Brad Jacobs, QXO, XPO, United Rentals & United Waste | David Senra

I'm ready when you are man, I'm in zone, I'm in zone man, we're gonna pick up right I hope we start with this I love you 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 would 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 Jesselsen you have a list of maxims in the very beginning of the book that you learned from other people though maxim that 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. Jesselsen I never called him Ludwig Mr. Jesselsen is you know significantly older than me and much more accomplished than they say I showed him respect but calling Mr. Jesselsen Mr. Jesselsen was a special guy this was someone who was deep very profound and had lived life fully and by principles and he was a religious guy but I wouldn't say it was like ultra religious he was more taking the morality of Judaism the do's and don'ts and ethical behavior and honesty and so forth and that became the core of his life that became the core of his personal life and his business life relationships 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 don't matter you don't take advantage of that it's long-term relationships and he had he had about a few dozen deep principles and and one of them is one you just mentioned which is because he was a trader and the largest commodity trading from the world for the brothers it was you got to get the long-term trend right you can get a lot of stuff right yeah but if you don't get the long-term trend right you kind of control so you got to you got to figure that one out you got to say what what's going on here you need context need to see what's happening what did happen what is happening and what will likely happen in the future and one of the different future states that could happen and what's the probabilities for each one of those and then you have your risk management so yeah the converse of that is if you get the major trend wrong you can do a thousand things right you're still going to lose not going to create alpha not going to create value there so yeah that that was a big lesson from him the other thing that I love is you were 23 years old you're having lunch with them on a very frequent basis like you just said he's much older is 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 thing most important lessons is like problems it is a line from Henry Kaiser who was you know in his day was as famous as I say like an Elon is today or you're becoming and you started a hundred different companies he built a Hoover damn he built Liberty ships out there for the allies in World War II and I've read a bunch of biographies on them because he was a Charlie 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 and work close and so I read the your recounting in your book of your some of your lunches with Mr. Justin is like oh he had the exact he essentially gave you the same advice yeah so in the book I talked about a specific episode when I was having lunch with him and I was kind of down and glam and so what's going on and I was talking about this problem and this thing I was just kind of down you know and he said well don't stay in the business world if you're going to 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 so long as you figure out how to address them and remove the the problem that's how you creating value that's a wonderful way to go through life number one it's great way to make money because you're not always down because you always have incoming missiles when you're in the business world they have problems with with employees with competitors with regular I mean just we're all day long you have incoming missiles you have great stuff too but in between that is punches to the face and if you're going to get beaten up by that you're not going to you're not going to be successful and secondly you're not going to be happy so you're going to go through life like glum you see sometimes you see these like multi-billionaire guys that always look like this well what's the point of all the money seriously so I I would not be want to be one of these senior guys who's like for having a long time like an upset and angry and depredited that's much more important to me being the right frame of mind it's a go through the short time we have in life happy reasonably happy I don't have a perfectionist standard I have to be like in ecstasy and bliss 24 hours a day some days we put generally happy did you ever meet sam zeal when he was a lot I did yeah for many times okay so 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 he was just like I know all the rich guys he's like you wouldn't believe how many are 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 in your book is like problems are just opportunities it reminded me of there's this line from in Jeff business is he's there's several books on them but one of his main biography this book called everything story everything story and they said that Jeff you would tell him problems about his business and he would get excited yeah cuz he's like oh and he talks about the shareholder it's like oh this is like these are problems if I solve these problems this is going to increase the enterprise value of the company that I'm building these are actually good things to identify and embrace a set of avoid 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 believe that this was important to 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 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 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 ramp is nearly impossible in the last twelve months they hired only point to three percent 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 that means a longer than 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 got a business if you're too inefficient ramp hopes you run an efficient organization from a customer's perspective what does a team of a plus players sound like it sounds like this customer view 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 dot com to learn how they can help your business save time and money today that is ramp dot com I do have a question on your long term reputation okay so there's this line do you remember when I forgot in all that trouble with uh with Solomon brothers right 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 book launch party because first of all is the only one that didn't show up in a suit so I rectified that today right and then everybody else is just like you know I've known Brad for three decades like how basically everybody there is like how do you know Brad it's like you know he I was investors 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 just like you have a fantastic long term reputation do you have any advice on how you're able to maintain that and how important it was for other people to do the same thing reputation is really important your 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 so every day you're in the office and doing stuff you're either raising your brand or you're lowering your brand and that's the main thing you got to work on you got to make sure that your brand reflects integrity and honesty and dependability and stability and people can come on you this goes back to mr. jessison so fellow brothers this is before email this is before actually 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 worth 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 have 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 me that advice did you and maybe we start applying it so you you were optimizing for the long term even when you were that young yeah I think as you get older you optimize long term more I think I think when you're young you're just so ambitious and you want to get stuff done you're in the now when you actually get older as you mature you have more context I think life in general is about getting more context seeing things in proportion to other things you say more about that well you know because we've talked about a lot outside of your podcast and I'm into meditation so a lot 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 expand my mind from the earth to the sun to the solar system to the galaxy to clusters of galaxies to the universe to the multiverse just go way way way way high and then bring it all all the way back in and then go into the molecule and add them 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 accordion 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 millennia just keep going way way way back all the way back 13.8 billion years go back all the way to the big bang and then go all the way forward and like picture the world going forward four four four four four four that time and space juxtaposition for me at least different things work for different people gives me context it gives me humility gives me humbleness it shows that I'm I'm just one thing right here and a major major thing going on I'm just one little tiny jet but at the same time I'm part of that so I'm very uplifted and I'm very inspired and very motivated like wow a part of like a real big deal here that's great we all are well part of this huge huge huge huge huge thing 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 if we've talked about this priorly it's like you obviously know I study uncommon people for living right like it's a great job that I appreciate yeah I appreciate it but like think about how crazy it's 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 and like there's almost like a let me let me give you some context here we were together a few months ago at a mutual friends birthday party in Miami our friend Rick and at that there's a bunch of interesting people at the party one of them it was a polo ono okay polo ono is the most decorated winter American Winterath Olympian of all time he's become a friend I met him through the podcast and he walks up to me there's just one of the funniest things and you know because he has people that hear Olympian like he was training for instance he was a kid his dad would make and 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 they're put on 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 blogger fees about these great entrepreneurs that like there is something inside of them driving them it is actually negative it could be insecurity could be you know 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 20 feet away you see that guy over there you go you know 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 you're uncommon amongst uncommon people because at least from the outside in the conversation how it's like I think part of this impenetrable nature that you have in like oh yeah business is problems it's gonna come you what do you think we're doing here like you don't seem to be rattled by them so like what is your inner monologue like when when when like you're doing huge fucking 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 like I'll stop talking there what is your inner monologue like so it goes back to what this just this Justin used to say is problems are your friend you want to you don't want to just tolerate problems you want to embrace problems you want to hook problems problems are the way you succeed you want to run to the fire you want to run away from the fire we brave we'll be courageous go into it 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 a study to start with negativity trauma stress insecurity fear anxiety 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 what this is I don't you're like a unicorn so I don't know that I'm a unicorn I don't embrace negativity I I'm okay with it but I don't make a big deal about negativity I'd much rather enjoy the positivity on the sunny side up guy but your inner monologue are you nice yourself you're ongoing inner monologue I'm reasonably nice like yeah I am I am vicious I sound like you know David Goggins is this like oh yeah I was just someone's talking to the awesome is it my inner monologue my inner monologue sounds like David Goggins we're just like you're not doing enough this wasn't good enough like I see the problems so like I attack them like it's like oh like I'll listen to like a past podcast or something anything I've done is like and all I see are the flaws I don't see any of the good part so let me comment on that I think there's two different ways you can approach that so yes as cognitive behavior therapy is taught everyone we're born with a schema a prism through which we see life and that can be clouded by core core beliefs of 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 so say well of course I'm hearing this I have executives who report to me over the years that have exact same scheme as you just described where they're always saying oh I'm no good at this oh I'm I'm I'm going to when people realize how bad I am I'm just faking it I'm wearing this mask and I'm doing a bad job I'm going to get fired people are hiding stuff against me so they don't they don't respect me it's all this like negative self-talk it's a complete waste of time but nevertheless that's their reality the reality is they have this steady drone of 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 of course I'm having all these negative thoughts because I got a tough job for example I have a big job is a lot of pressure and I'm not perfect so I'm not getting everything right and so I do mess stuff up and I do get things wrong and all that negative talk and then you you catastrophize on those negative things and make them into huge huge issues when they really should be minimized if you put in proper context so you first validate it but then dispute it and say well what does they have to say here is this really a rational thought or is this my schema kicking it to me when you say that it's like I think you have this gift to step outside of yourself which now you're saying but when I say you step outside of yourself you're like no I'm in myself I much prefer to be in myself okay not myself I like to come to center okay I like to find the center the first time that concept of centering came about was when I was I went to enrichment camp at at a school in summertime and there was a book they gave out called on centering I don't remember who wrote it and had a picture of someone making a pottery and and they were explaining in the book that it's all about finding the center of the pot you make it so centering finding that inner calmness finding that zone where you're in the groove and everybody has it everybody has that you just got to find it and that's that's one of life's missions is to find that center find that inner calmness zone and then when I went to college and I studied music under Bill Dixon same concept came out so I clearly said come back to the center so we're playing improvisation what he called black music made some people might call jazz he didn't like the word jazz 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 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're saying before see I have this negative self taught coming you can either take one of two paths you can take the path of validating and disputing it and seeing it in a proper rational way or you can take the approach of just witnessing it just enjoying it and just just it is where it is it's mindful acceptance of it so acceptance of that and I I I vacillate between those two sometimes I do the yes how I do it my internal monologue if negativity creeps and of course it creeps in I'm I'm dancing with the ghosts of my ancestors just the way you and everybody else is dancing with the ghosts of the ancestors evolution worked very slowly or 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 irrational thoughts so another way to look at it is just just observe it kind of more of a Buddhist way some serve it like so one of the ways the most simplest Buddhist meditation is just observe your breath observe your breath I mean how easy can that be all you gotta do is we did this before we started recording or let's go through a miniature like meditation before we began like I don't ever do that and I probably start should start doing it I just kind of wake up and go and just try to attack things that I feel like I don't get more like I absolutely I'm obsessed with what I do I love do I love my work I work on a 70s a week but I want it 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 now like did I want myself and I should be perfect I wanted this universe to be perfect when everything just goes swimmingly well at my my back and call and command well turns out that's not reality it's not made none of those three constituents are perfect there's something that you said in your book it's actually in this 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 also I've experienced in all the other books I read and I remember I got to have dinner with Charlie Munger I spent three hours with them you know six months eight months before he died there's like a trend here unfortunately where it's like oh you're kind of dangerous remember I'm like I don't know I don't know I'm gonna dinner with you but one of the things I love it was the top note I left myself because as soon as I left there I just wrote down like what I learned and I said that Charlie hasn't almost complete indifference to problems troubles from time to time should be expected this is inescapable so why let it bother you and 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 yeah you know he had nine 10 decades of of life experience he was way further down the line and obviously what way why so then I was so I have two comments on that one is when you go back go back to the big bang the current 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 everything came out of that had they're not have they 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 it won't won't really work when you were in your 20 so you said hey I wanted to be perfect not only do I want to be perfect I want everybody around me perfect yeah I wanted the universe be perfect like how long did it take for you to learn what you just explained so when I step down from you know rentals I see I still stay this chairman when I step down a CEO of you know rentals and done it for about 10 years and I wanted to do my next big thing I wanted to do another startup from beginning it was running a big company I wanted to start it from scratch and there was a period of a couple years where I tried to figure out what I was going to do and and I didn't find it and then the great financial crisis came and it was kind of lost that was kind of it was probably the only time in my life that I was depressed I'm just not depressed but that period of time I was actually clinically depressed I took the back depression inventory and I came up yep depressed wow 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 an environment that was very safe and confidential and trusting with someone who was a professional at psychology I was able to first of all identify and then notice more fully my automatic thoughts the negative thoughts and irrational thoughts, unconstructive thoughts and then 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 thoughts 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 you know I kind of know what's going on here now for I've gotten your your measures you want to hear I said yeah I want to hear it and they said you're suffering from perfectionism like you want everything to be perfect and then hey so we need to get over that we need to reduce these demands these musts these sheds these commands that either I or you or that's the world is perfect to you know preferences where 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 you need to radically accept that I need to I need to be in reality not put these you know Jeff you mentioned Bezos Bezos 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 is is nothing's perfect like literally nothing is perfect that I found yet he has another line I think this related it's similar to the idea in your book where he's just like if you don't want to be criticizing you don't want stress and you don't do anything exactly it's just like then just sit in a room and watch Netflix and order a door dash or something but like you're not going to do anything they can be proud of so that's another irrational thought you see people have and I used to have this a lot but I don't have it now because I went through that the therapy thing and it turned to switch on in my brain is a demand that 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 all perfectionism that's that's not reality so you just kind of modify that to well sure like everybody else I'd like to people to say good stuff about me around the bad stuff about me but I don't really care if people say bad stuff about me then okay maybe there's some truth in it maybe there'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 kind of they're imposing their distorses on me but does that really change who I am really doesn't if somebody is saying something bad about me or is that does that really matter it doesn't matter really at court and the again goes back to context in the larger context of things most problems really don't matter they just don't matter 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 on a bad problem on a bad thing I always say opportunities to change the piece that usually it frequently appears after a loss there's always a play there's always no matter what happens it goes back to the jessless in conversation no matter what gets thrown in your face at the moment it may seem ugly and bad 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 that's also unusual because most of the people that like I read biographies about they they they go through several different companies so they find like their life's work but normally they're working on something for like a very long time what why do you keep starting so many companies like what is going on that's my thing everybody so you're a great podcaster yeah you have a talent you're super power as you can consume large amount of information and then distill it down to like boom here are the most important takeaways from that it's a really brilliant that's your thing yeah that's what you're doing it right yeah that's what you're good at yeah you're not playing professional baseball and you know acting or singing whatever you're doing what you're good at this one good at I'm good at figuring out what's the right industry to consolidate and secondly I have a toolkit 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 of how you approach building your businesses so first I find the right industry I find something that's large find some that's growing I find something where it's fragmented I find something we can buy things at reasonable prices I find things where technology is it would could be used it's not very tech forward industry I find stuff that AI and automation are not going to disrupt anytime in the near future so I I find industries that have certain characteristics to it whether it was garbage whether it was construction whether it was transportation or logistics and now distribution it's that's they all have the same characteristics same traits so that's point number one 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 are more talented than me in what they do so I have a great CHRO who knows everything there is to know about HR and compensation and talent recruitment and so forth I have great M&A team who really know how to do deals and get deals done rather than turn them into dramas I have great finance accounting people who understand everything there's to know agency about running a fast growing company keeping the books clean so et cetera and I get the team together then I get the compensation sorted out so make everybody my partner on the senior team and I give people tons of equity but there's a catch it could vest but you can't sell it for five years and most of the vest in the last two years so everyone is committed going back to long-term relationships share people come and go for whatever personal reasons or people burn out or whatever but generally speaking most of the team stays for a while and you work together as a team and then I have I have certain rules of how we're going to 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 argues too strong reward we present different ways of looking at a situation that partly overlap and partly conflict and then we in a very scientific way figure out well let's let's risk a just these things figure out what's right it's a scientific experiment not ongoing science experiment like all day long of trial and error and experimentation and AB experimenting and so that culture that we create is gives us a power because of power to attack the industry in a way without all the the noise that a management team has a very coherent team like a super organism like a brain like a very organized group and then I have between all those people we have experience at our main job which is to buy companies at reasonable prices where there's a difference between what we can raise capital at and what we can deploy it at and then we have a skill set to be able to improve the companies that we buy these the two main things we're good at is buying companies in a disciplined way prices too high we don't do it prices reasonable but not be cheap we're not trying to steal companies prices reasonable we go for it with gusto 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 prove the procurement the HR element the compensation systems the technology the whole tech stack just everything from a to z we just good at transformation we're good at taking a company that is making a billion dollars at EBITDA of a profit and within three to five years doubling the doubling the profit double the EBITDA that's the main criteria I look at when I look at a at a company is purchase price and secondly can we double the profit in three to five years and and most of my main acquisitions have done that so Conway rubber done to song all these different ones they were great companies and everyone says all they're working really well okay well three years later we double the profit yeah because we apply the toolkit we apply the play playbook and it's the same playbook industry after industry the playbook gets refined a little bit here in hybrid it's the same playbook so when you say this is just what I do like to me you now have figured out who you are as a person right I have this weird theory that I can't I can't prove but I believe and you know there's like this myth of like the genius young entrepreneur and I was like well I don't know if you say like you say 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 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 theory that they also know themselves 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 and there's a great story I want your opinion in this in one second but there's a great story where you know Michael starts in his company was in 19 he's in his 20s and it's doing it fabulously well but he realized like hey I need some like grown up like some I need some help here and so he gets this guy I think his name was lee walker from him correctly and he's about 20 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 Michael decides to help him he lasts like four years and so I read the book and then I was about to make the podcast on it I go and see as I wonder what ever happened to this guy and I found an interview that he did and he's in his 80s 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 you know very similar people that were studying and he's just like you know Michael starts his company with a thousand dollars just I'm gonna take on IBM from my dorm room IBM is the most valuable company in the world of time which I didn't know it was the first company to hit a hundred billion market cap which is nuts and he's you know the audacity how that and he's like and the first few years like we're going against this behemoth and I lasted four years I started losing my hair my back hurts I can't sleep I'm unhealthy and he goes but he goes 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 is that the way you feel about the just like what you're doing is like this is it may seem weird because it is when they're not a pejorative way 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 you almost think you can't help yourself yeah and that's I know how to do that so it's just natural to you this is just like yeah this is I've done it many times before and I've made every mistake in the book over the decades 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 that I don't want to underestimate the team so one of the things about being the CEO and the founders you get all the credit but like 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 CEO's most important job is recruiting superlatives of people totally so you're totally so my question to you though is like what would it take to get you to stop yeah I don't know because I'm not and I don't see that in my near future this is I just started the company in the last few months this is what I know by in general like so this is what I loved about you know most of the people I admire it's like I can still remember this you know I put it into the maximum is like if you love what you do you're extra strategy's death right like you know something so like you know it's same so told me he's like I'm gonna be doing deals so I died well we just do deals that he died while monger same thing like I met him right after the um the Silicon Valley bank collapse it was like where I go he was like a kid in a candy shop he just thought this was like the fun he didn't want people to be hurt obviously but he's just like you know my 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 actually having dinner I remember I was I was a Harry's pizzeria in Miami in the design district and you know I was supposed to be paying attention to my wife and on our date and I was thinking about the podcast and all the shit I'm reading and I would 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 for free and I'll go no 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 take take for you to not work an apple that's not why he's doing it it's that if that's not why they're doing it in Enzo Ferrari S.T. Lauder Edwin Land Coco Chanel all these other people like they just can't my go for arrow I just the Michelin brothers like this just story over and over again I get the same sense to you it's like if I said hey what price I'm gonna pay you and you can't do any work you have to stay home you can't we're just like there's no price everyone you just named all those successful people they were all in they were 100% in they weren't like partly in and partly aren't they're in they're in 100% in and completely focused and single modestly concentrated on on executing the plan and that's important and I want you want to have people on your team who share that passion that commitment the best leaders in business are able to spot patterns but you can't spot patterns if you can't see your data and most businesses are only using 20% of their data because 80% of your customer intelligence is invisible hidden in emails transcripts and conversations unless you have HubSpot 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.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 where you're like I'm just gonna summarize this and jump in whenever you want but you're you envision you do another thought experiment yeah of okay do you want to see if you have the absolute best people on your team just visualize it they're coming into your office and they're saying Brad I quit so then what happens next in the scenario so I'm always interacting with my CHRO and going over talent and making sure everybody's happy and motivated how much percent of your like a lot I spend most of my time on people and talent issues so most of your time yeah there's not 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 there's a funny story about this and then I don't want to interrupt but I do this is inside of me and I just have to come out all these stories because I find the fascinating so there's two MBA students in Stanford in the 90 and late 90s and in 97 they interview 16 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 he reveals and they're telling Steve they're like well you know you're the founder of course you don't have time to you know recruit people and see it's like what like no it's the most it sounds exactly what you said in your book it's the most important he goes and he does a great great way to demonstrate the point he goes let's say you're starting a company right you're in Silicon Valley like so what you're doing over here you pick your co-founder you should think long and hard about that your co-founder is 50% 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 10th person that person's 10% of your company and you're saying you don't have time like what else are you doing it's all about the people 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 without fantastic leaders and I spend a lot of time especially on the top few dozen people I want to 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 to my office and saying Brad I quit like this is not a conversation about you making me a counteroffer I'm done I've already moved it with over with this is about a conversation about how do we make it orderly transition because I respect you and I don't want to leave you high and dry and then I try to feel and visualize what would be my reaction if that person came into me and quit if my reaction to that is yes I don't want to smile at things I don't want to act like I'm happy about this but you know I don't know nobody likes firing people and I just didn't you know I just kept postponing fire in that person I shouldn't have but I did and this is great I don't have to pay severance and you know I that solves that problem no problem at all we replace them that's a C-player that's so and really you should get the courage up to take to get off the manage get off the team right away and then on the second category if my reaction to it is you know kind of sucks you know it's what I would have preferred that person stayed but nothing of the world will hire a hand or head on to we'll get someone as good maybe something better and you know things to work out that's a B-player but if when I visualize that person quitting my reaction to that is pure terror absolute panic and like somebody took a baseball bat just whack me in the stomach and then punch me in the face I'm gonna oh my god like I'm never gonna find someone as good as you're no way or I'm never gonna have someone as talented as that person I'm never gonna have someone who brings the table their particular superpower I am and I I don't need I can't even hear what they're saying anymore because I'm just like having this internal panic dialog 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 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 love being in a relationship with the team with the company and that we all earn in it together to go conquer the world I think I think I named it it's been two years since I wrote the book but they had a chapter that said how to kill the competition instead of killing each other and and that's you know it's kind of funny but it's a serious 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 10s and tens of billions dollars of value 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 going to 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 higher 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 fucked if this person leaves that's an A-player that's a way to think about this but this also goes down to your gift and why I think I've learned so much from you one partially check your ability to feel like have very clear thinking and then put it in a memorable way so you're just talking about like the relationships that you have with the people you work for you have a line in the book where you're like he says 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 I agree with that who said that that was a good one basel says that line and I think it sure how large is like life is too short to work with people you don't admire like it's same situation it's like you're in charge you get to choose again this goes back to a little gift of being the CEO 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 you only want people to talk about the people it's all about the people because the people then create all these all the different processes and work streams and transformations and everything this is very fascinating because like it's obviously you know business is people right you're not he's like the people that are building a product but like all the businesses the best definition of business ever heard actually came for Richard Branson he says all businesses is an idea that makes somebody else's life better right and like there's infinite that's why there's always more opportunity because there's all infinite ways we think technology is going to like it changes things but then it just usually opens up other ways to make other people's lives better so just focus on like if you're looking for an opportunity how can I just serve other people another 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 was thinking about this though the best way I just I've heard describe what you were just saying it's all about people workers 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 Katmau 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 he says every single time people got it wrong they 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 a brilliant team they're either going to fix it or throw it out and come up with something better or something new but if you give a great idea to a mediocre team they're gonna screw it up so it's obviously because ideas come from people so it's the people um so you exactly what I'm trying to say well what he said he says it in like it's just wait 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 90% of all candidates so it's the first thing I look at there's no substitute for smarts the CEO trade mostly mostly mostly closely correlated with organizational success as a high IQ double down on hiring the brightest yeah well you want smart people and I particularly want people who are smarter than me and want people who are who uplift me who teach me I don't want to be do you want them specialized because you mentioned earlier you said you want some smarter new but also better at their particular the vast majority of them are specialized okay they're a finance person they're an investor person they're a strategic person they're a they have something that they protect person they bring to the table that they're really an inch wide mile deep in but you also want them to have certain human qualities that transcend what their specialty is and those are as are more important than the in the technical skills explain well you want to mention smart you want people to honest want people hard working you want people collegial you want people are really in it like a like on the work life balance thing and boom it's work yeah and their life is a lot their work and and you know that's that they enjoy that I don't have to hold them like a school teacher stick over their head getting them to work late or coming early work on weekends like they want to do that like they enjoy doing that their job their career their success the collective success of the company is is an important part of the Gestalt it's really important part of their being in their purpose was there ever a time I don't mean to be in our opinion 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 where work wasn't where you wore more balance when was the last time you balance so when you said your first company 23 I did not be completely in balance since I've been working seven days a week yeah cuz you've been skilled in like four years to I don't know like a couple billion dollars it was like insane story but me it's not work for me it's like I'm really enjoying it to me it's a craft it's a skill that I have were you always doing it were you always honest with yourself that it was the top priority I think so yeah I said a conversation with a friend of mine on the drive over here and I think I'm lying to myself so let me give you an example so you know in many cases like you read these biographies these people and it winds up being a cautionary tale you know because they kind of like we'll sacrifice everything for professional success their health their relationships everything else well that I'm not in favor yeah no no you're still married you're a good father like everything else yeah for sure but your main you know just like you have a bunch of abundance of hobbies outside of work from what I understand but meditation and music it's pretty much there you go so I for a long time at every single person I read about it's like okay well I even titled the episode My Personal Blueprint which was Ed Thorpe right Ed Thorpe I'll give you a short run hour quick you first in first person in event a quantity of hedge fund you invented you know the the ability to count cards for Blackjack writes this book in the 1960s called being a dealer you know made more money however 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 played a role into that but essentially like live the life of venture because he truly loved what he did once he made more money than he could spend he stopped trading more time for money he his had a good marriage till his wife passed away from cancer took care of his health but like much more of like a let's say there's five important things and you kind of like divvy it up maybe like work was 50% but the other four are other 50% and I was like oh that's that's kind of my personal blueprint and I said on the driver I go no I'm lying it's like 90% of what I think about and how I spend my time is just work that's beautiful thing so all the people you've mentioned so far all these very very successful people I guarantee you probably every single one of them with few exceptions if any were all in 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 like lose track of time and the whole rest of the universe is gone you just just in it you just really into something that you do well and it 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 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 and read one chapter that takes 10 minutes and get good ideas out of it drum running a sequel the last time you told me it'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 asked well you should really talk more about this this at first I said I'll never write another book yes I remember it's a lot of time to write a lot and I have a lot of time yeah but I had so many people ask me similar questions okay I'm gonna write a sequel that addresses those particular questions you know the title's gonna be 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 were very nice to send me an early copy this one but the 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 is just like you you see this you're talking about like even when you buy great companies good companies so like what else could you do it's like there's always more always you could 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 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 of what did you do you went in with a toolkit and you went into 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 the parent authoritarian figure at corporate you put in technology that frees up time that allows people to spend time doing selling and doing their job rather than trying to find information you're sharing information very good with the apply a certain toolkit boom you double profit so wait a minute this brings up something interesting I've been talking about lately the different archetypes there is and 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 I don't like that yeah so exactly I just heard the pupil part so who am I to criticize Steve no no no no it's not a criticism it's just like that's the beauty of entrepreneurship is like you get to do it I wouldn't be able to do that so what is your archetype what is like let me back up before I should question because I've been having a long conversations with Daniel act the founder Spotify who's become a good friend and that's his whole thing where he like we're actually might be writing something together about like he's concerned that there's going to be young entrepreneurs out there that 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 is discovered it's almost like this he recruits some of the best talent in the world so the point is 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 is like much more of a coach than a player what is your like archetype so you want to get the right people in place you want to get the compensation aligned and then you want to be communicating with each other in a very constructive way in a very prolific way so Friday we had our our second M.O.R. monthy operating of you for this company we'd bought beacon 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 no reason on phones or devices those all shut off we're very concentrating on the one person that had the the the the the Mike the proverbial microphone at a time and listening very carefully and certainly what that person was saying and then debating each point and each action point how do we come up with the agenda 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 I send around a question for an app and we say here's all the materials pre read for the meeting we don't do PowerPoints and go through all that nonsense where everyone tells each other how great they're doing it's just silliness that 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 quite the app say based on everything I read here are my main takeaways and here are the main questions that I think are so important in terms of creating value that we should the whole team all 25 of us who were in that meeting spend time debating and discussing around the table in the limited time we've got because 10 hours goes by like that and then I send back out the takeaways and I send back out the questions people rank them on a scale of 1 to 10 again we've an app for this and then I send people the takeaways here's how they were rated here's what 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 and KPIs but they've seen it from a little different angle very lightning and then I've got the questions I tell everybody rate the question 1 to 10 and then all the questions that are rated 8 9 and 10 and between 8 and 10 that's the agenda David that's what we talked about so we just went we then we put them in categories everything about tech that was rated 8 or above here they are everything that was on comp or people everything was on strategic everything was an M&A all the different categories only the ones that the group voted on at least in 8 now what what's what's the consequence of that number one we have amazing meeting like it's a good agenda much better than I could I could I could come up with because now it's got everybody's angle on it's group source secondly everybody's involved in it because the Boston 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 teaching everybody else it's a group I've created a group I've created a super organism I've created like a beehive or an ant colony or a brain or a human body super organisms things that are a collection of people that the sum is greater than the collection of the ports and and the hole is is greater than in each individual we have a holistic powerful approach to that that's that's how I run the business how many people would be in a meeting like that so I've experimented with this over the years I used to have larger meetings with 40 or 50 people and it just didn't work and so those meetings those monthly operating reviews which are the most important meeting the month okay that's more than the most senior people in the company come together and do the exercise I just mentioned for 10 hours with almost no breaks almost no breaks at all that I have 25 people and I limited to 25 I don't want more than 25 I don't know what's so magic about 25 but 20 to 25 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 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 the other people in the room so much 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 may be wrong maybe I got this thing completely upside down I'm starting to come around to look at it like this with one little twist now I think what we should do is xyz and then what do you all think of that that's a fantastic conversation when you have leaders of the company feeling it's safe to show that hey I was wrong I was thinking wrong and I modeled 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 dichotomous thinking but be open-minded be receptive to be willing to learn 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 in a situation like that so I open up usually and I rambulant 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 iPhone conclusions on but I try to frame things of these are the most important successes of the company but these are the things where we need to improve and here are the issues that in my view after reading everybody's votes and everything I think of the things we should attention direct we should spend most of my time solving because I think those will create the most amount of value and I try to keep it balanced the good stuff and the bad stuff yes I do add a boys and add a girls and ra ra's that's that's good thing to do for leadership but I eat an equal measure do look we got to keep it real we got to keep it honest here's things that we said by this deadline we're going to 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 going to happen and we're only 92% there how can we get to 100% so I try to start off with a balance but then I try to shut up and then I try to let the mecha the mechanical going through the questions where I just go down the questions by categories and then go around the room and here everyone's opinion and that's that's you don't want the leader talking huge amount of time yeah so you basically start with an hour then next in this case nine hour nine the nine hours for this or meeting you're everyone else everyone else I'm not talk to but not inordinately I've already used up my hour for God's sake yeah this is one of the things that I felt and I've seen this with a lot with like really remarkable people is how many people like when we had this intense breakfast at your house a few months ago you had an op-hat and you were I'm talking and you're taking notes like what the hell is going it's the reverse no it's just we the reverse in fact I have a story about this and then I want another question for you was Mitch Rails obviously one of the founders of Dan here great company oh incredible and it's in her way he's yeah he's he's he's actually a mentor of two close friends of mine so I get like insights from them about him and just what one of the most remarkable things that he did but he was at this vertical market software conference was only like 40 people there recently and a friend of mine I was going for a walk in New York City about this and he says 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 dollar company whatever it is and then take notes he was like that his whole time just the relentless like you have valuable information great I just did this episode in Jimmy Naveen is a very fascinating person he needs this great line he said great can come from anywhere and then you have this other thing I'll get back to that question great come from anywhere he and he's in the music business his point was that he was trying to help he he was partners in a mentor of Dr. Dre who's one of the greatest hip-hop producer of all time Drey didn't have an artist to work with they wind up getting this this demo tape from M&M and at the time he's this poor kid in Michigan living in a trailer park right no like no resources at all and yet they're like we weren't looking for you know somebody be controversial we were looking for great and guess what it can come from anywhere came from this kid that was obsessed sitting in a freaking trailer park saying I want to do this thing and I'm going to do this to best my ability I want to talk about I'm going to 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 I especially when companies get big and older they don't they stop asking information from from people from the front lines you're like often when we buy a company we discover that the front line 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 issues 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're just almost described in these in these meetings like hey we're going to disperse and ask these questions and see what comes back and then we'll rank the information. So the end of those operating reviews once we've gone through a 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 and I ask a series of questions I modify them a little bit every month but I have a list of a few dozen questions I pick which ones I want to ask each time usually one of the first ones is what is something somebody said today that you have a different opinion on what is something that somebody said you disagree with and you get a chance to talk about it and he's going around one by one to each person that's a wonderful thing I'm many management team can't do that because everyone will get upset yeah here it's like great this is and then we have a nice honest way I ask everyone what's your single biggest takeaway from today what is something that 10 hours ago you didn't understand about how we're going to make money and how we're going to serve customers better and how we're going to improve employee engagement and how we're going to kill the competition what is something you didn't know what's something you learned and just go around one by one by one by one and then I ask him 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 a most valuable player who somebody is going above and beyond that you really respect you really admire you really think is amazing which we had thousands more like that person and why why then and I send an email to them after which saying hey I was in a meeting leaders of the company and you were nominated as an MVP because XYZ people love it so I just start crying there's a lot of time yeah it's really really emotional things 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 the star already might have been high because everyone loves each other but even higher you're up and why what is something that somebody said today in the meeting that impressed you that when it made you go aha may say damn that's a good insight that's a good perception I really like that what it who was it what did they say we go around everything like that 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 resolve to improve the company by just go one by one and each person stands up and says I resolved to improve the company by and then they say what they what what they want to say it's a great thing what I didn't get a chance to do Friday because we ran out of time what I often do is then we go into the another one we get out of the boardroom get out of the competition and then we stand in a circle and just silently look at each other with for the first couple minutes a couple minutes a long time to be like looking around everybody else it's you know it's a lot of people that's uncomfortable it's not uncomfortable if you're all like each other yeah and and look at each person 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 and just go one by one look at each person and just identify that and then after a minute or two is going by say okay now let's do the same thing look at each person and say I really absolutely we've already said why I'm grateful they're on the team so now I want to say so it was a gratitude gratitude is a wonderful leadership technique and then the second thing is I really wish that person great success of the company and I can picture this company five years from now accomplishing xyz and and I'm I'm not I said nice vibes it's in love vibes to that person's go around one by one all silently nothing out loud it's one by one by one one you start seeing people smile like always I've done it so many times you start seeing people smile so you're looking at people you see looking at people in a very positive uplifting way and appreciative way and then I say okay now we've concluded the day and I declare the day of success and congratulations and we just clap and we clap sometimes this clapping goes out for like five minutes that's like really really awesome but it's a very often people levitate home get go to the airport and go home how much of is of your the way you run your companies like guided by intuition like you seem like a very intuitive person to me maybe not as much as you think no not yes there's always instinct is always intuition you always going by you gut well like how would you even know like this is this is an unusual like what you just describe 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 studied a lot of stuff I read a lot of stuff I meditate a lot my I do things that that worked for me so I think of things that have worked for me on my path my evolution of feeling gratitude and all the happiness that comes to feeling gratitude by feeling appreciation by problem solving all the different things and I try to and vibe that to other people so and then it works and feet so feedback loops 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 senior medium and frontline management feedback loops with customers feedback loops with vendors feedback loops with investors all the all the constituents of the constellation that make a corporation that make a company 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 in my organisms and my my organizations the most companies most companies they they're afraid to share it they're afraid to share the fridge share the good information I think a competitor is going to 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 we don't want to share the bad stuff because then the market's going to hear our weaknesses okay well it's kind of 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 I read something Jeff Bezos said that changed my perspective on the importance of high quality sleep he said that he makes sure he gets eight hours of sleep a night and as a result his mood his energy and his decision making is improved his point was that you get paid to make high quality decisions and you can't do that if you're sleeping terribly and the product that has made the biggest impact on my quality sleep for years is eight sleep I'm lucky enough to be friends with the founder of eight sleep Mateo and we live in the same city a few months after I started using eight sleep I randomly ran into Mateo at a restaurant and I was with some friends so I go over and say hi when I got back to my table my friend asked me who was I talking to and I said that's Mateo the founder of eight sleep and my friend replied he looks like he gets good sleep Mateo is living and breathing his product I had never had the ability to change the temperature of my bed before I had an eight sleep I had no idea how much that would improve the quality of my sleep I keep my eight sleep ice cold it's cold before I get into bed so I fall asleep faster and wake up less during the night that feature alone is worth 10 times the price there are very few no-brainer investments in life and I believe eight sleep is one of them that is why elite founders like Mark Zuckerberg and Elon Musk have all said publicly that they use eight sleep I would recommend getting the pod five which is the newest generation of their signature product it is a smart mattress cover that you place on top of your existing mattress and it is next level sleep tech it automatically regulates your body temperature throughout the night independently for each side of the bed the result is you get up to a full hour of additional quality sleep per night make the no-brainer investment in your sleep by going to eight sleep dot com 4th slash senra and use the code senra to get $350 off you can try it for 30 days at home and return it if you don't like it but I'm confident you will love it I will never let anyone take my eight sleep from me make sure you get yours at eight sleep dot com 4th slash senra 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 I thought of your ideas like hey we're gonna buy the company we're gonna ask like 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 time as principals 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 have survived 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's kind of constant doesn't really change and so what Jim realizes the more successful you became the more successful company became his executives their incentives were to like hide the bad news and just tell them good things because 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 they're delivering the the service to my customers so he would he would do is like he would 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 to the driver I love it unfiltered information same thing people would go and they try to meet Sam Walton and Betonville Arkansas right they'd show up they even have a appointment on the books and they'd walk into the office and they're like hey I'm here to meet Sam for you know 7 a.m. meeting and his secretary is like he hopped on because he used to fly his own plane he left a 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 it's 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 presented in a manner that that seems good so Todd Comes is one of Warren Buffett's mid managers and we were talking on a Saturday about I don't know 10 years ago 89 10 years ago when his first he was getting on the JP Morgan board and he was kind of moving up in the world stuff like that I'm lost touching them but really great guy roast smart guy and he said what do you do I said I'm reading employee service I'm reading all the employee service from the whole company of we ask them two questions what's your single best idea to improve the company and rate your job satisfaction scale of one to 10 and sometimes we add a third more water we'll 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 so that's amazing it's what's so amazing about that so I was just talking to Bezos and Bezos was reading customer service 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 goes 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 around all these kind of experiments for centuries and they built great companies and just because you know they passed on and maybe the companies are around anymore it's like there's so there's a treasure trove of data in there so like the Bezos idea I love where he would publicize it used to publicize the very early days of amazon Jeff at Amazon.com email me and he read part of one of the reasons that he figured out he's like oh I I can we can't just sell books like I could sell anything people he'd like he would send emails so that I think like the top thousand customers like what else would you buy and one guy he had this epiphany because they yeah they'd be like hey I want toilet paper I want 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 I was thinking about this recently because I just read this book translated from French about the Michelin family dynasty which starts out in 1891 selling tires in France you're selling tires there's like 350 cars in my road for God's sake but there's a line in the book that is related to all this where they start the two brothers have to take over this failing factory and they don't know what to make because most of the products of their manufacturing are unprofitable done bring bankruptcy they're one profitable product which so they limit everything else and they focus on the one profitable product which is a rubber brake pad for horse-tron carriages say they began a rubber brake pad for horse-tron carriages 18 this 1888 and so it takes them like a year to figure out like hey we should manufacture rubber and there's two twin phenomenons you don't know get remember with justice said get the major trend right yeah they're like well horse-tron carriages have been around for a while 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 he's like so we need to make more products 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 only have like 50 employees they're 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 no nothing about rubber 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 a peer 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 handles the material for eight hours a day while the CEO's in the office has something to teach you like he's going to understand something about that process because you 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 from there to grow and grow and grow and I just absolutely love this idea it's like you should have this unfiltered access unfiltered information over and over and over again completely all the different constituents in organization need to be talking to each other needs 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 and you really are or or how do you figure out how you're doing in your position I ask all day alone and we have different modalities of anonymous surveys and 360 reviews and and we're I'm interacting with the teams not stop all day long do you like and people's offices what's going on what do you think it is what do you think of that you like the um you have this great line in your book where it says I love working with that we're actually talented people to deliver outside returns for shareholders in public stock markets I love that you the this constant feedback from the public market it's fantastic you love it yeah I don't always agree with it but but but some of it there's always some truth in it that you you you get free advice from like the smartest people in the world a bit the global allocators people have raised billions of dollars from from 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 they're telling you this is what I like this that I don't like okay you don't have to you actually mathematically can't agree with it all it's a lot of times you get conflicting advice people saying you're you're going right you should be going left you know the guy saying you're going you should go left even more so you're it's good to hear all this stuff it's good to hear what people are saying but then you have to go within yourself and you have to you're going to make the decision you have to be an adult you have to you're taking tons and tons of information and opinions and beliefs and data as much as possible then you've got to kind of ignore all that just go inside and say this is what I'm going to you know make the call that's what a CEO does it's the leader does is you make the call but you have to get all that input otherwise you're in a you're just 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 like one big goal was like starting a company and then taking a public and now I talked to a lot of founders and even the ones that raise a lot of money and they don't want to ever go public do you have any like being public what like what advice would you give to somebody that's a 30 years younger than you they're trying to build a great public 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 have to be preferably profitable but there's there's a bunch of them like they want to go public yeah yeah that are that reach out criteria and are choosing not to you know it'd be interesting to ask them why what's the reason why you don't want people think it yeah that I can't speak for them but I think they're like maybe the scare to the public true need a hassle the but that goes back to what we're talking about an article is 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 like gee if I go public 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 people are selling think you're overvalued people are buying get the joke and they understand it's gonna you have a real real business plan who'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 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 visit 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 ma'am now I have to invest more around the cut cost yeah by other people 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 the other situation is what do you do with your top line what do you do with your price and volume what do you do with your organic growth in my business and all my businesses the only two things I had to do in the end in order to get great valuations and create shareholder value where grow the top line faster than the competition faster in the market be taking share and growing the margins increase in the market increasing the profit margins if I did those two things everything else float 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 many chefs many chefs in the kitchen should 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 much faster much more voluminous so you want to be a magnet for talent for drivers for people in the branches for people in mid-level management you want to you want to be getting 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 written about you by bunches of firms and you have press releases and a public website and 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 I like this I buy into it I like what you're doing I want to join the company so in order 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 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 it should do a private company instead or you were pretty much all in on it I've been doing public since 1992 and I'm not stopped and I'm I like it I don't I enjoy it it's I find very helpful very constructive I like the pressure I like I like the ability to hear what the street says and then agree with what I agree with but to disagree with what I think is wrong what I feel passionately and I 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 90 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 that hurts customer service or hurts employing morale and their understaff which is even worse than being overstaffed which is bad and and here it's a it's a completely different story so yeah I I like being public you said something interesting I like the pressure I do thrive on it what do you mean by that so many people give you the money whether it's a in 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 an endowment all these people are invested 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 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 I would guess over 90 percent of our investors in the company and that's that's what it's been over time well that's pressure man that's like wow I don't want to disappoint them these are my relatives these are my friends and people I really love is that people people come and say look I believe in you so much I put two-thirds of my my retirement plan in your stock just single no no to forget their first vacation boom I'm going all in on Braden's 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 because we were talking about the negative self-talk and like you know just living a pretty crazy life where it's like you want to work 70s a week or just completely all in and the way some again this goes back to you can hear a sentence and just like oh I feel that way too and it kind of changes the way you approach things and I remember reading about her killer which is to found yourself with airlines you know it's such a it's such a crazy story that like in an industry where bankruptcies the most common you know outcome the guy had his company was profitable for 40 straight years just nuts and he's like a nut job he's drinking a fifth of bourbon every day he's chained smoking cigarettes I don't know he's like no he wouldn't sleep he's like he's just hilarious stories in his life and I thought he was like he just lived on the edge and completely like all in is a great story about this where they try to get him you know he'd chain smoke and then drink a fifth of bourbon every day and they're like but then he had like prostate cancer something like that now you stop smoking he's like I don't smoke with my prostate but that's not the thing that I remember the thing that I loved in 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 yeah stress he's like I want to be in the game yes this is he was an attorney he deserves company it was his first company he was an attorney who's 35 years old and then it's like I'm gonna try to do an interstate or interest state airline and like then he had it was like four years of legal flights 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 constantly talk about the other people uh the other entrepreneurs other investors other CEOs that you learn from then then knowledgements all these maxims from all these other brilliant people you talk about obviously Ludwig Justin uh I do want to talk about I read something on LinkedIn about other I want to talk about the other people that you've learned from the other founders CEOs executives that you admire uh I want to start with Fred Smith since he he passed away um I read his biography uh I probably like four or five years ago and tell me from wrong you know more about the Sunnishian idea it seems like FedEx had to be one of the most difficult operational companies to ever invent like an unbelievable it's something you wanted pressure yeah the complexity you wrote on LinkedIn you you never miss an opportunity to spend time with them and you admire them could you just tell like why so Fred endorsed my book yeah I saw and I was very touched he did that yeah he was a competitor yeah literally yeah so Fred was amazing guy I mean this is a very special you meet people in life that are just special that are certain integrity and so I met Fred for the first time in 2013 and I was doing but I came out of nowhere from this industry I got into 2011 but I really started doing a bunch of acquisitions I I didn't know where suddenly I was on the front pages of the trade journals and I was in Atlanta at the National Association of Manufacturers the NAM conference and Fred was the keynote so I was in the audience watching and somebody uh so what do you think of Brad Jacobs I go oh my god my heart starts beating oh my god Fred Smith's about to like destroy me my friend is going to become something crust you know the icon of the industry is going to say oh yeah I don't believe it's like and he said I really like watching that guy work he said he is coming into this industry with courage and buying things left and right and has big goals and big ambitions and I'm gonna keep an eye on that guy and I know I would I cried I said wow Fred Smith like saying great stuff so I went up to him after it's after the the speech was over and I said Mr. Smith uh Brad Jacobs I really appreciate what you said when someone first of all I'm Fred and that was the beginning of a great great friendship and we got together many many times of course he was on the business council he was the longest serving member of the business council over quarter of a century oh wow and I go to every business council me I possibly can't to meet other CEOs and to hear what other people are thinking it was just a generous guy this was a guy who had vision he had passion talk about grit maybe he worked maybe was flying around all the time everywhere Vietnam he was decorative he was flying helicopters with people shooting bullets at him to go get Marines who have been he was a Marine yeah Marines who have been killed but you don't leave any Marine behind he'd go in that he's risking his life with bullets like shy we shooting at him to go get the remains of his head Marine yeah putting his own life online he got a purple heart he got still we got probably serious serious serious courageous high integrity guy and everybody everybody love everybody love Fred everybody love Fred the opening paragraph of that of his biography is the craziest opening paragraph I've ever heard I'm just going to like paraphrase it essentially like you know he's in debt he ran through like his the his greyhound his dad's greyhound bus millions I think he burned to like 15 or 20 million his planes are about to be confiscated they just got fired by his board the FBI's investigating him yes yes and then they're like he thought he thought he was like 30 years old at times so still young but he refused to let his federal express stream die and the line was just like he thought of suicide and then the next paragraph is like but the idea of Fred a Fred jumping out of windows ludicrous he's more likely to throw somebody out of a window he's just like a guy like he was like the term you couldn't stop like you just wouldn't stop coming there's a few lines I'll recognize that in him so okay so throwing some out the window I mean I was 30 I think you might have been a little different well maybe yeah but I was a direct competitive in transportation and logistics and it's more not in package we didn't do package 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's come to my house we spent hours and hours and hours talking about everything this is what is so special I know it's a part of humanity in general but entrepreneurship and in particular is it's like you see this over and over again just how generous yeah these people are with them because they know how fucking hard it is they just went through all this yeah and now we might be 15 20 30 years different in age but it's like just like like we just listen to did when you were 23 and in many cases like what you did with the book like the idea like think about Sam Walton right he wrote his autobiography he's cancer was all over his body he was in pain he knows his time is towards the end and what does he do he spends 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 yeah to future generations yeah and then in the book they're like somebody I love this part because they're in the book they're like 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 for your friend name is not going to get along no no I'm saying but like in general yeah obviously well yeah I can see why but my point being is that the transfer of even for competitors he was Fred was your competitor but he's transferring knowledge to you that is I don't know if people understand how much that go I'm glad you just said that because yeah you can see in the books you hear stories like that doors my book 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 off from his biography that just remind me of you and I'm curious if like you if you agree with some of these things one uh the amount it's about Fred Smith if it if I don't have that trait I should work on getting it okay well they're perfect the amount of information so like think about it like you started in FedEx in 60s I think something like that no after Vietnam so maybe early 70s but in the 80s he says that he estimated in during the 1980s he spent four hours a day reading he says he found he relied quite heavily on his own vision backed by assimilating information which you've mentioned multiple times so far for many different disciplines at once you've talked about that meetings you talked about and 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 going back to our Simford you don't want to be rigid in your thinking you want to be open minded you want to be flexible you want to 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 fact you want to get you want to interact with people who you respect and you want to be picking their brain all the time but you're also like a lot the way I described it so like you're you're also alive in 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 these waste management companies making like five hundred million dollars in proper you're like whoa what like they're picking up trash right from one spot and bring it to another right I need to learn about this industry but that's why point is like you're you're people like Fred people like you I think you know there's a ton of people to have the same thing where it's like they're 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 can trust into the oil business the oil business is a lot more complex 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 is that that is so much easier picking up good that's a simple business and move some garbage and send out an invoice so I definitely think I can do that and it seems like they make a lot of money and the trend seemed seem in the right direction so yeah you want to end the application of technology which is I love how at the end of your book you have essentially you want order all the the some key I did key technology developed by humans certainly you know back 300,000 years ago and you move forward I thought that was a beautiful way to like just put that in the the I think that from Kurzweil by the way Ray Kurzweil so Ray Kurzweil huge mentor of mine only met him once men for about six hours to do but I've read every book he's written I've read every article about him I see every YouTube he's I'm a Ray Kurzweil fan I mean I really and what I read in the singularity is near in 2005 2006 when that book came out was amazing where was a chronology of the universe going you know my meditation I go back to space and time I said kind of spirit here that somebody who thinks in large scale of time and and one of the key things that have happened over the last 13 billion years and reducing that down to a couple hundred points that was real helpful so I modified it a bit and and made it more specific to business things that would be applicable to business but the main trend going back to Mr. Justin about you got to get the main trend right the main trend for the last two million years has been humans creating tools aka technology to do things to outsource to those things that 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 digital electronics stuff we've done and all the internet and now artificial intelligence and robotics and now technology this is the trend the the main trend in life and therefore in business is technology outsourcing our senses outsourcing our memory outsourcing now our intellect our speech to to to computers to the to to the cloud this is big this is really really big so when I looked at 55 different industries before I picked building products I ruled out a bunch so this is look as I can interesting industry but I think AI and automation are going to kibachia and I didn't do it I mentioned in the book it was one particular online education company was called a cheque and I said I don't know it seemed like I got a good business but I think these these L the AI is going to come in basically do that for free well you know and I say I think the stock might come down stock came down a lot came out from 50 to single digits so fortunately I made a good prediction there as yogi bear said predictions are difficult particularly when they're about the future 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 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 that's not going to be AI or robotics going forward and then capitalizing on that and the the opportunity to always do something slightly better which is an event tools to do so technology even starts out when you were talking about collecting sometimes a lot better not slightly but the good thing is like this is not exclusive to the time we live and it's a constant throughout our experience like you can you can go and look at the like when you guys were collecting all this is you said before fax before email you were collecting all the information for amerex you know 40 years ago and then the waste management 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 this constant application technology is one of the things I'm glad it was all my notes but I'm glad you brought like directed the conversation there because the way I thought about this is really crystallize my mind when I read Andrew Carnegie's autobiography right which is probably written 130 years ago and 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 going to 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 it's like distillate you're not going to remember 250 pages but do you remember a paragraph first sentence if you can and Andrew's a young person getting into an existing industry it's a new industry but it's still existing industry most of his competitors were much older and they were very resistant to your point resistance to change you cannot be resistant to change you have to embrace the major trend which is what your mentor told you and so I was hearing the the criticism that his competitors almost like when you were in that business and they the guy took you out to launch and it's like slow down I used to be the first now in the second you know that's that's a terrible way to do business like take your competitor to lunch and like stop being better than me motivation yeah it's not going to work but the way it would summarize the main theme from Andrew Carnegie's book that then reappears over and over again all 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 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 best entrepreneurs the best CEOs 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 and again the benefit I have is like I'm reading about a chocolate company that was started 80 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 watch their costs and they're very efficient on in how they spend their 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 1979 right he's Samson is 60s and they're like hey we're doing everything by hand our businesses weight getting way too complex we have all these distributions under think about the logistics you know all this moving all the simple 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 he heard expense I can't do that and then he was slowly a lot was supposed to be convinced by the counts of people on his team and he wind up and when he when he decided to invest he would in like dabble he invested $500 million in 1979 dollars who knows what that would be today in the most advanced computer system to handle his logistics and distribution and that was an edge that no not not another retailer on the planet had or at least an america had that but he had the technological edge over the rest of his competitors in business you always want to be finding waste because we're always the sum and eliminated you always want to find inefficiencies where and they're always are want to reduce them technology helps you with that Walmart's a big tech company so my chief supply chain officer came out of Walmart very very sophisticated guy it's all about technology all about using tech or to get the data and then being very data driven I would argue that if any but 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 like america entrepreneurs is where because you know the when you have an outside share of entrepreneurs that everybody's like you should do more xyz is like why are they all American and that I understand that and my point being is like if you think about entrepreneurship in like the market economy it's only a couple hundred years old it's like well america is kind of dominated so it makes sense if 75 or 80% of my episodes are about that but I um I did one on one of the the most successful entrepreneurs in europe name Amoncio Oratega and I don't know anything about them all I know is that it's h&m uh zara oh zara uh inditex yeah yeah and then you're reading about this you're like it's not a fashion company 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 could see oh 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 a system and he can have manufacturer dresses with red flowers in eight you know 25 different countries in seven days that is technology he says it's like we're a technology company with a but chain of stores attached to it so zara inditex is a big customer of gxO logistics one of the companies we spun off from expio and gxO runs a lot of their warehouses in europe and it's exactly what you're saying it's e-commerce it's trying to do things very efficiently and very quickly 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 are they're going to be dinosaurs 100% I'm going to go back to Fred Smith he says something that sounds Fred isn't attacked oh of course in a big way yeah of course I always talking about this new invention he just didn't in the removing packages and robots and we were trying to figure out some way you could just automation LTO because he was a big LTO FedEx is the biggest action LTO and expio's big LTO and the automation is not there yet to get all the close spaces and all the people still involved in that but it's going to be package yeah automation now package automation is much further ahead yes so there's something we haven't touched on I have a question for you and this to quote from Fred in his biography says you have to be absolutely brutal in the management of your time oh yes do you have any insight if you want someone disagree with that you have to talk to somebody else I'm curious how 100% I'm curious how you do this though so time so when you're CEO when you're an executive you only got two things you got time in your capital and how you deploy that time and how you deploy that capital equals results so it's your time and it's the time of the people the organization so when I was running expio we had about 150,000 more employees worldwide see each one of those work at the senior manager worked long hours but the average work worked eight hours a day so you had eight times about 1.2 million hours a day of work getting done if you've got people very focused and very motivated and very well trained and feel good about the company feel good about their job that productivity of that 1.2 million hours a day is going to be a lot more than if they're if the conditions I just mentioned are not present so managing people's time folk putting them in the right priorities and and telling ranking what people should be spending their time on is very very very important success now how do I spend my time I spend my time deliberately unconsciously 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 now fair amount so if you're CEO you're you're managing you know 15 20 different things always you managing people you manage technology you manage budgets you manage investors you managing infrastructure you're managing transportation you manage logistics you managing pricing you managing procurement with the vendors you're managing customer relations you're managing sales there's you've managed sales force excellence it's just there's about 20 things that are your life like that's what a see 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 kind of just delegate the other 15 things that's that's really part of the CEO job you look at the great CEOs the CEOs have created a lot of alpha a lot of shareholder value they've been in each one of those 20 or so things you talked to a Dave Cody you talked to an Ed Breene you talked to Larry Culpe you can talk about any of those 20 things and they haven't they have things to say and you can learn from them you talk to CEOs who haven't created a lot of value they're not really good at this game they'll know four or five or six even half of those 20 things but they don't do the other they don't do the other part you got to be in all of them but but you're not in all those things an equal measure some things you don't have to spend as much time on the people things and compensation things I actually spend a lot of time on that's core that's critical to get right that's that's something that if you get wrong you wasted he would budgeting I spend a lot of time going on the budget customer satisfaction I spend a lot of time on that the employees serve the employee engagements going out to the field doing the town halls doing the zooms I'm all in on that but when you say that the CEOs that you think might not be doing the best they could are they delegating too much yeah they're they're they're they're not they're afraid to do the in-jet or making generalizations always exceptions but generally speaking what I find is they gravitate to the stuff they like that they're good at and they kind of 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 got to you've got to be if you want to be a good CEO and have a high performing performing company and being the top and being the top decide of stock performance like like United Rentals and XPO were both top ten stock performers last decade that's not random at the both of those companies it was the same same principles the 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 and see the whole picture of the levers so I always tell friends who report and I have a lot of friends who report rolling managers or analysts said on the by side I say when you bring management team in you need to ask them what's your stock price going to be five years from now and one of the levers that I have to believe that's going to get you there and if that's CEO tells you I'll get that's a great question I'll get back to you short that stock you at least don't buy that stock because that's the first thing the CEO has to know first thing is a CEO and the senior management team has to know with great specificity here's where we are right now the stock price we want to get massive out performance 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 improve our multiple generate free cash flow just how are we going to get to there and in my case it's not that hard because when you do the the the graph the first two bars when you could do levers comprise the vast majority of what you have to do to create the value 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 and so you have alternatives and you don't what's the distribution there so you've done over 500 acquisitions throughout your my teams and I have like you credit to my team yeah you're your team for sure so you you're a new team have done over 500 acquisitions you've looked at how many thousands and thousands I mean many thousands like 100,000 you think of me that I lost pounds okay I don't know if it's 100,000 and you know when I say look looked at in depth yeah yeah but in the thousands many thousands okay going back to the time management though I think especially in like the age that people are growing up in like we're like there's a shortened shortened attention span a lack of focus in my opinion and like yeah really easy to give into distraction like how you sound like you're almost not a previous to distraction that's not the right way to put it because I know how you're you're going to 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 barely know Warren Buffett I met him few times but it's not a close person for who she was he's not but I know a lot of people who are close to me who are close to him and they most of them have the same story so you must tell us everybody he tells people I'm the richest person I'm the wealthiest person in the world and they say well Miss Buffett you were born one period of time but I think you're number four when I said no I can prove that I'm the wealthiest person in the world I say why is that he reaches any brings out his daytime or his you know his calendar yeah and he says Monday I have one appointment Tuesday I have no appointment yeah Wednesday I have no appointment because he controls his time yeah he controls his time and he has no problem saying no and refusing people time it's very I think I have a problem saying no though like this is why I'm asking you what you need to solve that problem that's a problem you've identified that's great that's half of the solution to the problem he has a great line where he's like the difference in successful people and really successful people it's really successful people say no to almost everything so like you have 20 you know whatever the number is yeah so whatever the number is like you have 20 things that that you know you're you're focused on at the CO level at this this moment you're you know you know where you want to spend your time with your best at we talked about incentives and then recruiting talent but like you also 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 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 is that something you learned in the last like five years ten years would you like that when you were younger so first of all I'm not that famous I'm well known in the business community this is community that's the only community I care about they're like like you know no the average for yeah for sure and and I'm not one of the richest people in the world there's many people are vastly richer than I am but in my own modest way I do I've created some level of recognition and some of some of wealth and more importantly you should see my inbox when it comes to you but that's fine that's fine well I appreciate it but I just know context it's funny because people in the way you said it is a little grandiose I don't think I I don't think I am that this is why every time I say these things to you you say what do I want to correct that's good I don't want to get grandiose in the world it's smart move but the the funny thing is when I did the I had breakfast with Brad Jacobs episode now people were like it's flight like can you introduce yourself like no like you had to figure out to get to him yourself like then you can't when I was researching after after XPL yeah I was looking for my next thing no excuse me after United Rentals yeah for my next thing and I was looking at asset management 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 I know he's a neighbor down the Florida I don't know well no more enough and I you know I think he'd return my call if I called him but he would turn on the meeting he wouldn't take the meeting said wow that's kind of humbling but you can't even like spend an hour or so no Ken is a very and I think you you interviewed him right no and I yeah I did definitely I want to meet him so you can introduce me please he can be president of state so he's incredible the great 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 actually 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 in your episodes 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's in different league than I yeah Ken is like way way up there he's a very fascinating person yeah he's definitely do something on him you asked how I managed my time so I have a chief of staff he used to work in the Oval Office and manage a most important person the world's calendar so I mean he's he's always very good and more importantly he understands 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 and a margin expansion and everything folks he understands that he understands that in order to do that I have to focus on people I focus on technology understands the different levers to do that he understands so you run every decision between those two yeah that's my framework in business my framework is 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 shareholder value if I buy companies at significant lower multiples of profit than I trade at Monday morning at seven o'clock after we announce the acquisition I've already created alpha for my shareholders let's the nice way to start week number two if I then double 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 he understands that now what he also understands is all the components because you know in the in the month the operating of use in all the correspondents we're very we're very good at communicating with each other what's important and what's not important so he knows my my priorities and therefore it's a great gatekeeper is there anybody that could tell you when you're getting off track from what your profess to say everybody around me so if I'm spending too much time on like I'm gonna catch heck for being on this podcast you're the man for doing this by the way no I love doing it and it also gets like 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 it's like millions of people are gonna benefit from your lived experience you have 40 50 almost 50 years let's say 40 years of experience as an entrepreneur it's like how many people they've ever lived life that have done that most people you know they avoid they quit or they fail or the case is like you have so much to teach the world can I come in at something about the time yeah go ahead there's a phrase I used to use and I you brought it out on me so I'm gonna start using again I've been using recently is WattWam what WOT WOA okay waste of time waste of money so when people have brain storm recover let's do this let's do that someone can say WattWam 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 or increasing the margin and if it doesn't WattWam that's a waste of time waste of time you only you have limited time and you have limited capital you've got to be directing that time and deploying that capital of things have the greatest returns otherwise it's WattWam and I'm so glad first of all it's layers that I'm glad that you you said that you actually have other people around you doing this too because I am kind of skeptical that no human can can hit their goals and what they want to do you know 100% of the time I can't imagine you know the complexity of running FedEx and this guy's just like no you have to be brutal there's like that he pixie absolutely brutal is the word absolutely brutal time management yeah I think there's a lot of thing there's another thing that Fred Smith said that again like when I'm reading about Fred 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 price 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 23 compared to you know you can pick first million dollar company and you look at the second or the third or the fourth or the fifth or the same it's like you're not even that you'd go back and kick that dude's ass because of all the stuff you have learned since then well you do get better as you keep with experience like anybody in anything but the principles are pretty the same if you look at all my companies the essential concepts of the same that you want to have fantastic people that you want to have rules of engagement with those people where you get along and go 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 because you talk about compensation in census a lot very very early very early in the oral brokerage days because I used to have we had tables like 10 brokers at a table and every month to 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 and it would always come to like 300 percent never add up to 100 percent so I had these difficult conversations and the people said like you know you're inflated with how much to think about that but I would I realize very early on is people are coming to work not because 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 whoever and that's important to understand the motivation of the other person is really important it's called theory of mind when you understand and a child gets that after a few years they don't have it at first and that 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 vendor relations you need to understand their point of view 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 because people is gonna stick their tongue out they're gonna turn away and do something with else you have to be a have a partnership you have to be trading with people all the time you gotta 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 how can the world together I think you're a faster learner than me because like I I don't think I ever thought of about incentives uh I think episode like 97 so there's probably like six years ago I'd read that means I've read 96 biographies before this I get to poor Charlie Salamack 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 one of I still think he's the wisest person I ever met and probably one of those 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 the 60s when he said this there's a year that goes by where I don't underestimate the power of incentives and you were to beat over and over again he showed me the incentive I will show you the outcome remember I told you a few minutes ago that I give everyone on the top level of the company a bunch of equity yeah but it's locked up of five years so I meet with my CHRO who's fabulous regularly usually twice a month and she shows me a spreadsheet of how much the equity is going to be worth at $50 a share it's $75 share at $100 a share and I look at that look at the numbers and I say okay this person has something to work for this person's on the team this person that's something I see them working really hard to get get those numbers or I see G you know somehow or another we messed up the comp and maybe we go to top the person up or wow I can't take anything back but maybe I gave too much effort whatever but at least I know where everyone's head is at because I know what's in it for them you know there's always that joke I listen to radio station WIFM what's in it for me and people are generally they don't care about you and me David they care about them which is normal that's capitalism that's free market that's a good thing yeah 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 they go it's all different cultures like oh guess what money animates people everywhere yeah 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 they're doing it further their families I love this idea of I think it's really important to have a 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 schoolteachers pension plans viruses fireman and everything else is like the the importance of having a 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 you wouldn't have to do this and I've seen this in a couple different places where like Jeff Bezos we talked about him a few times today where his idea was when he started Amazon he's like I want 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 interest of the customer in the shareholder perfectly aligned they just have to be done done so over the extremely long term with this idea of like going I it drives me it's like I want to build wealth you know so my kids are proud of me and like and I show them like what it's like to like chase after something and be deeply committed to it and be passionate about 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 think I love that was one of my favorite parts of of your book do you know I think Amazon modified that that mission statement not something with employee engagement too something about workplace great workplace environment something like that the best workplace environment in the world it is funny when you think about it because it's one I have some conversation actually last night I went to dinner with our mutual friend Patrick Oshanasi he texted this morning he's like make sure you say tell Brad I yeah 100% and we had he was with us we had breakfast here a few months ago and we were having this discussion of dinner 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 80s because what about Microsoft Microsoft was in 70s like before us and I would say it's like for me the answer is like Amazon like we started in 97 like I can't think of another company started in the 90s like in terms of like as impressive as as what big success as what Jeff is built by reading your book listening to your interviews talking to you now you kind of for me personally like you kind of remove any self-imposed limit that I have where I'm like oh like there's no 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 see 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 absolutely love is and it's the way I ended the episode it's the way you ended the book and I would summarize what I'm about to say here as go all in you only get one shot at life and I think it's a perfect spot to like wrap our discussion and so I'm just gonna read from your book to you and you said the summer after eighth grade I attended the Rhode Island governor's school for the gifted in art music a summer enrichment program for kids who've been nominated by the 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 what it meant to go all in the magical connection between intensity of focus and the end result this is the to me the punchline and I love this if I put my whole heart and soul into a project I had it in me to create really cool stuff he talk about the passion and going all in and the advice that you'd have for other people listening to this I'm reliving the goosebumps literally but physically I'm feeling the tingly my sensation because that was in a critical moment my life where I understood that it's up to you you can dittle dattle through life and just kind of sleepwalk and then die or you can 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 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 very humbled and privileged to call your friend I appreciate it thank you very much 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 400 biographies of history's greatest 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