Ken Griffin started Citadel in a Harvard dorm room in 1987 with $265,000 raised from friends and family. He put a satellite dish on the roof of his building, ran a cable through an old elevator shaft, and pulled it through his window to get real-time stock quotes. In the 24 months before the 2008 financial crisis, Citadel earned $13 billion in trading profits. More than Amazon had made in its entire history at that point. Then Lehman failed. Citadel lost hundreds of millions of dollars a week. CNBC parked a van outside their office waiting to break the story of their collapse. By the end of 2008 they had lost half their capital. Here is how they survived. Every single day, they did whatever it took to buy one more day. Sold assets. Closed business lines. Let people go. Suspended redemptions. The management team personally absorbed $500 million in costs to show their investors they believed in the firm's future. One painful decision at a time. No putting things off. "Often the choice was between painful and more painful. But day by day, we bought ourselves a future." The lesson Griffin took from it came from Andrew Carnegie: take away my factories, my ships, my money, strip me of everything. Leave me my people. In two or three years I will have it all again.
