#335 How To Make A Few Billion Dollars: Brad Jacobs

Transcript from https://podmenti.com/t/b961709879f08475

During my forty four years as a CEO and a serial entrepreneur.
I've made every possible mistake in business.
I've overpaid for acquisitions and botched integrations.
I've run operations for cash when I should have invested for growth.
I've delegated tasks I should have done myself.
I've hired the wrong people.
I made strategic bets that didn't pay off.
And yet
My teams and I have managed to create tens of billions of dollars
Of value for our shareholders.
This book is about what I've learned from my blunders.
And how you can replicate our successes.
I'm what's called
A moneymaker.
I've started five companies from scratch.
Seven.
If you include two spin offs.
And turn them all.
into billion dollar
Or multi billion dollar enterprises.
My teams and I have completed approximately five hundred acquisitions.
In total.
These ventures have created hundreds of thousands of jobs.
And raised about thirty billon dollars.
in outside capital.
My career began in nineteen seventy nine.
When I started a privately owned oil brokerage company called Amoreks Oil Associates.
I was twenty three.
with just a few thousand bucks and no experience.
Within four years, my partners and I had four point seven billion.
In annual brokerage volume.
with offices worldwide.
We sold Amerex in nineteen eighty three.
And I move from New York to London.
To start an oil trading company called Hamilton Resources.
Hamilton generated about a billion dollars
A year in revenue.
And we made this money through an opportunistic combination of crude oil trading.
Counter trade.
Pre-finance and refinery processing deals.
In nineteen eighty nine, so six years later.
I move back to the United States.
And entered a new sector.
The rapidly expanding field.
of solid waste management.
I called my new venture United Way Systems.
And took it public in nineteen ninety two. So
Founded the company in nineteen eighty nine.
takes it public in ninety two, it's gonna sell it in ninety seven. We became
the industry's fifth largest player.
And in nineteen ninety seven, we sold United Waste for two point five billion dollars.
United Ways taught me.
That I love working with outrageously talented people.
To deliver outsized returns.
For shareholders in public stock markets.
So he sells United Waste in nineteen ninety seven that same year.
He says I started a new company, United Rentals, to rent construction equipment for job sites.
I took this venture public later that same year.
with a growth strategy that emphasized acquisitions from the start.
Within thirteen months.
We had built the largest equipment rental company in the world.
There's a hilarious story later in the book.
uh about a lunch that Brad had with the CEO of
the his major competitor in that industry.
I'll get to it later on in the episode.
Within thirteen months we had built the largest equipment rental company in the world, United Rental Stock.
is a hundred bagger.
The share price at inception was three dollars and fifty cents.
And it now trades at more than a hundred times that price.
In two thousand eleven, I was on to my next big thing.
XPO Logistics.
XPO
Was the seventh best performing stock in the Fortune five hundred.

Its main focus was freight transportation, matching truckers with shippers, forwarding freight.
and expediting urgent shipments.
We built XPO into an integrated global logistics leader.
I divided XPO into three separate publicly traded companies as a value creation strategy.
We spun off GXO, the largest contract logistics provider in the world.
And R XO
A freight brokerage platform.
That runs on technology that we developed in house.
I currently chair all three companies and each business is helmed by a strong CEO.
These experiences have allowed me to share
Thought experiments that can help you learn to think differently.
Which is an essential prerequisite.
to accomplishing big things.
This book is a guide.
If you have a burner
to make enormous amounts of money in business.
Or want to turbocharge your chances of success in sports, the arts.
Politics, philanthropy, or any part of your life.
Read on.
That was an excerpt from the book I'm gonna talk to you about today, which is how to make a few billion dollars, and it was written by Brad Jacobs. In addition to starting seven separate billion dollar companies, Brad also listens to founders. He sent me a very nice message saying that he was addicted to listening to these book reviews.
And he was kind enough to send me an early copy of this book.
A few months ago?
And I read it and wanted to re to make an episode or to release the episode rather.
Uh when it's available so you can actually order it.
Which I highly recommend that you do and you that'll be obvious as we go through some of the ideas contained in Brad's book.
So I want to jump right into it. He says, I've come to know a lot of extremely successful people in my life.
They all have one thing in common.
They think differently than most people.
All of them.
To a person
Have rearranged their brains to prevail at achieving big goals.
In turbulent environments where conventional thinking
often fails. I want to read one more sentence and I'm going to read to you this quote from Peter Teele.
that popped in my mind when I got to this section of the book. I love that what he said. All of them to a person have rearranged their brains to prevail at achieving big goals in turbulent environments where conventional thinking
Often fails. Making a few billion dollars doesn't just happen.
But it's possible with intense
Focus.
And a willingness.
To transform
How you use your mind. That is
The first chapter. So
We got to the section.
immediately when I read that the the one of my favorite quotes from Peter Till popped into my mind.
And Peter said the single most powerful pattern that I have noticed is that successful people
Find value in unexpected places.
And they do this.
By thinking about business
From first principles.
Instead of formulas.
that idea of finding value in unexpected places
And thinking from first principles, a set of formulas.
Yeah, instead of using conventional thinking. Remember that. Uh later on we're gonna talk about this outrageous
thing that happened.
Brad winds up making about four billion dollars, buying back a bunch of his stock, even though bankers and advisors around him were saying, Hey, no one's ever done something like this.
Before.
And his response was perfect because you could tell he was thinking from first principles. He's like, Well, just because we were the first company to buy back such a high percentage of our stock
In this situation doesn't mean it's a bad idea.
And it turned out to be a phenomenal idea.
So I like that he starts the book with this where it's like you need to rearrange your brain
to prevail at achieving big goals and turbulent environments where conventional thinking
Often fails.
If Brad had or another way to think about that, in this situation, which we'll cover later, if Brad had listened and adhered to conventional thinking, he'd be four billion him and his company would be four billion dollars poorer.
And so spread throughout the book, you're gonna see these like
Boxed.
stand alone
Maxims or pieces of advice that relate

Currently trying to teach us.
And they really like w the way I think about him is he's distilling down his knowledge from ma uh into like simple to remember maxims.
And so he says so much of success in business comes from keeping your head in a good
Place.
He talks about expecting the importance of expecting
Positive outcomes. And I think it says a lot that the first chapter of this book is called How to Rearrange Your Brain, and that he spends
a lot of time on the importance of managing your mind and attitude.
Entrepreneurship is difficult and stressful, requires sound judgment, and you cannot make high quality decisions.
If you don't manage your inner monologue, your inner feelings
And I love this idea of
Expecting
Positive
outcomes. Expect positive outcomes. Stop beating yourself up mentally.
I have.
The next time you catastrophize something that isn't that bad.
Understand that your reaction is a genetic
Survival trait.
That you inherited from your hunter gatherer ancestors.
The only time that I've ever felt truly lost was when I stepped down from United Rentals in two thousand seven. So he's gonna talk about
This is really this whole entire section is
Why understanding and controlling your mind is so important for founders.
And you and I've talked about this before. There's a great uh quote by Mark Andreessen that said entrepreneurs only ever experience
Uh two emotions.
Euphoria and terror, and nothing in between. It's the highest highs and the lowest lows.
You got to learn to control your your mindset and your emotions. The only time I felt truly lost was when I stepped down from United Rentals in 2007. I started looking.
For my next big thing and I couldn't find it.
I became depressed.
I'm an ambitious person by nature and a deal maker by inclination.
Now I had no deal going, no industry sector.
Where I could envision working my magic.
And so he starts reading like a library of psychology books, trying to figure out how to fix this.
He says I learn to turn my internal chatter.
To my advantage.
By reframing negative thoughts as useful data.
As useful data
rather than objective reality, that is tied to another idea that he's gonna use over and over again, something you and I have talked about over and over.
Uh it comes f there's this fantastic quote.
from this legendary
Founder named Henry Kaiser.
Uh, who is building companies.
around World War Two.
I read his biography because Charlie Munger recommended it to me and actually when I went to Charlie Munger's house to have dinner with him.
Uh the book was sitting behind Charlie on the shelf and I actually got to to ask him about it.
And it was incredible. Charlie hadn't read that book probably in like fifteen years, but his recall you could
It was i impeccable. Like told me
Like w essentially recited all of the facts that are in that book as if he had read it yesterday. But Henry Kaiser has this great quote in that biography.
Uh that says problems are just opportunities and work close.
And so I think it's a similar analogy to what he's saying here. It's like yeah, everybody's gonna have negative internal
Chatter in your mind.
Why don't we reframe that, use those negative thoughts as useful data.
rather than as objective reality.
Back to Brad.
Inevitably the process of running a business will test your bias.
Towards hope or fear, euphoria or terror is the way you and I talk about this. When I notice I'm feeling anxious about something, I ask this is fantastic.
I ask what's the worst that can happen?
And how would I cope with it?
And then he has another question he asked himself.
If a friend had a similar worry, how would I advise them to handle it? So this idea of stepping outside of yourself is something I've tried to practice as well.
Step outside of yourself. It's your problem, pretend it's somebody else's problem, a friend, a loved one.
Uh even a competitor, maybe?
And so okay, if the I had that similar warrior, the similar property
uh problem and it wasn't me, how would I tell them to solve it and then just take your own advice?
So you're saying putting distance between yourself personally and the source of your anxiety actually helps you
uh think more objectively about positive outcomes.
This idea. Like think about it. Yeah.
The guy has started seven separate
billion dollar companies.
And the his the the first
Chapter
Of the book is all about
The importance of managing your mind and attitude.
So he says not beating myself up has been a hard learned lesson for me.
I become much happier in my middle age when I stop expecting unrealistic levels of perfection from myself.
In my family, I still struggle with this all the time. I beat myself up.
I have a very I always say my inner monologue.
Sounds a lot like David Goggins, if you ever heard
His uh audiobook can't hurt me. That's a mine.
Sounds like so I'm gonna have to take Brad's advice here.
I've become much happier in middle age when I stopped expecting unrealistic levels of perfection from myself and my family, my friends, and my co workers.
Not to mention customers, vendors, and shareholders.
Uh the reality is that when you're trying to make a few billion dollars, your team is likely running in multiple directions at a fast pace.
Except that some goof ups are inevitable.
And you'll find that it's much easier to maintain
Your mental
Equilibrium
As you pursue big goals.
This goes over several pages.
try to summarize this for myself so I can remember in the future.
Don't beat yourself up.
Emotions blur judgment, keep a positive mental attitude and stay calm.
And one way.
that Brad does all of that is he's a big fan of thought experiments.
The reason you I mean you're just yeah I think it's a no brainer to to buy the book.
But there's a bunch of stuff that uh that I'm not gonna cover in the podcast that's in here.
Uh that the appendic I I think of this as what I would do is like I read it straight through.
And then I'd keep it on a shelf or keep it on your desk and then use it as a reference.
And you'll go back and there's a bunch of things like
All the chapters separate things.
So like
How to run great meetings.
Uh how to do a lot of
uh M and A without imploding your company.
How to build an outrageously talented team. I really do think this is a fantastic reference that should stay close.
um at hand. And so one of the things he has in this book is a bunch of thought experiments that he uses. So I just want to go outline why
Those things are so important to him.
He says Albert Einstein was a
Consummate daydreamer.
And then he preferred the term
Uh it's German. I'm not even gonna
Try to pronounce it.
But it's just daydreaming thought experiments.
So he says start experiments are not limited to genius scientists, gifted artists, composers composers, mathematicians
All use them for creative work or problem solving.
I usu spend
About half an hour a day.
Meditating.
Much of this time is spent in thought experiments.
This
Uh produces a profound sense of calmness.
And it's when many of my best
Decisions.
materialise. I don't I can't remember if I've already said this, but
Brad was kind enough.
to invite me to
uh the book launch party they had in New York. I flew up
Uh, to New York just for like sixteen hours, just to go to the book launch and and meet Brad.
Um, what was fascinating, and I had this inclination, is like he's just got great energy.
Uh, he's got great I hate to say the I have no other way to say it's just got a great personal vibe when you're like in person with him.
And I talked to people that worked for him. They said the same thing. They like love him.
they enjoy like the work environment that he's created.
And the best source I know
to experience like how Brad is, is I would listen to uh the Invest Like the Best episode that Brad did with my friend Patrick.
It's episode three fifty two.
of invest like the best. And Brad in that interview
Talks a lot about the importance of meditating. He's been meditating, I think, for over fifty years. And as he says right here in the book, he he feels it's been a a b a huge benefit.
uh to his career because that's where he feels many of his best decisions actually materialize.
So let's go to this
What I mentioned earlier that business is problems. This comes up over and over again.
that businesses problems and great companies
The way I think about it is
Great companies are just effective problem solving machines.
And I first
heard that idea or that idea was planted into my mind.
maybe seven years ago when I read Danny Meyer, the Famer Famous Restaurantur.
His autobiography?
And
Brad's gonna talk about his most important business mentor.
And the lesson that he taught Brad when Brad was in his twenties. I've had multiple business mentors over the years.
But none have been more important than Ludwig.
Jusselson.
Mr. Jesselson ran the largest commodity trading company in the world.
I got to know him in my twenties.
when his company was a client of my oil brokerage business.
Uh, before long we were having lunch regularly and he would share bits of business wisdom
That have stayed with me ever since.
At one memorable lunch I arrived burdened Remember Brad's in his twenties at this point, okay?
I uh one lunch I arrived burdened.
With problems that I began to unload on him. Mr Jusselson, listen carefully.
And waited until I had
I've finished speaking.
Then he put down his fork.
Turn to me.
And said, look, Brad.
If you want to make money in the business world, you need to get used to problems because that's what business is.
It's actually about finding problems, embracing and even enjoying them, because each problem is an opportunity.
To remove an obstacle.
and get closer to success. I'm going to put this book down.
And I'm gonna go to where I have my highlights stored from Danny Meyer's book, which is called Setting the Table.
It's in if you have access to founders notes, I highly recommend going, searching for setting the table, and then listen and then reading all of them. Takes less than ten minutes and it gives you a good overview or reminder of the lessons that Danny Meyer was trying to teach you in I from his book.
But he had this a very similar experience. I'm pretty sure he was in his twenties at the time as well.
He's having dinner.
with another older, more successful entrepreneur at the time, this guy named Stanley Marcus of the Neiman Marcus family. And
It's remarkable.
It's very almost dead on with what's happening with Brad.
in his when he was in his twenties when he's talking to Mr Jesselson.
And so Danny Meyer's kind of unloading his problems and his stresses to an older, wiser entrepreneur.
He says opening this new restaurant might be the worst mistake I've ever made.
Stanley set his martini down.
Looked me in the eye and said, So you this is one of my favorite
quotes I've ever read in any book.
So you made a mistake.
You need to understand something important and listen to me carefully.
The road to success is paved with mistakes well handled.
His words remain with me.
Through the night.
I repeated them over and over to myself, and it led to a turning point.
In the way I approached business.
Stanley's lesson.
Reminding me of something my grandfather Irving Harris, who was a famous or not famous
uh successful entrepreneur as well.
Uh, Stanley's lesson reminded me of something my grandfather Irving Harris had always told me. The definition of business's problems is exactly what Mr. Jesselson.
Is telling young Brad Jacobs.
The definition of business is problems.
His philosophy came down to a simple uh to a simple fact of business life.
Success lies not in the elimination of problems, but in the art of creative
Profitable problem solving. That's an excellent line too.
Success lies not in the elimination of problems, but in the art of creative, profitable problem solving. The best companies are those that distinguish themselves.
By solving problems most effectively the way
The maximum I distilled that down so I could remember myself.
is that business is problems and great companies are just effective problem solving machines, as we're gonna see. We'll continue on this page.
They get a lot a lot of the best entrepreneurs, they would get excited.
They would get excited when they found businesses.
or uh problems in their businesses.
And so Brad continues what he learned.
From this lunch.
Uh with Mr. Jesselson.
In that moment I learned something invaluable. Problems are an asset.
Not something to avoid, but something to run towards.
Big ambitions.
That's so
Uh excellent.
Not something to avoid.
But something to run towards.
You know what, let me interrupt. Let me interrupt where I'm at.
Because
When when I got to this part, again, it just popped right to my mind. I wrote down Jeff Bezos, Henry Kaiser.
I already told you Henry Kaiser loved problems. He said problems are just opportunities and work clothes.
Jeff Bezos, multiple books.
In the everything store.
The first biography of Jeff Baze was written by Brad Stone.
There's there's interaction between one of the

Jeff in one of his um
One of his employees.
And he tells them like some bad news, something that like they need to improve on or whatever.
And he goes, I brought him very bad news about our business, and for some reason he got excited.
Is that not exactly what Brad Jacobs is saying? Problems are an asset, not something to avoid, but something to run towards.
Later on in
I think this was in Jeff's uh one of Jeff Bezos' shareholder letters.
But he said
that he finds waste
uh very exciting. So he says uh the customer experience path that we've chosen requires us to have an efficient cost structure. This is
Jeff Bezos writing, by the way. The good news for shareholders is that we see much opportunity for improvement in that regard.
Everywhere we look.
We find what experienced Japanese manufacturers would call Muda.
Uh translates into waste.
What experienced manufacturers would call waste.
I find this incredibly energizing.
I see it as potential years and years of variable and fixed productivity gains.
And more efficient
Higher velocity and more flexible capital expenditures. That is from the book Invent and Wander.
uh highly recommend. I've done I think two podcasts on that already.
Uh it's
Jeff Vasers all Jeff Vasers' Sharehold letters and then transcripts of
Like his best speeches, but I love I reference that book all the time.
It's exactly what Jeff is talking about there. He's like, Oh, I get excited.
Ooh, this is waste good.
This is incredibly energizing. It's potential years and years and years.
of improvements in our business.
Very similar to what ja uh to what Brad Jacobs is telling us here.
uh big ambitions often beget even bigger problems. If your initial reaction to a major setback is overwhelming frustration,
That is counterproductive.
Instead do this. Great. This is an opportunity for me to create a lot of value. Is that not?
The exact same idea.
that Bezos just told us in his shareholders. It's the exact it's the same thing.
It's exactly the same. Great. This is an opportunity for me to create a lot of value.
If you can figure out how to solve this problem
I'll if I excuse me, if I can figure out how to solve this problem, I'll be much closer to my goal.
In the four decades since that lunch with Mr. Justice, I've dealt
with nearly every problem you can imagine.
Challenges with acquisitions, people, tech, branding, you name it. I am not surprised when things don't go perfectly.
That's the nature of this universe.
The big gunky problems can be where the best opportunities lie. It's reminded me of uh
When I got
to to talk to Charlie Mugger. He said the same thing. And it's you notice this um in his last
I think the last published interview he ever he did, or one of the last ones was with John Calson.
uh founder of Stripe interviewed him. It's actually published on the Vest The Best Feed Two. It's also obvious like w uh after spending a few hours talking to him.
When I got back to my hotel that night I l I had like this I immediately just put all like everything we talked about, because I didn't look at my phone one time when I was with them. I was like, Man, this is a once in a lifetime experience. I need to I I wanna document this. I wanna remember this. And one of the things that I wrote was that
Charlie had a complete almost a complete indifference to problems.
He said they should be expected, you should toughen up, like you just essentially suck up and cope when you have problems that come your way, and then you should be wise enough to try to prevent any any other problems.
uh but this idea, it's like very similar to what he's saying. I'm not surprised when things don't go perfectly. It's impossible.
He's been a CEO and entrepreneur for forty four years. You don't think he's run into every single problem? Like, of course. That's what makes the the book so valuable.
I think I saw it selling for like twenty seven dollars. Like it's absurd.
There's an absurd amount of value that you get. You get almost half a century.
of wisdom distilled down. At his book launch party, he said this. He's like, I don't have another book in me.
I'm not writing another book.
I gave you all my ideas.
Yeah, buy it if you want it.
Uh but I just think it's it's it's uh incredible.
How you know.
Everything I'm talking about. This is three, four pages.
And we see similarities in the way of Brad.
Things.
The Danny Meyer thought, that the guy from Neiman Marcus thought.
That Jeff Bezos thought, that Henry Kaiser thought.
Um that Charlie Munger thought I just love
Uh it excites me when all these ideas
Um connect.
Very, very fascinating.
Moving on.
This is great. He's got these great stories spread throughout the book.
And uh
Uh it this is how to lose five hundred million dollars.
So I wanna go back actually before I get into how to lose five hundred million dollars.
He's got a very unique uh acknowledgement segment s section.
I I read
I have to confess that I read a lot of the acknowledgement sections in the books that I read.
They're usually boring and like kind of like
Filler?
Every once in a while you'll find like an interesting source or an interesting book or something.
Brad what Brad did was
Put it at the front of the book, which is unusual.
And then what he did is like I he just made his acknowledgement section a list of maxims that he learned from other people.
And it's like
that he learned this from Michael Moritz. Small amounts of capital can generate gigantic returns.
uh from Ludwig Jusselson who we just talked get the major trend rate, which we'll go into.
uh, you know, dare to do new things, see the world.
For what it is, not what you wish it to be is one of the maxims.
In the acknowledgement section. I'm glad I read that before I got to this story about how to lose five hundred million dollars because
See the world for what it is and not what you wish it to be is exactly
What Brad did.
And so he says he calls this radical acceptance. Radical acceptance quiets the noise created by yesterday's decisions.
And today's wishful thinking.
Here's a story about radically accepting a five hundred million dollar loss.
So in the late nineteen nineties, Congress came up with this new law called the T twenty one
Tran so it's the Transportation Equity Act for the twenty first century.
In theory, this is what Brad thought was gonna happen.
This legislation was going to allocate about six hundred billion dollars to rebuild
The
Nation's infrastructure.
So I was like, Okay, there's gonna be a bunch of all this funding up for grabs. I started scooping up big
uh road rental companies, the ones that provide barricades, cones, striping and the like.
Then I waited for the market to come to me.
But that never happened. Only about a third
of the allocated government funding was spent.
And that was spent in little bits over time. My decision turned out to be a huge mistake.
And there was no point in compounding it.
We ended up selling those road rental companies at about a half a billion dollar loss.
because it was the best way forward under those circumstances. So this idea of
See the world
for what it is, not you not what you want wish it to be. He m he he's like, Oh, this is gonna be great.
They're gonna spend out uh dole out the six hundred billion dollars.
When that didn't happen, he didn't hold on to it. What does he call?
Uh radical exception quiets the noise.
Created by yesterday's decisions and today's
Wishful.
Thinking.
No reason to compound this loss. Let's cut our losses and move on.
The next story I want to tell you about is how to keep your head and make four billion dollars. This is my
That was my summary of what's about to happen.
So he at the time
He's running XPO, which is w is his third public company.
And I think this is in two thousand eighteen.
And they got hit with a short report.
And so this short report gets picked up by the media saying there's all kinds of problems with XPO.
You know, you've still stock everything else.
And so this is the story from Brad. The short report was packed with a lot of baloney.
But of course the market acted first and analyzed later and our stock price went into free fall down twenty percent.
Or twenty six percent in one day.
His response was fascinating. We did exactly what I've been describing in this chapter.
We concentrated on the situation at hand.
Without judging what had happened to us.
We spent hours
Going over the short report page by page, identifying the many places where their data had been twisted.
And so he takes a problem and he spots an opportunity, which is what he's been talking about, right? The short seller crisis.
Had made our stock extremely cheap.
And instead of fixating on that as bad, we focus on achieving a good outcome.
From that perspective, the share price was mana from heaven.
And we decided to buy back two billion dollars worth of stock. So this is what I mentioned earlier.
Where the bankers are like, two billion dollars, it's way too high. You can't do that, so it's too high of a percentage of your market cap. No one's ever done something like that.
And
Brad's like, who cares? Just because we were the first company to buy back such a high percentage of our stock, remember, it goes
From the opening it's
Like you have to th you can't r rest on conventional wisdom.
Is the way Brad put it.
You have to rearrange your brain. The way Peter Thiel says is hey you should successful people find value in unexpected places, and they do so by thinking about business.
From first principles instead of formulas.
There is no formula for the situation.
that Brad's dealing with, or if there was, it'd be like, Oh, buy, you know, a little bit, buy like a hundred million back, but you can't buy two billion dollars. What are you nuts?
Just because we were the first company to buy back such a high percent of our stock in a similar situation, didn't mean it was a bad idea. In fact, it was a once in a lifetime opportunity.
A couple of years later those two million dollars of share was we brought back we bought back
ended up being worth six
billion dollars giving them a profit
on that one transaction of four billion dollars.
Okay, moving on.
What this is this might be my favorite section in the entire book.
Uh I love how he describes all the research he does.
before he jumps into an industry and it's this idea that he gets. He said one of the most valuable pieces of advice I've received from my mentor
Uh Mr Jesselson.
And you can mess up a lot of things in business and still do well as long as you get the big trend right.
I make sure I understand the major trends that could threaten
the business or help it soar.
I'm obsessive.
when learning about an industry. This this part this entire
I'd read the entire chapter.
I'm gonna go over
Uh the parts that are obviously most interesting to me.
But it's a it's another illustration of this idea that you and I speak about over and over again. You see it in the books, and it came came from David Ogy.
And he says the good ones no more.
They just do more research, they read more, they talk to more people, they just know more about what they're doing.
The good ones no more.
Um, and so
His idea is like one of the main things.
themes that the mega trend
uh is that technology is the the dominant mega mega trend in our universe. If you want to make a lot of money in almost any any industry, plan to invest heavily
In tech.
And that idea is as true today as it was a couple hundred years ago.
Uh, I remember reading Andrew Carnegie's autobiography.
uh, you know, many years ago, I don't know, maybe four years ago.
And he's talking about building businesses in the eighteen hundreds.
And he was talking about building Carnegie Steel at the time, and I had summarized
the advice he was giving in that book
Uh uh it's specifically around
Technology.
as this and this this comes up in the books a lot.
Invest in technology, the savings compound.
It gives you an advantage over slowing moving competitors.
And can be the difference between a profit and a loss. That is from th th that's a summary of
Andrew Carnegie's ideas.
Which I think Brad
uh based on this chapter would definitely
Agree with if you want to make a lot of money in almost any industry, plan to invest heavily in tech. So
This is how he starts doing research.
before he starts a new company. I start by reading everything I can get my hands on.
Journals, periodicals, newspapers, trade publications, employee reviews.
on web based recruiting sites, you name it. I look up I look at all the websites
And social media of the major players and the up and comers
in the industry.
I watch lots of interviews with the CEOs.
I use paid services like Bloomberg, AlphaSense, and Thomas Rooters.
Uh, I look at analysis from sell side and buy side analysts.
And I search this SCC database.
uh which has large amounts of information on every publicly traded US company, including IPO documents, financial reports, and proxies.
I scope out the most valuable industry conferences and I attend them.
He goes to cell side conferences.
Because they're an opportunity to meet
Management teams face to face and hear the questions investors are asking.
Trade associations have a wealth of industry data.
I interview experts.
Uh, I seek out people who live and breathe the industry that I'm considering.
this phys of the research is about getting face to face and listening intently. I love
Talking to CEOs.
In addition to CEOs, I seek out investment bankers.
who are most active in the industry and who know it deeply. Just look at how much work
And how much information
Uh it's collected, right? He this is it keeps going.
So it says in addition to CEOs, I see on investment bankers who are most active in the industry and who know it deeply. I also talk to venture capital firms because they spend a lot of time looking at the big trends in different industries.
I tap buy side institutions and successful fund managers who have battle scars from investing in that industry.
Uh industry vendors keeps going.
Industry vendors are also a good source. They have a sense of the trends that could drive changes in the market. And finally, or not finally, there's two more.
Shareholder activists.
uh often have important insights as well. And I reach out to journalists who know the industry because by nature they're a skeptical bunch.
And I want to hear their perspectives.
So then what he'll do is he runs through
Like short descriptions of how
Uh to get the major trend right.
in a bunch of the b or how he did in a bunch of the businesses that he started.
And you know this goes over forty
Years.
What's interesting is uh the the first one. So he talks about amareks and Hamilton resources.
And it's about like his time in the oil industry.
It reminded me of a very important idea that I think that it's
That you see applied to a bunch of different industries.
This idea that you can
Identify a market with valuable but hard to get data.
And
My favorite application of this'cause it's just so nuts.
was uh the episode I did on the the billionaire art dealer Larry Gagosian.
Uh episode three twenty five if you haven't if you haven't listened to that.
That episode.
It was
Fascinating,'cause that's exactly what he did. He identified a market with valuable but hard to get data and then essentially made him his made uh like a personal treasure map.
That
That his entire business.
uh rest upon. So that came to mind when I was reading this section.
A little bit of luck put me in the oil industry in nineteen seventy nine, when I started my oil brokerage company, Americx.
It was a highly profitable business.
And my realization was that a big trend was forming around the need to capture and share information more quickly. Remember, this is nineteen seventy nine pre internet.
This whole section is nuts.
So it says that was a trend that transformed the industry in the late nineteen eighties. We made a lot of money.
By being the first oil broker to get ahead of the trend. At the time, there's no internet, no email, no centralized databases with easy global access.
The main s this is gonna s blow your mind.
The main source of information about the price of oil was a newsletter.
That came in the mail.
And so he talks about he's like, listen, we're making verbal handshakes with clients in Europe and Asia.
For fifty and seventy five million dollars over the phone.
With nothing on paper for days.
And so this next sentence is a description of the problem. The lack of timely information was a big problem for oil brokers.
We made our money by matching buyers and sellers and taking a commission, just like Larry Gagosian.
I could see that there was isolated pockets of valuable oil pricing data trapped all over the globe.
And I knew that if we could figure out a better way to share that information, we can unlock a lot of value.
And so there's no off the shelf solution. So he builds his own. I think this is something he does multiple times.
And he says essentially they built like their own crude version of the internet.
Um but it allowed
uh us to do something revolutionary. Every time an Amor X employee
learned something useful about a buyer seller act buyer or seller activity or the price of oil, they entered it into our database. Then we could share that information.
much more quickly with our brokers around the globe.
That process took hours.
Not days.
Which was close to
Too instantaneous back then in the seventies and eighties, so
Take something took days, now it takes hours.
We had created a way to obtain objective insights into global oil supply and demand and pricing trends.
And then here is the trends that he identified when he set up United
Ways systems
Uh the Red Bull episode that I did.
Uh episode
three thirty three, I think.
uh it's pretty wild that, you know, that business is gonna make him you know, it's net worth between somewhere between like twenty and forty million dollars.
He was paying himself before he died, somewhere between five hundred and eighty million dollars a year.
Identify the opportunity from reading a magazine article.
And like, hey, uh the richest guy in Japan, I think is the country, makes these like energy tonics,'cause there was no energy drink market at the time.
That's interesting and that cha that reading the article.
changed his life forever, Dietrich Maches, I think is how you say his name.
But we see Prad Jacobs coming up with an idea too. He's just like well
The idea from United Way Systems. This is fascinating. I remember vividly the moment the industry caught my attention.
In nineteen eighty nine, I was reading Merrill Lynch research reports in bed on a lazy Sunday morning. I love that.
Uh and came across a report written
By the top ranked analysts for environmental services, then the two largest companies in the waste industry at that time were each making about a half a billion dollars a year in profit. Remember.
That's why I brought up the Red Bull guy.
He's like, What?
This guy's the high the paying the most he's making the most money in this entire country and he sells v energy tonics.
And then Brad sitting in bed.
Reading research reports, right? And he's like, Wait a minute, these guys are making half a billion dollars a year in profit in nineteen eighty nine.
And I thought how hard can it be to have trucks pick up trash, deposit it in a safe place, and then send out an invoice.
I wanted to know more.
And so he identifies the two big trends at the time.
uh landfill capacity was becoming pr uh precious because regulations were pushing small trash dumps out of business. So that's trend number one.
Trend number two.
integration of hauling and disposal.
This created an opportunity for end to end consolidation.
I looked for a way to capitalize on both trends and found it in tech based truck.
Routing. So think about the entire oil industry kinda operating blind.
Waiting for this letter in the mail to tell him the prices.
He sees a very similar trend.
uh problem in the waste management business. Mom and pop owners were running trash collection companies by the seat of their pants and making money at it.
Few companies were planning their truck routes methodically.
Much less using technology to do it. I think he says they use like a map.
And like push pins.
It's like this is easy, this is ridiculous.
They did not focus on optimizing routes, and so he starts
Optimizing routes and this is the result. Instead of sending
Fifty trucks out over five days.
To pick up X tons of waste.
twenty trucks, so more less than half.
could now perform the same service in three days.
So instead of fifty trucks in five days, he's doing the same work.
Inch with twenty trucks.
In three days, our cost kept coming down.
As our processes improved and our profit margin grew significantly, that is the company that he sells for two point five.
billion dollars.
Then he talks about where he gets his idea for his other company, United Rentals.
I was looking up to roll I was looking to roll up another industry.
And so I set up half day meetings with nine different groups of bankers and analysts and Merrill Lynch. One of those analysts asked,
If I thought about going into the construction equipment rental. So that's how he finds
The idea for his next billion dollar company.
And even though it's a different industry.
He sees the same problem.
This is the part that I texted to a bunch of friends'cause I absolutely love.
While the rental industry overall was slow to computerized
The larger regional players were more tech savvy.
By nineteen ninety seven, nearly all of them were running on software developed by a company called Win Systems.
This is how to get
God mode and what I wrote to myself.
When I was a kid.
played a lot of video games and you'd use like cheat codes like GameGenie and stuff like that.
Uh and you could one of the things that you would try to unlock is
something that was referred to as God mode a lot, which essentially gives you like on omnipresent
uh like view of the entire world and like what you want to do.
You can think of what's happening here w this this this idea with I absolutely love that you did.
He gets omnipresent data.
Of his entire industry. It's almost like operating in God mode in video games when I was a kid. By nineteen eighty seven, nearly all of them.
all the larger larger players in this industry, right? We're running on software developed by a company called Wind Systems.
This told me that software was capable of managing hundreds of thousands of pieces of equipment.
flowing on and off job sites because they buy construction equipment.
And then
They rent them out. It's very
You know, straightforward business.
So what does he do?
I bought wind systems.
He bought
He bought the software that all of the main players were using.
Owning win accomplished two things.
One, we had an industry best platform that we can continue to develop internally for our own use.
And the acquisition gave us access to aggregated
Anonymized data on macro trends across across the industry.
This gave us a high level view.
of emerging market trends.
Such as equipment gluts.
Are shortages in the making.
Making what is
buying the software company allow him to do.
proactively.
adjust our pricing and asset management.
While the rest of the industry was being reactive. I'm gonna repeat that. That is so important. We could proactively.
adjust our pricing and asset management while the rest of our the industry, the rest of our competitors
was being reactive.
Okay, so then I love this story that comes from the chapter on how to do lots of high quality MA.
Uh without imploding.
And it reminds me of one of my favorite sayings that I bring up a lot, that opportunity is a strange beast and that it frequently appears after a loss.
Well can
appear to be a terrible thing.
Actually be uh actually winds up being
a blessing in disguise. And so he gives us some advice. He says be sure to cover your flank.
It's the stuff that comes out of left field that can take a deal down.
In two thousand seven, I sold United Rentals.
to the private equity firm
Cerberus. No way I'm pronouncing that right.
So this private equity firm buys it.
Uh, for seven billion dollars, or at least that's what
Brad thought happened.
Highly satisfied.
That I just sold the company, I stepped down as chairman and wandered off to my private investment firm to begin planning my next venture. Then
the great financial crisis arrived. Remember this is two thousand seven.
A great financial crisis arrived, private equity firms began welching on deals.
And
Cer Cerebus.
Uh defaulted.
On the United Rentals Agreement.
As a result, our stock plunged thirty one percent in twenty four hours.
Over the course of the following year
The stock fell to five dollars.
We collected a hundred million dollar breakup fee.
decided not to seek another buyer and eventually got things writed.
Today.
The market cap of United rentals is thirty eight billion dollars. So
Tried.
to sell it. Thought they sold it in s for seven billion.
In two thousand seven.
Fast forward what, fifteen years, something like that.
Good the good thing they did not sell it for seven million because the market cap is now
thirty one billion dollars higher.
The deals I've avoided have contributed more to my success than the deals I've done.
And I love this advice. He talks about the importance of set setting up uh feedback loops.
This is something that Brad's gonna have in common with just the ones that come to the top of my mind.
Leschwab.
Sam Walton of Walmart and Jim Casey.
of UPS. They all prioritize this.
And what is this? It's getting
Data.
From frontline employees.
They want data from the people that are actually interacting with the customers.
They all talk about it in their biographies and autobiographies over and over again.
She says 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 do to improve the company?
And this is insane. You would think that the owners would want to know that.
And so what Les Schwab, Sam Walton, and Jim Casey would say about this, in Jim Casey's case, any time he was driving, he'd see a UPS truck.
he'd pull over or have his driver pull over and he'd talk to them. He'd wanna know what's actually happening.
They all make they all say d differently.
But the the the idea behind it's the same. They're like your executives, the team you have around you, like they over time, they start to like filter information too much.
And they can give you like an overly rosy
or like false, like positive view of what's actually happening in your company and so the way you
You penetrate that?
Oh, Bezos did this too. I just remembered. He would
Uh work.
He has everybody on Amazon, including himself, would work
uh customer service like in the call centers and actually answer calls directly from
Uh customers.
So anyways d uh your executives and the people around you over time tend to give you like an overly like optimistic view of your company.
And so one way to cut through that is like Sam Waltman go in stores and you talk to people
Cha the cashiers. You talk to the people at the front door. You talk to the people on loading
uh the trucks. It's like tell me what the hell's going on in this company. I wanna know this.
Like what would you do to improve the company? Why are you not asking them that? Of course.
You should ask them that to them.
It was very uh obvious.
Uh but like almost I what I realized too is like
almost at the end of the book he has another uh
He has two questions that I thought were genius.
I wanna
add in this section too because I think it ties to what he's saying here.
And so what he would do
It doesn't have to just be in a a company requiring too. It could be in your existing company.
So he asks I love these questions.
He asked two questions.
What's your single
best idea to improve our company? What is your single best idea to improve our company?
And what's the stupidest thing we're doing as a company?
And so he would send that out company wide.
you know, send an email. I would you know, s you could probably just send us an email.
One at a time.
So everybody in the company. Respond back to this email. What is your single best idea to improve our company?
Right, think about all the interesting data and ideas that that uh you could
Co get.
And then what's the stupidest thing we're doing as a company?
I love this. I love these questions for business and then I was actually thinking.
It's actually good for a family, too.
Like I've talked about this before.
Where
You know, I'm obsessed with what I'm doing.
I work seven days a week.
Uh, you know, if you're listening to this, you're highly likely you're an obsessive person as well.
And yet I don't want I'm also a dad. So like I'm not going to be a shit dad. Like that's just not an option for me.
And so it sounds weird that this came to mind.
But
Uh, my son's too young for this, but my daughter's not. And so like I solicit feedback from from her.
I think I've told you this before.
Uh, but I will literally go
You know I'm not like I was just like hey like
How am I doing as a dad? Like am I like and I ask questions like this, like w what's the
Like when do I feel like
forgot who told me to do this. Like I asked her, uh
And I'll text her this too,'cause she's old enough to text, which is funny.
Like what do I do that makes you feel the most special?
Uh like what don't you like that I'm doing or like just how I'm doing. But this idea
It's almost basically like I think it's a good idea in the business, but also the idea of like
What's your or your single best idea to improve our family is another way to think about that, right? Instead of what's your single best idea to improve our company. What's the stupidest thing that we're doing as a family? What's the stupidest thing that I'm doing as a dad?
What's your single best idea?
To improve
What I'm doing as your father. I love the simplicity of it. And I love
The idea of like sending it out.
'Cause you could bury. The problem is like what I like about
the idea of setting it as a s uh like an individual question, right? That it just cuts right to the simplicity.
As opposed to putting it in
You know, maybe like a survey where there's like ten or twelve other
questions in there. I think those questions are so powerful that they're good enough to stand on their own.
Um so I absolutely love that idea.
And again, so what's the feedback from from
P this is just good intel. Like why wouldn't you do that?
So one thing that pops up over and over again that's really important is you just it's like
I have so many notes in the book it's like
Damn.

There's s speed. Oh, there's more speed. It just happens over and over again.
And so I mentioned this earlier, this hilarious story where his main competitor, the C of uh Hurts.
Which was the largest uh not only did they have the
The like rental car company.
But they're the the at the time they were the the largest
uh equipment rental chain.
Uh in the country as well.
And
Brad has this great line here. He's like
Yeah it uh Hertz did this.
And they built up a national equipment rental chain to about a billion dollars of annual revenue over the course of thirty seven years.
United Rentals did that in thirteen months. And so
He gets this invitation.
Come have lunch with the CEO.
He's like, Oh, maybe he's like trying to buy me out. Like what's happening? Let's just let me go over there and see what's up.
And it was ridiculous. And
The the no left myself is
A losing strategy.
Take your competitor out to lunch and ask him to slow down.
And essentially that's what he did.
It's like, you know, you made me change one of my taglines. I had the largest car rental company and the largest equipment rental company in the world.
And now I've got the largest car rental company.
And the second largest equipment rental company
I don't want to be second in anything.
And he's telling slow down, you're making a mess of this industry, you're going too fast, you're going to mess this up.
And fast forward uh several years and their United Rentals is making like six times the amount of
Money. So
Uh, that is a losing strategy. Do not take your competitor out to lunch and be like, Please slow down.
Please be nicer to me.
No.
Foot on the gas and foot on their neck.
I wanna go back to the maxims that are in the acknowledgement.
Um, because this thing about maxims is they're not hard rules and you need to know when to break the rules.
And so he has this idea that you should lose perfectionism.
And so
But there's one domain where you don't wanna actually
Lose perfectionism.
And that is in hiring.
The most important thing a CEO does is recruit great people. Yes.
I made the point that aiming for perfection can be counterproductive.
Good is usually good enough.
But
If you're going to break that rule
You break it for people.
Make your hiring choices as perfect as they can be.
Because there are a few mistakes costlier.
Then hiring the wrong
person. This is so good. A way to way to remember this. An empty seat.
is less damaging than a poor
Fit.
Make your hiring choices as perfect as they can be.
Because there are a few mistakes costlier.
Then hiring the wrong person, an empty seat.
is less damaging than a poor fit.
This entire section.
Is about
The difference between
super talented people and what they bring.
Uh to your company. So
I love this. Um I'm gonna read Steve Giles was was asked one time.
Uh, what talent do you think you consistently brought to Apple? This is his answer.
Uh this was his answer, rather.
And I'm gonna read it to you first because I think it sets up what what Brad's trying to teach us right here.
He says, I think 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 the dynamic range
between the average quality and best quality
Is at most
Two to one.
Pick anything.
It's gonna be basically two to one, right? But in the field that I was interested in.
I noticed that the dynamic range between what an average person could accomplish
And what the best person could accomplish.
was fifty or a hundred to one.
Given that
You're well advised to go after the cream of the cream.
You can build a team
That pursues
The A plus players, a small team of A players.
Can run circles.
Around a giant team.
Of B
And C
Players.
So then he's going to talk about how to build a rageously talented team and what he feels is most valuable. Remember.
C Joe said.
Hey.
I think one of the best things I did.
was I figured out who the really smart people were.
Hung around them, try to hire them.
I built.
Incredibly outrageously talented teams.
Brad says screening for superior superior intelligence.
Eliminates ninety percent of all candidates, so that's the first thing I look for.
There's just no substitute.
For smarts.
There is no substitute.
For brains.

Most closely correlated with organizational success is a high IQ.
Double down.
On hiring
The bright the brightest.
When he is interviewing people, he will ask himself
Can this person think dialectically? I'm going to define that for us because I love this d definition of dialectically.
The the ability to think dialectically is
The ability to view issues from multiple perspectives and to arrive at the most economical and reasonable reconciliation.
Of seemingly contradictory
information.
That's so important. The ability to view issues from multiple perspectives.
And to arrive at the most economical and reasonable reconciliation of seemingly
Contradictual.
Contradictory information.
Can this person think dialectically? That is, are they capable of thinking from multiple perspectives and reconciling streams of information that seem to flow in different directions?
And second second question.
Are they capable of changing their opinion?
Rigid thinkers at any level of intelligence are less valuable than
Because they are mired.
In their own.
Points.
A view.
More advice.
You should hire ambitious people who want to accomplish big things.
And make a lot of money.
More advice. It is better to be slightly understaffed.
I find that slightly understaffed teams are more focused and spend less time doing redundant.
Busy work.
Brad is big on vibes. I think he calls it the love vibe. And he says, My team and I spend a lot of time together.
So it's a big deal that we like one another.
An organization is like a party.
You only want to invite people who bring
The vibe.
Uh.
And so he talks about listen, man, I have advice for you.
This is how you're going to differentiate between the A, B, and C players on your team. His whole thing is like you cannot.
Have C players.
Ever.
And when you figure out B players.
It's inevitable that you're gonna have some.
But you can't have C players, and his whole point
Uh is that if you if you hire B players, they're likely to hire C players. So you gotta be very careful with the B players too, but
Uh there's a s uh organization scales.
You can't have all A players.
This is something Steve Jobs said, that Pixar when you had four hundred put four hundred
Employees. It's the first team of all A players that he ever saw in his life. And he said, you know, at Apple, I think that time had three thousand uh people. And he's like, it's impossible to have a team.
Have a company with
uh three thousand A players. So of course you can have some B players, but you've got to careful because they love hiring C players and C players suck.
This is how you differentiate between
A B and C players. And he does this in his mind. Again, thought experiment.
Uh I might I imagine this person coming into my office and quitting without warning.
Uh, just by imagining this scenario, I can immediately tell from my own inner response whether this person is an A, B, or C player. If my first thought is I was gonna fire this person sooner or later, so it's no big deal, that's a C player.
If my reaction is
I don't like this.
But I can live with it.
The transition period might be a little bumpy.
But we'll find somebody else, maybe even somebody better. We are talking about a B player.
But if my reaction is an internal dialogue of panic.
And it sounds like we're so screwed.
How did we get into this situation? There's no way we're gonna find somebody as fantastic as this person.
That is an A player.
And what do you do with A players?
You overpay the hell out of them.
'Cause here's the thing.
The reason you should overpay them
It's cause
You the reason you overpay for talent
Is because it's nearly impossible to overpay for talent. Think about what
Steve Jobs said earlier, right?
In in some fields.
The the the
The best person is not twice as good.
They're a hundred times as good.
Think about when Steve Jobs came back to Apple.
Apple bought next for almost a half a billion dollars.
Right.
The way to think about that is
Apple
Paid.
Half billion dollars to rehire Steve Jobs, and they got the deal of the century.
It is almost impossible.
to overpay
For talent.
And Brad talks about there's a lot of things that motivate people.
But you you're silly if you don't think compensation. Yeah, they have to believe in the mission, they have to like the w what work they do, they have to find it intellectually challenging, they have to like their team. They also should be paid.
Oodles and oodles of money.
So he says there's one hundred and seventy four thousand employees
uh out of all the three companies that he currently chairs.
Not a single one of them shows up for work because they want to make money for Brad Jacobs. They come because they want to make money for themselves and their families.
Money animates people everywhere. So he's talking about it's like
I have employees all over the world. This is not just a United States thing.
Money animates people everywhere. That's why I've overpaid, quote unquote, almost every direct report I've ha ever had.
To ensure I had top team
People in place.
overpay for talent. It is nearly impossible.
to overpay for talent. That's such a g in uh important thing to remember.
Never ever forget the dynamic range of humans.
It makes no financial sense to skimp on salary incentives.
To save a hundred thousand dollars a year.
When hiring a second best candidate
may cost you millions of dollars in lost
Profit.
Oh, this guy's good.
He's an A player. Let me I can save money. I hate when people sh try to like
Obviously uh huge.
What's what's the two biggest themes in the history of entrepreneurship, right?
Focus.
And watch your costs. That's repeated over and over again by all by the vast majority of the people you and I study.
Watching your costs does not count when you're doing talent. That's not it's like oh
I have a great A player.
But I can hire the uh for the same job, I can hire a B payer
play player for a hundred thousand dollars less. No.
That's not a hundred thousand dollars less.
You lost miljans.
Millions.
And in Steve Jobs case, if they didn't hire him, what if they said they didn't offer him, I think what was it, four seventy? What was that deal? Four hundred seventy million, something like that. They said and said, No, no.
It's only gonna be two hundred million, or whatever it is.
They try to shortchange him by a couple hundred million, he doesn't come back to Apple. What's Apple's probably out of business. Apple probably doesn't exist to this day.
Never, ever, ever forget the dynamic range.
of human beings and overpay for talent because it's nearly impossible.
to overpay for talent.
And then I want to close on what I feel is almost like a manifesto.
That
It's an incredible honor.
And a good thing for the world to
Build products and services that make other people's lives better.
to create jobs for hundreds of thousands of people in Brad Jacobs case.
To create wealth for your shareholders.
Um and really is a testament to
The all important entrepreneurial
Spirit.
I love being a CO.
There's a joy in creating value.
And an even greater joy in knowing that so many people beyond our organization are benefiting
For more accomplishments.
The best way to perform our duty is to fill an unmet need in the economy with a strong business model.
And a responsible organization.
We create a healthy workplace environment for our people and we pay them well.
We pamper our customers.
And we approach challenges with practical optimism.
That open our minds to solutions.
The great majority of the tens of billions of dollars of value.
That my teams and I have created
Have flowed outside.
Of my companies.
I'm extremely proud.
That our company could be counted on to create value.
This is only possible because we operate
In free markets where creating prosperity is a virtue.
I want to share a personal experience I had with a small business owner whose work ethic and customer focus echo the value system.
That I instilled.
In my own companies.
This small business owner, his name is Steve. Steve handles
The H VAX system
At my home.
Steve had originally worked for the large HVAC company.
That had installed the system.
But that company was sold, and Steve decided to set out on his own. So again, the all important
Entrepreneurial.
Spirit.
Steve is a hard working, take pride in your work entrepreneur who puts his customers first.
He cares a great deal about doing his job the way it should be done.
He told me his self esteem goes up and down with his customer satisfaction scores.
Naturally, he also measures his worth by how much money he's making to support his family.
There's a fair amount of criticism being voiced.
About profit seeking these days.
Some people are embarrassed to talk about the importance of money.
But Steve is totally comfortable with it.
And in his pursuit
of happy customers and a good living for his family.
He built a successful business.
As a result
Customers flocked to him.
Steve is the face of the entrepreneurial spirit.
I wrote this book with people like him in mind.
People who want to work their tails off.
Who wanna outsmart the competition, who want to put their customers on a pedestal.
And who want to make a lot of money for their families.
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'd 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, he said.
You have a choice.
You can waste the next couple of months.
And not accomplish much.
Or you can go all in.
This is an opportunity to go deep on a project.
and do the best work that you've ever done.
But you have to decide
If you want it.
He said.
It was there that I learned what it meant to
To go all in.
That magical connection.
Between intensity of focus and
And the end result.
If I put my whole heart and soul into a project
I had it in me to create really cool stuff.
We have it in our own hands.
To either make life meaningful
Are just past time.
Until we die.
That's up to us.
I hope you're inspired to run hard.
and making a few billion dollars or achieving some other big dream.
And I wish you
The exhilaration.
Of seeing it through.
to success.
And that is where I'll leave it. Highly, highly, highly recommend
Buying the book. As I said before, I really do think it's a reference. I'd read it through.
All the way uh read all the way through.
And then keep it close at hand as a reference, the appendix.
uh has a bunch of thought experiments. There's this really interesting history of technology timeline because that's a huge influence in the way Brad approaches his business. He calls the mega trend in the universe.
He's got interview questions for job candidates.
Recommended books.
uh how to conduct meetings. The appendix is like full of
Uh, you could buy the book just for the appendix, obviously read the whole thing.
But anyways, if you buy the book using the link that is in the show notes, you'll be supporting the podcast at the same time.
That is where I'm at? Three hundred? Three hundred and thirty five books down?
One thousand ago.
And I'll talk to you again soon.
It was fascinating in Brad's story how many times if you just listen
Uh that
Products or opportunities will be pulled out of you.
Like if you think about him
sitting in bed reading analyst reports, realizing, hey, maybe this waste management company
uh this waste management industry is a good it could be a good opportunity or meeting with the those analysts and getting an idea
to enter into a new industry. The same thing um has been happening to me. So I want to give you an update real quick on two things.
Uh before you go. One
Is founders only, founders only is
the first ever in person I'm calling it a conference.
That's taking place.
in Austin, Texas on march twelfth to the fourteenth.
really is
uh a way for
Founders to build
In person.
relationships with other founders. That is the purpose. That is the the North Star
That is the mission of the event. It's limited to 150 people. You can apply by going to foundersonly.com. That's founders with an S. Foundersonly.com. That link will also obviously be in the show notes as well. So
If you've already applied.
And haven't heard back.
I'm w first of all, there's way more the the reason I started this for saying that if you just listen
Uh you'll find opportunities.
'Cause for years people have been asking
for ways to connect with other founders, especially other founders that listen to founders.
And so that that product was kind of
Pulled out of me.
And so as a result, the demand has been higher than I
Anticipated, I guess.
And it's taken me a while. Like I I just have a lot of applications to go through. So if you have already applied, you don't have to reapply. I'm going through them. I promise you will hear back from me.
Um if you haven't yet
applied, even though there's more way more applications than there are slots.
Go.
And apply if you're interested to
me to come to these in person events.
These in person conferences and build relationships. Something that comes up on the podcast over and over again is relationships run the world. A single relationship can be life changing. Brad Jacobs just talked about the relationship that he built with Mr. Justison and that he had a bunch of business mentors.
And a bunch of relationships throughout business. Some are obviously gonna be more important than others, but one can literally change your life. And so that is what I'm trying to to do because this has happened in my life because of the podcast, because
So many founders listen to founders.
uh the the network I have, the relationships, the friendships I've built, like m the the before and after of my life.
It's just not comparable.
At all.
Um and so
Maybe the most the most valuable asset I have.
isn't even something that you can put a price on.
Or that you could buy and the most valuable asset I have by far is my network.
It's the friendships and the relationships that I've built.
And they all came from the podcast. And so I'm in a un unique position, I feel.
to be able to connect other people that have the same interests.
So the reason I would say is even though there's way more people
on the list and I can then we can do for the then I can do for the first time is
If you're interested in doing this, go and apply.
Um
And then what I'll be able to do is like figure out okay, where does everybody live? Where can I do other events? Like I'm gonna like
This gives me the ability to
really figure out like how many people want to do this.
And then I can immediately put my my events team, I have a world class events team behind me. I'm using the same people.
uh that play in capital camp. So if you ever m go on to capital camp, you know
Uh you know
That that's an a uh once a year event.
You know one of the highest end.
investor conferences in the country. There's a massive demand. Usually there's, you know, ten um ten X the amount of people that want to go
uh to that than can actu they can actually fit. So they've been doing this for many years.
There I've gone to it. It's a world class event.
So I was like, Oh, I'm gonna use these same people.
And so that's who's uh helping me not only do all logistics, the planning, but also helping me go through
And really figure out okay.
if there's w I may be vastly underestimating the point I'm telling you this and I know I'm rambling, the v I may be vastly underestimating the demand here and I shouldn't have because people have been asking me this for years. So it's really important
The the sooner you get in
on the list as soon as you put in your application.
The higher priority you have.
For
At future events. And
you can kinda help me figure out okay, this is the map, this is where everybody's at.
and I'm willing to travel, you know, anywhere. I don't live in Austin. I'm just going to Austin because
The venue
Where I'm hosting the first founders only event.
I spent a few days there at this other event.
Uh last year.
Um, and I thought it was incredible. I was like this is perfect.
And so I was like, Oh, okay, well, at least I've I've spent a few days here. I liked it. I enjoyed it. It makes perfect sense for what I'm trying to do, what my old overall mission is. I should just the first one should just do uh should just be here.
And so I'm gonna be doing these
Yeah, assuming they're successful, assuming I I'm you know, good at doing this.
Uh, which you know, I can learn.
You know I'm gonna be doing this.
Every year.
There's people coming in already.
Mm.
This is insane.
And I really do appreciate it.
Uh there's people flying in from all over the world already for the first founders only event. That's insane.
Main point here is
Apply as soon as you can.
It's helpful for you because you'll have priority.
for either future events or maybe even this one.
And
It really helps me understand like where I should be doing these in the future. So foundersonly.com
Founders only dot com, that's the place to do that.
Again, I think it's a no brainer. Uh relationships around the world.
uh meeting another founder
Another
Another person that is interested in the same things that you're doing, these driven
A players.
uh the relationship between these two people, they produce nonlinear returns. So I think this is something that you should prioritize.
It's something I'm definitely prioritizing. Not only have I have I been for the past few years, but definitely even more so moving forward. Okay, so that's that foundersonly.com.
Founderson only dot com. The second thing is founders notes.
Dot.
com founders with an S founders notes dot com.
This is another example of how just listening, paying attention to what's going on around you
uh you're gonna find opportunity and ways to serve other people. So people for years.
for years. This is the most common request. So like I want access to all your notes.
You're kind of this
ps psychopathically obsessed person sitting in a room documenting their history of entrepreneurship for now eight years.
uh you have all these ways to tie these ideas together. How the hell did you do that? People think I have a good memory. I promise you I don't. It's because I have
What at the time was
Uh what I said over and over again is the the most valuable app that I've ever paid for, which is ReadWise.
And all ReadWise allowed me to do is like store all of my notes and highlights for all the books I I read, right? So I have a history.
And I can go back and search them.
And
What it allows me is like, you know, let's say I have a couple I think I there's two hundred and eighty books in there right now, and I still have more I have to enter.
I can go and search any term, anything that I'm thinking about.
Uh so if you sign up for foundersnotes.com
Once you sign up.
Once you get uh
A welcome email from me and it explains in detail how I use the product.
So use that as a reference. And the second thing, it's gonna drop you on this page.
And the page, you're gonna have a bunch of options. The first one is search highlights in this big box at the top. And that's you know very self-explanatory. Anything that you're thinking about, a person, a place, something that you need in your business, hiring, recruiting, talent. We talked a lot about that in the Brad Jacobs episode. In fact, Brad, the the highlight let me give you example. The highlights from the Brad Jacobs episode.
uh book are already in
Founders notes.
They're they're waiting for you to explore.
So search highlights I use all the time. I it's in the browser.
This is uh right now it's only available on the web, so just keep the browser
Open
or keep the tab open in your browser. Eventually it's going to be in an app.
Uh you just gotta give me some time to w to work through everything. I'm still testing it, making sure everything's
uh functioning as I want it to function, so we're making improvements all the time.
So keep the tab open in your browser, search it for anything that comes to mind, okay?
The next thing I do, this is I think the searching is invaluable to me. I could not make the podcast without it.
I use it in conversations with with friends or founders w when we're trying to figure out problems they may have.

on demand tap into
The collective knowledge of history's greatest entrepreneurs is what I'm trying to do. And it will keep improving. So if you think about it now, if you invest in a subscription today, by next year,
There'll be another fifty books in there. There's probably another, I don't know, four thousand highlights or something like that. More connections to be made, more notes to be made. So the product improves every single day.
Uh, you can also also just go by books if you type on books and then obviously what I would do.
Think I mentioned in that episode that you just listened to.
It's like you know, go and find Danny Meyer's book and just read through all the highlights. It takes
Ten minutes, fifteen minutes, probably less than that.
If you're really focused.
Um I just clicked on books, like how to make a few billion dollars is there. My highlights from Oprah.
Uh the Bugatti uh book that is impossible to find.
There's fifty nine highlights there. You could probably read that in fifteen minutes and have a good idea and
remind yourself of like what was important to the founder of Bugatti, Napoleon, Tiger Woods, Ted Turner
Charlie Munger, Christian Dior, over and over again.
So
What I would do is when you have
extra time and you want to read something, instead of wasting time scrolling social media, go and read the highlights of a book. Now
The
I think the most valuable feature and I hate to say this'cause the search feature is
Search feature is probably most valuable feature.
But the feature that is like really interesting to me.
And the one I use a lot.
is the highlight feed.
Because
The highlight feed.
Is
Think about it, um my friend Morgan Housel, the best selling author.
His book, Psychology Money, sold like four million copies. It's crazy.
Um, I talk to him all the time. He's a massive fan of founders.
Uh he called he said he heard me say this on a podcast one time that I think the highlight feed is a smart Twitter feed.
And so he's like that's exact and he starts using it and he's like that's exactly what it is.
And so I just clicked on the highlight feed.
And what it does is instead of reading
think about when you go on any social media, right? It's just like random
collection of either posts, if it's in text, if it's like, you know, Twitter.
uh random collection of videos if it's you know reels or tick tock.
Well the highlight feed is random highlights.
presented to you from
all the books that I've ever covered. And
If you can train yourself No, he I I I need to back up.
I built this product for people already running successful companies.
Right.
That's I think you already know this. You probably obviously, but Founders has the most valuable entrepreneur audience in the world. If you knew who was listening to this and who I
get to interact with and talk to, it blow your mind.
So
Those are the people that are gonna get the most value from this because they already have existing successful businesses and empires where if they read one thing
They can apply that lesson immediately, just like Brad Jacobs.
He already had a lot of success, so he's reading that analyst report in his bed in London.
He already th has the resources to
Act on that idea.
Right.
When he goes to have that meeting with Merrill Lynch.
He has the resources to act on that idea.
So this is not people are always like can I get a free trial? The podcast is the free trial.
If you're not in a position where
you don't you're not already running a successful a successful business, do not sign up for founders' notes. Don't.
Listen to the podcast, get yourself into a pos use the lessons to build to get your business into a position where it makes perfect sense. It's like a no-brainer, of course.
I would subscribe to this. I would invest in subscription because
I could read it for
f forty years and you only you only need one idea. Think about what Charlie Munger said. You know, he read Barons for fifty years.
He made four hundred million dollars. He's like I found one idea that I can act on
In Barron's magazine.
He acted on it.
Because he had the resources to do so.
He turned that I think he made eighty million dollars from that one idea that he got in Barron's magazine and then gave that eighty million dollars to Li Lou and Li Lou
One of his favorite investors turned that eighty million into four hundred million.
And it was like oh
This is
If Charlie Munger's alive
Right, and his eyesight was better.
He would be using
This'cause it's such a giant like of course you would do this. So
the highlights fee and then I'm gonna wrap this up.
'cause I don't want to belabor this point too much.
The highlights feed, I really feel is magic. And that is why I'm so so um adamant. Like we have a bunch of ideas on the product roadmap.
the f the the first one we're doing next is the founders GPT. So you'll be able to like query
Um and like, you know, use the chat interface.
But after that, it's gotta be the app because
U you can read Founder the the highlight feed in the browser.
And I'm doing that right now and I do it all the time.
Um'cause I have this big ass iMac that I like to to use.
But I also love it on the go.
And
It's just perfect as an app.
You know, any time I'm stuck at a light, so I'm waiting for
You know, I'm meeting somebody for lunch and they're running late or I'm at a
Doctor's office, whatever, but getting in the habit of just reading the highlights feed, I really think that's like the killer feature here.
Um, because it's just
Again.
It's almost like history's greatest entrepreneurs talking to you.
Speaking to you like
Most of these highlights are like tweet sized.
So you can read it.
Some of them don't apply at at all. Like, okay, move on to the next one. Just like if you're reading any random, you know, anything online that doesn't apply to me. That's not helpful. Okay, move on.
But get in the habit of spending time with this. And then once you do that, you want to be constantly reminded of these lessons because now you have a way to actually apply them.
And so you could take knowledge and turn it into profit.
And so that if that is you
and you're in a position to take knowledge and turn into a profit, then I would heavily s uh ad I would heavily advise you
to invest in a subscription to founders notes.
And you could do that at founders notes dot com.
I've already been speaking uh a ton. I gotta work on I gotta go reading
Uh read and work on the next episode.
The next episode I'll give you a sneak peek. So this episode was how to make a few billion dollars. The next episode
is going to be how to lose
A few billion dollars. The rise and fall of a billionaire utility tycoon is coming.
Next week.
Thank you very much.
For your support.
I hope you
Do an application for founders only. I hope you come to one of these events.
And I hope
Uh
Assuming you're in the right position, I hope you invest in a subscription to founders notes dot com.
I will talk to you again. Sure.