with uncertainty. Finance, and investing especially, is a dynamic world in which you must adjust to new information, people, and situations quickly. If a candidate doesn’t demonstrate the ability to connect, engage, pivot, and change course within the bounds of a conversation, chances are that person won’t fare well at Blackstone.”

“Our people are all different, but they share some common traits: self-confidence, intellectual curiosity, courtesy, an ability to adjust to new situations, emotional stability under pressure, a zero-defect mentality, and an unwavering commitment to behaving with integrity and striving for excellence in all we choose to do. Being nice—thoughtful, considerate, and decent—doesn’t hurt either.”

“Investors are always looking for great investments. The easier you make it for them, the better for everyone.”

“Painful as it was, Lehman was the school I needed. Like any other craft, finance has to be learned. As Malcolm Gladwell pointed out in his book Outliers: The Story of Success, the Beatles needed to go to Hamburg from 1960 to 1962 to transform themselves from a garage band into the Beatles, and Bill Gates spent hours as a teenager on the computers at the University of Washington close to his house before he could write the software for the first PCs. Similarly, people who succeed in finance must start with repetitive practice before they can ever hope to achieve mastery. At Lehman, I observed every step of the process and was trained in all details, any one of which, done wrong, can bring everything crashing down.”

“The word on Pete was that he was smart but had no experience in finance or investment banking. He asked five times as many questions as anyone else, and people found him exhausting to work with. His relentless questions enabled him to get to the heart of the problems at the firm, but the process was trying. If he didn’t really know what he was doing and I still had so much to learn, it would be a case of the one-eyed leading the blind. I suggested we wait until I was better prepared. Pete took my candor well. But about two years later, he called again: he wanted me on his team. We were a good match. I knew what he didn’t but was young enough not to get in his way. One day, he invited me for lunch with Reg Jones, the CEO of General Electric.”

“He never stopped asking questions—torrential, relentless questions—and he instantly grasped the links between one idea and another, even if they were entirely new to him. He was like Tarzan swinging through the trees at blistering speed, never missing a vine, learning more quickly than I could teach.”

“Getting to know Jack and watching him in action reinforced my growing belief that the most important asset in business is information. The more you know, the more perspectives you have and the more connections you can make, which allow you to anticipate issues. Jack became CEO of General Electric in 1981 and began a run as one of the greatest CEOs in American history. Pete’s introduction also led to a long friendship. After decades, I’m still amazed by Jack. Meeting him was one of the gifts of being part of a major firm so early in my career. Wall Street and business are small worlds. If you start at a great school or a big firm, crossing paths with the best people of your generation, you’ll keep running into them. Many of the friends I made at Yale, Harvard Business School, the Army Reserves, and in those early years on Wall Street have remained my friends. The trust and familiarity of those early relationships have enriched my life in ways I could never have predicted.”

“In my relatively short career, I had learned that deals ultimately come down to a few key points that matter most to each side. If you can clear everything else away and focus on these points, you will be an effective negotiator. You cannot let all the voices, paperwork, and deadlines overwhelm you. What Ken and the board needed from me now was some clear thinking.”

Another trick I had learned for managing stress was to take a moment to slow myself down. People were always happy to let me have that extra moment. It even seemed to reassure them. They would be even more eager to hear what I had to say once I was ready. So I took a moment and then began.”

“First, I want to congratulate you. That’s fantastic. Second, you’re thirty years old and you’ve done something huge. And by yourself, I understand, without a partner or anyone else. So this is a huge breakout moment in your career. A lot of people are going to hate you. Don’t worry about that. You are different from them. Do not let that bother you! “The third thing is that you now have a responsibility to speak out in public. You will need to speak up when you see something wrong that can be corrected. Don’t fear doing that, because certain people have an obligation to society to do that. I’m one of those people. You are now one of those people.” Felix had a particular vision of the contribution bankers could make. But all I could think about was who would hate me. The phone rang again. It was Peter Solomon, Lehman’s vice chairman.”

“She went on: “Mr. Schwarzman says he approaches problems by asking himself, ‘What would I want if I were in their shoes?’ That, he says, is what gives him his rapport with people. Still a student of behavior, he listens hard to what people say, believing that things that are said are said for a reason. This art of listening gives him an unusually high gift of recall.” It was a pretty accurate picture of me at the time. Listening to people seemed obvious. But it evidently marked me out on Wall Street. I didn’t just try selling whatever it was I had to sell. I listened. I waited to hear what people wanted, what was on their mind, then set about making it happen. I rarely take notes in meetings. I just pay very close attention to what the other person is saying and the way he or she is saying it. If I can, I try to find some point of connection, an area of common ground, a shared interest or experience that turns a professional encounter into a more personal one. It sounds like common sense, but apparently in practice, it’s relatively rare.”

“They will never get to do the most interesting and rewarding work. Listening closely and watching the way people talk puts me much closer to answering the question I’m always asking myself, which is: How can I help? If I can help someone and become a friend to their situation, everything else follows. There is nothing more interesting to people than their own problems. If you can find out what they are and come up with solutions, they will want to talk to you no matter their rank or status. The harder the problem and the scarcer the solution, the more valuable your advice is. It’s in those situations, where everyone is walking away with averted eyes, that the field clears and the greatest opportunity awaits.”

“He could get anyone on the phone. He was twenty-one years older than me, but we had developed a close working relationship. We complemented each other. He could bring people together and nurture relationships; I could originate and execute deals. He was a thinker, tolerant and reflective. I could be confrontational if necessary. I ran and closed many of the deals that Pete initiated. People around the firm considered us a team. We trusted each other implicitly. But it was Pete’s tendency to trust people in the feuding castle of Lehman that eventually got him into trouble.”

“American Express and CEO of RJR Nabisco and then IBM. “You can work on some deals for American Express and teach Gerstner something about finance. He’s an operating guy.” That seemed better than sitting over at Lehman. So I had two offices and began spending a lot of my time at American Express next to Jim Robinson. I was grateful, but he could quickly sense how eager I was to get out. He proposed I take a job in Washington to complete my noncompete period. He even arranged an interview for me with Jim Baker, then President Reagan’s chief of staff.”

“The opportunity to spend some time in the capital appealed to me. You could not do the kind of work I had been doing in finance and not be fascinated by Washington’s influence over the economy. Averell Harriman and Felix Rohatyn had convinced me of the appeal of a life at the intersection of business and politics, linking two worlds that so often operated at cross-purposes. I’d met Jim Baker at the White House in 1982 at a meeting about stimulating the economy. The borrowing cost for even the best rated companies at the time was 16 percent. There were about twenty of us in the room, and I will never forget how scared those guys looked, worried that they would never be able to return the US economy to growth. Baker, though, was impressive, smooth, and effective in the combative world of Washington.”

“I had learned so much about myself by then. From high school, through Yale, HBS, and time and again at Lehman, I had proved to myself that I could survive almost any situation. I could create worthy fantasies and make them real. Coach Armstrong had taught me the value of persistence, of running those extra miles and making those deposits of hard work, so they were there when I needed a withdrawal. And I had figured how to invest them to advance my career.”

“The Tropicana deal had shown me that under pressure, I was capable of far more than I ever thought. Pete Peterson had shown me the value of a great mentor and partner. I had forged some treasured relationships with wonderful people—colleagues at the firm and executives like Jack Welch who would keep popping up throughout my career. I had experienced Wall Street at its best, the highs of executing complex deals, that sense of being at the center of the universe, exchanging information with some of the most interesting people in the world. And my exit from Lehman had shown me Wall Street at its worst, everyone for themselves. Watching the Lehman partners fail to take on Lew Glucksman had shown me how morality and ethics can buckle under fear and greed. I had seen that some people are vindictive and jealous. My experience selling Lehman and being forced to stay against my will not only taught me the worth of a good lawyer but also that money is a poor cure for a bad situation.”

“Our main assets were our skill sets, our experience, and our reputations. Pete was a summa cum laude, Phi Beta Kappa, process-oriented, analytic person. There was nothing he couldn’t figure out through method and logic. He knew everyone in New York, Washington, and corporate America and had an easy, casual way with all of them. I considered myself more instinctive, quick to read and figure people out. I could make decisions and execute fast and was now well known as an M&A specialist. Our skills and personalities were different but complementary. We were confident that we would be good partners and people would want our services. Even if most start-ups failed, we were sure ours wouldn’t.”

“From the outset, we strived to build a financial institution strong enough to survive multiple generations of owners and leadership. We did not want to be just another of those groups on Wall Street who set up a firm, make some money, fall out, and move on. We wanted to be spoken of in the same breath as the greatest names in our industry.”

“As the head of a private company, he could improve it over the long term instead of worrying about quarterly earnings to placate the stock market. And he would end up owning a lot more of the company. “There don’t seem a lot of reasons not to do it,” he said.”

“The appeal of the private equity business model to a couple of entrepreneurs was that you could get to significant scale with far fewer people than you would need if you were running a purely service business. In service businesses, you need to keep adding people to grow, to take the calls and do the work. In the private equity business, the same small group of people could raise larger funds and manage ever bigger investments. You did not need hundreds of extra people to do it. Compared to most other businesses on Wall Street, private equity firms were simpler in structure, and the financial rewards were concentrated in fewer hands. But you needed skill and information to make this model work. I believed we had both and could acquire more.”

“Pete and I thought of the people we wanted to run these new business areas as “10 out of 10s.” We had both been judging talent long enough to know a 10 when we saw one. Eights just do the stuff you tell them. Nines are great at executing and developing good strategies. You can build a winning firm with 9s. But people who are 10s sense problems, design solutions, and take the business in new directions without being told to do so. Tens always make it rain. We imagined that once we were in business, the 10s would come to us with ideas and ask for investment and institutional support. We’d set them up in fifty-fifty partnerships and give them the opportunity to do what they did best. We’d nurture them and learn from them in the process. Having these smart, capable 10s around would inform and improve everything we did and help us pursue opportunities we couldn’t even imagine yet. They would help feed and enrich the firm’s knowledge base, though we still had to be smart enough to process all this data and turn it into great decisions.”

“The culture we would need in order to attract these 10s would by necessity contain certain contradictions. We would have to have all the advantages of scale, but also the soul of a small firm where people felt free to speak their mind. We wanted to be highly disciplined advisers and investors, but not bureaucratic or so closed to new ideas that we forgot to ask, “Why not?” Above all, we wanted to retain our capacity to innovate, even as we fought the daily battles of building our new firm. If we could attract the right people and build the right culture at this three-legged business, offering M&A, LBO investments, and new business lines, all feeding us information, we could create real value for our clients, our partners, our lenders, and ourselves.”

“Pete and I believed that these changes to the culture at the big firms would lead to a shake-out of great people and great ideas. If they were anything like us, they would be searching for ways out. We wanted to be ready for them.”

“Our culture would attract the best people and provide extraordinary value for our clients. We were hitting the market at the right time and had the potential to be huge.

“It would be easy for Pete to work his many corporate contacts. Had I used us as an exhibit in my business school thesis on the architecture of financial firms, I would have noted that we were straining for prestige.”

“As an investment banker and later as an investor, I found that the harder the problem, the more limited the competition. If something’s easy, there will always be plenty of people willing to help solve it. But find a real mess, and there is no one around. If you can clean it up, you will find yourself in rare company. People with tough problems will seek you out and pay you handsomely to solve them.”

“You will earn a reputation for doing what others cannot. For a pair of entrepreneurs trying to break through, solving hard problems was going to be the best way of proving ourselves.”

“As a salesman, I’d learned you can’t just pitch once and be done. Just because you believe in something doesn’t guarantee anyone else will. You’ve got to sell your vision over and over again. Most people don’t like change, and you have to overwhelm them with your argument, and some charm. If you believe in what you’re selling and they say no, you have to presume that they don’t fully understand, so you give them another opportunity. After many discussions, Pete, in his own way, gave in. “If you feel that strongly, I’ll sign on for it.”

“Oh, yes. Quite interesting, but Delta doesn’t invest in first-time funds.” “You knew we’re a first-time fund. Why did you ask us all the way to Atlanta?” “Because you’re both famous people in finance and we wanted to meet you.”

“The rejections were horrible and humbling. The setbacks seemed endless. We met people who lied to us or never showed up for appointments even after we had traveled across the country. People we knew well in positions of authority rejected us. Pete and I talked throughout these struggles. He was not someone who failed. He hated failure. But at the same time, he was sixty years old. He was at a different place than I was, with a different mentality. If I had the drive, he had the patience and equanimity. He picked me up and kept me going.”

“Pete was from an immigrant family. His parents had come to the United States from Greece and opened a restaurant in Kearney, Nebraska, where Pete worked as a boy. He went to college and graduate school and made his way in business thanks to his intelligence and personal skills. He understood the journey I was on, the need I had to make this work. It had been his journey too. We were just on different schedules. “This is a high hill,” he would tell me before a meeting. “This is really pushing it.” But then he’d suck it up, and we’d go off to meet the next investor, where we’d get shot down again.”

“They could bring the Japanese companies to America, and Blackstone could work with them. A fifty-fifty split of revenues on condition they also invested in our first fund. It was a creative way for both of us to get what we wanted. We needed money for our fund; they needed to build their M&A business. People in a tough spot will often focus on their own problems when the answer may lie in fixing someone else’s. By paying attention to Nikko’s needs rather than ours, a possible solution had materialized for both of us. “Right now,” I told them, “you’re going to get 100 percent of no money. You’re going to fail. I can make you successful. All I want is for you to invest in our fund.”

“That’s all I care about. You’ll make plenty of money with it. But what’s important for you isn’t the investment. It’s what I can do for you.” They liked the idea in principle, and we agreed to meet in Japan. A week later, Pete, a representative from First Boston, and I went to Nikko’s Tokyo headquarters to meet with Yasuo Kanzaki, who ran its international business. The prospect of Blackstone working with Nikko to serve Japanese clients coming to America looking for acquisitions delighted him. “I know we will never be successful in America with our own people,” he said. I thanked him and told him that in addition to the joint venture, we wanted him to invest in our fund. I explained our investment strategy and said I knew my pitch was most unusual.”

“Recalling this on my sixtieth birthday, Pete said that one of my unique qualities is that my “goals are so demanding and dynamic that sometimes it is even hard for me to accept yes for an answer.”

“We were rolling. It was as if all the lights along the way had been switched from red to green. I called my old friend Jack Welch, now CEO of General Electric. “You guys don’t know what you’re doing, do you?” Jack said. “No,” I said, “but it’s us. We’re the same.” “Yeah, yeah, yeah. I love you guys. Listen, I’ll give you $35 million. Why? Because you are great, both of you. That way you can use the GE name to help get some other people. Maybe we’ll do some business together. Wouldn’t surprise me.”

“There is a saying in finance that time wounds all deals. The longer you wait, the more nasty surprises can hurt you. I like to finish work quickly. Even if tasks are not urgent, I like to get them done to avoid the unnecessary risks of delay.”

“By September 1987, stock markets were hitting record highs, and I did not want to get caught if they turned. We decided to push hard to close the fund and wrap up the legal details as soon as possible. Each of our thirty-three investors had a team of lawyers, and each lawyer wanted everything done right. It was like fighting thirty-three fights in thirty-three foreign countries all at the same time. But we pushed hard to have everything signed and sealed by Thursday, October 15, and we did it. Caroline James, our only associate, who was handling the closing, left soon afterward to become a therapist. She would have a lifetime of case material just from working with me on the closing.”

“Like us, Chemical had never done an LBO. And also like us, they wanted to get one done. They turned out to be the opposite of JPMorgan: enthusiastic, entrepreneurial, open, and collaborative. At our first meeting, Walt Shipley, the bank’s CEO; Bill Harrison, the head of corporate lending; and an investment banker my own age, Jimmy Lee, all greeted me.”

“For the next fifteen years, we financed almost every deal with Chemical Bank. Our businesses grew together. The erstwhile Comical went on to swallow Manufacturers Hanover, Bank One, Chase Manhattan, and eventually JPMorgan itself, whose name they adopted. Walt Shipley became CEO of Chase Manhattan, Bill Harrison CEO of JPMorgan Chase, and Jimmy Lee its head of investment banking and my best friend in business. In all our years of collaboration, we never lost a dime together. Pete was happy, I was happy, the three Comical Bears were happy. We had gotten off to a good start. Now we just had to keep doing it.”

“We had prepared ourselves to expect the unexpected, and here it was. We would be fools to let it slip. Pete and I decided we would each invest a further $2.5 million personally in Blackstone to fund Larry’s new venture. We would own half of the new company, Blackstone Financial Management, and Larry and his managers would own the other half.”

“Ken is a balanced, sensible guy and couldn’t hide his disbelief. He told me years later that he didn’t want to offend me, but at the time he thought I was out of my mind.”

“We were new to the real estate game, but that was our edge. We came without baggage, no failing properties or underwater loans. I could scarcely believe it. A country full of value and no competition. But as we prepared for the next auction, Joe told me that Goldman Sachs had offered him the chance to invest a billion dollars. Though he had committed to us, he wanted to take them up on it.”

“I kept pressing, and eventually he promised to give us twenty hours a week. He said he’d hire a couple of younger guys and mentor them for us, and use his connections to open some doors. We’d see how it went. In no time, his twenty hours were seventy hours. It was the 1980s all over again for him. I wasn’t sure how his wife felt about it, but we were delighted to have him. He stayed in Chicago, working from home, an éminence grise to those who didn’t know him. But he did much more than just hire a couple of younger guys and oversee them. He went in person to check out every single property we contemplated buying. Blackstone’s partners were investing their personal money, and the deals were so good they had us talking to ourselves. But months in and without a fund, we couldn’t get to real scale. It was driving me crazy.”

“Failures are often the best teachers in any organization. You must not bury your failures but talk about them openly and analyze what went wrong so you can learn new rules for decision making. Failures can be enormous gifts, catalysts that change the course of any organization and make it successful in the future. Edgcomb’s failure showed that the change had to start with me and my approach to investing and evaluating potential investments.”

“Finance is full of people with charm and flip charts who talk so well and present so quickly you can’t keep up. So you have to stop that show. Decisions are much better made through systems designed to protect businesses and organizations than through individuals. We needed rules to depersonalize our investment process. It could never again rely on one person’s abilities, feelings, and vulnerabilities. We needed to review and tighten our process. I had always been maniacal about not losing money, and the trauma of Edgcomb pushed me further. I began to think of investing as like playing basketball without a shot clock. As long as you had the ball, all you had to do to win was just keep passing, waiting until you were sure of making the shot. Other teams might lose patience and take those off-balance, low-percentage shots from behind the three-point line, the way we had done with Edgcomb.” 

“The presenter’s team would go back and find answers to our questions, and in doing so, they could implement fixes or figure out how to manage the downside, or they might uncover new risks, new probabilities of loss that they might never have seen before. And back they would come for another round of discussion. By the third round, we hoped, there would no longer be any nasty surprises lurking in the deal.”

“and he always thinks with that same objective clarity he showed me at that first meeting. He understands my brain, the intensity with which I experience and respond to the world. He helps me test my intuitions and strip away the psychological, social, emotional, and intellectual filters that can obscure the truth.”

“Byram was also right about my divorce clearing the way for a new chapter in my personal life. My friends were kind enough to set up dates for me, and one was with a recently divorced attorney, Christine Hearst, who had a job lined up and her boxes packed to move to Palo Alto. Not the most promising setup. We were both busy, and Christine was already thinking about her new life on the West Coast. But my friends were insistent that I meet her, and I had promised I would try.”

“At Blackstone, investment committees are about discussion and discovery, not about getting a deal approved. Because the decision to move forward or not is made together, no one feels pressured to sell a deal just because he or she brought the idea. Similarly, there is no pressure to approve a suboptimal deal as consolation for a deal team’s hard work in sourcing and analyzing the investment in question. If we make an investment and it goes wrong, we all got it wrong, and we are all responsible for fixing it. And when we are right, which is more often the case, we reap the rewards together.”

“I saw the opportunity to begin optimizing our hiring and training in 1991 when we hired our first class of MBA graduates. I knew at this moment that Blackstone would succeed. These promising young people, who were entrusting their careers to us, would be Blackstone’s future. In return, we owed them a culture in which they could realize their ambitions.”

“every one of these performances and sat in the front row. To see these actors playing my colleagues was shocking, absurd yet horribly undeniable. Confronting our shortcomings was the first step to eradicating this kind of behavior. We made clear that if there was any more of it, the perpetrators would be fired. It was up to me to say what I believed, to stand behind it and show everyone at the firm that I was serious.”

“So at Blackstone we invested in a thorough training program to make sure our recruits knew what to do before we put them to work. We expected them to be active and useful as soon as possible, flawless on the basics of finance and deal making, alert to our culture, not hiding to conceal their ignorance. The cost of an efficient, effective training program was minimal compared to the benefits of having our newest people, our greatest resource, feeling informed, confident, valued, and ready to work.”

“When we hired the class of 1991, Pete and I were looking decades ahead. We hoped that one day, this would be the group to which we could turn over the firm. They would ensure that Blackstone thrived long after us. They represented our future. We were training them not just to be great players, but future coaches for the classes that followed them. All the theories we had about building an information machine, adding new business lines and achieving significant scale, depended on these twenty-somethings living up to the promise we saw in them. Only time would tell if we had made the right bets.”



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Purpose: I create an empowering context for curious and hungry people looking for fulfillment, experiences, and creativity. We do this by developing their growth mindset, introducing self-love, and powerful group experiences. It results in people with strong boundaries, resilient mental health, and practical life skills

People leave with the ability to land their dream job, have autonomy and flexibility with their lifestyle, travel the world, and create from their heart and soul.


Davidson was once broke, insecure, low-confidence, and frustrated by doing all the wrong activities. Addicted to drugs, validation, and wallowing in self-pity. No relationship to family, and at the mercy of other people’s suggestions and opinions.

It was hell.

After spending $100k hiring different coaches, traveling the world doing workshops around the world, reading>1000 books, and through curiosity, have created the most effective system to remove people from that situation. My life’s work is to bring joy and abundance to people who as on a similar path as I was and bring back the joy and abundance of their life.

Through shared experiences and storytelling, I inspire and model behaviors that lead to a richer, more fulfilled life full of joy, experiences, passion, and ecstasy from the richness of relationships and being able to experience the depths of the human experience.

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