My Conversation with Brad Jacobs

Introducing David Senra, Brad Jacobs, and Early Mentorship Lessons I've started a new show where I have conversations with the greatest living founders. That show is called David Senra and it will be on a separate podcast feed from founders. So it's very important that you follow David Senra on Spotify, Apple Podcast, YouTube or wherever you're listening to this so you don't miss future episodes. The 1st 2 episodes were Daniel Act, the founder of Spotify and Michael Dell. This episode is with Brad Jacobs. I find Brad Jacobs very fascinating, not only because he started 8 separate billion dollar companies, but also because of his infectious energy and enthusiasm for business building and money making. He was kind enough to invite me to his house and that is where we recorded this conversation. I'm going to post our entire conversation on this feed so you know what the new show is like. I hope you enjoy the conversation and please don't forget to follow the new show David Center now so you don't miss future episodes. And by the way, nothing is changing with Founders. I'm still doing episodes every week and we'll work on Founders until I die. Speaker 2 I'm ready when you are, man. I'm in zone. I'm in zone. Speaker 3 Man, we're going to pick up, right? I hope we start with this. I love your energy. This is what I always tell people when, you know, I did the episode in your book, right? And since then, thousands, and this is not an exaggeration, thousands of people have sent me messages. But what I try to explain to people, they're like, well, what's like so different about Brad? I was like, well, first of all, how long do you have? Second of all, he's got the best energy and the most energy of any person I've ever been around. So like, I really appreciate you taking the time and agreeing to do this. One of my favorite things is your affinity and relationship that you had. You had a bunch of mentors, but one of your most important one that you mentioned, I think 4 times in the book is Ludwig Jeselson. You have a list of maxims in the very beginning of the book that you learned from other people. The 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. Speaker 2 He meant a lot. So Mr. Jefferson, I never called him a little bit Mr. Jefferson. He was, you know, significantly older than me and much more accomplished than me. So I showed him respect. But calling Mr. Jefferson, Mr. Jefferson 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. I wouldn't say he was like ultra religious. He was more taking the, the morality of Judaism, the do's and don'ts and ethical behavior and honesty and so forth. And 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. Doesn'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 11 you just mentioned, which is because he was a trader, ran the largest commodity trading firm in the world, Fuller Brothers. It was you got to get the long term trend right. You can get a lot of the stuff right, but if you don't get the long term trend right, you kind of in trouble. So you got to, you got to figure that one out. You got to say what what's going on here? You need context, you 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 1000 things right, you're still going to lose. You're not going to create Alfie. You're not going to create value there. So yeah, that that was a big lesson from him. Embracing Business Problems and Recruiting A+ Players The other thing that I love is you were 23 years old. You're having lunch with him on a very frequent basis. Like you just said, he's much older. He's one of the most successful people in the world. He's taking an interest in you. And yet you were 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 he's just like, yeah, business is problems. Like one of the, I think most important lessons, There's like problems. There's a line from Henry Kaiser, who was, you know, in his day was as famous as like, say like an Elon is today or you're becoming. And you know, he started 100 different companies. He built the Hoover Dam, He built liberty ships for the allies in World War 2. And I've read a bunch of biographies on him because he was C1 of Charlie Munger's favorite founders. And he set a line in the biography that's in multiple life stories about him that problems with his opportunities and work clothes. And so I read the your recounting in your book of your some of your lunches with Mr. Justelson. He's like, oh, he had the exact that. He essentially gave you the same advice. Speaker 2 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 glum and he said, 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. 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're creating value. That's a wonderful way to go through life #1 it's a great way to make money because you're not always down because you're always have incoming missiles. When you're in the business world, they have problems with with employees, with competitors, with regular. I mean just all day long you have incoming missiles. You have great stuff too. But in between that is punches to the face. 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 and they always look like this. Well, what's the point of all the money? Seriously. So I, I, I would not be want, want to be one of these zinger guys who's like frowning all the time and like and upset and angry and depressed. That's much more important to me, to be in the right frame of mind and to 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, seven days a week, but generally happy. Did you ever meet? Speaker 3 Sam Zell when he was alive. Speaker 2 I did, yeah, sure, many times. Speaker 3 OK, so great guy. He he had the same thing. I was lucky enough to have a 2 hour very intense lunch with him. He said the same very similar thing to you, 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 again in your book is like problems are just opportunities. It reminded me of there's this line from in Jeff Bezos. He's, there's several books on him, but one of his main biographies is a book called the Everything Story, everything store. And they said that Jeff, you would tell him problems about his business and he would get excited because 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 instead of a void. Speaker 1 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 ACEO does is recruit superlative people. Brad recruits the smartest people who can find and says there's no substitute for smarts. Steve Jobs believe that this was important too. Steve said. I think that I've consistently figured out who the really smart people were to hang around with. You must find extraordinary people. The key observation is that in most things in life, the dynamic range between average quality and the best quality is at most 2 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 50 or 100 to 1. You need to build a team that pursues the A+ 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 12 months they hired only .23% 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 24/7 to automate and improve all of your businesses financial operations. And they do this on a single platform. That means the longer they use Ramp, the more efficient your company becomes. This is important because as Sam Walton said in his autobiography, you can make a lot of different mistakes and still recover if you run an efficient operation. Or you can be brilliant and still go out of business if you're too inefficient. Ramp helps you run an efficient organization. From a customer's perspective, what does a team of a plus players sound like? It sounds like this customer review that I read which said Ramp is like having a teammate who you never need to check in on because they have it handled. Speaker 3 Gotoramp.com to learn how they can help your business save time and money today that is ramp.com. I do have a question on your long term reputation. Building a Strong Reputation and Finding Inner Calm Through Context OK, so there's this line. Do you remember when Buffett got involved in all that trouble with with Salomon Brothers? And he's like, listen, you can lose money, that's fine, but you lose a shred of reputation. Speaker 2 I'll be ruthless. Speaker 3 I'll be absolutely ruthless. I it was a very jarring experience for me at your book launch party because first of all, I was the only one that didn't show up in a suit. So I rectified that today, right. And then everybody else was just like, you know, I've known Brad for three decades, like how basically everybody there was like, how do you know Brad? It's like, you know, he, he, I was investors of his, you know, he made all this money for the pension fund that we were on and everything else. And like the stories that I've heard at the party. And then since I released the episode, it's just like you have a fantastic long term reputation. Do you have any advice on how you were able to maintain that and how important it was for other people to do the same thing? Speaker 2 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 count on you. This goes back to Mr. Jessison. So Phillip Brothers, this is before e-mail. This is before, actually it was even before faxes. It was more Twixes and telexes, so which took a few days to go through when they went through. So you could do a deal worth hundreds of millions of dollars on a handshake 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. Speaker 3 How old were you when you when he gave me that advice? Did you immediately start playing it? So you you were optimizing for the long term even when you were that young. Speaker 2 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 and as you get older and as you mature, you have more context. I think life in general is about getting more context. Seeing things in proportion to other things can. Speaker 3 You say more about that. Speaker 2 Well, you know, because we've talked about a lot outside of your podcast. 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, I expand my mind from the earth to the sun to the solar system, to the Galaxy, to the clusters of galaxies to the universe, to the multiverse, just the way, way, way, way hot. And then bring it all the way back in and then go into the molecule and the atom and the proton and the nucleus and right in the middle of all that and then go to strings and, and, and I find that 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 and 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 or forward, forward, forward, forward, forward. 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 in a major, major thing going on. I'm just one little tiny dead at the same time. I'm part of that. So I'm very uplifted, I'm very inspired, I'm very motivated. Like wow, I'm part of like a real big deal here. It's great. We all are. We're all part of this 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. Brad's Journey: From Negative Self-Talk to Accepting Imperfection I know you hate when I say this because if we've talked about this privately, it's like you obviously know I study uncommon people for a living, right? Like they. Speaker 2 Do a great job at it, I appreciate it. Unique. Speaker 3 Yeah, I appreciate it. But like think about how crazy it is. Like the people that I study on founders is they were so good at their job. Somebody wrote a book about their life. Like you're talking about very small, but most of their inner monologues, you're different. You were have a much more positive energy. And like there's almost like a let me let me give some context here. We were together a few months ago at a mutual friend's birthday party in Miami, our friend Rick. And at the there's a bunch of interesting people at the party. One of them, it was Apollo Ono. OK, Apollo Ono is the most decorated winter American, winter Ath Olympian of all time. He's become a friend. I met him through the podcast. And he walks up to me and there's this one of the funniest things. And you know, because he has people that you're Olympian. Like he was training since he was a kid. His dad would make him get up at like 5:00 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 under circumstances. So he was asking me. He's just like, I see this pattern in, you know, when you're reading all these hundreds of biographies about these great entrepreneurs that like there is something inside of them driving them. It is actually negative. It could be insecurity. It could be, you know, they grew up in poverty. It could be a bad relationship with their family. And he's like, are they all like that? And I and you're like 20 feet away, you see that guy over there you go, you know who that is? And 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 I had, it's like, I think part of this impenetrable nature that you have in like, Oh yeah, businesses problems. It's going to come you. What do you, what do you think we're doing here? Like it. You don't seem to be rattled by them. So like, what is your inner monologue? Like when, when like you're doing huge fucking deals right now. You're doing all kinds of crazy stuff. You build 8 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? Speaker 2 Like so it goes back to what Miss, just Miss 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 hug problems. Problems are the way you succeed. You want to run to the fire. You don't run, run away from the fire and be brave and 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 studies 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. Speaker 3 Was that ever your case? Speaker 2 Though that's not my. Speaker 3 This is I don't you're like a. Speaker 2 A Unicorn. So I don't know that I'm a Unicorn. I don't embrace negativity. I I, I'm OK, I'm OK with it, but I don't make a big deal about negativity. I'd much rather enjoy the positivity. I'm a sunny side up guy. Speaker 3 But your inner monologue, Are you nice to yourself? Your ongoing inner monologue I'm. Speaker 2 Reasonably nice. Like yeah, I am. Speaker 3 I am vicious. I sound like, you know, David Goggins. Is this like? Speaker 2 Oh yeah, I was just someone was talking. Speaker 3 My inner monologue, my inner monologue sounds like David Goggins versus 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, it was like I'll listen to like a past podcast or something. Anything I've done, it was like, and all I see are the flaws. I don't see any of the good part. Speaker 2 So let me comment on that. I think there's two different ways you can approach that. So yes, as cognitive behavior therapy has taught everyone, we're born with a schema, a 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, I'm doing a bad job. I'm going to get fired. People are hiding stuff against me because they don't, they don't respect me. They're all this like negative self talk. It's a complete waste of time. But nevertheless, that's the 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, OK, yeah, of course I'm having all these negative thoughts because I got a tough job. For example, I have a big job. There's a lot of pressure and I'm not perfect, so I'm not getting everything right. And so I do mess stuff up and and I do get things wrong and all that negative talk. And then you, you catastrophize on those negative things and make them into huge, huge issues when they're really should be minimized if you put them in proper context. So you first validate it, but then dispute it and then say, well, what does the evidence say here? Is this really a rational thought or is this my schema kicking it? Speaker 3 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 out of outside yourself, you're like, no, I'm in myself. Speaker 2 I, I, I, I much prefer to be in myself. OK, not myself. I like to come to center. 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, at school in the 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, they were explaining in the book that it's all about finding the center of the, of the, of the pot you're making. 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 just 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'm familiar, they said come back to the center. So we're playing improvisation, what he called black music. They some people might call it jazz. He didn't like the word jazz. Playing, 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 were 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 what 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, I'm dancing with the ghosts of my ancestors just the way you and everybody else are dancing with the ghosts of the ancestors. Evolution worked very slowly over 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. Just observe 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 got to do is. Speaker 3 We just did this before we started recording or like let's go through a miniature like meditation before we begin. And 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, and don't get me wrong, like I absolutely am obsessed with what I do. I love, I love my work. I still work on a seven days a week, but I wanted to be the best in the world at it. And that's where it's like, oh, you just see these deficiencies. Speaker 2 So that sounds to me like perfectionism. So I suffered a lot from perfectionism when I was younger. I wanted to be perfect. Not only did I want to be perfect, I wanted everybody else to be perfect. Not only did I want myself and others to be perfect, I wanted the universe to be perfect. Everything just goes swimmingly well at my my beck and call and command. Well, it turns out that's not reality. None of those 3 constituents are perfect. Speaker 3 There's something that you said in your book, it's actually in this, 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 and all the other books I read and I remember I got to have dinner with Charlie Munger. I spent 3 hours with him, you know, six months, 8 months before he died. There's like a trend here, unfortunately, where it's like kind of dangerous, remember? Like, I don't know, I don't know if I'm going to have dinner with you. But one of the things I loved, it was a top note I left myself because as soon as I left there, I just wrote down and like what I learned. And it said that Charlie has an almost complete indifference to problems. Troubles from time to time should be expected. This is inescapable. So why let it bother you? 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, you know, he had 9-10 decades of of life experience. He was way further down the line and obviously way wiser than I was so. Speaker 2 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 anti matter, just a slight imbalance. A lot of debate of what caused that. As a result of that, everything came out of that. Had there not, had there been perfection at the beginning of the universe, The Big Bang would not have happened. So we are imperfection. We are the children of imperfection. Imperfection is good. Imperfection is not bad. Expecting perfection is will cause you stress and strain. It won't won't really work. Speaker 3 When you were in your 20s, so you said, hey, I wanted to be perfect. Not only do I want to be perfect, I want everybody around me to be perfect. I wanted the universe to be perfect. Like how long did it take for you to learn what you just explained? Speaker 2 When I stepped down from United Rentals, I see I still stayed as chairman. When I stepped down as CEO of United Rentals and done it for about 10 years and I, I wanted to do my next big thing. I wanted to do another startup from beginning. I was running a big company. I wanted to start it from scratch. And there was a period of a couple of years where I was trying to figure out what I was going to do and, and I didn't find it. And then the great financial crisis came and was kind of lost. That's 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 Beck depression inventory and I came out, Yep, depressed. So, so I found a amazing cognitive therapist and I went to the guy twice a week, hour and a half a shot for two years. It was fantastic. One of the best things I've ever done in my life, because what we did was in a, in a, an environment that was very safe and confidential and trusting with someone who was a professional at, at, 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, the, the thoughts and then and then dealing with them really was the turning point in my life in 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 measure. You want to hear it? I said, yeah, I want to hear it. And they said you're suffering from perfectionism. Like, like you want everything to be perfect. And hey, so we need to get over that. We need to reduce these demands, these must these shoulds, these commands that either I or you or the rest of 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 need to radically accept that I need to. I need to be in reality, not put these, you know, Jet, you meant mentioned Bezos. Bezos has a lot of cool stuff, but one of the things he says often is don't fight with reality because reality always wins. So the reality is is nothing's perfect. Like literally nothing is perfect that I found yet. Speaker 3 He has another line, I think that's related. It's similar to the idea in your book where he's just like, if you don't want to be criticized, you don't want stress and you don't do anything. Speaker 2 Exactly. Speaker 3 It's just like, then just sit in a room and watch Netflix and order a DoorDash or something. But like, you're not going to do anything that you can be proud. Speaker 2 Of so that's another irrational thought you see people have it I used to have this a lot, but I don't have it now because I went through that that therapy thing and it turned a 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 going to happen that's called 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 rather than bad stuff about me. But I don't really care if people say bad stuff about me, then, OK, maybe there's some truth in it. Maybe it's maybe some good thing I can learn from that. Or maybe they're just off and they don't know me and they're just kind of they're do they're imposing their distortions on me. But does that really change who I am? It really doesn't. If somebody is saying something bad about me or is that does that really matter? It doesn't matter really at the court in 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 1, and maybe we're kicking in magnifying those problems and catastrophe make him into big catastrophes and dramas. But most problems really aren't. Aren't a bad problem, aren't a bad thing. Speaker 3 I always say opportunities are strange beasts that usually it frequently appears after a loss. Speaker 2 There's always a play. There's always. No matter what happens, it goes back to the justicing 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. Brad Jacobs' Winning Formula for Building and Growing Businesses 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're, they go through several different companies. So they find that like their life's work, but normally they're working on something for like a very long time. Why? Why do you keep starting so many companies? Like what is going on? Speaker 2 That's my thing. Everybody said their thing. So everybody. So you're a great podcaster. You, you, you have a talent, your superpower as you can consume a large amount of information and then distill it down to like, boom. Here are the most important takeaways from that. It's a it's really brilliant. That's your thing. That's why you're doing it, right, Because that's what you're good at. You're not playing professional baseball or you know, acting or singing, whatever you're, you're doing what you're good at. This is what I'm good at. I'm good at figuring out what's the right industry to consolidate and secondly, I have a tool kit and it's the same old tool kit. It's not. Speaker 3 You told me this last time, can you explain this? I love the way you described this tool kit of how you approach building your businesses. Speaker 2 So first to find the right industry, I find something that's large, I find something 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, would, would, could be used. It's not very tech forward industry. I find stuff that AI and automation are not going to disrupt any time in the near future. So I, 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 #2 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 and 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 is to know, agency about running a a a fast growing company, keeping the books clean, so etcetera. And I get the team together. Then I get the compensation sorted out. So I 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 it vested in the last two years. So everyone is committed. Going back to long term relationship, sure people come and go for whatever personal reasons or people burnout or whatever. But generally speaking, most of the team stays for a while and you you work together as a team. And then I have, I have certain rules of how we're going to 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 of a word. 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 adjust these things, figure out what's right. It's, it's a scientific experiment, an ongoing science experiment, like all day long of trial and error and experimentation and AB experimenting. And so that culture that we create is, gives us a power, gives us the power to attack the industry in a way without all the, the, the, the noise. That 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 where we can raise capital at and where we can deploy it AT. And then we have a skill set to be able to improve the companies that we buy. These are the 2 main things we're good at is buying companies in a discipline way. Price is too high, we don't do it. Price is reasonable, but not to be cheap. We're not trying to steal companies. If price is 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-Z. We just good at transformation. We're we're good at taking a company that is making a billion dollars of EBITDA of 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 I've done that. So Conway, Robert, Dr. Sangla knew all these different ones. They were great companies and everyone says, oh, they're working really well. OK, well, three years later we doubled the profit because we apply the toolkit, we apply the play kit playbook and it's the same playbook. Industry after industry, the playbook gets refined a little bit here in Ebert. It's the same playbook. Speaker 3 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 study like you study the history of entrepreneurship pretty intensely. You realize that like people do most of the time their best work many decades into their career. And so there's all all kinds of reasons they're like, oh, they've had more experience, they're wiser, they have more resources, they have more practice. And I don't dispute that. That is all true, but I have this weird 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 Dells 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 on this in one second. But there's a great story where, you know, Michael starts in his company was 19, he's in his 20s and it's doing fabulously well. But he realized like, Hey, I need some, like grown up like some I need some help here. And so he he gets us the guy, I think his name is Lee Walker, if I remember correctly, And he's about 20 years older than than Michael already started a bunch of companies rich, you know, didn't have to work anymore. But he, he saw an unusual once in a, you know, generation talent and, and Michael decides to help him. He lasts like 4 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 whatever 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 story's really story of you and everybody and all the people really are, you know, very similar people that were studying. And he's just like, you know, Michael starts his company with $1000, says I'm going to take on IBM from my dorm room. IBM is the most valuable company in the world at the time, which I didn't know it was the first company to hit 100 billion market cap, which is nuts. And he's, you know, just the audacity to have that. And he's like, and the first few years, like we're going against this behemoth. And I lasted 4 years. I start 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 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 in a not a pejorative way. It's not weird in a in a negative way. It's I don't know, another person started 8 separate billion dollar companies. So it's like you almost like you can't help that's. Speaker 2 What I do and that's I know how to do. Speaker 3 That so it's just natural to you. This is just like. Speaker 2 Yeah, this is, this is, I mean, I've done it many times before and I and I've made every mistake in the book over the decades 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 the. I don't want to understand 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. Speaker 3 Yeah, you have a great line in your book, which I see over and over again. You said the CE OS most important job is, is recruiting superlative people. Totally. It's like you're, you're totally. So my question to you though is like, what would it take to get you to stop? Speaker 2 Yeah, I don't know because I'm not, 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. Speaker 3 This is what I no, but in general, like so this is what I loved about, you know, most of the people I admire. It's like I, I can still remember this, you know, I, I put it into the maximum. It's like if you love what you do, your extra strategy is deaf, right? It's like it should be worthy on something. So like, you know, Sam so told me he's like, I'm going to be doing deals, So I died. Just do deal. So he died Munger, same thing. Like I, I met him right after the, the Silicon Valley Bank collapse. It was like Greg, he was like a kid in a candy shop. He just thought this was like the he didn't want people to be hurt, obviously, but he's just like, you know, 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 at 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 go and like, take a bite into a piece of pizza. And I was like, people, you say if you love what you do, you do it for free. And I go, no, there's a different level. If you love what you do, they couldn't pay you to stop. Speaker 2 There you go. Speaker 3 And I was like, how much money could you gone to Steve Jobs? Like, hey, how much would it take for you to not work an apple? That's not why he's doing it. It's that it that's not why they're doing it in Enzo Ferrari, Estee Lauder, Edwin Land, Coco Chanel, all these other people. Like they just can't. Michael Ferraro. I just the Michelin brothers like this, this story over and over again. I get the same sense to you. It's just like if I said, hey, what price I'm going to pay you and you can't do any work, you have to stay at home. You can't. It's just like there's no price. Speaker 2 Everyone you just named, all the 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 100% in and completely focused and single mindedly concentrated on on executing the plan. Why People and Talent are the Ultimate Drivers of Business Success And that's important. And I want you want to have people on your team who share that passion, that commitment. Speaker 1 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. Speaker 3 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 AB and C players where you're like, I'm just going to summarize this and jump in whenever you want, But you're you envision you do another thought experiment 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 in this scenario? Speaker 2 So I'm always interacting with my CHRO and going over talent and making sure everybody's happy and motivated. Speaker 3 How much percentage of your like? Speaker 2 A lot. I spend most of my time on people and talent issues. Speaker 3 So most of your time. Speaker 2 There's not the most, but the most. If I did a pie chart of like how I divide up my time, the largest percent is on people issues. Speaker 3 There's a funny story about this and then I don't want to interrupt, but I, I do This is inside of me and I just have to come out all these stories because I find them 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 everything else. 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 Steve'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. And he goes, let's say you're starting a company, right? You're in Silicon Valley. That's what you're doing over here. You pick your Co founder, you should think long and hard about that. Your co-owner 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? Speaker 2 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 spent 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 into my office and saying, Brad, I quit. Like, this is not a conversation about you making me a counter offer. I'm done. I've already moved. It's over with. This is about a conversation about how do we make an orderly transition because I respect you and I don't want to leave behind and dry. And then I try to feel and visualize what would be my reaction if that person came in to me and quit. If my reaction to that is, yes, I don't want to smile. I don't want to act like I'm happy about this. But you know, I didn't have nobody likes firing people and I I just didn't, you know, I, I, I just kept postponing firing that person. I shouldn't have, but I did and this is great. I don't have to pay severance and and you know, I, I that solves that problem. No problem at all. We'll replace them. That's AC player. That's someone really you should get the courage up to take to get off the manage, get off the team right away. And then it on the second category. If my reaction to it is, you know, it kind of sucks. You know, it's what I would have preferred that person stayed. It's not the end of the world. We'll hire headhunter. We'll get someone as good, maybe something even better. And you know, things will work out. That's AB player. But if when I visualize that person quitting, my reaction to that is pure terror and absolute panic. And like somebody took a baseball bat and just whacked me in the stomach and then punched me in the face. I'm going Oh my God, like I'm never going to find someone as good as her. No way. Or I'm never going to have someone as talented as that person. I'm never going to have someone who brings to the table their particular superpower. I am and I, I don't even, I can't even hear what they're saying anymore. So I'm just like having this internal panic dialogue going on. That's what you call an A player. So I want all a players around me. I want people whose relationship with me, 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 are in it together to go conquer the world. I, I think I, I named it, it's been 2 years since I wrote the book, but they had a chapter that said how to kill a competition instead of killing each other. And and that's, you know, it's kind of funny, but it, it's a serious, it's a serious title is you don't want to have a dysfunctional management team. One of the most important things that has allowed us to create 10's and 10s of billions of 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. Speaker 3 First of all, I love the way you described because everybody says, Oh yeah, hire a player. So 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. 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 were just talking about like the relationships that you have with the people you work for. You have a line in the book where, like he says, an 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. Speaker 2 Yeah, I I agree with that. Who said that? That was a good one. Speaker 3 Bezos has a line and I think a shareholder is just 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 the 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. Speaker 2 All 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. Speaker 3 This is very fascinating because like it's obviously, you know, business is people, right? You're not only just like the people that are building a product, but like all the businesses. The best of the definition of business ever heard actually came from Richard Branson. He says all businesses is an idea that makes somebody else's life better, right? And like there's infant. 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 I was thinking about this, though, the best way I just I've heard describe what you were just saying. It's all about people. Work with the best people you possibly can. The A players we're going to talk about, 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 Catmull, 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, he said it was the ideas. And he's like, no, it's the people. And so he has this great line where he's like, listen, if you give a mediocre idea right to a brilliant team, they're either going to fix it or they'll 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 going to screw it up. So it's obviously because ideas come from people. So it's the people. So it's. Speaker 2 Exactly what I'm trying to say. Well, what? He said. Speaker 3 He says it in like, 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 trait most mostly most closely correlated with organizational success as a high IQ double down on hiring the brightest. Speaker 2 Yeah, well, you want smart people, and I particularly want people who are smarter than me. I want people who are, who uplift me, who teach me. I don't want to be. Speaker 3 Do you want them specialized? Because you mentioned earlier you said you want them smarter than you, but also better at their particular. Speaker 2 The vast majority of them are specialized, OK, They're, they're a finance person, they're an investor person. They're a, a strategic person. They're a they, they have something that they tech person they bring to the table that they're really an inch wide and a 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 than the technical skills. Well, you want to mention smart, You want people who are honest. You want people who are hard working. You want people who are collegial. You want people who are really in it like a like on the work life balance thing and boom, it's work and their life is a lot of their work and and you know, that's that they enjoy that. I don't have to hold them like a school teacher, a stick over their head getting him to work late or come in 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 and their purpose. Brad's Approach to Collaborative Leadership and Continuous Feedback Loops Was there ever a time? I don't mean you can be, but this is fascinating and it's almost selfish to have this conversation because like, I get to ask you questions and and learn from you. Was there ever a time where work wasn't where you were more balanced? When was the last time you were balanced? So when you start your first company of 23. Speaker 2 I did and I've been completely imbalanced since. I've been working seven days a week. Speaker 3 Yeah, 'cause you have your vacation scaled like 4 years to, I don't know, like a couple billion dollars. It was just like an insane story. Speaker 2 But for me, it's not work for me. It's like I'm I'm really enjoying it. To me, it's a craft. It's a skill that I have were you and I enjoyed doing. Speaker 3 It were you always honest with yourself that it was the the top priority? Speaker 2 I think so, yeah. I I. Speaker 3 Had 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 examples. 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, will sacrifice everything for professional success, their health, their relationships, everything else. Speaker 2 Well, that I'm not in favor. Speaker 3 Of no, no, no, you're still married, you're a good father. You're like everything else. Yeah, for sure. But your main it's not like you have a bunch of abundance of hobbies outside of work from what I understand. But. Speaker 2 Meditation and music. That's pretty much it. There you go. Speaker 3 So I, I, I for a long time, every single person I read about, I was like, OK, well, I, I even titled the episode my personal blueprint, which was Ed Thorpe, right? Ed Thorpe. I'll give a short right now. We're correct. First first person to invent a quantitative hedge fund he 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 than he'll ever spend. But if you read his book, you get to the end. It's like he was much more balanced, right? He also came from Macadamia and maybe this had played a role into that. But essentially like live the life adventure 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 he kind of like divvied up. Maybe like work was 50%, but the other four or 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. Speaker 2 That's a 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, and what what they were doing was their passion and they were just so excited about it. They were in the flow. They were in the flow of being so absorbed on something that you'd like lose track of time and the whole rest of the universe is gone. You just, you just in it, you just really into something that you do well and with people that you really like and you're likely to be successful because you're, you're doing what you do. Speaker 3 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 1 chapter that takes 10 minutes and get good ideas out of it. Speaker 2 Do I'm writing a sequel last? Speaker 3 Time you told me it was like I only had one book in me. I have nothing else so I. Speaker 2 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, this. At first I said, I'm never writing another book. It's a lot of time to write a book, and I have a lot of. But I had so many people ask me similar questions. OK, I'm going to write a sequel that addresses those particular questions. You know what title's going to be. That was How to make a few billion dollars. This was going to be called How to make a few more billion dollars. That great award. Speaker 3 Yes, let me get an early copy, please. You're very nice to send me an early copy of this one. But the I think what ties all this together, when I think about your research process, the way you go afterlife, all the people we've been talking about from Steve Jobs to Jeff Bezos, this is like mediocrity is always invisible until passion shows up and exposes it. Love it. I think that is what animates me. It's just like you, you see this, you're talking about like even when you buy great companies, good companies. So like, what else could you do? It's like there's always more because you can always infuse passion into what you're doing. Obsession, work with the best people. Of course you can keep getting better and better results. Speaker 2 Yeah. Well, I agree with that, I think. So what you just said you buy a company, it's doing very well and then 3-4 years later you've doubled the profit out. What did you do? You went in with a tool kit and you went into the tap 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 in very good ways. So you apply a certain toolkit. Boom, you double profit. Speaker 3 So wait a minute, this brings up something interesting and I've been talking about lately the different archetypes there is and founders and CEO's, right? Everybody thinks like, oh, there's kind of 1 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. Speaker 2 So who am I to criticize Steve? No, no, no, no, no. Speaker 3 It's not my stuff. It's not a criticize criticism. It's just like, that's the beauty of entrepreneurship is like you get to do. Speaker 2 It I wouldn't be able to. Speaker 3 So what is your archetype? What is like? Let me back up before I ask you a question because I've been having a long conversations with Daniel Act, the founder of 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 are like, I'm not like Elon or I'm not like Steve or I'm not like all these people. So therefore I can't be an entrepreneur. He's like there's multiple archetypes. He's like, I'm not like that. He says he thinks he's a better coach than he's a player. And essentially he has discovered it's almost like this. He recruits some of the best talent in the world. So the point was like, I used to be the best at product. That guy's better at product. He should do it. I'm that guy's a better designer. That guy, that person's a better HR, that person's everything. So he's like, the way I look at it is like much more of a coach than a player. What is your like archetype? Speaker 2 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 Mor monthly operating review for this company. We'd bought Beacon and how did we come up with the agenda? It was 10 hour meeting, 2 breaks, one was 10 minutes, one was 5 minutes. Nobody was distracted. Nobody's on phones or devices was all shut off. We're very concentrating on the one person that had the, the, the, the, the, the proverbial microphone at a time and listening very carefully and intently what that person was saying and then debating each point and each action point. How did 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 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 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 the silliness that you see a lot in corporate America. We send all those decks out ahead of time. We have everybody read them and then we have everybody fill out the quit the app, say based on everything I read, here are my main takeaways. And here are the main questions that I think are are so important in terms of creating value that we should the whole team, all 25 of us who are in that meeting spend time debating and discussing around the table in a 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 been 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, same KPIs, but they've seen it from a little different angle. It's very lightning. And then I've got the questions. I tell everybody rate the question one to 10 and then all the questions that are rated 8-9 and ten and between 8:00 and 10:00. That's the agenda, David. That's what we talked about. So we just went we, we then we put them in categories. Everything about tech that was rated 8 or above here they are. Everything that was on comp or people, everything was on strategic, everyone was on M&A, all the different categories, only the ones that the group voted on at least in eight. Now what it what's it? What is the consequence of that? Number one, we have an amazing meeting. Like it's a good agenda. Much better than I could I could I could come up with because now it's going to everybody's angle on his group source. Secondly, everybody's involved in it because the boss didn't come down and like here's the agenda. It's like we collectively made the agenda so people realize the truth of the matter is we really respect each other's opinions. There's no one person who's the authoritarian figure who's like teaching everybody else. It's a group. I've, I've created a group, I've created a super Organism. I've created like a beehive or, or, 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 parts and, and the, the whole is, is greater than than each individual. We have a a holistic, powerful approach to that. That's that's how I run the business. Speaker 3 How many people would be in a meeting like that? Speaker 2 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 abuse, which is the most important meeting of the month, that's been 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 limit it 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 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 made you 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 thing wrong. And I model that. I role model that myself all the time. Be flexible in thinking. Don't be rigid in thinking. Don't be black and white dichotomous thinking, but be open minded. Be receptive to be willing to learn and to be challenged. And that's OK to be proven wrong. It's actually a good thing we're learning together. Speaker 3 Two questions on that. How? What percent of the meeting are you speaking in a situation like that? Speaker 2 So I open up usually and I ramble on for like an hour or maybe even more than an hour of the State of the Union from from my perspective. And I try not to just mention things that I form conclusions on, but I try to frame things of these are the most important successes of the company, 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 selling because I think those will create the most amount of value. And, and I, I try to keep it balanced, the good stuff and the bad stuff. Yes, I do add a boys and add a girls and rah, rah. That's, that's a good thing to do for leadership. But I eat in 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 the mechanical going through the questions where I just go down the questions by categories and then go around the room and hear everyone's opinion. And that's that's you don't want the leader talking huge amount of time. Speaker 3 Yeah, so and you basically start with an hour the next, next, in this case 9 hours, the 9 hours for this one meeting. Speaker 2 Everyone else, everyone else, and I'll talk to, but not inordinately. I've already used up my hour, for God's sake. Speaker 3 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 a notepad and you were I'm talking and you're taking notes. Like what the hell is going? It's the. Speaker 2 Cool stuff. Speaker 3 No, it's just to be the 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 Dana Hair? Speaker 2 Great company. Speaker 3 Incredible and. Speaker 2 Dana her way. Speaker 3 He's, yeah, 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 build a $200 billion 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. Jimmy Ivine is a very fascinating person and he's 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 home from anywhere. He he's in the music business. His point was that he was trying to help. He he was partners and a mentor of Doctor Dre, who's one of the greatest hip hop producer. Several times Dre didn't have an artist to work with. They wind up getting this this demo tape from Eminem. 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 to be controversial. We were looking for great. And guess what? It can come from any where it 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 the best of 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 especially when companies get big and older, they don't, they stop asking information from from people from the front line. So you're like, often when we buy a company, we discover that the frontline employees, middle managers and even some senior executives have never been asked, what would you, what would you do to improve the company? You would think owners would want to know that. And then you have this great thing that I think is actually good for business, but also personal 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 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 the information. Speaker 2 So the end of those operating reviews, once we've gone through all the lists, now we now we do human interactions. That's where the fun starts. So we work really hard 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 didn't get a chance to talk about it? I just go around 1 by 1 to each person. That's a wonderful thing. Many management chiefs can't do that because everyone get upset here. It's like, great, this is then we have a nice. I ask everyone, what's your single biggest take away 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 what is something you didn't know? What is something you learned and just go Round 1 by 1 by 1 by 1? And then I asked 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 the Most Valuable Player, who's somebody who's going above and beyond that you really respect, you really admire, you really think it's amazing. Wish we had thousand more like that person. And why? Why are they? And I sent an e-mail to them afterwards saying, hey, I was in a meeting with the leaders of the company and you were nominated as an MVP because XYZ people love it. So I just start crying. There's a lot of times 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 the star go up? The star already might have been high because everyone loves each other, but even higher. And why? What is something that somebody said today in the meeting that impressed you, that made you go aha, made you say, damn, that's a good insight, That's a good perception. I really like that. What it who was it and 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 resolved to improve the company by just go 1 by 1 and each person stands up and says I resolved to improve the company by and then they say what they what, what, what, what they want to say. It's a great thing 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 room, we get out of the boardroom, get out of the compass room, and then we stand in a circle and just silently look at each other with for the first couple minutes, a couple minutes is a long time to be like looking around everybody else. It's you know, it's a lot of people that's uncomfortable. It's not uncomfortable if you all like each other and and look at each person 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, I say, OK, 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 it. So it was a gratitude. Gratitude's 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, I'm, I'm night, I, I, I send nice vibes, I send love vibes to that person. Just go around 1 by 1, 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, OK, 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 5 minutes. That's like really, really goes out. Making Data-Driven Decisions and Applying Timeless Business Principles But it's a very Let people levitate home, go to the airport and go home. Speaker 3 How much of is of your? The way you run your company is like guided by intuition like. You seem like a very intuitive person to me. Speaker 2 Maybe not as much as you think, you know, Not really. Yes, there's always instinct, there's always intuition. You're always going by your gut. Speaker 3 But like, how would you even know? Like this is this is an unusual like what you just described? Like how did you learn that? Speaker 2 So I've experimented. Over time. I've experimented with different things. I've read a lot, I've studied positive psychology, I've studied cognitive therapy. I've, I've studied a lot of stuff. I read a lot of stuff. I meditate a lot. My, I do things that, that worked for me. So I, I think of things that have worked for me on my path, my evolution of feeling gratitude and all the happiness that comes from feeling gratitude by feeling appreciation, by problem solving all the different things. And I try to imbibe that to other people. So, and then it works. If 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, a corporation, that make a company we have, we have to be communicating. We'd 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, in my, in my organization's than most companies. Most companies, they, they, they're afraid to share it. They're afraid to share, they're afraid to share the good information. I think a competitor's going to hear about it. OK, well, they will, but let them try to copy us. They don't have all the ingredients to 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. OK, well, that'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. Speaker 1 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 8 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 8 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 8 Sleep I randomly ran into Mateo at a restaurant and I was with some friends so I'd 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 8 sleep. I had no idea how much that would improve the quality of my sleep. I keep my 8 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 8 Sleep is one of them. That is why elite founders like Mark Zuckerberg and Elon Musk have all said publicly that they use 8 Sleep. I would recommend getting the Pod 5 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 eightsleep.com/senra and use the code SENRA to get $350.00 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 8 sleep from me. Make sure you get yours at eightsleep.com/senra. Speaker 3 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 an idea that I think when, when I thought of your ideas like 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 timeless principles. Not timely, right? And when I read that in your book, what I thought of was not you building your company. I thought of Jim Casey building UPS 100 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. They really depend on human nature because like history doesn't repeat what human nature does, right? Human nature is kind of constant, doesn't really change. And So what Jim realizes the more successful he became, the more successful company became. And 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 that are delivering the the service to my customers. So he would, he would do is like he would, he would instruct his driver every time we see a brown UPS truck, you were to pull over and he would get out no matter how successful he was. And he would talk to the driver. I love it. Unfiltered information. Same thing. People would go in to try to meet Sam Walton in Bentonville, AR, right? They'd show up. They even have 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, 7:00 AM meeting. And his secretary's like, he hopped on because he used to fly his own plane. He left at 5:00 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 us over and over again. They, they want unfiltered access from the front lines. They don't want the information to be, you know, massaged or or presented in a manner that that seems good. Speaker 2 So Todd Combs is one of Warren Buffett's managers, and we were talking on Saturday about, I don't know, 10 years ago, 8-9, ten years ago when he was first, he was getting on the JP Morgan board and he was kind of moving up in the world, stuff like that. I'm lost touch with him. But really great guy, real smart guy. And he said, what are you doing? I said, I'm reading employee service, I'm reading all the employee surveys from the whole company of we asked him two questions. What's your single best idea to improve the company and rate your job satisfaction scale of 1 to 10? And sometimes we add 1/3 of what it will take to make it a 10. And I just, I just go through all these one by one because I like, I feel like I'm talking to every employee and learning on that. He said that's amazing. So what's so amazing about that? So I was just talking to Bezos and Bezos was reading customer service, customer service. So I'm talking, so it's this, so he's talking to customers, I'm talking to employees, but it's the same concept. You need feedback loops. You don't know how you're doing unless you have radar like sending beep, beep out there and see how it comes back. You have to have this very intense feedback. Navigating Public Markets and Thriving Under Pressure as a CEO This is why I'm so obsessed with what I'm doing because what like nothing we're doing is new. Like you had all these people that ran all these kind of experiments for centuries and they built great companies and just because you know, they passed on and maybe the company's not around anymore. It's like there's so there's a treasure trove of data in there. So like the basis idea, I love where he would publicize it. Used to publicize the very early days of Amazon. Jeff at Amazon.com e-mail me and he read part of the 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 be like, he would send emails so that I think like the top 1000 customers, like what else would you buy? And one guy, he had this epiphany because they, you know, they're like, hey, I want toilet paper. I want, you know, groceries, whatever. One guys like, I want windshield wipers and he's like windshield wipers. If this guy wants windshield wipers, I'm going to 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 on the road, for God's sake. But there's a line in the book that is related to all this where they start the the the the two brothers have to take over this failing factory and they don't know what to to make because most of the products that they're manufacturing are unprofitable. They're on the bankruptcy. They're one profitable product which they eliminate everything else. And they focus on the one profitable product which is a rubber brake pad for horse drawn carriages. Speaker 2 Say that again though. Speaker 3 A rubber brake pad for horse drawn carriage. OK, 1800 this is 1888. So it takes them like a year or two to figure out like, hey, we should manufacture rubber and there's 2 twin phenomenons you're talking about. Get remember what Justin said get the major trend right? They're like, well, horse drawn carriage has been around for a while while you know what's going way faster? Bicycles and then cars even from a small number like we need to go to where the technology's going. But the point being is like, so we need to make more products, We need to make rubber tires. And the guy took over factories like I don't know how to do that. So his answer was he would go and he sounds just like what you do. He he only had like 50 employees that were making the rubber brake baths and he would just ask questions. He's like I came to them and I admitted my ignorance. I go no, nothing about very manufacturing. Why did you do that? Can you explain to me? Can we what if we did and not in like what you just said? You said something about like not like coming down from on high. It's like appear almost like teach me 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 8 hours a day while the CE OS in the office has something to teach you. Like he's going to understand something about that process because you, 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. Speaker 2 Completely. All the different constituents in an organization need to be talking to each other, need to have feedback loops to know how they're doing. If you're not asking your customers how you're doing, you may think you're doing a lot better than you, than you, than you really are, or or. Speaker 3 How do you figure out how you're doing in your position? Speaker 2 I ask all day long and and we have different modalities of anonymous surveys and 360 reviews and and we're I'm interacting with the teams non-stop all day long. I'm walking on people's offices. What's going on? What do you think of this? What do you think of? Speaker 3 That you like the you have this great line in your book where it says, I love working with that, where you just sit down to people to deliver outside returns for shareholders in public stock markets. Speaker 2 I love that. Speaker 3 Do you have this constant feedback from the public market? Speaker 2 It's fantastic. Speaker 3 You love it. Speaker 2 Yeah, I don't always agree with it, but I but I 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 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 is I don't like OK, you don't have to You actually mathematically can't agree with it all because a lot of times you get conflicting advice. People say you're going right, you should be going left. You know the guy saying you go, 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 got 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 just ignore all that. Just go inside and say this is what I want to do. You're going to make the call. That's what Aceo 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 just hear your own thoughts instead of others. You want people challenging your thoughts all the time. Speaker 3 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. Speaker 2 Do you have any like being public? Speaker 3 What would like, what advice would you give to somebody that say, 30 years younger than you? They're trying to build a great company. They've raised a bunch of money, but they don't want to go public. Speaker 2 Well, they have to be at a level of maturity of the company to go public. They have to be preferably profitable. Speaker 3 But there's there's a bunch of them like they never. Speaker 2 Want to go public? Speaker 3 Yeah, yeah, that are that reach that criteria and are choosing not to you know it'd. Speaker 2 Be interesting to ask them why. What's the reason why you don't want? I think. Speaker 3 People think, yeah, that I can't speak for them, but I think they're like maybe the scared of the public scrutiny, the hassle, the. Speaker 2 But that goes back to what we were talking about an hour ago is so they might have a core belief saying I need everybody to always be like saying great stuff about me, which is never going to happen. And they may think that's, 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. The people selling think you're overvalued. People are buying, get the joke. And they understand you have a real, real business plan here that's going to 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 visited one of your locations. I didn't think the service was so great. Oh, wow, I didn't know that. Thank you for telling me that. So, ma'am, now I have to invest more around than cut costs. You have other people who say, you know, I'm looking at your numbers here, your margins are growing, which is great. That's only half the half the situation here. The other situation is what are you doing with your top line? What are you doing with your price and volume? What are you doing 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 were grow the top line faster than the competition, faster than the market, be taking share and growing the margins, increasing the increasing the profit margins. If I did those two things, everything else float, everything else float from that. But those are the 2 main things. In order to do those, accomplish those two things, you want as much input as possible. You want as many, many chefs, many chefs in the kitchen as you possibly can. The public gets you hundreds and thousands of voices. So it's amazing data. It also being public allows you to build a brand much faster and much more voluminously. 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 won't be get going back to what you said before. You always want great talent coming in. Well, if nobody knows who you are, they're a little sceptical 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. But people say, OK, I get it, you're a known quantity and, and I, I like this, I buy into it, I like what you're doing. I want to join the company. So in order to, and then you can pay them, you can 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 a compensation point of view, which is a big element of success in these high growth business plans, being public is fantastic. Speaker 3 Was there ever a time in your career where you're like, maybe I should do it, should do a a private company instead or you were pretty much all in on it? Speaker 2 I've been doing public since 1992 and I'm non-stop and, and I'm, I, I like it that I don't, I, I enjoy it. It's, I find it 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 I what I think is wrong, what I feel passionately and have evidence to support, they're wrong. So sometimes the street particularly like the hedge funds, they're very focused on like this quarter, like the next 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 employee morale. And they're understaffed, which is even worse than being overstaffed, which is, which is bad. And, and here it's a, it's a completely different story. So yeah, I, I, I like being public. Speaker 3 You said something interesting. I like the pressure. Speaker 2 I do thrive on it. Speaker 3 What do you mean by that? Speaker 2 So many people give you the money, like whether it's a a retail individual, whether it's a high net worth family, whether it's it's a sovereign wealth fund, whether it's a pension plan, whether it's an endowment. All these people are investing 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% of them are invested in the company. And that's, that's what it's been over time. Well, that's the pressure, man. That's like, wow, I don't want to disappoint them. These are my relatives. These are my friends and the people I really love is that people, people come to say, look, I believe in you so much. I put 2/3 of my my retirement plan in in your stock. Just single, No, no, to forget, just reversification. Boom. I'm going all in on Bradner's team. Well, that's a lot of pressure. I like that pressure. I enjoy that pressure that it motivates me, that inspires me, that makes me feel. So I have something to do here that's important. Speaker 3 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 seven days 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 Herb Kelleher, which is the founder of Southwest Airlines. You know, it's such a, it's such a crazy story that like in an industry where bankruptcy is the most common, you know, outcome the guy had his his company was profitable for 40 straight years. Just nuts. And he's like a nut job. He's drinking 1/5 of bourbon every day. He's chain smoking cigarettes. No, no, no, he's like, I don't advocate that. No, he wouldn't sleep. He's like, it was he's just hilarious stories in his life. And I thought he was like, he just lived on the edge and and completely like all in is a great story about this where they try to get him, you know, he chain smoke and then drink 1/5 of bourbon every day And they're like, but then he had like prostate cancer or something like that. Now you should stop smoking. He's like, I don't smoke with my prostate. But but that's not the thing that I remember the thing that I loved in an interview one time. They're like, you had like you deal with a ton of stress. Like how do you handle it? He goes, I don't handle it. I like it. He wanted the stress. He's like, I want to be in the game. This is, he was an attorney, he just started his company. He was his first company. He was an attorney who was 35 years old and he's like, hey, I'm going to try to do an Interstate or intrastate airline. And like then he, he had, it was like 4 years of legal fights before he could even take his first flight. He's just like, I love this shit. This is what I want. I want the pressure. Insights from Fred Smith and the Ubiquitous Role of Technology in Business Passion. Speaker 3 What I love about this is it's in your book, you, you constantly talk about the, the other people, the other entrepreneurs, other investors, other CEO's that you learn from. Then then acknowledgements all these maxims from all these other brilliant people you talk about obviously Ludwig Justice and 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, CEO's, executives that you admire. I want to start with Fred Smith since he passed away. I read his biography probably like, four or five years ago and tell me if I'm wrong. You know more about the Cindy. She and I do. It just seems like FedEx had to be one of the most difficult operational companies to ever invent. Like an unbelievable. You're talking about something you wanted pressure. Yeah. The complexity. You wrote on LinkedIn, you you never missed an opportunity to spend time with them and you admire them. Could you just tell like why? Speaker 2 So Fred endorsed my book. Speaker 3 Yeah, I saw. Speaker 2 And I was very touched to do that. Speaker 3 Yeah. Speaker 2 He was a competitor, literally. Competitor still endorsed my book. So Fred was an 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'd really started doing a bunch of acquisitions out of nowhere. It sounded like I was on the front pages of the trade journals and I was in Atlanta at the National Association of Manufacturers N AM conference and Fred was the keynote. So I I was in the audience watching him and somebody. So what do you think of Brad Jacobs? I go, Oh my God, my heart starts being, Oh my God, Fred Smith's about to like destroy me. My brand is going to be completely crushed. You know, the icon of the industry is going to say, oh, yeah, I don't believe he's really. 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, I'm going to keep an eye on that guy. And I, I would, I cried. I said, wow, Fred Smith like saying great stuff. So I went up to him afterwards, after the the speech was over. And I said, Mr. Smith, I'm Fred Jacobs. I really appreciate what you said to me. I said, well, first of all, I'm Fred. 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 1/4 of a century. Oh, wow. And I go to every Business Council meeting I possibly can to meet other CEOs and to hear what other people are thinking. It was just a generous guy. This is a guy who had vision. He had passion. Talk about grit. I mean, he worked. Maybe he was flying around all the time everywhere. Vietnam, he was decorate, he was flying helicopters with people shooting bullets at him to go get Marines who have been he was a Marine, Marines who have been killed, but you don't leave any Marine behind. He'd go in the he's risking his life with bullets like shy every shooting at him to go get the remains of a Ted Marine putting his own life online. He got a Purple Heart, he got silvery. He got, I mean serious, serious, serious, courageous, high integrity guy. And everybody, everybody loved. Everybody loved Fred. Everybody loved Fred. Speaker 3 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 and investigating him. It goes to Vegas, yes. And then they're like he thought he he thought Amy was like 30 years old at the time, so still young, but he refused to let his Federal Express dream die. And the line was just like he thought of suicide. And then the next paragraph is like but the idea of thread of Fred jumping out a window is Ludacris. He's more likely to throw somebody out of a window. He's just like a guy like he was like determinate. You couldn't stop, like he just wouldn't stop coming. There's a few lines I don't. Speaker 2 Recognize that in him so so throwing some out the window. Speaker 3 I mean, I was at 30. I think he might have been a little. Speaker 2 Different. Well, maybe. Yeah. But I was a direct competitor of him in transportation and logistics and not in package. We didn't do package, but pretty much all the other lines of business. We competed against him. He was generous. He was terrible. He would always take a meeting with me. He used to come to my house. We'd spent hours and hours and hours talking about everything. Speaker 3 This is what is so special. I know it's part of humanity in general, but entrepreneurship and and in particular is just like you see this over and over again, just how generous, yeah, these people are with it because they know how fucking hard it is. They just went through all this. And now we might be 1520, thirty years different in age, but it's like just like Ludwig Justin did when you were 23. And in many cases, like what you did for the book, like the idea, like think about Sam Walton, right? He wrote his autobiography. His cancer was all over his body. He was in pain. He knows his time is towards the end. And what does he do? So it's a big chunk of the last time he had left. Saying this is what I learned in my 6 decade long career. That is a gift to future generations. 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. Right. And that Fred would do that. It's what It's a beautiful thing you did for your book, Fred. And Amazon didn't get along. No, no, no. I'm saying. But like, in general. Yeah, obviously. Well, yeah, I can see why. Speaker 2 But my point being. Speaker 3 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 think people understand how much that. I'm glad you just said that because yeah, you can see in the books. Speaker 2 You hear? Speaker 3 Stories like that. Exactly. You hear stories like that all the time in private. And for you to say that, I think it's really important. There's a few things I pulled out from his biography that just remind me of you. And I'm curious if, like you, if you agree with some of these things. One, the amount if it's about Fred Smith, if it's if I don't have that trait, I should work on getting it. OK. Speaker 2 Perfect the amount of information. So like, think about it like. Speaker 3 He started in FedEx in the 60s, I think something like that. No, after Vietnam, so maybe early 70s. But in the 80s, he says that he estimated in during 1980s he spent 4 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 from many different disciplines at once. You talked about the meetings, you talked about in trade journals, you talked about all the research you do, right? This is his quote, though, that I want to read to you. The common trait of people who supposedly have vision is they spend a lot of time reading and gathering information and then synthesize it until they come U with an idea. That sounds like you to me. I like that. Yeah. Going back to, I said before, you don't want to be rigid in your thinking, you want to be. Speaker 2 Open minded. You want to be flexible, you want to be scientific about it, that if new evidence comes along that disproves 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 to describe it is like you're also alive and paying attention, like the story in your. Speaker 3 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 $500 million in profit. You're like, whoa, what? Like they're picking up trash from one spot and bring it to another. I need to learn about this industry. But that's my point is like you're you're people like Fred, people like you. I think, you know, there's a ton of people that have the same thing where it's like they're the whole world is like a classroom. If you're actually paying attention, like you can pick up ideas all over the place. So the waste management business I contrasted to the oil business, the oil business was a lot more. Speaker 2 Complex 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. That's a simple business. They move some garbage and send out an invoice. I definitely think I can do that. And it seems like they make a lot of money and the trend seemed seem in the in the right direction. So yeah, you. Oh, and the application of technology, which is. I love how at the end of your book. Speaker 3 You have essentially one order all the the some key ID, some key technology developed by humans starting, 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 so I had that from Kurzweil by the way, Ray Kurzweil. So Ray. So Ray Kurzweil. Huge mentor. Speaker 2 Of mine only met him once. Met him for about 6 hours to yeah, but I've read every book he's written. I've read every article about him. I see every YouTube He's I, I, I'm a Ray 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 kindred spirit. Here is somebody who thinks a 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 100 points. I know that was real helpful. So I, I modified it a bit and, and made it more specific to business things that would be applicable to business. But the main trend going back to Mr. Jefferson about you got to get the main trend right. The main trend for the last two million years had 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 or whether it was the printing press, and more recently all the, all the digital electronic stuff we've done and all the Internet and now artificial intelligence and robotics and nanotechnology, this is the trend. The, 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 of them. So this is looks like an interesting industry, but I think AI and automation are going to kibosh it. And I didn't do it. And I, I mentioned it in the book. There was one particular online education company. It was called Chegg. And I said, I don't know, it seemed like you got a good business, but I think these, these, the AI is going to come in and basically do that for free. Well, you know, and I said, I think the stock might come down. Well, stock came down a lot, came out from 50 to single digits. So fortunately I made a good prediction there. As Yogi Berra 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. Speaker 3 To me I'm. Speaker 2 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? Is that something going to be AI or robotics going forward? And then and then capitalizing on them and the the opportunity to always do something slightly better, which is an. Speaker 3 Eventualism to do so. Technology even starts out when you were talking about collecting. Sometimes a lot better, not slightly better. But the good thing is like this is not exclusive to the time we live. Speaker 2 In it's a constant. Speaker 3 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 or fax before e-mail, you were collecting all the information for Amarex, you know, 40 years ago. And then the waste management when you're like, hey, how like I should get into this. And then you realize, wait, they're not even using technology to figure out the most efficient route. And you, you, you this constant application 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 crystallized 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 to this idea that you and I share. It's like distill it. You're not going to remember 250 pages, but you remember paragraph or a 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, your mentor told you. And so I was hearing the, the, the criticism that his competitors, almost like when you were in that business and they, they, the guy took you out to lunch. It's like slow down. I used to be the first, now I'm the second. That's that's a terrible way to to do business. Like take your competitor with a lunch break. Stop being better than me. That's motivation. It's not going to work, but the the way it would summarize me the main theme. Speaker 2 From Andrew Carnegie's book. Speaker 3 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 the best entrepreneurs, the best. Speaker 2 CE OS the best. Speaker 3 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, 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 Sam's in his 60s and they're like, hey, we're doing everything by hand. Our business is way getting way too complex. We have all these distribution centers. Think about the logistics. You would know all this moving all this material where it needs to be at the right time. We need to invest in computers. And Sam, at the first talk he heard computer, he heard overhead, he heard expense. I can't do that. And then he was slowly allowed himself to be convinced by the talents of people on his team and he wind up and when he when he decided to invest, he wouldn't 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 a, an edge that no, not another retailer on the planet had, or at least in America had that he had the technological edge over the rest of his competitors. In business you always want to be finding waste because they're always the sum and eliminated. Speaker 2 You always want to find inefficiencies and there always are want to reduce them. Technology helps you with that. Walmart's a big tech company. So my chief supply chain officer came out of Walmart very, very sophisticated guy. It's all about technology, all about using tech in order to get the data and then being very data-driven. I would argue that if anybody there, I don't think you could be the leader in any industry and not also. Speaker 3 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. I wanted to do more than just like American entrepreneurs. Just where? Because you know the we have an outside share of entrepreneurs that everybody's like. Speaker 2 You should do more XYZ. It's like, why are they all American and that? Speaker 3 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 100 years old, just like, well, America's kind of dominated. So it makes sense if 75 or 80% of my episodes are about that. But I, I did one-on-one of the the most successful entrepreneurs in Europe named Amancio Ortega. And I didn't know anything about them. All I know is that is H&M, Zara, Zara, Inditex, Inditex. Yeah, Yeah. And then you're reading about this, you're like. Speaker 2 It's not a fashion. Speaker 3 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 can see oh, there's there's a trend here where all these ladies are wearing dresses with whatever you know, red flowers on them. And he can take that idea and put it through a system and they can have manufacture dresses with red flowers in. 8 you know, 25 different countries in seven days. That is technology. And he says it's like we're a technology company with a chain of stores attached to it. So Cesar Intertex is a big customer of GXO Logistics, one of the companies we spun off from. Speaker 2 XPO and GXO runs a lot of their warehouses in Europe. And it's, it's exactly what you're saying. It's it's e-commerce. It's trying to do things very efficiently and very quickly and very accurately. And you need technology to do that. You need robots and need AI. Every business, every single business is going to see more automation and more AI. People have to get on the program on that or they're going to be dinosaurs 100%. I'm going to go back to Fred Smith. He says something that sounds Fred where's in a tech? Speaker 3 Yeah, of course. I mean in a big way. Yeah, of course. I'm always talking about this. Speaker 2 New invention he just did in the removing packages and robots and we would try to figure out some way you could use automation LTL because he was a big LTL. FedEx is the biggest action LTLXPOS, big LTL, the automation's not there yet to get all the closed spaces and all the people still involved in that. But it's going to be package. You have automation though package automation is much further ahead. Mastering Time Management and Leveraging Incentives for Business Success Yes. So there's something we haven't touched on. I have a question for you and this is a quote from Fred. Speaker 3 In his biography says you have to be absolutely brutal in the management of your time. Oh yes, do you have any insights if you want someone to disagree? Speaker 2 With that, you'll have to talk to somebody else. I'm curious how you. Speaker 3 100% I'm. Speaker 2 Curious how you do this though so time. So when you're ACEO, when you're an executive, you. Speaker 3 Only got two things. Speaker 2 You got time and you get capital and how you deploy that time and how you deploy that capital equals results. So it's your it's your time and it's the time of the people of the organization. So when I was running XPO, we had about 150,000 a little more employees worldwide. See each one of those work at the senior management worked long hours, but the average worker worked 8 hours a day. So you had eight times but 1.2 million hours a day of of work getting done. If you've got people very focused and very motivated and very well trained and feel good about the company and 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 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, very important success. Now, how do I spend my time? I spend my time deliberately and consciously and intentionally on the things that I think make most amount of value for the for the company. How many things at any given time are you having to focus on now? A fair amount. So if you're CEO. Speaker 3 You're, you're managing, you know, 1520 different things. Speaker 2 Always, you're managing people, you manage technology, you're managing budgets, you're managing investors, you're managing infrastructure, you're managing transportation, you're managing logistics, you're managing pricing, you're managing procurement with the vendors, you're managing customer relations, you're managing sales, there's your managing Salesforce excellence. I mean, it's just there's about 20 things that are your life. Like that's what a, that's what a good CEO does. The problem with a lot of CE OS 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 CE OS, the, the CE OS 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 Breen, you talked to Larry Culp. 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 CE OS who haven't created a lot of value. We're not really good at this game. They'll know four or five or six or 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 in equal measure. Some things you don't have to spend as much time on. The people things and compensation things I actually spent a lot of time on. So that that's core, that's critical to get right. That's that's something that if you get wrong, you, you waste budgeting. I spent a lot of time going on the budget, customer satisfaction. I spent a lot of time on that the employee serve, the employee engagements, going out to the field, doing the town halls, doing the zooms. I'm I'm all in on that. But when you say that the CE OS that you think might not be doing the best they could, are they delegating? Speaker 3 Too much. Yeah, They're, they're, they're not, they're, they're afraid to do the I'm making. Speaker 2 Generalizations. There's always exceptions, but generally speaking, what I find is they gravitate to the stuff they like and that they're good at 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, 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 be in the top and be in the top decile of, of stock performance. Like like United Rentals and XPO were both top 10 stock performers last decade. That's not random at the both of those companies because it was the same same principles, the same same structures. You've got to have CEOs and they they did that are in the whole thing and understand from A-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 are and I have a lot of friends who are portfolio managers or analysts at, at on the buy side. I said when you bring a management team in, you need to ask them what's your stock price going to be 5 years from now And one of the levers that I have to believe that's going to get you there. And if that CEO tells you, I'll get, that's a great question, I'll get back to you. Short that stock, really don't buy that stock because that's the first thing the CEO has to know. First thing you see ACEO 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 outperformance 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, the graph, the 1st 2 bars, when you do the levers comprise the vast majority of what you have to do to create the value. And those are buying companies, right, meaning being very disciplined what you pay and looking at lots of acquisition candidates at the same time, so you don't fall in love with any one of them. And so you have alternatives and you don't what, what's the distribution there. So you've done over 500 acquisitions throughout your my teams and I have I. Speaker 3 Like to give credit to my team. Yeah, you're your team for sure. Speaker 2 So you, you and your team have done over 500. Speaker 3 Acquisitions, you've looked at how many thousands and thousands, many thousands like 100,000 you think it would be that I've lost? Speaker 2 Count. I don't know if it's 100,000. Speaker 3 When I say look, look that in depth. Speaker 2 But in the thousands, many thousands, OK, going back to the time management though, I think especially in. Speaker 3 Like the age that people are growing up in, like where like there's a shortened, shortened attention span, a lack of focus, in my opinion. And like really easy to give in to distraction. Like how you sound like you're almost not impervious to 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, I barely know Warren Buffett. I met him a few. Speaker 2 Times, but he's not a close personal friend. I wish he was, but he's not. But I know a lot of people who are close to me who are close to him and they they most would have the same story. So he must tell us to everybody. He tells people I'm the richest person. I'm the wealthiest person in the world. And I said, well, Miss Buffett, you work for one period of time, but I think you're #4 or whatever. He says, no, no, no. I'm the, I can prove that I'm the wealthiest person in the world. I say, why is that? He reaches and he brings out his daytime or his, you know, his calendar. And he says Monday I have one appointment. Tuesday I have no appointments. Yeah, Wednesday I have no appointments 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. Well, you can solve that problem. Speaker 3 That's a problem you've identified. That's great. That's half of the solution of the problem. Speaker 2 He's working. He has a great line where he's like the difference between successful people and really successful people. It's really successful, people say. Speaker 3 No, to almost everything. So like you have 20, you know, whatever the numbers. 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 at this moment, you're you know, you know, where you want to spend your time, what you're best at. We talked about incentives and and then recruiting talent. But like you also are one of the most and you're not going to 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 discipline? 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 5 years, 10 years? Would you like it when you were younger? So first of all, I'm not that famous. I'm well known in the in the business community. Speaker 2 The business community, that's all. That's the only community I care about. But like like. Speaker 3 You know, no, the average per year for sure. And and I'm not one of the. Speaker 2 Richest people in the world? There's many people who are. Speaker 3 Fastly richer than I am. Speaker 2 But in my own modest way, I've I've 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 that but but. Speaker 3 I just know context it it's funny because people not the way you. Speaker 2 Said it is a little grandiose. I don't think. I, I don't think. Speaker 3 I am. This is why every time. Speaker 2 I say these things to you. You say the same thing because I want to correct that. I don't want to get. Speaker 3 Grandiose in the wrong? No, it's it's a smart move, but. Speaker 2 The The funny thing is when I did the I had Breakfast with Brad Jacobs episode. Speaker 3 Now people were like flooded, like can you introduce her? Like, no, like you had to figure out to get to him yourself. Like you can't. So when I was researching after after. Speaker 2 XPOI was looking for my next thing. No, no, excuse me, after United Rentals, I was looking for my next thing and I was looking at asset management and I went and I went to Chicago and I wanted to get an appointment with Ken Griffin, who now I've met and now I know he's a neighbor down in Florida. I'm don't know well know well enough. And I, you know, I think he'd return my call if I called him, but he would turn down the meeting. It wouldn't take the meeting said, wow, that's kind of humbling then. And but you can't even like spend an hour says No 10 is a very and I think you, you interviewed him, right? No, not yet. I did. I should you definitely should. I want to meet him. I want to meet him so you can introduce me. Speaker 3 Please, he can be president of the United States so that he's the so this is the good thing about when I do. Speaker 2 Remember most of the people? I said You're dead. Speaker 3 When I do episodes on people that are living, This is why I was asking some of the questions because like, I'll do this episode. It reaches a very valuable community and they're really helpful. And then I get all these crazy stories about this guy's even more remarkable than your episode. It's like, and I got it about you and I got it about Ken. And then I was like, oh, I got it like I definitely meet Ken. Ken is indifferently than I. Ken is like way, way up there. He's a very fascinating person. You should. Speaker 2 Definitely do something on him. You asked how I. Speaker 3 Managed my time so. Speaker 2 I have a chief of staff. He used to work in the Oval Office and then it's the most important person in the world or something. 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 got to do or have organic revenue growth better than the competition and a margin expansion and everything falls. He understands that. He understands that in order to do that, I have to focus on people. I have to focus on technology. He understands the different levers to do that. Hey, Anders. So you've run every decision between those two. Yeah, that's my framework. Speaker 3 In business, my framework is because I've learned if I do those. Speaker 2 Two things and it takes 100 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 7:00 after we announced the acquisition, I've already created Alpha for my shareholders. That's a nice way to start the week #2 if I then double the, the profit over the next three to five years, then I'll get a nice multiple. And if I generate those, those are the 2 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 monthly operating abuse and all the correspondence, 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 he's a great gatekeeper. Is there anybody that could tell you when you're getting off track from what you're professed to say? Speaker 3 Everybody around me. So if I'm spending too much time on like, I'm going to. Speaker 2 Catch heck for being on this podcast like dude, you're the man for doing this. By the way, No, I love doing it and it. Speaker 3 Will also get to like I do think you know one of. Speaker 2 The things that you obviously accomplished with the book. Speaker 3 And like I try to help amplify with my work, it's like millions of people are going to benefit from your lived experience. You have 4050, almost 50 years, let's say 40 years, years of experience as an entrepreneur. It's like how many people that have ever lived life that have done that? Most people, you know, they quit or they fail or whatever the case is, like you have so much to teach the world. Self-Improvement, Purpose, and the 'Go All In' Approach to Life Can I comment on something about the time? Yeah, go ahead. There's a phrase I used to use and. Speaker 2 You brought it out on me, so I'm going to start using it again. I've used it recently as wotwom. WOTWOOM, OK, waste of time, waste of money. So when people have brainstorm recurrent, let's do this, let's do that, someone can say, wah, wam, everybody knows that's a waste of time wasting 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, wah, wah, that's a waste of time, waste of money. 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 Wat wom and I'm so glad. First of all, it's hilarious that I'm glad that you you said that you actually have other people. Speaker 3 Around you doing this too because I 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 is just like no, you have to be brutal. There's a word like that. He picks it absolutely brutal is the word absolutely brutal in your time manager. 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 $1,000,000 company, then you look at the 2nd or the 3rd or the 4th or the 5th or the 2nd. It's like you're not even like you'd go back and kick that dude's ass because of all the stuff you have learned since then. Well, you you do get better as you keep with experience, like in anybody in anything. Speaker 2 But the principles are pretty the same. If you look at all my companies, that essential concepts are 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. Speaker 3 Incentives a lot. Very, very early, very early in the oil brokerage days, because I used to have. Speaker 2 We had tables like 10 brokers at a table and every month we 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%, never added up to 100%. So I had these difficult conversations that people said, like, you know, you, you're inflated with how much of these are like that. But I, I, what I realized very early on is people are coming to work not because they love me. They might love me, I might love them, but 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 to understand the motivation of the other person is really, really important. It's called theory of mind where you understand and a child gets that after a few years, they don't have it at 1st and there's a lot of psychological studies done on 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 at deal making, that's good in compensation, that's good at 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 going to go get it because people are just going to stick their tongue out how you're going to turn away and do something with else. You have to be a have a partnership. You have you have to be trading with people all the time. You got to be figuring out what will help them, what's good for them, and how can we make money together. Not me at your expense, you at my expense, but how can we go conquer the world together? I think you're a faster learner than me because like I, I don't think I ever thought. Speaker 3 Of about incentives, I think episode like 97, so it's probably like 6 years ago I'd read that means I read 96 biographies before this. I get to poor Charlie's Almanac 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 the most brilliant people. And he said something fascinating in that book where he's like, I've been in the top 5% 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 not a year that goes by where I don't underestimate the power of incentives. And you repeat over and over again, you show me the incentive, I will show you the outcome. Remember I told you a few minutes ago that I give everyone on the top level of the company a? Speaker 2 Bunch of equity, but it's locked up in five years. So I meet with my CHRO who's fabulous regularly, usually twice a month, and she shows me a spreadsheet of how much the equity is going to be worth at $50 a share, at $75 a share, at $100 a share. And I look at that, look at the numbers, and I say, OK, this person has something to work for. This person's on the team, this person. That's something that I see them working really hard to get get those numbers or ICG, you know, somehow or another we messed up the comp and maybe we got to top the person up or wow, I can't take anything back, but maybe I gave too much 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, and people are generally, they don't care about you and me, David, They care about them, which is normal. That's that's that's that's capitalism, that's free market. That's a good thing. Yeah. It's I don't, I don't feel it's a negative thing at all. It's like we're all self obsessed. But I I do. Speaker 3 Think you have a great line in the book where you're like money? He's like, I built businesses all over the world. When you have 150,000 employees, they're spread throughout, you know, people like, oh, it's all different cultures. Like oh, guess what? Money animates people everywhere for the whole point. You have a great line in the book like they're not coming to work to make Brad Jacobs more money. Not at all. They're doing it further their families. I love this idea of I think it's really important to have AI think it's tied to your obsession with like the public markets too. And what you said in your book about being very proud of building wealth, not just for yourself, but for school teachers, pension plans, nurses, firemen and everything else 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 don'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 interests of the customer and the shareholder perfectly aligned. They just have to be done, done so over the extremely long term. But this idea of like. Going it drives me. It's like, I want to build wealth, you know, so my kids are proud of me and like, and, and I show them like what it's like to like chase after something and be 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, that was one of my favorite parts of, of your book. Do you know, I, I think Amazon modified that that mission statement now something with employee engagement. Speaker 2 Too. You know something about something about workplace, great workplace environment or something like that. The best workplace environment in the world. It it is funny when you think about it because it's one of I had. Speaker 3 This conversation, actually last night I went to dinner with our mutual friend Patrick O'Shaughnessy. He texted me this morning. He's like, make sure you say tell Brad. Yeah, 100%. We had. He was with us. We had breakfast here a few months ago and we were having this discussion at 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 the 70s. So he was before us. And I would say it's like, for me, the answer is like Amazon like 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 story as what Jeff has built by reading your book, listening to your. Speaker 2 Interviews. Speaker 3 Talking to you now, you kind of for 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 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 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 going to read from your book to you. And you said. The summer after 8th grade, I attended the Rhode Island Governor's School for the Gifted in Art and Music, a summer enrichment program for kids who've been nominated by 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, 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 talked about the passion and going all in and the advice that you have for other people listening to this. I'm reliving the goosebumps literally, but physically I'm feeling the tailing of my sensation. Speaker 2 Because that was a critical moment, my life where I understood that it's up to you. You can diddle daddle 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's not going to be big 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. There's a perfect place to end. Thank you very much for writing the book. Thanks for taking the time, Brad. I really admire. Speaker 3 You, I've learned a lot from you and now I'm I'm very humbled and privileged to call your friend. I really appreciate it. Thank you very much. I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and. Speaker 2 Leave a review. Speaker 1 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.