My Conversation with Brad Jacobs

0:00 I've started a new show where I have conversations with the greatest living founders. That show is called David Senra, and it will be on a separate podcast feed from Founders. So it's very important that you follow David Center on Spotify, Apple Podcasts, YouTube. Or wherever you're listening to this, so you don't miss future episodes. The first two episodes We're Daniel Eck, the founder of Spotify. And Michael Dell.

0:19 This episode is with Brad Jacobs. I find Brad Jacobs very fascinating, not only because he started eight separate billion dollar companies. But also because of his infectious energy and enthusiasm for business building and money making. He was kind enough To invite me to his house. And that is where we recorded this conversation. I'm gonna post our entire conversation on this feed.

0:40 So you know what the new show is like. I hope you enjoyed the conversation and please don't forget to follow the new show, David Center Now. So you don't miss future episodes. And by the way, nothing is changing with founders. I'm still doing episodes every week and will work on founders until I die.

0:56 I'm ready when you are, ma'am. I'm in the zone. I'm in the zone. We're gonna we're gonna right. I hope we start with this. I love the energy. This is what I always tell people when you know, I did the episode in your book, right? And since then Thousands, and this is not an exaggeration, thousands of people have sent me messages. But what I try to explain to people, they're like, Well, what's like so different about Brad? I was like, Well, first of all, how long do you have? Second of all, he's got the best energy and the most energy of any person I've ever been around. So like I really appreciate you taking the time and agreeing to do this. One of my favorite things is your affinity and relationship that you had. You had a bunch of mentors, but one of your most important one that you mentioned, I think four times in the book, is Ludwig Jesselson. You have a list of maxims in the very beginning of the book that you learn from other people.

1:40 Uh the maximum you listed for him was get the major trend right. So if you could just talk about your relationship with him and what he meant to you. I think that's a perfect place to start. He meant a lot. So Mr. Jessel

1:52 I never called him Ludwig. Mr Jesselson is you know significantly older than me and much more accomplished than me. So he I Showed him respect, but calling Mr. Justice. Mr. Shefferson uh was a special guy. This was someone who was deep, very profound and had lived life

2:07 Fully. and by principles. And He was a religious guy. I wouldn't say it was like

2:13 Ultra religious. He was more taking the the morality of Judaism. the do's and don'ts and ethical behavior and honesty and so forth. And and that became the core of his life. That became the core of his personal life and his business life. Relationships.

2:27 Deep relationships, long term relationships. Honest relationships, relationships you can Keep coming back to And Sometimes one person has the leverage, sometimes the other person has the leverage.

2:38 Doesn't matter, you don't take advantage of that. It's long term relationships. And he had Yeah, at about. A few dozen. Deep principles.

2:47 And and m one of them is one you just mentioned, which is Because he was a traitor. Ran the largest commodity trading firm in the world, Phillip Brothers. You gotta get the long term trend right. You can get a lot of the stuff right. Yeah.

3:00 But if you don't get the long term trend right. You're kinda in trouble. So you gotta You gotta figure that one out. You gotta see what what's going on here. You need context.

3:09 You just see What's happening, what did happen. And what are the different things? future states that could happen and what's the probabilities for each one of those. And then you have your risk management. So yeah.

3:23 The converse of that is If you get the major trend wrong. You can Do a thousand things right. you're still gonna lose. You're not gonna create alpha, you're not gonna create value there. So yeah, that that was a big lesson from him.

3:35 The other thing that I love is you are twenty three years old. You're having lunch with him on a very frequent basis. Like you just said, he's much older, he's one of the most successful people in the world. He's taking an interest in you. And yet you are still comfortable to like unload your Like your stresses and your problems, and he would sit there patiently listening. And then I love his response where it's like, Yeah, business is problems. Like one of the most important lessons is like problems. There's a line from Henry K Kaiser, who was, you know, in his day was as famous as like say like an Elon is today or you're becoming. And you know, he started a hundred different companies, he built the Hoover Dam, uh, he built liberty ships uh for the Allies in World War Two. And I've read a bunch of biographies on him'cause he was uh Charlie M one of Charlie Munger's favorite founders. And he said a line in the biography that's in multiple life stories about him that problems are just opportunities in work clothes.

4:21 And so I read the the your recounting in your book. of your l uh some of your lunches with uh Mr. Justison, and it's like oh he had the exact same he essentially gave you the same advice. Yeah. So In the book I talked about a specific

4:35 Episode when was having lunch with him and I was kinda down and glum and what's going on Talk about this problem and This thing. I was just kinda down. Yeah.

4:45 And he said, Well Don't stay in the business world if you're gonna get down on this stuff. This is the things you should get up from. Yeah. We have problems, we have challenges, you have obstacles. By addressing those. That's how you make money. You make money. So the more problems you have, as long as you can solve them, as long as you figure out how to address them and remove the The problem

5:04 That's how you're creating value. That's a wonderful way to go through life. Number one, it's a great way to make money because you're not always down'cause You always have. incoming missiles from near the vision. Yeah, problems with With employees, with competitors, with regular I mean, just all day long you have incoming missiles. You have great stuff too, but in between that is punches to the face.

5:23 And If you're gonna get beaten up by that. You're not gonna You're not gonna be successful. And secondly You're not gonna be happy.

5:30 So you gonna go through life. Like glump. You see, sometimes you see these like multi billionaire guys and they always look like this. Well what's the point of all the money? Seriously. So I I I I would not be wanna want to be one of these Is there guys who's like

5:46 And upset and angry and depressed. That's much more important to me. be in the right frame of mind and to go through the short time we have in life. Happy.

5:55 reasonably happy. I don't have a perfectionist standard. I have to be like in ecstasy and bliss twenty four hours a day, seven days a week, but generally happy. Did you ever meet Sam Zell when he was alive? I did, yeah, many times. Okay. So he Great guy. He he had the same thing. I was lucky enough to have a two hour, very intense lunch with him. He said the same very similar thing to you. He's just like I know all the rich guys. He's like you wouldn't believe how many Or

6:16 Miserable. He's like, don't do that. He's like, I wake up every single day. You guys have a lot of similarity where like I'll spend time with you. You know, the very first time I met you when I went to your book launch party, right? I just remember like, Oh, this guy's got crazy energy. And I'd already read your book by then. But something that you talk about over and over again in your book is like problems are just opportunities. It reminded me of there's this line from um in Jeff Bezos's He's there's several books on him, but one of his main biographies is a book called The Everything Story. Everything Store and They said that Jeff, uh you would tell him problems about his business and he would get excited. Yeah. Cause he's like, Oh, and he talks about the shareholders like, Oh, this is like these are problems. If I solve these problems, this is gonna increase the enterprise value. of the company that I'm building. These are actually good things to identify and embrace instead of avoid.

7:02 One of the most important things that I learned from Brad Jacobs is the importance of working with the smartest and most talented people you can. Brad says. The most important thing that a CEO does is recruit Superlative people. Brad recruits the smartest people he can find. And says there's no substitute for smarts. Steve Jobs.

7:18 believe that this was important too. Steve said. I think that I've consistently figured out who the really smart people were to hang around with. You must find extraordinary people. The key observation is that in most things in life

7:29 The dynamic range between average quality And the best quality is at most Two to one. But in the field that I was interested in. I noticed that the dynamic range between what an average person could accomplish

7:40 And what the best person could accomplish. was fifty or a hundred to one. You need to build a team that pursues the A plus players. That is the end of the Steve Jobs quote, and that is exactly what Ramp has done. Ramp has the most talented technical team in their industry. Becoming an engineer at Ramp is nearly impossible. In the last twelve months they hired only point two three percent

8:02 Of the people that applied. That means when you use ramp. You now have top tier technical talent. And some of the best AI engineers working on your behalf twenty four seven. to automate and improve all of your businesses financial operations. And they do this on a single platform.

8:17 That means the longer they use ramp, the more efficient your company becomes. This is important because as Sam Walton said in his autobiography. You can make a lot of different mistakes and still recover if you run an efficient operation. Or you can be brilliant. And still go out of business if you're too inefficient. Ramp helps you run.

8:34 an efficient organization. From a customer's perspective, what does a team of A plus players sound like? It sounds like this customer review that I read, which said ramp is like having a teammate who you never need to check in on because they have it handled. Go to ramp.com to learn how they can help your business save time and money today. That is ramp.com. I do have a question on your long term reputation.

8:56 Okay. So there's this line. Do you remember when Buffett got uh involved in all that trouble with uh with Solomon Brothers and he's like, Listen, you can lose money, that's fine. But you lose a shred of reputation. I'll be ruthless. I'll be absolutely ruthless. I It was a very jarring experience for me at your

9:13 Book launch party. Because first of all I was the only one that didn't show up in a suit. So I rectified that today, right? And uh and then everybody else was just like, you know, I've known Brad for three decades. Like how basically everybody there was like how do you know Brad? It's like you know he I was an investor of his, you know, he made all this money for the pension fund that we were on and everything else. And like the stories that I've heard at the party, and then since I released the episode, is it's like you have a fantastic long-term reputation. Do you have any advice?

9:39 on how you were able to maintain that and how important it was. For other people to do the same thing. Reputation is really important. Your br your personal brand is Extremely important because Based on that, people are going to want to do business with you or they're going to want to not do business with you.

9:53 So Every day. You're in the office and doing stuff. You're either raising your brand or you're lowering your brand. That's the main thing you gotta work on.

10:01 You gotta make sure that your brand reflects integrity and honesty and dependability and stability and people can count on you. It goes back to Mr. Jessison. So Phillip Brothers, this is before Email. This is before Actually it was even before faxes. It was more Twixes and Telexes. So which took a few days to go through when they went through. So you could do a deal where

10:22 hundreds of millions of dollars. On a handshake or on a phone call. There's no written confirmation of that for like days. In the meantime, maybe the price of whatever you were trading, oil or copper, had gone Up a lot. You still had to have a deal. Otherwise, you know, the whole system doesn't work. So dependability is so so trust is so so important to do. How old were you when you when he gave you that advice, did you immediately start applying it? So you you were optimizing for the long term, even when you were that young?

10:48 Yeah. I think as you get older you optimize long term more. I think. I think when you're young You're

10:54 just so ambitious and you want to get stuff done. You're in the now. When as you get older, as you mature, you have more context. I think life in general is about Getting more context.

11:04 Seeing things in proportion to other things. Can you say more about that? Well you know

11:11 I'm into meditation. One of the meditation I do is Changing looking at space. from different perspectives, not the normal perspective that we have right this minute. So I I expand my mind from the earth to the sun to the solar system to the galaxy, to the clusters of galaxies, to the universe, to the multiverse. Just go way, way, way, way, way high. And then

11:31 Bring it all the way back in. And then go into the molecule and the atom and the proton and the nucleus and Right in the middle of all that and then go to strings. And and and I find that According

11:43 Making making my mind like an accordion getting really big and then really, really small. And they're doing the same thing with time. looking at time go back. Towards my life. over the last few decades and then go back centuries and

11:54 millennia and just keep going way, way, way back all the way back. thirteen point eight billion years go back all the way to the Big Bang and then go all the way forward. Like picture the world going forward, forward, forward, forward, forward, forward. That time and space juxtaposition for me at least. different things work for different people.

12:10 Gives me context. It gives me humility. gives me humbleness. It shows that I'm I'm just one thing right here. Major, major thing going on.

12:19 But at the same time. Part of it. So I'm very uplifted, I'm very inspired, I'm very motivated like Wow. part of like a real big deal here. We all are. We're all part of this huge, huge, huge, huge huge thing.

12:32 So I think context. is really important. It gives you meaning, it gives you purpose. It gives you understanding. It gives you wisdom. I know you hate when I say this, because we've talked about this privately. It's like you obviously know I study uncommon people for a living, right? Like they do a great job at it. I appreciate it. Yeah, I appreciate it. But like think about how crazy it is. Like the people that I study on founders is they were so good at their job, somebody wrote a book about their life. Like you're talking about very small, but most of their inner monologues. You're different, you have a much more positive energy.

13:01 And like There's almost like a let me let me give some context here. We were together a few months ago at a mutual friend's birthday party. in Miami. And at the Uh there's a bunch of interesting people at the party. One of them was Apollo Ono. Okay. Apollo Ono is the most decorated winter American winter ath uh Olympian of all time.

13:19 He's become a friend. I met him through the podcast. And he walks up to me and this is the one of the funniest things. And you know,'cause he he has People think you're Olympian, like he was training since he was a kid. His dad would make him get up at like five in the morning and run drills in the in the school parking lot. But he still comes from like a very positive he has a great relationship with his dad. Normally it's like, you know, not good when you when they're put in the circumstances. So he was asking me, he's just like, I see this pattern in, you know, when you're reading all these hundreds of biographies about these great entrepreneurs, that like there is something inside of them driving them. And it's actually negative. It could be insecurity, it could be, you know

13:53 they grew up in poverty, could be a bad relationship with their family. And he's like Are they all like that? And I You're like twenty feet away, you see that guy over there? You go, You know who that is? He goes, No, I go, that's Brad Fucking Jacobs. I was like, I guarantee you, he's not driven by that. This is what I mean.

14:12 At least from the outside in the conversation I had, it's like I think part of this impenetrable nature that you have in like, Oh, we have businesses problems, it's gonna come. You What do you think we're doing here? Like it you don't seem to be rattled by them. So like What is your inner monologue? Like when when like you're doing huge

14:29 deals right now. You're doing all kinds of crazy stuff. You built eight separate billion dollar companies. You don't do that by accident. So how do you make it I'll stop talking there. What is your inner monologue like that? Mr Justin used to say is

14:42 Problems are your friend. You want to you don't want to just tolerate problems. You won't embrace problems. You want to hug problems. Problems are the way you succeed. You wanna run to the fire. You don't run run away from the fire. Be brave, be courageous, go into it.

14:55 I think you can start with anything that's Anything. And in this case, in Apollo's case, he starts with and other people he's he studies start with negativity. Trauma, stress, insecurity. Fear. Anxiety.

15:08 And then that's their motivator. They they zero in on that. And then that makes them Run faster. Was that ever your case? No. That's not my own you're like a

15:18 A unicorn. So you're I don't know that I'm a unicorn. I don't embrace negativity. I'm I'm o I'm okay with it, but I don't make a big deal about negativity. I'd much rather Enjoy the positivity. I'm a Sunny Side Up guy.

15:30 But your inner monologue are you nice to yourself? Your ongoing inner monologue. I'm reasonably nice life. Yeah, I am. I am vicious. I sound like uh you know David Goggins is like Oh yeah, it was just someone was talking uh the Oscar monologue. Where it's just like you're not doing enough. This wasn't good enough. Like I see The problems.

15:53 I attack them like it's like oh Well like I'll listen to like a past podcast or some anything I've done I was like And all I see are the flaws. I don't see any of the good part. So l let me comment on that. I think there's two different ways you can approach that. So yes.

16:06 As Cognitive behavior therapy is Taught everyone. We're born with it. Schema.

16:11 A a prism through which we see life. And that can be Clouded by Core. core beliefs of

16:19 I'm inadequate. I'm weak. I'm defective. I'm unattractive. I'm unlovable. All kinds of negative stuff. Now there's two ways you can approach on that. You can either Dispute those things. First validate, then dispute.

16:34 Well of course I'm hearing this I have executives who report to me over the years that have exact same schema as you just described, where they're always saying Oh, I'm no good at this. Oh I'm I'm I'm gonna when people realize how bad I am, I'm just faking it, I'm wearing this mask and I'm I'm doing a bad job, I'm gonna get fired, people are hiding stuff against me because they don't they don't respect me. All this like negative self talk. It's complete waste of time. But nevertheless, that's the reality. The reality is they have this steady drone of

17:02 Automatic negative thoughts. There's two ways to deal with that. Either you can dispute them. But first validate it. Don't start with the disputing. First validate and say, Okay, yeah.

17:13 Of course I'm having all these negative thoughts because I got a tough job, for example. I'm I'm I have a big job, there's a lot of pressure And I'm not perfect, so I'm not getting everything right. And so I do mess stuff up and and I do get things wrong and all that negative And then you're not going to be able to do

17:26 you catastrophize on those negative things and make'em into huge, huge Issues when they're really should be minimized if you put in proper context. So you first validate it. But then dispute it. They say well

17:38 What does the evidence say here? Is this really a rational thought? I think you have this gift to step outside of yourself, which now you're saying, but when I say you step out of side outside of yourself, you're like, No, I'm in myself. I I I I much prefer to be in myself. Okay. I like to come to center. Okay. I like to find the center. The first time that concept of centering came about was

18:00 When I was uh I went to enrichment camp at uh And at school in the summertime. And there was a book they gave out called On Centering. I don't remember who wrote it.

18:10 And had a picture of Someone making uh pottery. And and they they were explaining in the book that it's all about Finding the center of of the of the pot you're making. So centering, finding that inner calmness, finding that zone where

18:23 You're in the groove. And Edward has it. Everybody has that. You just gotta find it. And that's that's one of life's missions is to find that center. Find that inner calmness zone. And then

18:33 When I went to college and I studied music under Bill Dixon Same concept came out. Come back to the centers. We're playing improvisation. What he called black music. Some people might call it jazz. He didn't like the word jazz.

18:45 Playing playing with some friends and then You have to find the center. Come back to center. Back to the center. Back to the center. So there'd be a center point. In the music. You could go anywhere you wanted in the music. You can improvise all over the place.

18:59 but come back to center and then everybody come back to their common center. So so I've I've incorporated this concept of centering, of finding a center. into my meditation practices, into my business practices, into my philosophy of life. So I like to find centers. But going back to what we were saying before, so you have this negative self talk coming. You can either take one of two paths.

19:18 You can take the path of Validating then disputing it. And seeing it in a proper rational way. Or You can take the approach of

19:26 Just witnessing it, just enjoying it and just Just m it is what it is. It's mindful acceptance of it. So acceptance of that. And I d I I vacillate between those two. Sometimes I do the You asked how I do it. My internal monologue

19:41 If negativity creeps in, of course it creeps in. I'm I'm dancing with the ghosts of my ancestors just the way you and everybody else are dancing with the ghosts of the ancestors. Evolution worked very slowly over m generations over long periods of time. So we always have the set of genes. that were good for survival and procreation of our ancestors, but not necessarily now. We still have in the gene pool all these like

20:03 Irrational. So another way to look at it is Just l just observe it. Kind of more of a Buddhist way. Just observe it. One of the

20:12 Waves the the most simplest Buddhist meditation is just observe your breath. I mean, I'm not sure. How easy can that be? All you gotta do is we just did this before we started recording. Like let's go through a miniature like meditation before we begin. Like I don't ever do that. And I probably start should start doing it. I just kinda wake up And go. And just try to attack things that I feel like

20:33 And don't get me wrong, like I absolutely am obsessed with what I do. I love my work. I work on a seven days a week. But I wanted to be the best in the world at it. And that's where it's like, Oh you just see these deficiencies. So that sounds to me like perfectionism. So I suffered a lot from perfectionism when I was younger. I wanted to be perfect. Yeah. Not only did I want to be perfect. I wanted everybody else to be perfect. Not only did I want uh myself and others to be perfect I wanted the universe to be perfect. I wanna w everything just go swimmingly well at my my beck and call and command.

21:01 Well turns out That's not reality. None of those three constituents are perfect. There's something that you said in your book. Uh it's actually in this the section that I was writing down, you're like, I'm not surprised when things don't go perfectly. That's the nature of the universe. The big problems can be where the best opportunities lie. And so obviously you know, like anytime I read something, it's not that I'm reading it. I think about how it relates to every single thing else I've experienced and all the other books I read. And um I remember I got to have dinner with Charlie Munger. I spent three hours with him uh you know, uh six months, eight months before he died. There's like a trend here, unfortunately, where it's like kinda dangerous. Remember You're like, I don't know. I don't know if I'm gonna have dinner with you. Um but one of the things I loved, it was the top note I left myself, because as soon as I left there, I just wrote down and like what I learned. And it said that Charlie has an almost complete indifference to problems. Troubles from time to time should be expected. This is inescapable, so why let it bother you?

21:52 It's like one of the things I most admired about him. He's like, Yeah. It's part of life. What's wrong with you? Like w you know, he had nine ten decades of of life experience. He was way further down the line and obviously m way wiser than I was. So I have two comments on that. One is When you go back go back To the big bag. Mm-hmm. The current

22:10 construct model of how the universe was created. It was actually created out of imperfection. There was like a slight imbalance between Matter and antimatter. Just a slight imbalance. A lot of debate of what caused that. As a result of that

22:23 Everything came out of that. Had there not had there been perfection at the beginning of the universe, the Big Bang would not have happened. So We are imperfection. We are the children of imperfection. Imperfection is Good. Imperfection is not bad. Expecting perfection is will cause you stress and strain and won won w won't really work.

22:40 When you were in your twenties, though you said, Hey, I wanted to be perfect. Not only do I want to be perfect, I want everybody around me to be perfect. I wanted the universe to be perfect, like how long did it take for you to learn what you just So when I step down from United Rentals. C I still stayed as chairman. When I step down as CEO of United Rentals I wanna do my next big thing. I wanna do another startup from the beginning.

23:01 I was running a big company. I wanted to start it from scratch. And There was a period of a couple years where I was trying to figure out what I was gonna do. And

23:10 And I w didn't find it. And then the great financial crisis came and It's kinda lost. That's kind of It was probably the only time in my life. That I was depressed.

23:19 I'm Just not depressed. But That period of time, I was actually clinically depressed. I took the Becky.

23:26 depression inventory and I came up yep depressed. Wow. So so I found a amazing cognitive therapist and I went to the guy twice a week. Hour and a half a shot. For two years. It was fantastic. One of the best things I've ever done in my life because what we did was in a in a

23:41 An environment that was very safe and confidential and trusting with someone who was A professional it It's psychology. I was able to First of all

23:51 Identify and then Noticed more fully my automatic thoughts. The negative thoughts. Mm-hmm. And irrational thoughts, unconstructive thoughts. And then

24:01 First validate them. Then dispute them. first join and then lead to a more constructive way of looking at things. So that cognitive therapy approach of Identifying the the the thoughts.

24:12 And then And then dealing with them. really was the turning point in my life on this perfection thing. Because after a few sessions you said. Yeah, I kinda know.

24:20 What's going on here now? I've gotten your your measure. You wanna hear it? I said, Yeah, I wanna hear it. And they said You're suffering from perfectionism. Like you want everything to be perfect. And it eight. We need to get over that. We need to reduce these demands. These must, these shoulds, these commands that

24:39 Either I or you or Yeah. Preferences.

24:45 I would like Me to be Better. I would like you to be better. I'd like things to go better, but They don't have to. I can still be happy and frankly they're not going to all the time, so I need to accept that.

24:54 Need to radically accept that. I need to be in reality, not put these You know, Jeff, you mean mentioned Bezos. Basis says a lot of cool stuff. One of the things he says often is uh Don't fight with reality because reality always wins. Yeah. So the reality of this is

25:10 Nothing's perfect. Like literally nothing is perfect that I found yet. He has another line that I think that's related. It's similar to the the idea in your book where he's just like If you don't want to be criticized and you don't want stress and you don't do anything. Exactly. So that's another irrational thought you see people have I I used to have this a lot, but I don't have it Now'cause I went through that the therapy thing and it turned a switch on in my brain. Is

25:38 A demand that I that everybody likes me and everybody respects me and everybody says great stuff about me and I get good press and I get good reviews and the stock just goes up every single day. Well That's not gonna happen. That's called perfectionism. That's that's not reality. So you just kind of modify that to

25:55 Well sure, like everybody else. I'd like to people to say good stuff about me rather than bad stuff about me, but I don't really care. If people say bad stuff about me then Okay.

26:05 Maybe there's some truth in it. Maybe it's maybe some good thing I can learn from that. Or maybe they're just off and they don't know me and they're just kinda They're doing they're imposing their distortions on me, but Does that really change who I am? It really doesn't. If somebody is saying something

26:18 Is that Does that really matter? It doesn't matter really at core. And the again goes back to context. In the larger context of things. Most problems Really don't matter. They just don't matter.

26:30 Maybe at the time they seem like one, and maybe we're kicking in magnifying those problems and Catastrophe making them into big catastrophes and dramas, but Most problems really aren't aren't a bad problem. Aren't a bad thing. I always say opportunity is a strange beast. It usually it frequently appears after a loss. There's always a play. There's always

26:48 No matter what happens, it goes back to the Jessiclean conversation. No matter what At the moment it may seem Ugly and bad.

26:58 There's a play. There's a way to utilize that. There's a way to use that. There's a way to to embrace that and turn that into success. Anything can be turned into Positivity and success, even if it starts in a bad place. Something came to mind when you were talking.

27:12 Uh that's also unusual. Because most of the people that like I read biographies about They They're they go through several different companies so they find the like their life's work, but normally they're working on something for like a very long time. Why why do you keep starting so many companies? Like what is going on? That's my thing. Everybody's got their thing. So everybody So you're a great podcaster. You're you have a talent, your superpowers you can

27:34 consume large amount of information and then distill it down to like boom, here are the most important takeaways from that. It's a it's really brilliant. That's your thing. Yeah. That's why you're doing it, right? That's what you're good at. Yeah. You're not playing professional baseball or you know acting or singing or whatever. You're you're doing what you could. This is what I'm good at. I'm good at Figuring out What's the right industry to

27:54 Consolidate. Mm-hmm. And secondly I have a tool kit. It's the same old toolkit. It's not You told me this last time. Can you explain this? I love the way you describe this toolkit.

28:03 So First I find the right industry. I find something that's large, I find something that's growing, I find something where it's fragmented, I'm I find something where we can buy things at reasonable prices, I find things where Technology is it would would could be used. It's not a very tech forward industry. I find stuff that AI and automation are not going to disrupt at any time in the in the near future.

28:25 So I look I find industries that have certain characteristics to it. Whether it was garbage, whether it was construction, whether it was um transportation or logistics and now distribution. It's That's they all have the same characteristics, same traits. So that's point number one.

28:41 Point number two is I then put together an amazing team. I put together a team of people who are generally smarter than me. And who were more talented than me. In what they do.

28:51 So I have a great C H R O who knows. Everything there is to know about HR and compensation and talent recruitment and so forth. I have Great MA team who

29:00 really know how to do deals and get deals done rather than turn'em into dramas. I have. Great finance accounting people who understand Everything there is to know A to C about running a A a fast growing company keeping the books clean.

29:12 So Etc. And I get the team together. Then I get the compensation sorted out. So I make everybody my partner on the senior team.

29:20 And I give people tons of equity. But it's a catch. It could vest, but you can't sell it for five years. And most of it vests in the last two years. So everyone is committed going back to long term relationships. Sure, people come and go for whatever personal reasons or people burn out or whatever, but generally speaking most of the team Stays.

29:37 For a while. And You you work together as a team. And then I have I have certain rules of how we're going to

29:46 Interact with each other. In a very Respectful way. But in a way that encourages looking at things from different angles. So we disagree and we argue.

29:55 Or use too strong of a word. different ways of looking at a situation. Then partly overlap and partly conflict. And then we in a very scientific way figure out well

30:06 Let's let's risk adjust these things and figure out what's right. It's it's a scientific experiment, an ongoing science experiment, like all day long of trial and error and experimentation and A B experimenting. So That culture that we create. is gives us a power.

30:20 This is a power to attack the industry in a way. Without all the the the the noise that a management team has. Very coherent. Team, like a super organism, like a brain.

30:30 Like a very organized group. And then I have Between all those people We have experience. And our main job, which is to buy companies

30:40 At reasonable prices. where there's a difference between where we can raise capital at And when we can deploy it at. And then We have a skill set to be able to improve the companies that we buy.

30:51 These are the two main things we're good at. Buying companies in a disciplined way. Price is too high, we don't do it. Price is reasonable? But not to be cheap, we're not trying to steal companies, the price is reasonable.

31:02 We go for it with Gustave. And secondly. The other talent that the team collectively has is We know how to improve the businesses. We know how to Improve the pricing.

31:10 With the procurement. Uh the HR element, the compensation systems, the technology, the whole tech stack. Just everything from A to Z. We're just good at transformation. We're good at taking a company that is

31:23 Making a billion dollars at EBITDA of of profit. And within three to five years doubling the doubling the profit, doubling the Ibidah. That's the main criteria I look at when I look at um Purchase price. And secondly

31:37 Can we double the profit? In three to five years. And and most of my main acquisitions I've done that. So Conway, Robert Dr. Sangla, new all these different ones, they were great companies and everyone says, oh, they're working really well. Okay, well three years later we double the profit.'Cause we apply the toolkit. We apply the play kit playbook. And it's the same playbook Industry after industry. The playbook gets refined a little bit here in Ibrit.

31:58 The same playbook. So when you say this is just what I do, like to me you now figure out who you are as a person, right? I have this weird theory that I can't um I can't prove, but I believe. And you know, there's like this myth of like the genius young entrepreneur.

32:14 And I was like, Well, I don't know. If you study like you study the history of entrepreneurship pretty intensely, you realize that like people do most of the time their best work many decades into their career. And so there's all all kinds of reasons. They're like, Oh, they've had more experience, they're wiser, they have more resources, they have more practice. And I Don't dispute that. That is all true. But I have this weird They also know themselves.

32:35 Way better. And I think the key to being a great entrepreneur is building a business that's I used to say building a business that's authentic to you. And then I read Michael Dell's excellent autobiography. And he has a better line. He said He built a business that's natural to him.

32:50 And there's a great story, I want your opinion on this in one second, but there's a great story where, you know, Michael starts in nineteen, he's in his twenties and it's doing f fabulously well, but he realized like, Hey, I need some like grown up like some s I need some help here. And so he he gets this guy, I think his name was Lee Walker, if I remember correctly. And he's about twenty years older than Then Michael already started a bunch of companies. Rich, you know, didn't have to work anymore, but he he saw an unusual once in a you know generation talent and and Michael decides to help him.

33:17 He lasts like four years. And so I read the book and then as I'm about to make the podcast on it. I go and see it. I was like, wonder whatever happened to this guy. And I found an interview he did and he's in his eighties. And he's talking about that time and he gave me Some of the best context to really understand this story and Michael's story is really story of you and everybody and all the people really are the you know, very similar people that we're studying. And he's just like

33:38 You know. Michael starts his company with a thousand dollars, says I'm gonna take on IBM for my dorm room. IBM is the most valuable company in the world at the time, which I didn't know. It was the first company to to hit a hundred billion market cap, which is nuts. And he's you know, just the audacity to have that, and he's like in the first few years, like we're going against this behemoth. And I lasted four years. I start losing my hair. My back hurts. I can't sleep. I'm unhealthy. And he goes, but and he goes.

34:04 But Michael was energized by it. He built a business that was natural to him. Yeah. Because like this is what I want to do. I'm not I'm not losing my hair. I'm not you know, depressed, my back's not hurting, I can't sleep. I'm like waking up every day just getting after it. So D is that the way you feel about the just d like the what you're doing? It's like I this is

34:23 It may seem weird because it is It's not weird in a In a negative way. It's I don't know another person that started eight separate billion dollar companies. So it's like almost like you can't help yourself. And that's I know how to do that. So it's just natural to you. This is just like

34:39 Yeah. This is this is I mean I've done it. many times before. And I and I've made every mistake in the book over the decades. I've and I've learned from those mistakes. And I've refined it and refined it, but I have a winning formula. I know how to execute on this. And the team I have knows how to execute on this. I don't want to underestimate the team. So one of the things about being the CEO and the founder is you get all the credit. But like

34:59 There's a lot of people on the team who are doing these things, accomplishing these things. Yeah, you have a great line in your book, which I see over and over again, you said the CO's most important job is is recruiting superlative people. Totally. So you're you're Uh my question to you though is like what would it take To get you to stop. Yeah, I don't know,'cause I'm not I'm not and I I don't see that in my near future. This is what I just started the company in the last few months. This is what I No, but in general, like so this is what I loved about, you know, most of the people I admire. It's like I I I can still remember this. You know, I I put it into the maximum. If you love what you do, your extra strategy is death. Like we're on something. So like you know, Sam Zell told me it's like I'm gonna be doing deals till I died. Well

35:40 He was doing deals so he died. Well, Munger, same thing. Like I I met him right after the um the Silicon Valley bank collapse. It was like very going he was like a kid in a candy shop. He just thought this was like the f he didn't want people to be hurt, obviously. But he's just like you know he Financial panics that I've seen in my lifetime, like of course, this is like nothing new. So I I was I remember I was uh Actually having dinner. I remember it was I was at Harry's Pizzeria in Miami in a design district. And you know, I was supposed to be paying attention to my wife and on our date

36:09 And I was thinking about the podcast and all the shit I'm reading. And I go and like take a bite into a piece of pizza. And I was like People you say if you love what you do, you do it for free. And I go, No.

36:21 There's a different level. If you love what you do, they couldn't pay you to stop. There you go. And I was like, How much money could you've gone to Steve Jobs like, hey. How much would it c take for you to not work on Apple? That's not why he's doing it. It's that it that's not why they're doing it. In Enzo Ferrari, Estee Lauder, Edwin Lan, Coco Chanel, all these other people, like they just can't Michael Ferrero, I just the Michelin brothers, like this story over and over again. I get the same sense to you. It's just like if I said, Hey What price.

36:50 I'm gonna pay you and you can't do any work. You have to stay home, you can't just like there's no Price. Everyone just named all the successful people. They were all in. They were 100% in. They weren't like partly in and partly aren't.

37:01 They're in. They're a hundred percent in it, completely focused and single mindedly Concentrated on. On executing the plan. And th th that's important too. And I w you want to have people on your team who share that passion. A commitment.

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37:30 Hub spot. HubSpot is where all of your data comes together so you can see the patterns that matter. Because when you know more, you grow more, and that is a pattern that never fails. Visit hubspot.com today. That is hubspot dot com. That leads me to another great one of your I don't even think you think it's a maximum, but it's how you differentiate between A, B, and C players.

37:52 Where you're like U I'm I'm just gonna summarize this and jump in whenever you want, but um you're you envision, you do another thought experiment. Yeah of okay, do you wanna see if you have the absolute best people on your team. Just V visualize that they're coming into your office and they're saying, Brad, I quit.

38:08 Yeah. So then what happens next in the in this scenario? So I'm I'm always Interacting with my C H R O Mm-hmm. And going over talent.

38:15 And making sure everybody's happy and motivated and how much percent of your Like A lot. I spent I spend most of my time on people and talent issues.

38:24 So most of your time. Yeah. No, no, not the most, but the most if I did a pie chart of like how I divide up my time. The largest percent is on people issues. And then I I'm I don't wanna interrupt, but I I do this is inside of me and I just has to come out all these stories because I find them fascinating. So there's two MBA students in uh Stanford in the ninety and late nineties, and in ninety seven they interview uh sixteen technology company founders since they're in Silicon Valley at the time, you know, and they publish this book called In the Company of Giants, and everybody's in there, you know, Bill Gates and Steve Jobs and everybody else. And they're telling Steve, they're like, well Uh you know, you're the founder. Y of course you don't have time.

39:03 to you know recruit people. And she's like, What? Like no, it's the most im it sounds exactly what you said in your book, it's the most important he goes and he he does great great way to demonstrate the point. He goes, Let's say you're starting a company, right? You're in Silicon Valley, like what you're doing over here. You pick your co founder. You should think long and hard about that. Colder is fifty percent of the company at that point. And then he goes and then he goes, but you still goes out. Now you have to pick the tenth person. That person's ten percent of your company. And you're saying you don't have time? Like what else are you doing?

39:31 It's all about the people. You know, systems and tech and budgets and customers and sales, all these things. are really, really important. But you can't achieve excellence in those things without fantastic people. Well fantastic leaders. And I spent a lot of time

39:48 Especially on the top few dozen people. I wanna make sure everybody's in it to win it. Everybody is Fully fully engaged. And I do a mental exercise where I picture the person coming into my office. And saying Brad, I quit. Like

40:00 This is not a conversation about you making me a counter offer. I'm done. I've already moved and it's over with. This is about a conversation about how do we make an orderly transition,'cause I respect you and I don't want to leave you high and dry. And then I try to feel What would be my reaction?

40:15 If that person came in to me and quit. If my reaction to that is Yes. I don't wanna smile so I don't wanna act like I'm happy about this, but you know, I I didn't have you know nobody likes firing people and I I I just didn't Yeah. I I I just kept postponing fire in that person. I shouldn't have, but

40:33 I did. And this is great. I don't have to pay severance. And and you know, I I that solves that problem. No problem at all. We'll replace them. That's a C player. That's so when really you should get the courage up to take to get off the manage get off the team right away. And then it's

40:48 On the second category, if my reaction to it is You know? Kinda sucks. You know, it's What I would have preferred that person stayed. But not the end of the world.

40:58 We'll hire Hunter Head Hunter. We'll get someone as good, maybe some even better. And you know, things will work out. That's a B player. What? If when I visualize that person quitting My reaction to that is pure terror.

41:10 Absolute panic. And like somebody took a baseball bat and just whack me in the stomach and then punch me in the face. I'm on Oh my god. Like I'm never gonna find someone as good as her. No way, or I'm never gonna have someone as talented as that person. I'm never gonna have someone who

41:26 brings the table their particular superpower. I am and I I don't even I can't even hear what they're saying anymore, because I'm just like having this internal panic dialogue going on. That's what you call an A player. So I want all A players around me. I want people whose relationship with me.

41:42 I value so much. That if it was terminated. I would be Lost. And I want them to feel the same way. I want to have mutual relationships. I want people who

41:53 Love being In relationship with the team, with the company. And that we all I I think I I had named it's been two years since I wrote the book, but I think I had a chapter that said How to

42:06 kill the competition instead of killing each other. And and that's you know, it's kinda funny, but it w it's a serious it's a serious title is You don't want to have a dysfunctional management team. One of the most important things that has allowed us to create tens and tens of billions of dollars of value.

42:22 Is the management team's coherent? We have the right people on the management team. And we have the rules of the road of how we're gonna deal with each other in a respectful way that still encourages Differences of opinion. First of all, I love the way you described because everybody says, Oh yeah, hire A players. Like people it's really hard to differentiate. Like what does that actually mean? And I think this thought experiment is perfect. It's like we are

42:43 Fucked. If this person leaves, that's an A player that's the uh a way to think about this. But this it also goes down to your gift and why I think Um I've learned so much from you. Your ability to like have very clear thinking and then put it in a memorable way. So you were just talking about like the relationships that you have with the people you work for. You have a line in the book where like he says, An or an organization is like a party. You only want to invite people who bring the vibe up. My team and I spend a lot of time together, so it's a big deal that we like one another. Yeah.

43:12 I I agree with that. Who said that? That was a good one. Bezos has a line in I think in Shareholder is like life is too short to work with people you don't admire. Like it's same situations. Like you're in charge. You get to choose. Again, this goes back to one of the gift of being the CO of being an entrepreneur. It's like it's very rare that you get to literally choose who has access to, who's around you. And I love this idea. It's like, hey. The organization is just like a party. You want people to uh you only want people to bring the fight. The people. It's all about the people,'cause the people then

43:42 create all the all the different processes and work streams and transformations and everything. This is very fascinating'cause like It's obviously, you know, business is people, right? You're not only just like the people that are building a product, but like all the businesses. The best de definition of business I've ever heard actually came from Richard Branson. He says all businesses is an idea that makes somebody else's life there. Right?

44:01 And like there's infinite that's why there's always more opportunity, because there's always infinite ways we think technology is gonna like it changes things, but then it just usually opens up other ways to make other people's life better. So just focus on like if you're looking for an opportunity, how can I just serve other people? Another uh Line that's very related to this. is Henry Ford where he says money comes naturally as a result of service. Like I think those two ideas go together. The reason uh I I was thinking about this though, the best way I just I've heard describe what you were just saying, it's all about people, work with the best people you possibly can, the A players, we're gonna talk about uh you have this great line about there's no substitute for brains. But before that, it's like the way that I've heard this described best, in my opinion. is from Ed Catmall, the founder of Pixar, right? He would go around and give all these talks, and he was actually like shocked that he would ask the audience, like, what's more important? People are ideas.

44:50 He says every single time people got it wrong. He said it was the ideas. And he's like, No, it's the people. And so he has this great line where he's like, Listen, if you give a mediocre idea Right. to

45:00 A brilliant team. They're either going to Fix it or the throw it out and come up with something. Better. something new. But if you give a great idea to a mediocre team, they're gonna screw it up.

45:10 So it's obviously'cause ideas come from people, so it's the people. Um exactly what I'm trying to say. He says it in like just wait, but You have a very like explicit. Piece of advice in your book that I think is interesting where you're like screening for there's no substitute for brains, screening for superior intelligence eliminates ninety percent of all candidates. So it's the first thing I look at. There's no substitute for smarts. The CO trait most core mostly most closely correlated with organizational success is a high IQ, double down on hiring the brightest. Yeah.

45:40 Well, you want smart people. And I particularly want people who are smarter than me. I want people who are Who uplift me, who teach me. I don't want to be Do you want them specialized?'Cause you mentioned earlier you said you want some them smarter than you, but also better at their particular The vast majority of them are specialized. Okay. They're they're a finance person They're an investor person. They're a

46:00 a strategic person, they're a They they have s something that they br tech person they bring to the table that they're r uh an inch wide, a mile deep in. But You also want them to have certain human qualities that transcend what their specialty is. And those are As or more important than the And the technical skills. Explain. Well, you want to be mentioned smart. You want people honest, you want people hardworking, you want people who are collegial.

46:22 You want people to really in it. Like on the work life balance thing and boom, it's work. And their life is a lot of their work. And and you know, that's that they enjoy that. I don't have to hold them like a school teacher or stick over their head, getting them to work late or coming early or work on weekends. Like they wanna do that. Like they enjoy doing that. Their job, their career, their success, the collective success of the company. Is an important part of their gestalt. It's really important part of their being and their purpose. Was there ever a time I don't mean it could be interrupting you, but this is fascinating and it's almost selfish to have this conversation, because like I get to ask you questions and learn from you. Was there ever a time?

46:57 Where Work wasn't where you were more balanced. When was the last time you met us? So when you start your first company at twenty three. I did and I've been completely imbalanced since then. I've been working seven days a week. Yeah,'cause you vacation scaled like four years to I don't know, like a couple of billion dollars. It was just like an insane story. It's not work. For me it's like I'm I'm really enjoying it. To me it's a craft, it's a skill that I have. Were you that I enjoy doing it. Were you always honest with yourself that it was the the top priority.

47:23 I think so. Yeah. I I just had I had a conversation with a friend of mine. Uh on the drive over here. And Um I think I'm lying to myself. So let me give you an example. So

47:34 You know, in in many cases, like you read these biographies of these people and it winds up being a cautionary tale. You know,'cause they kinda like will sacrifice everything for professional success, their health, their relationships, everything else. Well that I'm not in favor of. No, no, no. You're you're still married, you're a good father, like everything else, yeah, for sure. Uh but your main it's not like you have a bunch of an abundance of hobbies outside of work, from what I understand. But Meditation and Music. That's pretty much it. I I I for a long time, out every single person I read about, I was like, Okay, well I I even titled the episode My Personal Blueprint, which was Ed Thorpe, right? Um Ed Thorpe.

48:06 I'll give a short run now quick. First person to invent a quantitative hedge fund. Um he invented, you know, the the ability to count cards for blackjack, writes this book in the nineteen sixties called Beat a Dealer. you know, made more money than he'll ever spend, but if you read his book, you get to the end, it's like he was much more balanced, right? He also came from academia, and maybe this had uh played a role into that. But essentially like lived a life of adventure because he truly loved what he did.

48:32 Uh, once he made more money than he could spend, he stopped trading more time for money. Uh He his uh had a good marriage till his wife passed away from cancer. uh took care of his health. But like much more of like a let's say there's five important things and you kinda like

48:48 Divvied up, maybe li work was Fifty? But the other Or Or other fifty percent. And I was like, Oh, that's that's kinda my personal blueprint and I said on the driver I go No, I'm lying. It's like ninety percent of what I think about and how I spend my time.

49:03 Is just Work. That's a beautiful thing. So all the people you've mentioned so far are all these very, very successful people. I guarantee you probably every single one of'em, with few exceptions, if any.

49:15 We're All in. And and what what they were doing. was their passion and they were just so excited about it. They were in the flow. They were in the flow of being so absorbed on something that you'd like lose track of time and

49:26 the whole rest of the universe is gone. You're just you're just in it. You're just really into something that you do well and with people that you really like. And you're likely to be successful because you're You're doing what you do. When I was thinking about

49:38 the amount of research that you do that you explain when you before you get into an industry, before you start a company. It's like The way I describe your book is buy it, read it all the way through, and then what I really think it is, you put it close to your desk because it's a reference manual. Because you can just pick this up now.

49:53 And read one chapter. That takes Ten minutes and get good ideas. Out of it. Do I'm writing a sequel?

50:00 Last time you told me he's like I only had one book in me, I have nothing else. So I Wrote the book. And I got so much feedback of what people thought about it. And people ask, Well, you should really talk more about this and this this. At first I said I'm never writing another book. Just a lot of time to write a book. And I don't have a lot of time. I had so many people ask me similar questions. Okay, I'm gonna write a sequel that addresses those particular questions. You know what the title's gonna be?

50:22 That was How to make a few billion dollars. This was gonna be called How to Make a Few More Billion Dollars. Let me get an early copy, please. You're very nice to send me an early copy of this one. But the the what I think what ties all this together, when I think about your research process, the way you go after life, all the people we've been talking about from Steve Jobs to Jeff Bezos, this is like Mediocrity is always invisible until passion shows up and exposes it. Love it. I think that is what animates me. It's just like You you see this, you're talking about like even when you buy great companies

50:51 So like What else could you do? It's like there's always more. Because you can always infuse passion into what you're doing, obsession, work with the best people. Of course you can keep getting better and better results. Yeah. Well I agree with that. I think

51:04 So what you just said. You buy a company. It's doing very well. And then three, four years later, you've doubled the profit. What did you do? You went in with a toolkit and you

51:13 When did the Attack the pricing using algorithms and elasticity analysis. You've tacked the compensation, so you've Got the salespeople made partners rather than pupils to the p the the parent authoritarian figure corporate.

51:26 You put in technology that frees up time. It allows people to spend time doing selling and doing their job rather than Trying to find information, you're sharing information in very good ways. So you apply a certain toolkit. Boom, you double profit. So wait a minute. This brings up something interesting that I've been talking about lately, the different archetypes there is in founders and CEOs, right? Everybody thinks like, oh, there's kind of one archetype and especially the ones that are popularized now, it's like essentially like the Steve Jobs dictator make you know almost all the decisions. No, no, no, no.

52:00 I wouldn't be able to do that. So what is your archetype? Like let me back up before I ask you a question, because I've been having long conversations with Daniel Eck, the founder of Spotify, who's become a good friend. And that's his whole thing. Where his he like we we're actually might be writing something together about Like he's concerned that There's gonna be young entrepreneurs out there that are like, I'm not like Elon, or I'm not like Steve, or I'm not like all these people, so therefore I can't be an entrepreneur. He's like, There's multiple archetypes. He's like, I'm not like that. He says he thinks he's a better coach than he is a player. And essentially he has discovered

52:34 It's almost like this. He recruits some of the best talent in the world to the point where it's like I used to be the best at product. That guy's better at product. He should do it. I'm not that guy's a better designer. That guy, that person's a better HR. That person's everything. So he's like the way I look at it is like much more of a coach than a player. What is your like Archetype.

52:52 So You wanna get the right people in place. You wanna get the compensation aligned. And then you want to be communicating with each other in a very constructive way and a very prolific way. So Friday We had our our second M O R monthly operating review for this company we had bought, Beacon.

53:08 And How did we come up with the agenda? It was 10 hour meeting, two breaks. One was 10 minutes, one was five minutes. Nobody was distracted, nobody was on phones or devices, so it was all shut off. We're very concentrating on the one person that had the the the the sp the mic the proverbial microphone at a time. And listening very carefully and intently to what that person was saying, and then debating each point and each action point. How did we come up with the agenda?

53:31 Here's how. Did I, the CEO Come From above and say, here's the agenda that I think is the important thing. I'm smarter than all of you, and here's what we should be doing. No. How pompous and arrogant and kind of Ineffective really to do that. What I do is just the opposite.

53:47 I send around a a question pro it, an app. And we say, Um Here's all the materials uh pre read for the meeting. We don't do powerpoints and

53:57 where everyone tells each other how great they're doing. It's just the silliness that you see a lot in corporate America. We send all those decks out ahead of time. We have everybody read them. And then we have everybody fill out The qu the app. Say

54:09 Here are my main takeaways. And here are the main questions that I think are w are so important in terms of creating value. That we should The whole team, all twenty five of us were in that meeting.

54:22 spend time debating and discussing around the table in the limited time we've got. Because ten hours goes by like that. And Then I send back out the takeaways. And I send back out the questions. People rank'em on a scale of one to ten. Again, we have an app for this.

54:37 Then I send people the takeaways, here's how they were rated. Here's what w people thought were the most important takeaways. Very valuable. Now you've got the benefit of everybody's perspectives on the same data. So people have seen the same charts, the same data, the same metrics, same KPIs, but they've seen it from a little different angle. It's very enlightening. Then I've got the questions I tell everybody. Rate the question one to ten.

54:57 And then all the questions that are rated eight, nine, and ten and between eight and ten, that's the agenda, David. That's what we talked about. So we just went we we then we put them in categories. Everything about tech. that was rated eight or above, here they are. Everything that was on comp or people, everything that was on strategic, everything that was on MA, all the different categories. Only the ones that the group

55:17 voted on at least in eight. Now What what's the what is the consequence of that? Number one, we have an amazing meeting. Like it's a good agenda. Much better than I could I could m I could come up with because now it's got everybody's angle on it. Secondly, I think it's a good thing.

55:31 Everybody's involved in it because the boss didn't come down and like here's the agenda. It's like we collectively made the agenda. So people realize the truth of the matter is We really respect each other's opinions. There's no one person who's the authoritarian figure who's like

55:47 Teaching everybody else. It's a group. I've I've created a group, I've created a superorganism. I've created like a beehive, or or an ant colony, or a brain, or a human body, superorganisms. Things that are a collection of people. That's the sum is greater than the collection of the ports. And

56:04 And uh the whole is is greater than than each individual. We have a a holistic Powerful approach to that. That's that's how I run the business. So I've experiment with this over the years. I used to have larger meetings with Forty or fifty people, it just didn't work.

56:20 And so those meetings, those monthly operating abuse, which are the most important meeting of the month. Then the most senior people in the company come together. And do the exercise I just mentioned for ten hours with Almost no breaks. Almost no breaks at all. That I have twenty five people.

56:34 And I limit it to twenty five. I don't want more than twenty five. I I don't know what's so magic about twenty five, but Twenty to twenty five is the ideal. group. You have enough people that you get diversity of opinion and you have Dialectical discussions meaning looking at issues from multiple perspectives, then analyzing those and synthesizing them and finding the truth.

56:51 But you don't have so many people that you're you know, people are peacocking and trying to impress each other and And don't want to be vulnerable. You want people to be vulnerable. You want people to be to trust

57:03 that you've created a safe zone to say, you know what? I've been thinking this and thinking this, but the more I'm listening to you, the more I'm hearing about this I ain't wrong. Maybe I got this thing completely upside down. I'm starting to come around to looking at it like this with one little twist. Now I think what we should do is X Y Z. And then what do y'all think of that? That's a fantastic conversation. When you have leaders of the company feeling it's safe.

57:25 to show that hey I was wrong. I was I was thinking wrong up and I model that. I role model that myself all the time. Be flexible in thinking. Don't be rigid in thinking. Don't be black and white D c dichotomous thinking, but be open-minded, be receptive, to be willing to learn and to be challenged. And that's okay to be. proven wrong. It's actually a good thing. We're learning together. Two questions on that. How what percent of the meeting are you speaking.

57:50 In a in a situation like that. So I open up usually and I ramble on for like an hour or maybe more than an hour of The state of the union from from my perspective. And I try not to just mention things that I form conclusions on, but I try to frame things of These are the most important successes of the company.

58:07 But these are the things where we need to improve. And here are the issues that in my view, after reading everybody's repo uh votes and everything I think are the things we should attention direct. We should spend most amount of time selling because I think those will create the most amount of value. And and I I try to keep it balanced, the good stuff and the bad stuff.

58:25 Yes, I do add a boys and add a girls and rah rah. But I e in equal measure do Look, we gotta keep it real. We gotta keep it honest. Here's things that we said by this deadline we're gonna do it. We're we're a couple weeks behind on this. Let's get going here. What's going on? Here's we thought this outcome was gonna happen and We're only ninety-two percent there. How can we get to hundred percent? So I try to shut start off with a balance, but then I try to shut up. And then I try to let the mechan the mechanical Going through the questions. Well

58:51 I just go down the questions by categories. And then go around the room. And hear everyone's opinion. And that's that's m you you don't want the leader talking Huge amount of time.

59:02 Basically Start with an hour. The next the next in this case nine hour nine the nine hours for that's a meeting. Everyone else. Inordinately.

59:11 I've already used up my hour, for God's sake. Yeah, this is one of the things I I felt and I've seen this with a lot with like really remarkable people, is how many people like when we had this You had a notepad and you were I'm talking and you're taking notes. Like what the hell is going on? It's the reverse stuff. No, but it's should be the ver the reverse. Uh in fact, uh I have a story about this and then I want another question for you was um Mitch Rails, obviously one of the founders of Dan Hair. Um great company. Oh incredible. And um her way. He's yeah, he's uh he's actually a mentor of two close friends of mine. So I get like insights uh c uh uh from them about him and just what one of the most remarkable things that he did. But uh he was at this uh vertical market software.

59:53 Um uh conference. Forty people there recently. And a friend of mine, I was going for a walk in New York City about this, and he's just like, I don't understand. The guy sat in the front row. He's the most successful person there by far. And he was just taking notes the whole time. I was like, that is why he's successful. It's not the reverse. It's not that you go and you build a$200 billion company or whatever it is, and then take notes. He was like that his whole time, just the relentless, like, You have valuable information. Great uh I just did this episode in Jimmy Ivine, he's a very fascinating person, and he's this great line. He said, Great can come from anywhere.

1:00:23 And then you have this other thing. I I'll get back to the question. If you come from anywhere, he w he's in the music business, his point was that Uh he was trying to help he w he was partners and a mentor of Dr. Dre, who's one of the greatest hip hop producers of all time. Dre didn't have an artist to work with, they wind up getting this. Just demo tape from Eminem. And at the time he's this poor kid in Michigan living in a trailer park. Right.

1:00:45 No like no resources at all. And yet they're like, we weren't looking for, you know, somebody to be controversial. We were looking for great. And guess what? It can come from anywhere. It came from this kid that was obsessed sitting in a frickin' trailer park saying, I wanna do this thing and do this to the best of my ability. I wanna talk about um I'm gonna go back to this question I have, but You have I love this idea of of grabbing information. Which is really fascinating. There's multiple examples in your book, and then I find these in other books where it's just like it's so nuts. That

1:01:13 Ta especially when companies get big and older. They don't they stop asking information from from people from the front line. So you're like often when we buy a company, we discover that the frontline employees, middle managers, and even some senior executives have never been asked, what would you what would you do to improve the company? You would think owners would want to know that. And then you have this great thing that I think is actually good for. business but also personal relationships, you ask what is the the stupidest thing we're doing and what is the smartest thing we're doing. This ability to like You just almost described it in these in these meetings. It's like hey, we're going to Disperse and ask these questions and see what comes back, and then we'll rank the the information. So the end of those operating reviews.

1:01:52 Once we've gone through our list. Now we Now we do human interactions. That's where the fun starts. So we work really hard going solving all these problems and debating all these issues. Now we put that aside.

1:02:03 And I ask a series of questions. I modify'em a little bit every month, but I have a list of A few dozen questions. I Usually one of the first ones is What is something somebody said today that you have a different opinion on?

1:02:16 What is something that Somebody said. You disagree with And you need to get a chance to talk about it. I just go around one by one to each person. That's a wonderful thing. Many management teams can't do that because everyone will get upset. Here it's like great, this is and then we have a nice. I ask everyone

1:02:31 What's your single biggest takeaway from today? What is something that Ten hours ago. you didn't understand about how we're gonna make money and how we're gonna serve customers better and how we're gonna improve employee engagement and how we're gonna kill the competition. What what is something you didn't know? What is something you learned? And just go round one by one by one by one. And then I ask him

1:02:50 When I think about People not in this room, but people in the organization out there in the field. Who's an MVP? Who's the most valuable player? Who's somebody who's going above and beyond that you really respect, you really admire, you really think is amazing, wish we had thousands more like that person, and why?

1:03:06 Why are they and I sent an email to them afterwards saying, hey, I was in a meeting with the leaders of the company. And you were nominated as an MVP because XYZ. People love it. Sometimes they start crying. Yeah, it's really, really emotional thing. It's really, really nice thing. validating the field. And then I bring it inwards. And I say, Who around this table today In your mind, did their star go up?

1:03:27 The store already might have been high, because everyone loves each other, but even higher. You know, and why? What is something that somebody said today in the meeting? that impressed you, that w made you go, uhha. Made you say Yeah. That's a good insight. That's a good perception. I really like that. What was it? And what did they say? We go around everything like that.

1:03:45 And I have a few other questions like that. And then I bring it down to the person themselves. And I say. Finish the sentence. I resolved to improve the company by Just go one by one and

1:03:57 Each person stands up and says. I resolved to improve the company by And then they say what they what what what what they want to say. It's a great thing. Well I didn't get a chance to do Friday because we ran out of time. What I often do is

1:04:08 Then we go into the another room, we get out of the boardroom, get out of the conference room, and then we stand in a circle. And just silently look at each other. With For the first couple minutes, a couple minutes is a long time to be like looking at around everybody else. It's it's you know it's a lot of people that's uncomfortable. It's not uncomfortable if you all like each other. And and look at each person.

1:04:26 And say I admire this person because Like what are the strengths, what are the qualities, what are the traits What are the skills? What are the things that they do that you really are impressed with. You really like that person a lot.

1:04:40 And just go one by one, look at each person, and just identify that. And then After a minute or two's gone by, I say okay now let's do the same thing. Look at each person and say I really

1:04:51 So we've already said Why I'm grateful they're on the team. So now I want to say so with gratitude. Gratitude's a wonderful leadership technique. And then the second thing is I really wish that person great success to the company. And I can picture this company five years from now accomplishing XYZ. And and

1:05:08 I I'm I'm nice I I w I send nice vibes, I send love vibes to that person. Just go around one by one. All silently. Nothing out loud. One by one by one by one. You start seeing people smile. Like always, I've done it so many times. You start seeing people smile, you start looking at people, you see looking at people in a very positive, uplifting way, and appreciative way.

1:05:26 And then I say, Okay, now we've concluded the day and I declare the day a success. And congratulations. Then we just clap. And we clap. Sometimes this clapping goes on for like five minutes. It's like really really goes on. But it's a very people Levitate home. Go to the airport and go home. How much of

1:05:43 Is of your the way you run your company is like guided by intuition. Like you seem like a very intuitive person to me. Maybe not as much as you think. No. Yes, there's always instinct. There's always intuition. You alwa you always go by your gut. But like how would you even know like this is This is an unusual

1:05:59 Like what you just described, like how did you learn that? So I've experimented over time. Okay. I've experimented with different things. I've read a lot. I've studied positive psychology. I've studied cognitive therapy. I've I've studied a lot of stuff. I read a lot of stuff. I Meditate a lot. I Do things that that worked for me.

1:06:16 So I I think of things that have worked for me on my path, my evolution of Feeling gratitude and all the happiness that comes from feeling feeling gratitude. By feeling appreciation. by problem solving. All the different things and I try to im imbibe that to other people. So and then if it works if feed so feedback loops.

1:06:33 One of the key tenants of all my companies is we have intense voluminous feedback loops, feedback loops between the senior team. feedback loops between the senior team and mid level management. senior feedback loops between

1:06:48 senior, medium, and frontline management. Feedback loops with customers, feedback loops with vendors, feedback loops with investors, all the part all the constituents of the constellation that make a a corporation, that make a a company. We have we have to be communicating. We have to be communicating very intensely with each other in an honest way and then sharing that information. I share information much more widely.

1:07:11 Am I organisms my My organizations than most companies. Most companies They they they're afraid to share it.

1:07:18 They're afraid to share They're free to share the good information. They think a competitor's gonna hear about it. Okay, well they will. But let them try to copy us. They don't have all the ingredients to do that. Or they say.

1:07:30 We don't want to share the bad stuff because Then the market's gonna hear our weaknesses. Okay, well that's kinda true too. That's so much overshadowed by the benefit of We're learning where we have to improve. We're learning how to become better.

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1:09:40 So this is what you were describing earlier, this like almost a constant iterative trial and error process. Absolutely. And just keeping the information flowing through the company. There's a idea that I think when when I thought of um your idea is like, hey, we're gonna buy the company, we're gonna ask like w what would you do if you were running the company, what's the stupidest thing we're doing, what's the smartest thing we're doing? I as you know, like very I'm not interested I'm interested in timeless principles, not timely, right? And When I read that in your book, what I thought of was not you building your company, I thought of Jim Casey building UPS a hundred years ago. And what he learned, because a lot of these things that these ideas that survive for a long period of time, they're not dependent on the company, really depend on human nature, because like history doesn't repeat human nature does, right? Human nature is kinda constant, doesn't really change. And so what Jim realized is the more successful he became, the more successful his company became.

1:10:22 His executives their incentives were to like hide the bad news and just tell them. Good things. Cause then it's like everything's great in the company, Jim. And so like and I was the one that made that great. And so pay me more and like make sure I keep this great job I have. And Jim realizes like oh I need to have constant unfiltered access. from the people that are delivering

1:10:41 the the service to my customers. So he would he would do is like He would He would instruct his driver every time we see a brown UPS truck. You were to pull over. And he would get out no matter how successful he was, and he would talk

1:10:54 I love it. Unfiltered information. Same thing. People would go and they try to meet Sam Walton in Betonville, Arkansas, right? They show up, they even have appointment on the books. And they'd walk into the office and Like, hey, I'm here to meet Sam for our you know, seven A. meeting and his

1:11:09 Uh secretary's like He hopped on because he used to fly his own plane. He left at five AM this morning and he went to, you know, this Walmart over here and he's hanging out and like greeting customers and talking to the people stocking the shelves and everything else, but this constant I think there's a lot of wisdom in what you said in your book, basically is what I'm saying. It's like you see this over and over again. They they want unfiltered access from the front lines. They don't want the information to be, you know, massaged or or presented in a manner that m that seems good.

1:11:35 So Todd Combs is one of Warren Buffett's managers. And uh We were talking on a Saturday about I don't know, ten years ago.

1:11:44 Eight, nine, ten years ago. uh when he was first he was getting on the JP Morgan board and he was kind of moving up in the world stuff like that. I've lost touch with him, but really great guy, very smart guy. And he said, What are you doing? I said I'm reading uh employee service. Uh I'm reading all the employee surveys from the whole company of

1:12:00 We ask him two questions. What's your single best idea to prove the company and rate your job satisfaction scale of one to ten. And sometimes we add a third one of what it will take to make it a 10. And I just I just go through all these one by one because I like I feel like I'm talking to every employee and learning on that. That's amazing. So what's so amazing about that? So I was just talking to Bezov.

1:12:16 And Bezos was uh reading customer survey. So I'm talking so it's this so he's talking to customers, I'm talking to employees, but it's the same concept. You need feedback loops. You don't know how you're doing unless you have radar like sending beep beep out there and seeing how it comes back. You have to have this. Very intense feedback. This is why I'm so obsessed with what I'm doing, because what like nothing we're doing is new. Like you had all these people that ran all these kind of experiments for centuries and they built great companies. And just because you know, they passed on and maybe the company's not around anymore, it's like there's so there's a treasure trove of data in there. So like uh the basos idea I love where he would publicize it, he used to publicize the very early days of Amazon. Jeff at Amazon.com. Email me.

1:12:56 Part of the one of the reasons that he figured out he's like, Oh, I I can s we we can't just sell books. Like I can sell anything. People he'd be like he would send emails to I think like the top phozen customers like what else would you buy? And one guy gave this epiphany'cause they you know, they're like, Hey, I want toilet paper, I want all you know, groceries, whatever. One guy's like, I want windshield wipers. And he's like, Windshield wipers. If this guy wants windshield wipers, I'm gonna be able to sell everything. Like it is a true everything store. But I was uh I was thinking about this recently because I just read this book translated from French about the Michelin family dynasty, which starts out in eighteen ninety one selling tires in France. You're selling tires just like Three hundred fifty cars on the road, for God's sake. But there's a line in the book that is related to all this where

1:13:33 They start the the the the the two brothers have to take over this failing uh factory. And They don't know what to do to make because most of the products that they're manufacturing are unprofitable, they're on the brink b bankruptcy. They're one profitable um product, which so they eliminate everything else and they focus on the one profitable product, which is a rubber brake pad for horse drawn carriages. Say that again though. A rubber brake pad for horse drawn carriages. Remember eighteen this is eighteen eighty eight.

1:13:58 And so it takes them like a year or two to figure out like, hey, we should manufacture rubber. And there's two twin phenomenon. You're talking about get remember what justice said, get the major trend, right? Yeah. They're like Well Horse drawn carriages have been around for a while a while. You know what's growing way faster? Bicycles and then cars, even from a small number. Like we need to go to where the technology's going. But the point being is like so we need to make more Uh

1:14:18 Products, uh we need to make rubber tires. And the guy took over a factory he's like I don't know how to do that. So his answer was he would go and he sounds just like what you do? He he only had like 50 employees that were making the rubber brake pads, and he would just ask questions. He's like, I came to them and I admitted my ignorance. I go know nothing about red manufacturing. Why'd you do that? Can you explain to me? Can we what if we did and not in like what you just said, you said something about like not like coming down from on high. It's like appear almost like teach me. Yes. And he's like, it was wildly effective, and he's got a great line in that book. He's like, it turns out. The guy that

1:14:49 handles the material for eight hours a day while the CO's in the office. ha has something to teach you. Like he's going to understand something about that process because you have you're you have like a bird level view. He has a very particular job and he found it very instructive. And he's like it was a wonderful way to learn the business. And then that led him to like, oh now I know how to make things. And then he From there to grow and grow and grow. And I just absolutely love this idea. It's like You should have this unfiltered access.

1:15:14 Unfiltered information. over and over and over again. Completely. All the different constituents in the organization need to be talking to each other. Need to have feedback loops to know how they're doing. If you're not asking your customers how you're doing, you may think you're doing a lot better than you than you than you really are. Or or How do you figure out how you're doing?

1:15:33 In your position. I ask all they along. And and we have different modalities of Anonymous surveys and three sixty reviews and And we're

1:15:41 I'm interacting with the teams nonstop all day long. What's going on? What do you think of this? What do you think of that? Uh you have this great line in your book where it says, uh I love working with outrageously down to people to deliver outside returns for shareholders in public stock markets. I love that. feedback from the public market. It's fantastic.

1:16:02 You love it. Yeah. I don't always agree with it. There's always some truth in it. Th you you You get free advice.

1:16:10 Like The smartest people in the world bit the global allocators. People have raised billions of dollars from from uh pensions and endowments and and and sovereign wealth funds And now they're They're analyzing what you're doing and they're giving you advice.

1:16:25 They're telling you this is what I like, this is what I don't like. Okay. You don't have to you actually you mathematically can't agree with it all,'cause a lot of times you get conflicting advice. People saying you you're going right, you should be going left. You the other guy's saying you're going you go you should go left even more. So Us. It's good to hear all this stuff. It's good to hear what people are saying.

1:16:41 But then you have to Go within yourself. And you have to You gotta make the decision. You have to be an adult.

1:16:47 You have to you take in tons and tons of information and opinions and beliefs and data to as much as possible. Then you've got a Kind of just ignore all that. Go inside and say

1:16:59 This is what I want to do. And make the call. That's what a CEO does. It's what the leader does is you make the call. But you have to get all that input. Otherwise You're in a you're just in a bubble chamber echo chamber, you're just hearing your own thoughts instead of others. You want people challenging your thoughts all the time. I think for a long time. the like the one big goal was like starting a company and then taking it public. And now I talk to a lot of founders and even the ones that raise a lot of money and they don't want to ever go public.

1:17:23 Do you have any I like being public. Why what advice would you give to somebody that's, say, thirty years younger than you? They're trying to build a great pub uh company, they've raised a bunch of money, but they don't want to Go public. Well they have to be at a level of maturity of the company to go public. Yeah. Preferably profitable. Yeah, yeah. That are that reach that criteria. And are choosing not to. You know, it'd be interesting to ask them why.

1:17:48 What's the reason why you don't want to do it? Maybe the scare of the public scrutiny, the hassle, the But that goes back to what we were talking about an hour ago. So they might have a core belief saying I need everybody to always be like saying great stuff about me, which is never gonna happen. And they may think that gee, if I go public

1:18:06 When you're public At any moment in time, you have people in favor of you and people who are naysayers. You have people who are selling and buying. The people selling think you're overvalued. People are buying. get the joke and they understand it's g you you have a real real business plan here that's gonna create more much more value. So you always have those two different things going. Maybe those people don't want to hear the naysayers. Maybe those people don't understand that Naysayers sometimes can help you correct your own path.

1:18:31 Can tell you. Gee, you know, maybe I'm cutting costs too much. People come in and say, You're cutting costs too much. I visited one of your locations. I didn't think the service was so great. Oh wow, I didn't know that. Thank you for telling me that. So maybe now I have to invest more rather than cut costs. You have other people who say, You know, I'm looking at your numbers here, your margins are growing, which is great. That's only half the half the situation here.

1:18:50 The other situation is What are you doing with your top line? What do you do with your price and volume? What do you do with your organic growth? In my business, in all my businesses. The only two things I had to do in the end. In order to get great valuations and create shareholder value.

1:19:03 We're Grow the top line faster than the competition, faster than the market. Be taking share. And growing the margins, increasing the margin, increasing the profit margins.

1:19:13 If I did those two things, everything else flowed. Everything else flow from that. But those are the two main things. In order to do those accomplish those two things, you want as much input as possible. You want as many many chef many chefs in the kitchen as you possibly can. The public gets you hundreds and thousands of voices. So it's amazing data. It also being public Allows you to build a brand.

1:19:33 Much faster and much more vol voluminous. So You wanna be a magnet for talent, uh for drivers, for people in the branches, for people in mid level management. You wanna you wanna be get going back to what you said before, you always want Great talent coming in. Well, if nobody knows who you are, they're a little skeptical about joining your company. If you have research writ written about you by bunches of firms and you have

1:19:54 press releases and a public website and y you're very well known what you're doing. It's very clear what you're doing. People say, Okay, I get it, you're a known quantity and and I I like this. I buy into it, I like what you're doing, I wanna join the company. So in order to And then you can pay them. You compensate them with stuff they can look on their iPhone every day and see the value of the compensation if you're private. You give people these phantom shares or whatever the compensation plan is. They don't really know the value of it until they sell it someday. And it may be very different than what they thought it was all along. So from a

1:20:23 A compensation point of view, which is a big element of success in these high growth business plans, being public is fantastic. Was there ever a time in your career where you're like, maybe I should Do should do a priv a private company instead? You were pretty much all in on it? I've been doing public since nineteen ninety two. And I'm nonstop. And and I'm I I like it. I don't I'm I I enjoy it. It's I find it very helpful, very constructive. I like the pressure.

1:20:45 I like I like the ability to hear what the street says. And then agree with what I agree with. but to disagree with I what I think is wrong what I feel passionately and have evidence to support they're wrong. So sometimes the street, particularly like the hedge funds, they're very focused on like this quarter. Like the next ninety days. That's a terrible thing long term. You don't want to be focusing on just what's good for the quarter. You end up you see these public companies that go out and they cut costs. In the field.

1:21:11 that hurts customer service or hurts employee morale and they're under staffed, which is Even worse than being overstaffed, which is which is bad. And and here it's a it's a completely different story. So I yeah, I I I like being public. You said something interesting. I like the pressure.

1:21:25 Thrive on it. What do you mean by that? So Many people give you the money. Whether it's a a it a retail individual, whether it's a high net worth family Whether it's it's a sovereign wealth fund, whether it's a pension plan, whether it's

1:21:39 an endowment. All these people are invest long only funds, mutual funds. All these people are giving, they're wiring money to buy your shares. This is a Intense pressure. This is a this is probably the biggest pressure I have in life.

1:21:51 is to make sure that I do everything I possibly can to make sure I give them back more money than they gave me. Make sure that They invest in the company and Like if you look at my neighbors and my friends I don't know the exact number, but

1:22:04 I would guess over ninety percent of them are invests in the company. And that's that's what it's been o over time. Well that's pressure, man. That's like wow, I don't wanna disappoint them. These are my relatives, these are my friends, these are people I really love. People come to say look, I believe in you so much, I put

1:22:19 Two thirds of my my retirement plan in in in your stock. Just single no no forget just diversification. Boom, I'm going all in on Brad and his team. Well that's a lot of pressure. I like that pressure. I enjoy that pressure. That motivates me. That inspires me. That makes me feel so I have something to do here that's important. I think that's so important to like put that out. Um 'Cause we were talking about the negative self talk and like, you know, just living a a pretty crazy life where it's like you want to work seven days a week or you're just completely all in.

1:22:46 And the way some d again, this goes back to you can hear a sentence. And just be like, oh, I feel that way too. And it kind of changes the way you approach things. And I remember reading about Herb Kelleher, which is the founder of Selfist Airlines. You know, it's such a it's such a crazy story that like in an industry where bankruptcy is the most common you know outcome, the guy had his his company was profitable for forty straight years. And he's like a nut job, he's drinking a fifth of bourbon every day, he's chain smoking cigarettes. No, no, he's like I don't advocate that. No, he didn't sleep. He's like J it was just he's just hilarious stories uh in his life. And I thought he was like he just lived on the edge and and completely like all in. There's a great story uh about this where they try to get him, you know, he chain smoke. And then drink a fifth of bourbon every day. And they're like

1:23:29 Um, but then he had like prostate cancer or something like that. And I you should stop smoking. He's like, I don't smoke with my prostate. But but that's not the thing that I remember. The thing that I loved uh in an interview one time. They're like you have like You deal with a ton of stress. Like how do you handle it? He goes, I don't handle it. I like it. Yeah. He wanted stress. He's like, I wanna be in the game. Yes. This is he was an attorney. He didn't start his company, it was his first company. He was an attorney, he was thirty five years old. And then it's like hey, I'm gonna try to do a interstate or intra state.

1:24:01 Airline. And like then he we had it was like four years of legal fights before he could even take his first flight. He's just like I love this shit. This is what I want. I want the pressure. Passion. What I love about this is it's in your book. You you constantly talk about Uh people. uh the other entrepreneurs, other investors, other CEOs that you learn from.

1:24:19 then the acknowledgments all these maxims from all these other brilliant people. You talk about uh obviously Ludwig J Justin. Uh, I do wanna talk about I I read something on LinkedIn about other I'm gonna talk about the other people that you've learned from, the other founders, CEOs, executives that you admire. Uh I wanna start with Fred Smith since he he he passed away. Um I read His biography.

1:24:43 Uh probably like four or five years ago. And I tell me if I'm wrong, you know more about the Cindy Sh than I do. It just seems like FedEx had to be one of the most difficult operational companies to ever invent. Like an unbelievable. Yeah. The complexity. You wrote on LinkedIn that you you never missed an opportunity to spend time with them and you admired him. Could you just tell like why So Fred endorsed my book. Yeah, I saw. And I was very touched he did that. He was a competitor. So Fred was an amazing guy.

1:25:14 I mean this is a very special y you meet people in life that are just special. That are So I met Fred for the first time in two thousand and thirteen. And I was doing a bunch I came out of nowhere from this industry. I got in in 2011, but I really started doing a bunch of acquisitions uh out of nowhere, and suddenly like I was on the front pages of the trade journals. And I was in Atlanta.

1:25:36 At the National Association of Manufacturing NAM conference. And Fred was the keynote. So I I was in the audience watching. And somebody uh

1:25:46 So what do you think of Brad Jacobs? I go, oh my God, my holidays charge vehicles. Oh my God, Fred Smith's about to like destroy me. My brand is gonna be completely crushed. You know, the icon of the industry is gonna say, Oh yeah, I don't believe you. He said. I really like watching that guy work. He said the is coming into this industry with courage. and buying things left and right and has big goals and big ambitions and I'm I'm gonna keep an eye on that guy.

1:26:13 And I would I Cry. I said, Wow, Fred Smith likes that great stuff on it. So I went up to him afterwards. After the when the speech was over. And I said, Mr. Smith, uh

1:26:23 I'm Fred Jacobs. I really appreciate what you said. I said, Well, first of all, I'm Fred. And that was the beginning of a great, great friendship. And we got together many, many times. And of course he was on the business council. He was the longest serving member of the business council, over a quarter of a century. Oh wow. And I go to every business council meeting I possibly can to meet other CEOs and to hear what other people are thinking. He was just a generous guy. This was a guy who had vision, he had passion. Talk about grit. I mean he wore maybe was flying around all the time, everywhere. Vietnam. He was decorate. He was f I fly helicopters.

1:26:55 With people shooting bullets at him. Marines who had been he was a Marine. Yeah. Marines who've been killed, but you don't leave any Marine behind. He'd go in the he's risking his life with bullets like shot every shooting at him to go get the remains of a dead Marine. Putting his own life on line. He got a purple heart, he got silver, he got. I mean serious, serious, serious. Courageous. high integrity guy and Everybody.

1:27:18 Everybody loved. I'm everybody loved Fred. The opening paragraph of that of his biography is the craziest opening paragraph I ever heard. I'm just gonna like paraphrase it essentially like You know, he's in debt. Um

1:27:32 he ran through like his the his greyhound his dad's greyhound bus millions. I think he burned to like fifteen or twenty million. Uh his planes are about to be confiscated. They just got fired by his board. Uh the FBI is in uh investigating him. It goes to Vegas. Yes. And then they're like, he thought uh he he thought and he was like thirty years old at the time, so still young, but he refused to let his federal express dream die. And he the line was just like He thought of suicide. And then the next paragraph is like but the idea of thread uh a Fred jumping out a window is ludicrous. He's more likely to throw somebody out of a window. He's just like a guy that you like he was like the tournament you couldn't stop uh like he just wouldn't stop coming.

1:28:09 There's a few lines. I mean I was a little different. Well maybe but I was a direct competitor of him in transportation and logistics and internal not in package, because we didn't do package, but pretty much all the other lines of business we competed against him. He was generous. He was charitable. He would always take a meeting with me. He used to come to my house. We'd spend hours and hours and hours talking about everything. This is what is so special. I know it's part of humanity in general, but entrepreneurship in in in particular is just like you see this over and over again, just how generous these people are with the'cause they know how Fucking hard it is. They just went through all this. And now we might be fifteen, twenty, thirty years different in age, but it's like just like Ludwig Justerson did when you were twenty-three. And in many cases, like what you did with the book. The idea, like think about Sam Walton, right?

1:28:56 He wrote his autobiography. We've cancer was all over his body. He was in pain. He knows his time is towards the end. And what does he do? So A l a big chunk of the last time he had left Saying this is what I learned in my six decade long career. That is a gift to future generations. Yeah. And then the in the book they're like, somebody I love this part because they're in the book, they're like

1:29:17 Uh people ask me all the time, could another Walmart story happen? He's like, Yeah, it's probably happening right now. And it was Jeff Bezos going around with his copy of the book, writing it, annotating it, giving it to the executives, the early executives, Amazon. It's such a beautiful thing that Fred would do that. It's what it's a beautiful thing you did uh for your book. No, no, no. I'm I'm saying but like in general, yeah, obviously. Well, yeah, I can't. But my point being is the the transfer of Even for competitors. He was Fred was your competitor, but he's transferring knowledge to you.

1:29:47 I don't think people understand how much that goes I'm glad you just said that. Yeah, you could see in the books. And you hear stories like that. Exactly. You hear stories like that all the time in private. And for you to say that, I think it's really important. There's a few things I pulled out from his biography that just remind me of you. And I'm curious if like you th if you agree with some of these things. One.

1:30:07 Uh If it's about Fred Smith. If it if I don't have that trait. I should work on getting it. Okay, well perfect.

1:30:16 Think about that. Like he started FedEx in the sixties, I think, something like that. No, after Vienna, so maybe early seventies. But in the eighties, he says that he estimated in in during the nineteen eighties, he spent four hours a day reading. He says uh he found he relied quite heavily on his own vision. Back by assimilating information, which you've mentioned multiple times so far, from many different disciplines at once. You talked about in meetings, you talked about in trade journals, you talked about all the research you do, right? This is his quote though that I want to read to you. The common trait of people who supposedly have vision is they spend a lot of time reading and gathering information and then synthesize it until they come up with an idea. That sounds like you to me. I like that. Yeah.

1:30:53 Going back to what I was saying before, you don't want to be rigid in your thinking. You wanna be open minded, you wanna be flexible. You wanna be scientific about it. That if new evidence comes along that just proves your Your theory, then modify your theory. Go by the evidence, go by the facts. You won't get You wanna

1:31:08 Interact with people who you respect. And you wanna be picking their brain all the time. But you're also like ali the way I describe it is like you're you're also alive and paying attention. Like the story in your book where you're like reading a magazine in bed on a Sunday morning and you read about like uh these waste management companies making like five hundred million dollars in profit. You're like Whoa what? Like they're picking up trash from one spot and bringing it to another. I need to learn about this industry. But that's one point like you're you're people like Fred, people like you, I think you know, there's a ton of people that have the same thing where it's like they're the the whole world is like a classroom if you're actually paying attention, like you can pick up we ideas all over the place. So the waste management business. I contrasted to the oil business. The oil business was a lot more complex.

1:31:48 Yeah, negotiating. complicated long term contracts and chartering vessels and negotiating processing agreements with big major oil companies and hedging and I mean it's very complicated, complex business. When I read that about the garbage business, I said that is so much easier picking up that's a simple business. They move some garbage and send out an invoice. I definitely think I can do that. And it seems like they make a lot of money and and the trend seemed

1:32:12 Seeming the r in the right direction. Yeah, you want to and the application of technology, which is I love how at the end of your book you have essentially hu what are all the the the some key idea some key technology developed by humans certain, you know I thought that was a beautiful way to like just put that in the theory. So I got that from Kurzweil, by the way. Ray Kurzwell. So Ray Ray So Ray Kurzweil huge mentor of mine. Only met him once, but met him for about six hours. But I've read every book he's written. I've read every article about him. I see every YouTube he's I mean I I I'm a Ray uh Ray Kurzweil fan. I mean I really st and when I

1:32:47 Read in the Singularity is near in two thousand and five, two thousand six when that book came out. Where was uh chronology of the universe going you know my meditation I go back to space and time said Kindred Spirit here. This is someone who thinks of large scale of time.

1:33:02 And And one of the key things that have happened over the last thirteen billion years. and reducing that down to a couple hundred points. I thought it was real helpful. So I I modified it a bit and And made it more specific to business, things that would be applicable to business. But the main trend

1:33:17 Going back to The main trend for the last two million years. Had been humans.

1:33:25 Creating tools. AKA technology. That's

1:33:33 Do better than us to free up our time. So whether it was fire, whether it was a wheel, whether it was the printing press and More recently all the all the digital electronic stuff we've done and all the internet and now artificial intelligence and robotics and nanotechnology. This is the trend. The tr the main trend in life and therefore in business is technology.

1:33:53 outsourcing our senses, outsourcing our memory, outsourcing now our intellect, our speech. To to to computers, to to the to to the cloud. This is big. This is really, really big. So when I looked at fifty five different industries before I picked building products. I ruled out a bunch of them, so this is looks like an interesting industry, but

1:34:12 I think AI and automation are gonna kaibash it. And I didn't do it. I I mentioned in the book. There was one particular online education company was called uh Check. I said, I don't know. It seemed like you got a good business, but

1:34:25 I think these uh these L the AAI is gonna come in basically do that for free. Well you know, and I say I think the stock might come down. Well stock came down a lot. It came down from fifty to single digits. So Fortunately I made a good prediction there. As Yogi Barry said, predictions are difficult, particularly when they're about the future. But that turned out to be a good prediction. Why was that a good prediction? Because to me, I'm looking at it saying the main trend, the long term trend. is to use technology

1:34:52 to do things that we've been doing ourselves. And and so I'm always trying to look at these different work streams and say, is that something that can be automated? Is that something that can be AI or robotics going forward? And then and then capitalizing on that. And the the opportunity to always do something slightly better, which is and event tools on the to do so technology.

1:35:11 Sometimes a lot better, not slightly better. But uh but it the the good thing is like this is not exclusive to the time we live in. It's a constant throughout our experience. Like you can you can go and look at the like when you guys were um collecting all the this is you said before facts, before email, you were collecting all the information for Amareks. Yes, yes. Uh you know. Forty years ago. And then uh the waste management uh when you're like, hey, how are like I should get into this, and then you realize wait, they're not even using technology to figure out the most efficient route. And you you you this constant application to technology is one of the things that I'm glad it was on my notes, but I'm glad you uh brought like uh directed the conversation there because The way I thought about this has really um crystallized my mind when I read Andrew Carnegie's autobiography, right? Which is probably written a hundred and thirty years ago. And

1:35:57 For whatever reason, if you talk to somebody today, they don't think of like the production of steel as technology, which is like a crazy thing. At the time, it was like they literally invented a new and a better way and then Everything in the world was gonna be made out of this. And so what I do is like when I'm finished reading a book, again, we go back to This idea that you and I share. Distill it. You're not gonna remember two hundred fifty pages, but you'll remember a paragraph or s uh sentence if you can.

1:36:20 And Andrew's a young person. getting into an existing industry. It's a new industry, but it's still an existing industry. Most of his competitors were much older and they were very resistant to your point, resistant to change. You cannot be resistant to change. You have to embrace the major trend, which is what your your mentor told you. And so

1:36:36 I was hearing the the the criticism that his competitors j oh almost like uh when you were in that business and um they the the guy took you out to lunch and it's like Slow down. I used to be the first, now I'm the second. That's a terrible way to do business. It's like take your competitor at the lunch and be like, stop being better than me. Motivation. Yeah, it's not gonna work. But the the way I would summarize the main theme from Andrew Carnegie's book that then reappears over and over again on these stories is invest in technology. The savings compound, it can give you an advantage over slower moving competitors and can be the difference between a profit and a loss.

1:37:13 And you see that over and over and over again. It doesn't matter if it's steel, waste management. Software over and over again. It's like the the best entrepreneurs, the best COs, the best executives, they're you they're not scared of technology. If you're scared of it, you're going to get destroyed by it. They embrace it. And they invest heavily in it.

1:37:31 Again. Uh The benefit I have is like I I'm reading about a chocolate company that was started eighty years ago, and they have some of the most advanced robots. Making chocolate. I'm reading about a tire company from 150 years ago. They

1:37:43 watch their costs and they're very efficient on in how they spend their uh their time. And their money, but they invest heavily. In technology, no one thinks of Walmart. As a technology company, but if you go back in nineteen seventy nine Right?

1:37:58 Sam's in his sixties. And they're like, hey We're doing everything by hand. Our business is way getting way too complex. We have all these distribution centers. Think about the logistics, is you would know all this, moving all this material where it needs to be at the right time. We need to invest in computers. And Sam at the first thought. He heard computer, he heard overhead.

1:38:16 He heard expense. I can't do that. And then he was slowly allowed himself to be convinced by the council people on his team and he wind up and when he when he decided to invest, he wouldn't Like Dabble, he invested five hundred million dollars in nineteen seventy nine dollars. Who knows what that would be today? In the most advanced. computer system to handle his logistics and distribution.

1:38:35 And that was a an edge that no not not another retailer on the planet had, or at least in America, had. That's But he had the technological edge over the rest of his competitors. You always want to be finding waste.

1:38:48 And eliminated. You always want to find inefficiencies. And there always are. Want to reduce them. Technology helps you with that. Walmart's a big tech company, so my chief supply chain officer

1:38:58 Came out of Walmart. Very, very sophisticated guy. It's all about technology, all about using tech in order to get the data and then being very data driven. I would argue that oh if anybody there I don't think you could be the leader in any industry and not also we don't think of them as tech companies because we think tech has to be like Google or Facebook. It's like no, they're all tech companies. I just did um I wanted to do more than just uh like American entrepreneurs is where'cause you know Do we have an outsize share of entrepreneurs. Everybody's like, you should do more X, Y, Z. Like, why are they all American? And that that I understand that. And my point being is like if you think about entrepreneurship in the market economy, it's only a couple hundred years old. It's like well, America's kind of dominated out there. So it makes sense if seventy five or eighty percent of my episodes are about that. But I uh I did one on one of the the most successful entrepreneurs in Europe named Amancio Ortega.

1:39:46 And I didn't know anything about him. All I know is that H M. Uh Zara. Oh Zara In Detect. In Detect. Yeah, yeah. And then you're reading about this, you're like It's not a fashion. It is a technology company. What does that mean? He built the logistics and the system to say me and you can walk out on the street right now and we can see

1:40:03 Oh, there's there's a trend here where all these ladies are wearing dresses with whatever, you know, red flowers on them. And he can take that idea and put it through his system and he can have Manufacturer. Dresses with red flowers. In

1:40:16 You know Twenty five different countries in seven days. That is technology. So Zara Intertext is a big customer of GXL Logistics, one of the companies we spun off from XPO. And G XL runs

1:40:33 It's exactly what you're saying. It's it's e commerce. It's trying to do things very efficiently and very quickly and very accurately. And you need technology to do that. You need robots and you need AI. Every business. Every single business is going to see more automation and more AI. People have to get on the program on that, or they're going to be dinosaurs.

1:40:49 A hundred percent. I'm gonna go back to Fred Smith. He says something that sounds Oh, of course. He's always talking about this new invention he just did in the movie packages and robots and We were trying to figure out some way you could use automation in LTL,'cause he was a big LTL, FedEx is the biggest action LTL and XPO's big LTL. The automation's not there yet.

1:41:10 to get'cause all the closed spaces and all the people still involved in that. But it's going to be. Package automation though. Package automation is much further ahead. Yeah. So there's something we haven't touched on and I I have a question for you. And this a quote from Fred in his biography says you have to be absolutely brutal. in the management of your time. Oh yes.

1:41:29 Do you have any insights into the Someone disagree with that, you're gonna talk to somebody else. I'm curious how you do this, though. So time. So when you're a CEO, when you're an executive You only got two things. You got time and you got capital.

1:41:43 And How you deploy that time and how you deploy that capital. Equals results. Mm-hmm. So it's your it's your time.

1:41:51 And it's the time of the people, the organization. So when I was running XPO We had about hundred fifty thousand a little more uh employees worldwide. See each one of those work the senior management worked long hours, but the average work w worked eight hours a day.

1:42:05 Yeah. Eight times. But one point two million dollars a day of of work getting done. If you've got people very focused and very motivated and very tr well trained and feel good about the company and feel good about their job. that productivity of that one point two million hours a day is gonna be a lot more. Then

1:42:25 if they're if the conditions I just mentioned are not are not present. So Managing people's time. F putting them in the right. priorities and and Telling ranking what people should be spending their time on is very, very, very, very important to success. Now how do I spend my time?

1:42:40 I spend my time deliberately and consciously and intentionally On the things that I think make most amount of Value. for the for the company. How many things at any given time are you having to focus on? No fair amount. So if you're CEO, you're you're managing

1:42:53 You know, fifteen, twenty different things always. You're managing people. You manage technology, you're managing budgets, you're managing investors, you're managing uh infrastructure, you're managing transportation, you're managing logistics, you're managing pricing, you're managing procurement with the vendors, you're managing customer relations, you're managing sales. You've m managed Salesforce Excellence.

1:43:13 There's about 20 things that are your life. Like that's what a C that's what a good CEO does. The problem with a lot of CEOs is they've come up through just sales or operations and they're good at that. But they kinda just delegate. The other

1:43:26 Fifteen things, but that's that's really part of the CEO job. You look at the great CEOs, the the CEOs have created a lot of alpha, a lot of shareholder value. They've been in each one of those twenty or so things. You talk to a Dave Cody, you talk to an Ed Breen, you talk to Larry Culp. You can talk about any of those twenty things. And they haven't they have things to say. And you can learn from them.

1:43:45 You talk to CEOs who haven't created a lot of value, who are not really good at This game. They'll know. four, five or six, even half of those twenty things, but they don't do the other. Don't do the other part. You gotta be in all of'em. But but you're not in all those things in equal measure.

1:44:00 Some things you don't have to spend as much time on. The people things and compensation things I actually spent a lot of time on. So that's that's core, that's critical to get right. That's That's something that if you get wrong you you waste it. Budgeting. I spent a lot of time going on the budget. C customer satisfaction. I spent a lot of time on that. The employee service the employee engagements, going out to the field, doing the town halls, doing the zooms.

1:44:21 I'm I'm all in on that. But when you say that the COs that you think might not be doing the best they could, are they delegating too much? Yeah. They're they're they're not They're they're afraid to do the th in gener making generalizations. There's always exceptions, but generally speaking what I find is They gravitate to the stuff they like and that they're good at.

1:44:39 And they kinda just don't do the stuff that they don't like or they don't aren't very good at. And you can't. You've gotta you've gotta be if you wanna be a good CEO and have a high performing performing company and being the top and being the top decile of

1:44:53 Like United Rentals and XPO were both top ten stock performers last escape. That's not random that the both those companies were it was the same same principles, same same structures. You've got to have CEOs and they they did where that are In the whole thing. Understand from A to Z. What running a business is. and how you create shareholder value.

1:45:15 And see the whole picture of The levers. So I always tell friends who are portf and have a lot of friends who are portfolio managers or analysts at on the buy side. So when you bring a management team in. You need to ask'em.

1:45:28 What's your stock price gonna be five years from now? And what are the levers. that I have to believe that's gonna get you there. And if that CEO tells you I'll get that's a great question. I'll get back to you. Short that stock. Please don't buy that stock. Because that's the first thing the CEO has to know.

1:45:42 First thing is C a CEO and the senior management team has to know with great specificity. Here's Where we are right now the stock price. We wanna get

1:45:52 Massive outperformers and get to here. That's great. That's just the beginning. Here are the levers of how I get there. Here are the levers of the things that we must do as an organization that will Improve our profitability.

1:46:05 improve our multiple, generate free cash flow. Just how are we gonna get to there? En in my case It's not that hard because when you do the the the the graph the first two bars when you do levers

1:46:19 And those are Buying companies right, meaning being very disciplined what you pay. And looking at lots of acquisition candidates at the same time, so you don't fall in love with any one of them.

1:46:33 And so you have alternatives and you don't what's the distribution there? So you've done over five hundred acquisitions throughout your teams and I have. I like to give credit to my team. Yeah, you're your team, for sure. So you you and your team have done over five hundred acquisitions. You've looked at how many? Thousands and thousands. I mean many thousands. Like Hundred thousand, do you think it would be that few? Okay, so I don't know if it's a hundred thousand. Looked at in depth. Yeah. But in the thousands, many many thousands. Okay. Going back to the time management though.

1:47:01 I think th especially in in like the age that people are growing up in, like where I Like there's a uh shortened shortened attention span, a lack of focus, in my opinion, and like really easy to give in to distraction. Like how You sound like you're almost not impervious to detraction. That's not the right way to put it,'cause I know how you're you're gonna be humble when you describe yourself, but how do you avoid being pulled into things that are not prioritized? So many many people know Warren Buffett. I I barely know more about that.

1:47:28 Met him a few times but it's not a close personal friend which he was, but he's not. But I know a lot of people who are close to me who are close to him. And they they most of them have the same story, so you must tell this to everybody. He tells people I'm the richest person, I'm the wealthiest person in the world. And I said, Well, Ms. Buffett, uh you were for one period of time, but I think you're number four or whatever. He says, No, no, I'm the I can prove that I'm the wealthiest person in the world. I say, Why is that? He reaches in, he brings out his daytime or his you know his

1:47:53 Calendar. Yeah. And he says, Monday. Tuesday, I have no appointment. Yeah. Wednesday, I have no appointment. Because he controls his time. Yeah. He controls his time and he has he has no problem saying no and refusing people time. I think I have a problem saying no, though. Like this is why I'm asking you to say that. Well you could solve that problem.

1:48:11 That's a problem you've identified. That's great. That's half of the s solution to the problem. He'd work out. He has that great line where he's like the difference between successful people and really successful people is really successful people say no to almost everything. So like you have twenty you know, whatever the number of Yeah, so whatever the number is like you have twenty things that that you know, you're you're focused on at the CO level at this at this moment. You're sp you know you know, where you want to spend your time, what you're best at. We talked about the in uh incentives and and then uh recruiting talent. But like You also

1:48:39 are one of the most and you're not gonna like this, but like one of the most famous and wealthiest people in the world. You have an unbelievable amount of t people that want your time. How do you stay disciplined? Like you're you seem to be disciplined from the outside of saying no to a lot of things. Like How

1:48:54 Is that something you learned in the last like five years, ten years, or you like that when you were younger? So first of all. I'm not that famous. I'm well known in the In the business community. No, the average person, yeah, for sure. I'm not one of the richest people in the world. There's many people who

1:49:12 Vastly richer than I am. But in my own modest way I've I've to I created some level of recognition and some of some of the wealth and More importantly, well, you should see my inbox when it comes to you. But that's fine. That's fine. Well I appreciate that. It's funny because people the way you said it is a little grandiose. I don't think I I don't think I am. This is why every time I say these things to you, you say I want to correct that? No, it's it's a smart move, but the The funny thing is when I did the I had breakfast with Brad Jacobs episode. Now people were like Flood like can you introduce her like No Like you had to figure out to get to him yourself. Like the you can't. So when I was researching

1:49:49 After After XPO. Yeah. I was looking for my next thing. No, no, excuse me, after United Rentals. That's my next thing. And I was looking at asset management.

1:49:59 And I went and I went to Chicago and I wanted to get a point with Ken Griffin. Yeah. Who now I've met, and now I know and he's a neighbor down in Florida. I'm don't know well know him well enough. And uh I you know, I think he'd return my call if I called him. Uh but he would turn down the meeting.

1:50:12 You wouldn't take the meeting. Said, wow, that's kinda humbling. And but you can't even like Spend an hour? No, not yet. I did a meet him. I wanna meet. So if you can introduce me, please. He could be president of the United States something. He's incr the cr so this is the good thing about when I do remember, most of the people I study are dead. when I do episodes on people that are living, this is why I was asking some of the questions, because like I'll do this episode. It reaches a very valuable community and they're really helpful. And then I get all these crazy stories about This guy's even more remarkable than your episode. It's like and I got it about you, and I got it about Ken and and then I was like, Oh I got it, like I definitely want to meet Ken. Ken's in differently than that. Ken is like way, way up there. He's a very fascinating person. Oh, just yeah.

1:50:56 Do something like him. You asked how I manage my time. So I have a chief of staff. He used to work in the Oval Office and managed the most important person in the world calendars. I mean he's he's always very good. And more importantly, he understands

1:51:09 What I'm doing. He understands my my priorities and he understands what I was talking to you before like the two most important things that I gotta do. Or have organic revenue growth. Better than the competition.

1:51:20 And a margin expansion. He understands that. He understands that In order to do that, I have to focus on people, I have to focus on technology. He understands the different levers to do that. So you run every decision between those two Yeah. That's my framework. In business my framework is

1:51:36 Because I've learned if I do those two things And it takes a hundred different things to do those two things well. But if I do those two things well. I will create dramatic shareholders. If I Buy companies. At significant

1:51:48 lower m t multiples of profit than I trade at. S Monday morning at seven o'clock after we announce the acquisition, I've already created alpha for my shareholders. That's a nice way to start the week. Number two, if I then double the the profit over the next three to five years. Then I'll get a nice multiple and if I generate those those are the two main things I need to focus on. And he understands that. Now what he also understands is all the components because you know in the and the monthly operating reviews and all the correspondence. We're very we're very good at communicating with each other what's important and what's not important.

1:52:20 So he knows my my priorities. And therefore he's a great gatekeeper. Is there anybody that could tell you When you're getting off track. From what you're professed to say. Everybody around me. So is if I'm spending too much time on

1:52:32 Like I'm gonna catch heck for being on this podcast. Dude, you're the man for doing this, by the way. No, I love doing it. And it will also get to like I I do think, you know, one of the things that you obviously accomplished with the book and like I try to help amplify with my work is like just millions of people are gonna benefit from your lived experience. You you have forty fifty almost fifty years It's like forty years of experience as an entrepreneur. Like how many people They've ever lived life that have done that. Most people, you know, they unfortunately they quit or they fail or whatever the case is like you have so much to teach the world.

1:53:03 Can I comment on something about the time? Yeah, go ahead. There's a phrase I used to use and I you brought it on to me, so I've I'm gonna start using it again. I haven't used it recently. It's woman. What? W O T W O O L. Waste of time, waste of money. So when people have brainstorm we're kind of let's do this, let's do that. Someone can say.

1:53:20 What womb. That's a waste of time, waste of money. Like how does that How does what you're suggesting we do influence directly or even indirectly. Growing organic revenue growth.

1:53:32 Or increasing the margin. And if it doesn't Wa wam. You only you have limited time. and you have limited capital. You've got to be

1:53:41 And deploying that capital that things have the greatest returns. Otherwise it's what while And I'm so glad first of all it's hilarious. No human can't be a can hit their goals and what they want to do, you know, a hundred percent of the time. I can't imagine You know, the complexity of running

1:54:04 FedEx. And this guy's just like no, you have to be brutal. There's a war like that he picks the absolutely brutal is the word. Absolutely brutal time management. Yeah. I think there's a lot of things. There's another thing that Fred Smith said. Um

1:54:17 That again, like when I'm reading about Fred, I'm when I was going through and rereading all my highlights from his biography, I wasn't really thinking about Fred, I was thinking about you, you know, like This to me feels like A lot of what I've learned from you. And this is a direct quote from Fred. He says, I believe that a man who expects to win out in business without self denial and self-improvement stands as about as much a chance as a prize fighter would stand if he started a ring battle without having gone through intensive training. Natural ability Even when accompanied by the spirit to win, is never sufficient. If I look at the way you were building businesses when you were twenty-three. compared to, you know, you can pick first billion dollar company, then you look at the second or the third or the fourth or the fifth or the seventh. It's just like you're not even

1:54:57 Th like you'd go back and kick that dude's ass because of all the stuff you've learned since then. Well you you do get better as as you keep with experience like like in anybody in anything. But the principles are pretty the same. If you look at all my companies that

1:55:13 Fantastic people. That you want to have. Rules of engagement with those people where you Get along and Go

1:55:20 Kill the competition instead of killing each other. That you want to have fair compensation so that everybody's in on the action here. So that When did you kept repeating that? When did you understand the power of incentives?

1:55:30 'Cause you talk about compensation incentives a lot. Mm very very early. very early in the oil brokerage days. Because I used to have We had tables. Like Ten brokers at a table.

1:55:40 And every month could pay people monthly, I'd meet with everyone and say Look, we made so much this month in the bonus pool. What percent do you think you contributed to it? And then I would add it up. It would always come to like three hundred percent. Never add it up to a hundred percent. So I had to have these difficult conversations with people saying, look, you know you're inflated with how much of these other. But I I what I realized very early on is People are coming to work.

1:56:03 Not'cause they love me. They might love me. I might love them. That's not their main motivation. The main motivation why they're coming to work is to make money. and make money for themselves and more often to make money for others, to make money for their families, for their spouses, their kids or Whatever. And

1:56:18 That's important to under to understand the motivation of the other person. It's really, really important. It's called theory of mind. Well you understand and a child gets that after a few years. They don't have it at first. And there've been a lot of psychological studies done in that. It's important to to look at things from what's motivating the other person, what's driving the other person, what's important to that other person. That's good in deal making, that's good in compensation, that's good in building teams, that's good in customer relations, that good with vendor relations. You need to understand their point of view.

1:56:46 You can't just be in your mind. You can't just say, Here's what I want, here's what's important to me, and I'm a bully, I'm gonna go get it'cause people just gonna stick their tongue out and turn away and do something with else. You have to be a have a partnership. You have to be you have to be trading with people all the time. You've got to be figuring out What will help them? What's good for them. And how can we make money together, not me at your expense, you at my expense, but how can we go Conquer the world together. I think you're a faster learner than me because like I I don't think I ever thought of about incentos.

1:57:14 Uh I think episode like ninety seven. So this is probably like six years ago. I'd read that means I read ninety six biographies before this. I get to poor Charlie Tomanac and He's really the one that got Charlie was the one that really put into the my mind about how important this was because I thought he was m one of the

1:57:31 I still think he's the wisest person I ever met and probably mo one of the most brilliant people. And he said something fascinating in that book where he's like, I've been in the top five percent of my age cohort my entire life. Of understanding the power of incentives. and how it drives human behavior. And there's not a year that goes by. And he's probably in his sixties when he said this, there's not a year that goes by

1:57:49 Where I don't underestimate. the power of incentives. And you repeat over and over again, you show me the incentive, I will show you the outcome. I give everyone on the top level of the company a bunch of equity. Yeah. But it's locked up in five years. So I meet with my CHRO who's fabulous regularly, usually twice a month. And she shows me a spreadsheet.

1:58:09 Oh. how much the equity is gonna be worth at fifty dollars a share at seventy five dollars a share at a hundred dollars a share. And I I look at that, I look at the numbers. And and I say okay, this person has something to work for. This person's on the team. This person that's something that I'm gonna I see them working really hard to get get get those numbers. Right C, you know, somehow or another we messed up the cop and Maybe we've got to top the person up or

1:58:27 Wow. I can't take anything back, but maybe I gave too much extra Whatever, but at least I know where everyone's head is at. I know what's in it for them. You know, there's always that joke I listen to Radio station, W I F M, what's in it for me. And and people are generally They don't care about you and me, David. They care about them, which is normal. Yeah, it's I don't I don't feel it's a negative thing at all. It's like we're all self-obsessed. But I do think you have a great line in the book where you're like money he's like I built businesses all over the world. When you have 150,000 employees, they're spread throughout, you know, people like, oh, it's all different cultures like Money animates people everywhere. For the whole point, you have a great line in the book, like they're not coming to work to make Brad Jacobs more money. Not at all. They're doing it for their

1:59:11 their families. I love this idea of I think it's really important to have a and I think it's tied to your obsession with like the public markets, too. And what you said in your book about being very proud of building wealth, not just for yourself, but for school teachers, pension plans, nurses, firemen, and everything else. So like the the importance of having a um a mission bigger than yourself. I think like if you just live a completely selfish life, first of all, you would have stopped Way a long time ago. Like you didn't need to and in general, people d you wouldn't have to do this. Um and I've seen this in a couple of different places where like um

1:59:42 Jeff Bezos, we talked about him a few times today, where his idea was when he started Amazon, he's like, I want to be able to build the world's most customer centric company. So I want to be an example. not just to our employees and our customers, but to other companies. to see look how you can over the long term you can align the interests of the customer and the shareholder are perfectly aligned. They just have to be done

2:00:04 uh done so over the extremely long term. But this idea of like Going like it drives me. It's like I want to Build wealth. You know, so my kids are proud of me and like And and I show them like what it's like to like chase after something and be

2:00:16 deeply committed to it and be passionate about it and love it. And also make something that's better for other people. And if you do that automatically. you know, the family will prosper and everything else. So I think that's like I think I love that was one of my favorite parts of um of your book. Do you know I I think Amazon modified that that mission statement, not something with employee engagement too.

2:00:34 Something about w something about workplace great workplace environment or something like that. The best workplace environment in the world or Um, it it is funny when you think about it because um It's one I I I have in this conversation actually last night I went to dinner with our mutual friend Patrick O'Shaughnessy. He text me this morning, he's like, Make sure you say uh tell Brad High. Yeah, a hundred percent. And we had he was with us uh when we had breakfast here a few months ago. Um

2:00:57 And we were having this discussion at dinner. Uh, with his family. I was like, What is the most impressive company? built in our lifetime. And so me and him were born in the eighties'cause what about Microsoft? Microsoft is the seventies, like it was before us. And I would say it's like for me the answer is like Amazon. Like started in ninety seven. Like I can't think of another company starting in the nineties, like in terms of like

2:01:16 as impressive as as what as what uh Jeff has built. By reading your book, listening to your interviews. Talking to you now. You kind of For m for me personally, like you kind of remove any

2:01:29 l self imposed the limit that I have. Where I'm like, oh, like there's no d I don't think Brad has a limit to what he thinks he can achieve. He thinks on a big scale automatically, like you just you operate in a very big and ambitious way, where I think a lot of people have like self There's like a s self imposed ceilings that are most likely invisible in many cases. Right? If you want to build more wealth, you want to grow great companies, just find more Customers to serve. Like it's pretty straightforward process. But I do think one of the things that I l absolutely love is and I it's the way I ended the episode, it's the way you ended the book.

2:01:59 And I would summarise what I'm about to say here. uh as go all in. you only get one shot at life, and I think this is a perfect uh spot to like wrap our discussion. And so I'm just gonna read From your book to you.

2:02:10 And you said the summer after eighth grade I attended the Rhode Island Governor's School for the Gifted in Art and Music, a summer enrichment program for kids who've been nominated by their schools. I wasn't sure what to expect. On the first night, I was captivated by a speech given by one of the leaders. I remember goosebumps rising on my arms as he spoke This program is a special opportunity, but it's up to you to take advantage of it. You have a choice. You can waste the next couple of months and not accomplish that much. Or you can go all in. This is an opportunity to go deep on a project and do the best work you've ever done, but you have to decide if you want it. I learned

2:02:44 what it meant to go all in. The magical connection between intensity of focus and And the end result. This is the to me the punchline. I love this. If I put my whole heart and soul into a project

2:02:57 I had it in me to create really cool stuff. He talk about the passion and going all in. And the advice that you have for other people listening to this. I'm reliving the goosebumps literally. Physically I'm feeling the tingling my sensation because that wasn't a critical moment in my life where I I I

2:03:15 Understood. There it's up to you. You can diddle daddle through life and just kinda Sleepwalk and then die. Or you can

2:03:24 live life, you can embrace life, you can have big dreams and go all in and find your passion, which for most people is not going to be b business or making money, but whatever it is, that's what it is. and really achieve something fantastic. And for me that's big motivator. This is a perfect place to end. Thank you very much for writing the book. Thanks for taking the time. Brad, I really admire you. I've learned a lot from you. And now I'm I'm very Uh Humbled and privileged to call you a friend. I really appreciate it. Thank you very much. All best.

2:03:50 I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review. And make sure you listen to my other podcast founders for almost a decade. I've obsessively read over four hundred biographies of history's grace entrepreneurs. Searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through founders.

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