#373 Breakfast with Brad Jacobs + How To Make A Few Billion Dollars
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One of the most important things I learned from brad's book, and we spoke about this when I had breakfast for brad as well, was the importance of working with the smartest and most talented people that you can. Brad says that the most important thing that A C O does is recruit superlative people, and brad will recruit the smartest people. He confined and actually talks about this.

Brad says there is no substitute for smarts. And that reminded me of something to see. Ve jobs said in this interview or read that Steve gave in the late nineteen nineties, and this is what d you said.

I think that i've consistently figured out who the really smart people were to hang around with. You must find extraditing people. The key observation is that in most things in life, the dynamic range between the average quality and the best quality is that most to the one.

But in the feel that I was interested in, I noticed that the dynamic range between when an average person could accomplish and with the best person could accomplish with fifty or hundred to one, given that you are well advised to go after the cream of the cream, you need to build a team that pursues the a plus players. And this is exactly what rap did. Rap has the most talented technical team in their industry.

Becoming an engineer at rap is nearly impossible. In the last twelve months, they hired only point two three percent of the people that applied. That means when you use ramp, you now have top teer technical talent in some of the best AI engineers working on your behalf, twenty four seven, to automate and improve all of your businesses, financial Operations.

And all of this happens on a single platform. The longer you use RAM, the more efficient your company becomes. And this is important because as sam molton to graph, you can make a lot of different mistakes and still recover if you run an efficient Operation, or you can be brilliant and go out of business if you're too inefficient, ramp helps you run an efficient organization.

In the end of that interview, Steve jobs add IT. He said a small team of a plus players can run circles around a giant team of b and c players. From my customers perspective, what does a team of a plus player 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.

Ramp gives you everything you need to optimize Oliver financial Operations, all on a single platform ramps. Website is incredible. Make his great proud by RAM to learn how they can help your business today.

That rap. So I wants to tell you what I learned when I had the opportunity to have a two hour breakfast with brad Jacobs, a few a scale. So brad Jacobs is without a out out one of the most talented living entrepreneurs.

In case you aren't familiar with him, he has started eight different billion dollar or multi billion doll businesses. He's done over five hundred acquisitions. He's raised over thirty billion dollars now that numbers even higher.

He started his first company at twenty three, and he is sixty eight years old today, and he's the most energetic person I think i've ever been wrung. I don't think he has any plans to retire or to stop doing deals and to stop building companies are really any ways to slow down at all. So about a year ago, he published his life story, which is called how to make a few billion dollars.

There was one of my three books that have read in the last year, and the episode that I made about the book almost a year ago actually was one the most popular episodes of founders this year. And one of the most remarkable things is the fact that brad listens to founders. In fact, he send me a message.

He said he's addicted to these book reviews that I do so coming from someone like bad. You can imagine that fired me up, and brad was actually kind enough to invite us and to host us in his home. So is me and my friend Patrick ony from the invest, the best podcast.

And then brad, head of comms, joe tucker, who is a super nice guy and really gotta to meet, who also listens for founder. So the idea was, I want to go over just a few things I learned from speaking the bread for two hours. And I guess the first story I should tell you actually happens on the flight up to see bread.

So maybe I an hour and happen to the flight, the guy sitting next to me turns to me and he goes, do you want to be a billionaire? And I was taking a back by question I could excuse me, like for his words, that he has said me. So is that he goes, do you want to be a doing that? And so he points at me.

He goes, because I ve never seen someone go through a book like that. And so I look at what he's pointing at all. My lab was my copy of bread book. And so if this guy sitting next to me sees the title how to make a few billion dollars. And he also had seen me going for like last year, half going through all of my highlights and rereading my highlights and single work I post sticking out of.

And so he assumed, because I was reading IT and I had all these notes, that I assumed that this book was an instruction manual, how to make a few billion dollars. And I found that funny, because this kind of is an instruction manual to some degree. Uh, if anything, is encounter of how brad jacket made a few billion dollars.

And so after my breakfast for brad, I organized on my notes. And so we would be, say, seven lessons. And these are lessons that I wanted remember for myself, and I think by making to has be beneficial. So the first one is go to school on everybody I have lost count how many of issues gate founders that you and I studies. Forecasts are described at some point in their life as a sponge.

If you listen to the last week episode with about a month or a people around him literally describe, and they use that word, that he is a monster, or take is one of the wealthy people on the planet. He's been building up his company for over sixty years. He dropped out of school at twelve years old.

But his dedication to lifelong learning, into being sponge like, into going to school on everybody, never ceased. And I thought of this because when I got to brad house, I was actually surprised at what brad was doing. So he was at the table.

Next to him was a stack of papers, probably five hundred pages high. Brad had printed out my personal website. So if you go to David center 点 com， and if you, my email is shorty, know this. But basically what I do is I just I tried to widdle down all my notes and highlights from every book I read to, like ten sentences as concise as possible. And then for every book I read, very simple, just send that list out.

And so brad printed out my entire site, and you can just go through, you know, these books really fast as a way like, actually, I really go way to review the lessons on the park cast, because you have ten concise ideas for every single book. And this, absolutely this, this is like a lentz drive to learn the this total dedication to life, long, long learning is a trade that brad chairs. Nearly every single I can think of a single person that you and I study a shares with every single one of his two founders.

And the reason I call this going to school on everybody is I actually got that idea in a biography of jeff basis, because jeff is definitely this as well. There is a biography of jeff called the everything store. I last cover the episode on.

I covered the book on episode one seventy nine. And I want to read a section from that book that's seer this idea into my brain. And it's somewhere I new jeff really well, he said he went to school on everybody.

I don't think there was anybody jeff knew that he didn't walk away from with whatever lessons he could. Jeff BIOS went to school, everybody. Brad Jacobs goes to school on everybody there.

Mitch rails, the cofounder of dinner here, goes to school on everybody. So which traded this competition. Then here, there, here is like a hundred and seventy billion dollar market cap company today.

Okay, a friend of mine, we just tell me a story. He was at a small intimate conference with mitch recently, and he was actually like blown away by how focused mitch. Wz, so the entire time that mitch was listening to the speakers, he was taking pages of notes. And my friend had the thought was like, he couldn't understand .

he like .

why like he didn't say that verbalized this but he was thinking, he says, like, match why you're more successful else here. Why are you taking notes? And when my friend was telling me the trigger, no wrong answer.

There is a great line in bill washes book, which is called the score takes care itself. And I think this line is very important related to this. And bill wash talks about this.

He says, champions behave like champions before their champions. I guarantee you, Mitchell did not build a hundred and seventy billion hour company and then start taking notes. I guarantee you that mitch was doing that way before he was quoting, quote, the most successful person in the room. The entire time I was speaking to bread, he had a new book and a pen with him, and he would jot down notes when he heard something that he thought was interesting or valuable.

And if you read brad's book, you know that brad was like this from an early age two, one of my favorite experts from the book, uh, my book, how to make a few billion dollars, I want to read to you IT, is about the amount of research that he does before entering an industry. This part blew my mind. And so, brad, right?

I'm obsessive when learning about an industry. I started by reading everything I get my hands on, journal, periodical, newspapers, trade publications, employee reviews, you named. And I look at all the websites and social media of the major players and the upon commerce in the industry.

I watched lots of interviews with, see, I use paid services like bloomberg, Alice scans and root and reuters. I look at analysis from cells and bytes. Analysis are an an analyst rather, and search the S, C, C.

Database, which has large amount of information on every publicly traded U. S. Company, including IPO documents, Fanny reports and proxies.

I scope out the most valuable industry conferences and attend them. Sales conferences are an opportunity to meet management teams face to face and hear the questions investors are asking. Trade associations have a wealth of industry data experts.

I interview experts. I seek out people who live and breathe the industry and considering. This phase is more about getting face to face and listening intently. I love talking to ceos. In addition to CEO, I see investment Bakers to most active in the induction deeply.

I also talk to venture capital firms because they spend a lot of time looking at the big trans and different industries, and I tap bytes institutions and successful fund managers who have battle scars from investing in the industry. Industry vendors are also a good source. They have a sense of the trends that can dry changes in the market environment.

Shareholder activists often have important insights as well. And I reach out to journalists who know the industry because buying nature there are skeptical bunch, and I wanna hear their perspectives. That is the end of the quote from brad's book, what he's describing here.

This is one of my favorite parts, because this is all effort and envisions. M, this is just collecting more information. This is applicable to every domain. There is a maxim for this that comes to David organ. David gary says, the good ones know more. David org wrote about this in this book called confessions of an advertising man, which I think was like publishing, maintain sixty five or something like this. And this is the advice was given, he said, said yourself, to becoming the best informing person in the agency on the account to which you are signed.

If, for example, is a gasoline account, read books on oil geology and the production of controlling products, read the trade journals in the field, spend saturday mornings and service stations talking to motorists, visit your clients for fineries and research laboratories at the end of your first year, you will know more about the oil business in your boss, and you'll be ready to succeed him. That's the end of the David will be quote. And the reason I think this this is the first thing I wanted to bring up is collecting more information in putting forth more effort is still a competitive advantage today.

And IT always will be. This is not a matter of intelligence or talent. This is a matter of effort. So go to school on everybody. Number two, the importance of clear thinking and being easy to understand and easy to interface with.

So I want to to read something from this book called insanely simple, which is written by an advertising executive who worked very closely with Steve jobs. And he talks about in the book how different steps Steve and all the people have study. Steve is the clear thinker I have anybody ever come across.

And this advertising executives also noticed any compares, in contrast, Steve, with some of the other clients. And this is a great description of why this is so important, says clarity, propelled and organization. Not occasional clarity, but pervasive.

Twenty four hour in your face. Take no prisoners. clarity. Never underestimate the degree to which people crave clarity and respond positively to IT. I know a bunch of people that know bread, and they all say things like that. They say he just cuts right through IT.

You are never confused by the point he trying to make, and I don't know if you'd even agree with this, but I I put a line from his book that I really think is is one way to understand. He's just really easy to interface with and so he says, and what called a monem ker, I love working without rigorously talented people to deliver outsize returns for shareholders in public stock markets. When you read that line or brad associated interview, he says, I love working without ragged ously talented people to deliver outsize returns for shareholders in public stock markets.

That is brad expressing the refinement of his thinking. That is brad making him very easy understand, very easy to interface with. He even talks about this was like his grander strategy.

So one of the things we talked about him, what was like, I really, really, really curious, like what is in his mining, the role of the founder, the role of the CEO, the role of the company leader. And by answering this question, he describes his basic approach to company building. So, you know, as the founders, a leader, he has the vision as the first thing.

He has to set the vision. He has to visualized IT in his mind. And I know sometimes when you bring up validation people, I think it's like some Willy food food thing. All I can tell you is it's in a tony these box.

And I take noted that every time I come across IT S A laughter talks about this bob noise to founder intel advance Steve jobs on our short of tiger woods, kobe japs, but says, the leader has to have the vision they visualize IT. Then the leader has to get the very best people. Then you incentivize the very best people with a lot of money, but you have to tie that money to certain checkpoints along the way.

And then as long as you have the major trend rate and you have the best people in your investing technology, he says, then it's very hard not to make lots of money. And so when I was thinking about the conversation, I A bread I came back to, this is the order left, clarity, thought, taking time to refine your message, so you're easy to understand and us, your message is easy to spread, right? Because anything is easy understand is easy spread, then keeping your organization committed to a common goal.

All of those ideas, I feel, are related to one of my favorite quotes from brad's book. Race says, narrow your focus to your most important dreams and tune out everything else. That sounds a lot like Steve jobs to me.

And just like if you go back and read about the jobs people were from, say, hey, you might not like what Steve saying, please you you have you don't have to guess at what IT means. He's very, very easy. understand.

So was brad. Brad's clearly of laught was obviously when I spoke to IT was obvious in interviews he does it's obviously obvious in the book is also obvious to other people. My friend regards, just spend a weekend with bread.

And after they were talking my project, unprompted and unsolicited, rick told me how clear of a communicator bridge. My friend jared cushier just invested in brad's latest company, enjoying his board. Jared told me, spent several hours of brad. I think this might have been at a board meeting, if I remember correctly, but he said he was one of the most educational and enlightening meetings they had ever had, and that, brad, ideas are well thought out and easy to understand.

So the second thing I took away from my breakfast or bread is the importance of putting work into clarifying your thinking and making sure that you're making yourself easy to understand and easy to interface with the people around you. The third takeaway related to the second take away, you'll see how all of these work together. And the third one is, people are power law.

In the best ones, change everything. Brad says that the most important thing A C O does is recruit superlative people in this book. He says, make sure that you're hiring choices.

You make your hiring choices as perfect as they can be because there are few mistakes, costlier, then hiring the wrong person. And he's got a great maximum on this. I've i've remember this, I read at the first time he says an empty seat is less damaging than a poor fit.

And so even to the day sense, most of this time we're citing the very best people because people power all on the best one, change everything he says. There's no substitute for smart and you need to double down on hiring the brightest people you can. And he also talks about the importance of not over hiring.

He says, I find a slightly understated teams are more focused and spend less time doing redone in busy work. And one thing we talk about our breakfast is the fact that now is spend a ton of time recruiting. He thinks that you know the most important thing that to see your desk.

But he says when you find the most time to people, you pay them a lot of money. This is what he says about this, the book, he says, I do business in dozens of countries, and money animates people everywhere. That's why i've called on go, overpaid.

Almost every direct report i've ever had to ensure that I had top tear people in place. And when I read that the first time the note love myself in the book was overpay for talent because it's nearly impossible to overpay for talent. The example I give is that if you think about when apple buys next, right, they paid essentially a half a billion dollars for next.

That's not the way I think about IT, the way think about apple paid half a billion dollars to rehire Steve jobs and they got the deal of a lifetime. This is a mistake that brad sees other companies make. He says that makes no financial sense to skip on salary and incentives to save a hundred thousand a year when hiring a second best candidate may cost you millions of dollars in lost profit.

This is something that brad repeated. Find the very best people, literally the best people you possible can and pay them. Most people don't do this.

Most companies feel doing this back, this thing. I A note here, a line in one of his books where he says, you pay peanuts and you get monkeys. So whatever takes round yourself with fire for the most tons of people.

My favorite. The way I think about this, it's ed camp male whose the founder, pixar, he talks about the importance of know, never, ever forget the dynamic range of humans. And he says, if you give a good, this is why getting hiring the best people important this way.

I camel said, if you give a good idea to a media or team, they will screwed up. If you give a mediocre idea to a brilliant team, they will either fix IT or thrown away and come up with something Better to take away. Here is worth repeating.

Getting the team right is the necessary press or to getting the ideas right. So find the smart s and most thousand of people you can and work with them. Zero exceptions.

You would rather have an empty seat than A B player. okay? We'll take a away number four, get the big trend right and invest in technology. Brad's spoke about one of his most important mant tours at breakfast. This, this guys, also in brad's book, is a skinning ludwig justice.

And when the most important piece of advice of bread ever received from mister justice is the fact that you can mess up a lot of things in business and still do well, as long as you get the big trend right? And brad said he took mr. Judson's words to hark, and that with each new company that he started, he made sure to understand the major trends decade, either threaten the business or help IT sore.

And so I think about what brad said and what he wrote his book about this. And I thought of his blog post that mark injection did many, many years ago, probably fifteen years old, and he was trying to figure out like what correlates the most to success as a team, product or market. I'm going to read extra from this post to you. And and so mark, great.

And for those of us who are students to start a failure, what's most dangerous? A bad team, a weak product or a poor market? If you ask entrepreneurs, vcs, which of team product, our market is most important, many, you will say team.

That is the obvious answer, in part because in the beginning of a startup, you know a lot more about the team and you do the product, which hasn't even been built yet or the market which hasn't have been explored. Personally, I will take the third position. I will assert that market is the most important factor in the start of successor failure.

why? In a great market, in market with lots of real potential customers, the market pulls product out of the setup. The market needs to be fulfilled and the market will be fulfilled by the first viable product that comes along.

Conversely, in a terrible market, you can have the best product in the world in an absolutely killer team. And IT doesn't matter. You're going to fail.

So let me pause there, and i'm going to introduce another idea. This is like an idea instead of an idea of an idea, or getting like inception levels here. So here in brad, speak about this.

And I think about the market rison post. Then I read in the market and rison post, and, you know, I think of there, I think of Billy dant. Billy dean was the founder, general motors, one of the most town's entrepreneurs to ever live.

But billie dan's business before general motors is a perfect example of what Martin said. Mark said, in a term market, you can have the best product in the world. And absolutely, our team and IT doesn't matter going to fail.

What was Billy dran doing before he found a general motors? He was one of the main manufacturer of horse drawn carriages. And at first he was very resistant to not making you, making time of money.

manufacturing horse from characters.

And then this new eventually called the automobile, comes up. And then he eventually he realizes all shit, I can have the best horse ong carriage in the world. I can have the best team inside this industry.

And IT, does that matter if I don't switch on dead? So back to market residents post, you can obviously scrope a great market and that has been done and not infrequently. But assuming the team is competent in the product is fundamental acceptable, a great market will tend to equal success and a poor market will tend to equal failure.

Markets matter. Most markets that don't exist don't care how smart you are. So now back to brad and take a way. Number four, get the big trend right and invest in technology is a second part of that is something that he's been doing since his first company at twenty three.

There's a line in zero to one from Peter till I think is accurate, says properly understood, any new and Better way of doing things is technology. I believe that every company for you today, every company is a technology company. Uni, talk about this last week, a much, you will take a build a hundred and thirty billion dollar fortune applying technology to an ancient industry.

He was the most technologically advanced clothing company for god sake, and is a great line in that. Or take a barter py that I think brad would agree with where? Or take a says or somebody as subscribing or take us a process.

There are no mature sectors where everything is already discovered, but rather companies are managers with close minds who resist innovation. I bet brad would agree with that statement. And so the advice from brad is you want to make a lot of money, almost any industry.

You have to plan to heavily invest in tech. We obviously art a lot at a breakfast because that's also not a new idea. Go read entrepreneur graphics.

Carney was building his new company, eighteen hundreds, and his automotive phy. He talks about the old heads in the in his industry member. What or take us know, the less of this is mature sectors which are discovered.

Rather, companies are managers with close minds to this novation carty ran up against the old heads in the, in the steel industry and the like, why spending all this money, investing all these new thing, all Operations. And Andrew carnegie knew what brad Jacobs knows, that if you want to make a lot of money and what should industry, you should plan a, invest heavily in tech. And so the take away with the main take away what argue from carnegies a autobots phy, is.

Invest in technology. The savings compound, IT, gives you an advantage over solar moving competitors and can be the difference tween a profit and a loss. So take a number four, get the big train right and invest in technology.

Number five, pay IT forward, help the next generation. And so brad mentioned his mentor, mr. Justice, and a bunch in the book.

He mentioned her several times during our breakfast, and mr. Justice ran the largest commodity trading company in the world, and mr. Justice took an interest in a Young brad Jacobs.

And he actually mental. Brad and the two would have lunch to get all the time when brad was in a certain, when brad was in his chinese. And what's fascinating me is like the bits of, you know, business wisdom that brad learned during those lunches brad still uses to this day.

And in his book, brad said that the most important lesson that mr. Justle son, which was his most important businessman, tor, taught him, happen when when brad was in his choice. And i'm just going to read the story to you.

You told, my favorite is in the book. He says that one lunch I arrived burden with problems that he began to unload on him. mr. Justice, listen carefully.

Then he said, look, read, if you want to make money in the business world, you need to get used to problems, because that's what business is. It's actually about finding problems, embracing and even enjoying them, because each problems an opportunity to remove an obstacle and get closer to success. Brad says, I learned something invaluable.

Problems are an asset, not something to avoid, but something to run towards. Big ambitions often be, get even bigger problems. If your initial reaction to a major setback is overwhelm frustration, that's counterproductive.

You should be excited. great. This is an opportunity for me to create a lot of value.

If I can just figure out how to solve this problem, i'll be much closer to my goal. And this is one of my favorite things about entrepreneurs. I tried to point out all the box I read.

You know, most of the people I get to to blish with their older than me, smarter than me, well here than me. And yet there, just like mr. Justice, was to a Young brake.

S in my mind, when I think about this, A A bunch of different examples. One of my favor books, I had talked over over again, the episode two fifty five, it's called the fish at the wale about sama murray. And one of my favorite stories .

in the book is .

one of the very first, you know, multi national companies, an existence where these food companies, and one of the biggest, actually the biggest food company, was this company called united fit. United was founded by the sky name Andrew present. And what is very common is when you have very talented entrepreneurs know that there is a Younger version of themselves, and in many cases, they seek that person out and they try to help them.

They mention them just like mr. Joseon believe that a Young brad Jacobs had potential and was worth the investment of his time. And so Andrew present, this is one of my favorite quotes for our paragraphs from the fish to will.

He says when Andrew present, the president of united fruit, visited mobile, alabama in nineteen, no three, he asked to me, sam a. Murray, the russian selling the ripes present, was about fifty seven years all the time. And sam married somewhere in his chinese when this is happening.

And this is the description, the titan who began the trade, shaking hands with the nobody who would perfect IT pressed in later spoke of the muri with admiration. He said the kid from russia was closer in spirit to the banana pioneers than anyone else working. He's a risk taker present, explain, he's a thinker and he's a duer present, winds up buying I think I think he buys twenty five.

He taught zone was, so tell these, this is another me. When are buying? I think like something five percent of his company was fascine in. When was Price was alive and he was running united fruit. He respected summary and then present dies.

And you have these non founders take over the company, and they looked at the muri with schorn instead of partners with them, instead of helping him, they try to compete against him, the executives, and estimated the person that present respected. And so I will remember to the degree that I can, I want to pay IT for, I want to help the next generation. And this is something brad benefit from because he talks about.

He also what he does, Younger town people, Younger down twitter, and he think are down to, because there is something the bread ask you to do when he goes to, when you go to his house to has to do with dancing. okay. So I have friends that brad has helped out and taking an interesting, and they told me about this before.

So when brad mentions, hey, come over here to do this at all, I know all about the dancing and he said, I had you up with the dancing ago because my friend jack sloan told me. And what brad said next was a perfect illustration as he goes, I love j. He's a Young brad Jacobs, so take away over five as much you can pay forward and help the next generation.

Number six, don't hide your eccentric ties, embrace them. I can tell you how many messages I got from people who heard the page and then bought braddle book and were shot at the fact. The first, the first part of braddle book is all about building a strong and healthy mind.

He talks about the importance of meditation. He talks about the value of thought experiments. And this is so important that the first chapter is called how to rearrange your brain.

And so probably with the link, the first I don't thirty minutes of the breakfast were a visual ation breath of meditation. And my from Patrick k mentions not like not being able to visualize like when you closures ze actually seeing IT and so bad immediately. So I can help you to this.

And right, the middle right, he leads Patrick through a guided meditation. And I think this is the opposite of what most people try to do. They try to, like, present a certain act to the world.

And I think the most important thing is like just be a human being, even in so called professional settings. At breakfast, we talked a bunch of business, but I bet you was quite twenty five percent or less of the conversation. We talked mean bread, talk a lot about our childhoods.

We talk about this idea that you can always understand the son. But the story is father, the story, the father's Better. And sun, that's true for me.

That true for brad. Brad gave me great advice on marriage and what to expect when my kids are grown and they go away to college. The conversation went in all kinds of unexpected and unpredictable directions.

And bread is an a central guy, and I am too, and I like him even more. Because of that, you felt IT was bread being who bread really is. And people love, I think they take way that I would try to member myself.

Like, people love authenticity way more than I love perfection. There are no perfect human beings. I think it's a mistake to pretend otherwise.

And if you've listen to some of the other episodes i've done like this, I had dinner where there I had lunch with episodes like the one I did on charlie monger are the one on, uh, when I had lunch at sams l, when you exercise is monger such public than such a public, but, you know, you could go on youtube and watch them on stage and and watch your interviews, or you can hear them on a pocket. And when you're eat with them in person, that's exactly what you got. Both monger in zo were exactly that way.

They did not try to hide their eventualities. They embrace them. And that's part of the reason that they had such a coat like following. And so take away. Number six for me was, don't hide my centric ties, embrace them.

I think I do this now, but i'm going to make sure it's a concern minder, just be who I really am, even if that person is imperfect. And number seven, relationships run the world, and your reputation is everything. So there is a video of warn buffs you can see on youtube to warn off in one thousand nine hundred.

And one I think he's testifying for congress is when he's having this issue with the salon brothers at big scandal. And he says something I think is very powerful, and it's the advice that he was giving for only people selling brothers, but he repeats as someone never going away around him says, lose money for the firm and I will be understanding, lose a thread of reputation for the firm and I will be ruthless. And in later instances, he says, you know why the support has IT takes twenty years to build a reputation and five minutes to ruin IT.

And if you think about that, you will do things differently. You act differently. And so I would take that idea for more in buffet. And I would tired to this other idea that I read in a arrah y of David org.

A one time, the book is called the king of medicine avenue and is run by a guy who worked with David view for quite a while. And he has a lining ary. They called the David file.

And so he says, almost everyone who brushed up against the man has a David story. And so he gives an example the first time he added to his quote, quote David file and reason telling this, I think great SHE won't going this. There is a brad file and our expendable.

So from the king of medicine avenue, there are the person working for David. Ogi says, David was fifty two and famous. I was thirty three and a junior account executive.

Early on, he wrote a letter to one of my clients after listing eight reasons. While some of the ads prepared for the company's design department would not be effective, he delivered his ultimate argument. This is what David road.

The only thing that could be said in favor of the layouts is that they're different. You could make a cow look different by removing the other. With that cow would not produced results.

That is the end of all the bees quote. This is now the guy working firm. So began my David file. Almost everyone who worked at the agency kept one. So brad has been an entrepreneur for over forty years.

Okay, since this.

this happens when I make epo des about people that are alive, uh, because since I made the episode about brad h brads book, i've been on the receiving end of several brad stories that that very unique. And just like David o gravy, just like brushing up against David ogi, if you brush up against the brad, it's gonna produce a memorable story.

Now here is the mind blowing thing concerning, he's got a four decade over four decade long track record. Every single story i've heard was positive, and many of them are hilarious. And so this I did.

This reminds me of one of my favor maxims. That is, opportunity. Handle well leads to more opportunity. Because of his track record, because of his reputation, because of the compounding of his relationships, brad is now able to pursue opportunities that would have been impossible, inaccessible when he was just starting out as a twenty three year old entrepreneur. And I think the important reminder is the long term view is the right view.

And just like buffer t said, we must never jeopardize our reputation, our harm, our long term relationships for short term gains. So take away. Number seven is relationships run the world, and your reputation is everything.

And so what i'm going to do now, I am going to replay the episode made on brad's book. If you have to listen to IT, make sure you listen to the whole episode if you listen to IT, you know. But I was over year ago, listen to IT again is worth the time to remind yourself of the lessons.

I will also leave a link down below in the parking player and available a farkas icon. If you have idea bat brads book, highly recommend that you do so. And if you do so using a link, if we support in the pike is the same time. Thanks for listening far, and I hope you enjoy my review of brad's book, how to bake a few billion dollars.

During my forty four years as A C. E. O in a series entrepreneur, i've made every possible mistake in business.

I've overpaid for acquisitions and botched integrations. I've run Operations for cash. When I should have invested for growth, I delegated tasks i've should have done myself.

I've hire the wrong people. I made strategic bets that didn't pay off. And yet my teams and I have managed create tens of billions of dollars of value for our shareholders.

This book is about what i've learned from my blenders and how you can replicate our successes. I'm what's called a monem ker. I've started five companies from scratch, seven, if you include two spinoff, and turn them all into a billion dollar or multi billion dollar enterprises.

My teams and I have completed approximately five hundred acquisitions in total. These ventures have created hundreds of thousands of jobs and raised about thirty billion dollars in outside capital. My career began in one thousand and seventy nine when I started a privately owned oil broker company called amx oil associates.

I wish twenty three with just a few thousand books and no experience. Within four years, my partners and I had four point seven billion in annual broker volume with offices worldwide. We sold amex in one nine hundred eighty three, and I moved from new york to london to start an oil trading company called hamilton resources.

Hamilton generated about a billion dollars a year in revenue, and we made this money through an opportunistic accommodation of crude oil trading, counter trade, refinance and refinery processing deals in one thousand and eighty nine. So six years later, I moved back to the united states and entered a new sector, the rapidly expanding field of solid waste management. I called my new venture, united waste systems, and took a public in nineteen ninety two.

So found to the company, one thousand nine takes the public in ninety two is going to sell IT. In ninety seven we became the industry s fifth largest player and in one thousand nine hundred and ninety seven we sold united waste for two point five billion dollars. United waste taught me that I love working with outrageously talented people to deliver outsized returns for shareholders in public stock markets.

So he sells united waste in one thousand nine hundred ninety seven. That same year, he says, I started a new company, united rentals, to rent construction equipment for job sites. I took this venture public later that same year with a growth strategy that emphasize acquisitions from the start.

Within thirteen months, we had built the largest equipment rental company in the world. There's a hilarious story later in the book about a launch that brad had with the C O. Of the his major competitor in that industry.

I'll get to a later on in the episode. Within thirteen months, we had built the largest equipment rental company in the world. United rental stock is a hundred baggar.

The share Price at inception with three dollars and fifty cents, and IT now trades and more than one hundred times that Price in two thousand and eleven. I was onto my next big thing, X P O logistics. X P O was the seventh best performing stock in the fortune five hundred of the last decade.

Its main focus was free transportation, matching truckers with shippers, fording freak, and expanding urgent shipments. We built X, P, O into an integrated global logistics leader. I divided X, P, O into three separate publicly traded companies as a value creation strategy.

We spent off G, X, O, the largest contract logistics provide in the world, and R X O, A freak broker platform that runs on technology that we developed in house. I currently chair all three companies, and each businesses hold by a strong C. E.

O. These experiences have allowed me to share thought experiments that can help you learn to think differently, which is an a central prerequisite to accomplishing big things. This book is a guide. If you have a burning passion to make enormous amounts of money in business, or want a turbo charge, your chances of success in sports, the arts, politics for me, erp, or any part of your life, read on. That was an extra from the book and we talked about today, which is how to make a few billion dollars and resorting by brad Jacobs.

In addition to starting seven separate billion dollar companies, brad also listens to founder, send me a very nice mester, saying that he was addicted till listening to this book reviews and he was kind enough to send me an early copy of this book a few months ago and I read IT and wanted to to make an episode or to really see episode ther, uh, when it's available so you can actually order IT, which I highly recommend that you do. And that will be, obviously, we go through some of the ideas containing brads book, so on, to break into IT, he says, i've come to know a lot of extremely successful people my life. They all have one thing in common.

They think differently than most people. All of them, to a person, have arranged their brains to prevail at achieving big goals. Turbulent environments where conventional thinking.

Often fail. So I want to read one more sentence, and i'm going to read you this, quote, computer, till that part to my mind. And I got to the section of the book.

I love that what he said, all of them to a person, have arranged their brains to prevail at achieving big golf interval ent environment where conventional thinking often fails. Making a few billion dollars doesn't just happen, but it's possible with intense focus and a willingness to transform how you use your mind. That is the first chapter. So got to this section immediately. When I read that the one of my favorite tes from Peter, T.

O, pop into my mind, and Peter said, the single most powerful pattern that I have noticed is that successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas, that idea of finding value on accepted places and thinking from first principles and set of formula, set of using commercial thinking. Remember that later i'm going to talk about this outrageous thing that happened. Brad ones are making about four billion dollars, buying back a bunch of his stock even though bankers and advisers around him, we're saying, hey, no, no one's ever done something like this before.

And his response was perfect because you can tell he was thinking for first principles. He is like just because we were the first company to buy back such a high percentage ck in the situation doesn't mean it's a bad idea. And I turned out to be a phenomenal idea.

So I like that he starts the book with this words, like you need to return your brain to prevail. Achieving big goals and turbulent environments where conventional thinking often fails. If brad are another way thing about that in this situation will recover later.

If brad had listened and in here to conventional thinking, he'd be four billion. Him in his company would be four billion dollars poor. And so spread to out the book, you're going to see these like boxed, standalone maxims or pieces of advice that were late to what he's currently try to teach us.

And they really like the way talking about he's ceiling down his knowledge from h intel, simple to remember maxims. And so he said, so much of success in business comes from keeping your head in a good place. He talks about expecting the importance of expecting positive outcomes.

And I think IT says a lot that the first chapter of this book is called how to rearrange your brain. And he spends a lot of time on the importance of managing your mind and attitude. Entrepreneurship is difficult and stressful, require sound judgment, and you cannot make high call decisions if you don't manage your inner monologue, inner feelings.

And I love this idea of expecting positive outcomes, expect positive outcomes. Stop beating yourself up mentally. I have the next time you can assist.

Y something that isn't that bad. Understand that your reaction is a genetic survival trade that you inherit from your hunter gather ancestors. The only time that i've ever felt truly lost was when I step down from united thousand and two thousand and seven.

So he's going to talk about this is really the entire section is why understanding and controlling your mind is so important for founders and you I ve talked about this before. There's a great quote by mark and rison that said entrepreneurs, our experience uh to emotions, euphoria and terror, nothing in between. It's the highest highs in the low lows.

You got to learn to control your your mindset in your motions. The only time I felt truly losses when I stepped down from united s in two thousand and seven and I started looking for my next big thing, and I couldn't find IT. I became depressed.

I'm an ambitious person by nature and a deal maker by inclined. Now I had no deal going, no industry sector where I could vision, working my magic. And so he starts reading like a library of psychology about trying to figure out how to fix.

He said, I learned to turn my internal chatter to my advantage by reframing negative thoughts as useful data, as useful data, rather than objective reality that is tied to another day that he's going to use over over against you. And I have talked about over over comes for this fantastic quote from this legendary founder name, Henry kiser, who was building companies around war war two. I read his biography because charlie monger recommended to me.

And actually, when I went to troy monger's house to have dinner with them, uh, the book was sitting behind charly on the shelf and actually got to to ask him about IT. He was incredible. The charly had read that book trying like fifteen years, but his recall that could be IT was impacted like told me like essentially recited all of the facts I were in that book as if he he'd read IT yesterday but henrico has a great quote in labored phy, uh, that says problems are just opportunities in workplace.

And so I think it's a similar analogy to what he saying here. It's OK. Everybody's going to a have negative internal chatter in your mind. Why don't we reframe that, use those negative thoughts as useful data rather than as objective reality back to bread.

Inevitably, the process of running a business will test your bias towards hope or fear, euphoria or terrorists the way you I talk about this, when I noted some feeling anxious about something, I ask, this is fantastic. I asked, what's the worst that can happen? And how would I cope with IT? And then he is another question.

He asked yourself, if a friend had a similar worry, how would I advise them to handle this? So this idea of stepping outside of yourself, something i've try to practice, well, step IT is your problem. Pretend to some else.

Se's problem with friend, a love one. He'd been a competitor, maybe. And okay, if that I had that similar warrior, the similar problem, and IT wasn't me, how would I tell them to solve them? Then just take your own advice.

So saying putting this is between yourself personally, the source of your anxiety actually helps you think more objectively about positive outcomes. This idea I think about, yeah, the guy has started seven separate billion dollar companies and is the first chapter of the book, is all about the importance of managing your mind and attitude. So he says, not beating myself up has been a hard learn lesson for me.

I become much happier in my middle age when I stop expecting unrealistic levels of perfection for myself and my family. I still struggled this all the time. I'd beat myself up.

Have a varied, I always say my inner on alou gue sounds a lot like David gargan. If you ever heard his audio book, can hear me that your mind sounds like i'm going to have to take breads advice here. I've become much happier midd age when I stop expecting unrealistic levels of perfection from myself and my family, my friends and my coworkers.

Not imagine customers, vendors and shareholders. Uh, the reality is that when you're trying to make a few billion dollars, your team is likely running in multiple directions that fast pace except that some goffs are innovation able and you'll find that is much easier to maintain your mental equal. Liberum, as you pursue big goals.

This goes over several pages. Try to summary this for myself. I can remember in the future, don't beat yourself up, up emotions, blind judgment, keep a positive mental attitude, and stay calm. And one way that brad does all of that is he's a big fan of thought experiments. The reason you I mean, you just I think it's a no brainer to buy the book, but there's a bunch of stuff not going to the protest in here.

Uh, that the the I think of this is what I would do is like to restate through and then i'd keep them on a shell for keeping your desk and then use IT as a reference and you'll go back and there's a bunch of things like all the chapters are separate things. So like how to run great meetings, uh, how to do a lot of uh ma without losing your company, how to build an outrageously related team. I really do think this is a fantastic reference that should say close um at him.

And so one of the things he has in this book is a bunch of different outline. He says Albert edson was a daydreamer and then he preferred the term at its german and not even try to pronounce IT, but daydreaming thought experiments. So says, thought experiments are not limited to genius scientists, gifted artists, composers, mathematicians.

I'll use them for creative work or problem solving. I usually spend about half an hour a day meditating. Much of this time is spent in thought experiments. This are produced a profound sense of commons and is when many of my best decisions materialized.

And I can remember if I already said this, but brad was kind enough to invite me to, uh, the book launch party they had in new york. I flew up a to new york just like sixteen hours. Sh, just to go to the book launch.

And me bread. Um what was fascine? And I had this inclinations like he just got great energy.

He's got great hate to say any other way to say is a great personal vibe when you're like in person with them. And I talk to people that work for him, they said the same thing. They like love him.

They enjoy like the work environment that is created and the best source I know to experience, like how brad is, is I would listen to uh, the investing the best episode that brad day with my friend Patrick. It's episode three fifty two of invest like the best. And brad in that interview talks a lot about the importance of meditating.

He's been meditating, I think, for over fifty years. And as he says we're here in the book, he he feels it's been A A huge benefit to his car because that's where he feels many of his best decisions actually materialize. So let's go to this. What I mentioned earlier that businesses problems, this comes up over over again, that businesses problems and great companies, the way I think about IT is great companies are just effective problem solving machines. And I first heard that idea.

That idea was planted into my mind maybe seven years ago, when I read dani mayor, the family famous restaurant tour, his autograph y and brad going to talk about his most important businessman tour, and the lesson that he taught brad when brad was in his twenty years. I've had multiple businessman tories over the years, but none have been more important than ludwig Justin. mr.

Justin ran the largest commodity trading company in the world. I got to know him in my chinese when his company was a kind of my oil brigge business. Before long, we were having lunch regularly, and he would share bits of business wisdom that have stayed with me ever since.

At one memorable lunch, I arrived burdened, member of brazil, china. At this point of one lunch, I arrived burden with problems that I began to unload on him. Mister justice, listen carefully.

And waited until I had finish speaking. Then he put down his fork, turn to me and said, look bad. If you want to make money in the business world, you need to get used to problems because that's what business is.

It's actually about finding problems, embracing and even, and enjoying them, because each problem is an opportunity to remove an obstacle and get closer to success. I want to put this book down, and i'm going to go to where I have my highlights stored from danny, mrs. Book, which is called setting the table it's in.

If you have access to founders notes, I highly recommend going, searching through setting the table and then list. And reading all them takes less than ten minutes, and IT gives you a good overview. Minder of the lessons that Daniel I was to teach you eye from his book, but he had a very simple experience and pretty sure he was in twenty years at the time as well.

He's having dinner with another older, more success entrepreneurs. Time is guiding staining markets of the new man markets family. And it's remarkable. It's very almost dead on with what's happening with brad when he was in chinese, when he's talking to mr. justice.

And so dane mires kind of unloading his problems in his stresses to an older, wise entrepreneur he is opening the new restaurant might be the worst mistake have ever made. Stanly set his Martini down, looked me in the eye and said, so you, this is one of my favorite quotes, have ever read any book, so you made a mistake. You need to understand something important and listen to me carefully.

The road to success is paved with mistakes. Well handled, his words remain with me through the night. I repeated them over over to myself and IT LED to a turning point in the way I approached business Stanleys lesson, reminding me something.

My grandfather, irving Harris, who was a famous or not famous success to me, well, say the lesson, one of something my grandfather, irving Harris, had always told me, the definition of businesses. Ms, exactly what mr. Justice is telling a Young brad Jacobs, the definition, businesses, problems.

His philosophy came down to a, to a simple fact of business life. Success lies not in the elimination of problems, but in the art of creative profitable problem solving. That's an excEllent line, too. Success lies not in the elimination of problems, but in the art of creative profitable problem solving.

The best companies are those that distinguished themselves by solving most effectively the way the maximum I distil that downside I could remember myself is that business is problems and great companies are just effective problem solving machines, as we're going to see continue on this page. They get A A lot of the best of experience. They would get excited.

They would get excited when they found businesses are, uh, problems in their businesses. And so brad continues what he learned from this lunch, uh, with mr. justice.

In that moment, I learned something valuable. Problems are an asset, not something to avoid, but something to run towards big ambitions that's so excEllent. Not something to avoid, but something to run towards.

You know, let me interrupt, let me interrupt. Because when I got to this part again, just pop right to my mind, I was down. Jeff business, Henry kiser already told you hundred times are loved problems, said problems with your opportunities and workload.

Jeff visas, multiple books in the everything store, the first biography of jeff isa in my bread stone. There's actually which one of the jeff and one of his one of his employees and he tells them like some bad news, something that like they need to improve on or whatever. And he goes, I brought a very bad news about our business and for some reason he got excited.

Is that not exactly project saying problems, an asset that's something to avoid but something to run towards later on in I think this is in jeff s, uh, one of jeff basis, shareholder TTS. But he said that he finds waste, uh, very exciting. So he says, uh, the customer experience path that we've chosen requires us to have an efficient cost structure.

This is jeff is just writing, by the way, the good news for shareholders is that we see much opportunity for improvement in that regard. Everywhere we look, we find what experienced japanese manufacturers would call muda, uh, translates into waste, what experience, manufacturing, recall waste. I find this incredibly energizing.

I see IT as potential years in years are variable and fixed productivity gains and more efficient, higher velocity and more flexible capital expenditure. That is from the book event in wander, a highly recommended them. I think two podcast on that already.

H it's jeff faces all jeff pisos of shareholders and then transcripts of like his best speeches. But I love I reference to A A couple of time and exactly what your mother is all I get excited. Oh, this is always good.

This is incredibly energizing its potential years and years and years of improvements in our business, very similar to a, to a project to big ambitions, often to get even bigger problems. If your initial reaction to a major setback c is overwhelming inflammation that is counter productive, instead, do this great. This is an opportunity for me to create a lot of value.

Is that not the exact same idea that basis just told us in shareholder? It's exact. It's the same thing.

It's exactly the same. great. This is an opportunity for me to create a lot of value. If you can figure out how to solve this problem, or if I extreme, if I can figure out how to solve this problem, i'll be much closer to my goal in the four decades since I launched mr. justice.

And i've doubt with nearly every problem, you can imagine chAllenges with acquisitions, people, tech branding, you name IT. I am not surprised when things don't go perfectly. That's the nature of this universe.

The big bunny problems can be where the best opportunities life reminded me of when I got to to talk to truly monger he said something and it's you noticed um in his last I think the last publish interview here he did or one of last ones was with john coulson found her stripe interviewed him is actually publish on the the best feet too it's also obviously, after spending a few hours talking to when I got back to my hotel and I said I had like this. I immediately just put all like everything we talk because I don't look at my phone. One time on, I was with the most like, man, this is once like, time experience.

I, I want to, and I want to remember in one of things that I wrote that truly had a complete, almost a complete indifference to problems. He said, they should be expected. You should toughen up, but you just essentially suck up and cope when you have problems that come away, and then you should be wise enough to try to prevent any any other problems.

Uh, but this idea is like very so much everything. I'm not surprised when things don't go perfectly. It's impossible.

He's been A C, E, O and entrepreneurs forty four years. You don't think he's grunted to every single problem. Like, of course, that's what makes the books so valuable.

I think I saw selling for like twenty seven dollars. It's absurd. That is the third amount of value that you get.

You get almost half a century of wisdom is still down. At his book launch party, he said this, so I don't have another book at me. I'm not running another book I gave you. Your ideas get by if you want IT uh but I just think it's it's it's a incredible how you know everything i'm talking about this is three, four pages and we see similarities in the way red thinks the danny mor thought that the guy from name markets thought that japan's thought that had reiser thought um that charly monger thought I just love ah IT excites me when all these ideas um connect very, very fascinating moving on this is great.

He's got these great stories spread through the box and um uh if this is how to lose five hundred million dollars so I want to go back actually before I get to how to lose one hundred million dollars, he's got a very unique a acknowledged section section I I read I have to confess that I read a lot of the acknowledged sections in the books that read they're usually boring in like time failure. Every once a while, you find like an interesting source and interesting book or something. D what brad was put at the front of the book, which is unusual.

And then what he did is like he just made his ignored dgm section a list of maxims that he learned from other people. You have all the conversations and you just still down one of the main ideas like that he learned from Michael mortes. Small amounts of capital can generate dragani returns uh from ludd justice who which not get the major train rate what's all gone to, uh you know, dare to do things, see the world for what IT is not what you wish IT to be as one of the maximum in the ignored cement section.

And i'm glad I read that before I got to this story about how to lose five hundred million dollars, because see the world for what IT is, and would you wish you to be, is exactly what bread did. And so he says he causes us radical acceptance, radical acceptance. Quite the noise created by yesterday's decisions in today's wishful thinking.

Here's a story about radically accepting a five hundred million dollar loss. So in the the nineteen ninety congress came up with this new law called the tea china one, the transportations equity act for the tiny first century. In theory, this what bad thought was going to happen?

This legislation was going to allocate about six hundred billion dollars to rebuild the nations infrastructure, so as like, okay, there can be a bunch of always funding up for grabs. I started scooping up big, uh, road rental companies, the ones that provide barratt cos stripping and the leg. Then I waited for the market to come to me, but that never happened.

Only about a third of the allocated government funding was spent, and that was spent a little bit over time. My decision turned out to be a huge mistake, and there was no point in compounding IT. We ended up selling those road rental company about a half a million doll loss because he was the best way forward under those circumstances.

So the idea of see the world for what IT is not, you know what you want, wish IT to be. He, he's, I go. This is going to be great.

They're going to spend out to out to six hundred billion dollars when that didn't happen. He didn't hold on to IT. What did you go? Uh, radical action.

Quite the noise created by yesterday's decisions and today's wish for thinking. No reason to compound this loss. Let's cut our losses and move on.

The next story I want to tell you about is how to keep your head and make four billion dollars. This is my, that was my summary. What's about to happen? So heat at the time he is running X, P, O, which is is his third public company.

And I think this is in two thousand eight, and they got hit with a short report. And so the short report is picked up by the media saying this, all kinds of problems with X, P, O. You should stock everything else.

And so this is the story from bread. The short report was packed with a lot of a loni, but of course, the market acted first and analyze latta in our stark Price went into free fall, down twenty percent are twenty six percent. In one day his response was facing, we did exactly what i've been describing in this chapter.

We concentrated on the situation at hand without judging what had happened to us. We spent hours going over the short report, page by page, identifying the many places whether data had been twisted. And so he takes a problem, any spots, an opportunity, which is what he's been talking about, right?

The short seller crisis had made our stock extremely cheap. And instead of fixing on that as bad, we ve focused on achieving a good outcome from that perspective. The share Price was mona from heaven, and we decided to buy back two million years with sox.

What I mentioned earlier, where the bankers are like, two million, other way too high, you can do that is too high. Person, mark cap, no one ever done something like that. And birds like, who cares? Just because we were the first company to buy back such a higher percentage of our stock member goes from the opening. Its like you have to that you can rest on conventional wisdom is the way brad put IT you have to rearrange your brain the way Peter till says they say you should successful people find value in unexpected places, and they do so by thinking about business from first principles instead of formulas.

There is no formula for the situation that bras dealing with, or if there was, I would like, oh, but you know a little bit, but like a hundred million back, but you can buy two, bring hours where you not just because we were the first completed by such a high percent of our stock, any similar situation didn't mean that was a bad of idea. In fact, I was a once in a lifetime opportunity. A couple of years later, those two million also share with we brought back, we brought back, ended up being worth six billion dollars, giving them a profit on that one transaction of four billion dollars.

Okay, moving on. what? This this might be my favorite section, the entire book. I love how he describes all the research he does before he jumps into an industry, and it's this idea that he gets, he said, when the most valuable piece of I receive from my mentor, mr.

Justice, if you can mess up a lot of things in business and still do well, as long as you get the big trend right, I make sure I understand the major trends that could regen the business or help IT sore. I'm obsessive when learning about an industry. This this part is entire.

I'd read entire chapter. I'm going to go over, uh, the parts that are a sey most interesting to me. But IT is another illustration of this idea that uni speak about over overground, you see in the books.

And IT came came from David ogre, and he says, the good ones no more. They just do more research. They read more, they talk to more people, they just know more about what they're doing, the good ones no more.

Um and so his ideas, like one of the main things themes of the mega trend, uh is that technologies that the dominant magazine, our universe, if you want to make a lot of money in almost any industry, plan to invest heavily in tech. And that idea is true today. As IT was a couple hundred years ago.

I remember reading Andrew carnage autobots phy uh you know many years, but I don't know, maybe four years ago and he's talking about building businesses and eighteen hundreds, and he was talking about building carney, steal the time. And I had summarized the advice was giving in that book, uh, specifically run technology as this and this, this comes up in the books alive. Invest in technology.

The savings compound IT gives you an advantage over slowing moving competitors and can be the difference between a profit and a loss. That is from that's a summary of Andrew dig's ideas, which I think bread based on the chapter would definitely agree with. If you want to make a lot of money, enforce any industry planned to invest heavily in tech.

So this is how he starts doing research before he starts a new company. I start by reading everything I can get my hands on journal, periodical, newspaper, s trade publications, employee reviews on web base recruiting sites, you name IT. I look up, I look at all the websites and social media of the major players and the up and commerce in the industry.

I watched a lots of interviews with the ceos. I use paid services like bloomberg, Alice sence and Thomas rooters. I look at analysis from outside and bytes analysts, and I searched the S, C, C.

Data base, uh, which has large amounts of information on every publicly traded U. S. Company, including IPO documents, financial reports and proxies.

I scope out the most valuable industry conference, and I attend them. He goes to suicide conference because there an opportunity to meet managment, teams face to face. And here the questions investors are asking.

Trade associations have a wealth of industry data. I interview experts. Uh, I see out people who live and breathe the industry that i'm considering.

This phase of the research is about getting face to face and listening intently. I love talking to OS. In addition to ceos, I seek out investment bankers who are most actively the industry and who know IT deeply.

Just look at how much work and how much information, uh, is collected, right? This is IT keeps going, so says in addition to C O to see on investment Bakers who are most active in the industry and who know deeply as to talk to venture capital m, because they spend a lot of time looking at the big trans different I tap bytes institutions and successful managers who have battles scars from investing in that industry. Uh, industry vendors keeps going.

Industry vendors are also a good source. They have a sense of the trends that could dry changes in market and finally, are not. Finally, there's two more shareholder activists often have important insights as well. And I reach out to journalists who know the industry because by nature, there a skeptical bunch, and I want to hear their perspectives.

So then what he'll do is he runs through like short descriptions of how to get the major trend right in a bunch of the are how he did in a bunch of the businesses that he started. And you know, that goes over forty years. What's interesting is a the first one.

So he talks about amy x and hamilton resources. And it's about like his time in the oil industry. IT reminded me of a very important idea that I think that that you should be applied to a bunch different industry.

This idea that you can identify a market with valuable, but hard to get data. And my favorite application of this, because it's just so nuts, was a the episode did on the billionaire deal, lara gozen a epo de three twenty five. If you haven't have a listen to that, that epsom IT was fascinated because that's exactly did.

He identified a market with valuable, but hard to get data, and essentially made he made a like a personal treasures map that is entire business, uh, response that I came mind when I was reading the section a little bit of look put me in the oil industry, thousand and seventy nine when I started my oil portraits company. Max IT was a highly profitable business. And my realization was that a big train was forming around the need to capture and share information more quickly.

Remember, this is nineteen, seven, nine, three, internet. This whole section is nuts as well. Says that was a trend to transform the industry.

In the late one thousand and eighties. We made a lot of money by being the first oil broker to get ahead of the trend at the time. There is no internet, no email, no centralized databases with easy global access.

The main, so this is going to buy your mind. The main source of information about the Price of oil was a newsletter that came in the mail. And so he talks about, like, listen, we're making verbal handshakes with clients in europe and asia for fifty and seventy five million hours over the phone, with nothing on paper for days.

And so the next sentence is a description of the problem. The lack of timely information was a big problem for oil workers. We made our money by matching buyers and cellars and taking a commission.

Just like a gogo sian. I could see that there was isolated pockets of valuable oil pricing data trapped all over the globe. And I knew that if we could figure out a Better way to share that information, we can unlock a lot of value.

And so there's no off the shelf solution. So he built his own. I think this is something he does multiple times.

And he says sentiment, they built like their own crude version of the internet. But IT allowed us, us to do something revolutionary. Every time in M.

X, employee learning something useful about a buyer cellar, a biocel or the Price of oil, they entered into our database. Then we could share that information much more quickly with our brokers around the globe. That process took hours, not days, which was closed to instantaneous back then in the seventies and eighty.

So takes something, took days. Now takes hours. We had created a way to obtain objective insight into global oil supplying demand and pricing trends. And then here is the trends that he identified when he set up united wave systems.

Uh the red bull episode that he did, episode three thirty three I think um it's pretty wide that you know that business is gonna make him yes network visum beaching in and forty billion dollars he was paying himself before he died， some of change, five hundred eight million dollars a year. He identified the opportunity from reading a magazine article and like, hey, uh the richest guy in japan I think was the country makes these like energy tonics because there was no energy drink market at the time. That's interesting in that that reading the article change his life forever.

Detrick misses, I think, is he says, name. But we see project of coming over. The idea too is like, well, the idea from united systems. This is fast. I remember vividly the moment the industry caught my tension.

In one thousand nine, I was reading mary linch research reports in bed on a lazy sunday morning I love that, uh, and came across the report written by the top rank analysts for environmental services, then the two largest companies in the waist e industry at that time, where each. Making about a half a billion dollars year and profit member that I brought up, the red bow guy. He like what this guy is high, the paying the most.

He's making the most money in the entire country. And he sells energy tonics. And then brad sit in bed reading research reports, right? It's like women. These guys are making half a billion dollars in profit in nineteen eighty nine.

And I thought, how hard would be to have trucks pick up trash, to posit IT in a safe place and then send an invoice? I wanted to know more. And so he identifies the two big trends at the time.

Uh, landfill capacity was becoming precious because regulations were pushing small trash dumps out of business. So that try number one, try number two. Integration of halling and disposal. This created an opportunity for enter and consolidation.

I look for a way to capitalize both trends and found the in tech based truck routing to think about the entire oil industry kind of Operating blind, waiting for this letter in the mall down the Prices. He sees a very similar trend, uh, problem in the waste management business. Mom and pop owners are running trash collection companies by the seat of their pants and making money at IT.

Few companies are planning their truck routes method ally, much less using technology to do IT. I think he says they use like a map and like push pins. So this is these, these are details.

They did not focus on optimizing routes. And so he starts optimizing rights. And this is the result. Instead of sending fifty trucks out over five days to pick up x tons of waste, twenty trucks. So more lesson half could now perform the same service in three days.

So instead of fifty trucks in five days, he's doing the same work in which twenty trucks in three days. Our cost kept coming down as our processes improved and our profit margin grew significantly. That is the company that he said for two point five billion dollars.

Then he talks about where he gets his idea for his other company. United rentals was looking up to roll. I was looking to roll up another industry.

And so I set up half day meetings with nine different groups of bankers and analysts. And mary linch, one of those analysts, asked if I think about going into the construction equipment rental. So that's how you find the idea for his next billion other company.

And even though a different industry, he sees the same problem. This is the part that I text IT up. Your france is actually love.

While the rental industry overall was slow to computerize, the larger regional players were more tech si. By one thousand eight ninety seven, nearly all of them. We're running on software.

Develop a company called wind systems. This is how to get god mode. everyone. I worked to myself when I was a kid played a lot of view games. And you use like chick's, like game genius of like that.

Uh, and you one of the things that were tried on lock is something that was referred to god motor lot was essentially gives you like on the present like view of the entire world. And like we do, you can think of what's happening here. This this idea that I absolutely ve they did, he gets on the present data of his entire industry, almost like Operating god mode.

Video, I was a kid by one thousand and eighty, nearly all of all the larger, larger players in this industry now, right, we're running on software development company called wind systems. This told me that software was capable of managing hundreds of thousands of pieces of equipment flowing on and off job sites because they buy construction and and then they went out very new straight business. So what did he do? I bought wind systems.

He bought, he bought the software that all of the main players were using, owning when accomplish two things. One, we had an industry best platform that we can continue develop eternally for our news. And the acquisition gave us access to aggregated anonymized data on macro trends.

Cost across the industry give us a high level view of emerging market trends such as equipment gluts or shortages in the making, making what is buying the software company allow him to do. We could now proactively adjust our pricing and asset management while the rest of the industry was being reactive. I am going to repeat that, that is so important, we could proactive adjust our pricing and asset managment while the rest of our the industry, the rest of our competitors was being reactive.

okay. So then I love this story that comes from the chapter on how to do lots of high quality ema h without including and if we're mountains, one of my favourite things that I bring up a lot that opportunity is a strange beast. And that frequently appears after a loss.

What can appear to be a terrible thing actually be, actually once have been, a blessing in disguise. And so he gives us some advice. He says, be sure to cover your flank.

It's the stuff that comes at a left eld that can take a deal down. In two thousand and seven, I sold united rentals to the private equity firm servers. No way i'm pronounce right.

So this privately ity for him by IT h for seven billion dollars. That's what brad thought happened, highly satisfied that I just saw the company. I stepped down as chairman and wandered off to my private investment firm to begin planning my next venture.

The great financial crisis arrived. Remember, this is two thousand and seven. Uh, great financial sis arise.

Private equity firms to began watching on deals, and serb defaulted on the united rentals agreement. As a result, our stock plunge thirty one percent in twenty four hours. Over the course of the following year, the stock fell out of five dollars.

We collected a hundred million doll break up fee, decided not to seek another buyer, and eventually got things riot. Today, the market cap of united rentals is thirty eight billion dollars. So tried to sell IT, thought they sold IT for seven billion in two thousand and seven fast forward wet fifteen years.

Something like that good thing. They did not sell up for seven billion because the market cap is now thirty one billion dollars higher. The deals i've avoided have contributed more to my success than the deals i've done.

And I love this advice. He talks about the importance of set, setting up a feedback loops. This is something that brad's onna have in common with just the one to come to the help my mind lesh.

wab. Sam walton of walmart in. Jim casey of U. P. S. They all prioritize this. And what is this is getting data from front line employees. They want data from the people are actually interacting with the customers they all talk about in their bike py es on autobiographies over over again.

SHE says, when we buy a company, we discovered that the front line employees, middle managers and even some senior executives have never been asked, what would you do to improve the company? And this is insane. You would think that the owners would want to know that. And so a lush, wab and walton in gym, casey would say about this, in gym cases, case, any time he was driving, he ups truck, he'd pull over or have his driver pull over and he d talk to them, he'd wanted know what actually happening. They all make they all say differently.

But the the idea behind this the same, they're like your executives, the team you have around you, like the overtime, they search like filter information too much and they can give you like an overly rosy or like false like positive view of what actually happened in your company is so the way you penetrate oh basis is this too? I just remember he would work. He has everybody name is on, including himself would work customer service like in the call center and actually answer calls directly from uh, customers.

So is that your executives, the people around you over time tend to give you like an over really like optimistic view of your company. And so one way to cut do that is like some of them go on stores and he talked to people at the cashiers. You talk to the people different door, he talk to the people loading, uh, the trucks.

Like, tell me what the how is going on in the company? I wanna know this. Like what would you do to improve the company? Why are you not asking them that? Of course, you should ask that to them. IT was very obvious.

But like almost I what I realized you is like almost at the end of the book, he has another, uh, he has two questions I thought were genius that I want to add in this section too, because I think that is to what he saying here. And so what he would do IT doesn't have to just be in a company requiring too could be in your existing company. So he asks, I love these questions.

He ask two questions, what is your single best idea to improve our company? What is your single best idea to improve our company? And what's the stupidest thing we're doing as a company? And so he would send that our company wide, you know, said an email.

I know you try this email one at a time. Everyone company respond back to ma was your single best idea to improve our company. I think all the interesting data ideas that you could, could get and IT was a stupid thing we're doing as a company. I love this. I love these questions for a business and I was actually thinking, that's you good for a family too like i've talked about this before where you know i'm obsessed with what i'm doing.

I work seven days a week ah you know if you're listen to the issue, highly likely you're in a obsessive person as well and yet I don't want i'm also dead so like i'm not going to be a shit dead like this is not an option for me and so IT sounds aw ayd that this kind of mind but my sons too Young for this but my daughter is not so like I solicit feedback from so far I think i've told this before ah but I would literally go, you know not like I would just like, hey like how am I doing is that and I ask questions like this like like when do I feel for her who told me to do this like I asked and our texture that's too she's all enough to tax which is funny like what do I do that makes you feel the most special um like what do you like that i'm doing or like just how i'm doing. But this idea it's almost easily like I think it's good in the business. But also the idea is like what you are your single best idea to improve our family.

He is another way to think about that is your single company. What's the stupid thing that we're doing as a family? What's the stupid of thing and i'm doing as a dad? What's your single best idea to improve.

What i'm doing as your father, I love the simplicity of IT, and I love the idea of like sending IT out because you could bury the problem is like what I like about the idea of setting IT as set, like an individual question. right. Just got to the simplicity as opposed to putting IT in.

You know maybe like a survey where there's like ten or twelve other questions there. I think those questions are so powerful that they're good enough to stand on their own. So I S A A lot of the idea. And again, so as a feedback from from p this is good.

Intel, like, why wouldn't do that? So one thing that pops up open over again that's really important is you just is, like, have so many notes in the books like, damn, this guy is moving fast and I like there's speed oh, there's more speed just happens over over and so imagine this earlier is hilarious story where his main competitor, the sea of uh hurts, which was the largest uh knowledge have the migrant car company. But the the at the time the the the largest uh equipment rental chain uh in the country as well.

And brad has a great line here is like yet hurts to this. And they built up a national equipment rental chain to about a billion dollars of annual revenue over the cost of thirty seven years. United rentals did that in thirteen months.

And so he gets his invitation. Come have lunch with the CEO. Yeah, maybe like trying to buy me out what's happening.

Just let me go see what's. And he was ridiculous. And self is a losing strategy.

Take your competitor out to lunch and ask him to slow down. And essentially, that's what he did. He is like, you know, you maybe change one of my tag lines.

I had the largest car rental company and the largest equipment rental company in the world. And i've got the largest car rent company and the second largest equipment rental company. I don't want to be second and anything.

And he found him slow down. You're making a mess of this industry. You're going too fast.

You're going to mess this up and fast. Ford, uh, several years and their universities making like six times the amount of money. So that is a losing tragic.

Do not take your competitor out lunch bly, please slow down. Please be nice. Me, no, put on the yes and foot on their neck. I want to go back to the maxims that are in the acknowledged um because the single maxims is they're not hard rules and you need to know when to break the rules. And so is the idea that you should lose perfectionism.

And so but there's one domain where you don't wanna actually lose perfectionism and that is in hiring the most important thing A C E O does is recruit great people. Yes, I made the point that aiming for profession can be counter productive. Good is usually good enough.

But if you're going to break that rule, you break IT for people, make your hiring choices as perfect as they can be, because there are few mistakes cost lier, then hiring the wrong person. This is so good with with member, an empty seat is less damaging than a poor fit. Make your hiring choices as perfect as I can be because their few mistakes costlier than hiring the wrong person, and empty seat is less damaging than a poor fit.

This entire section is about the different train super talent people what they bring uh to your company so I love this um i'm going to read Steve job was asked one time, uh, what talent do you think you consistently brought to apple? This is his answer uh this was his answer rather and i'm going to read you first because I think IT sets up what what brad's trying to teach us her here he says, I think i've consistently figured out who the really smart people were to hang around with, you must find extraordinary people. The key observation is that in most things in life, the dynamic range between the average quality and best quality is the most to the one pick.

Anything can be basically two to one, right? But in the field that I was interested in, I notice that that the dynamic range between what an average person could accomplish and what the best person could accomplish was fifty or a hundred to one, given that your well vice to go after the cream of the cream, you can build a team that pursues a plus players. A small team of a players can run circles around a giant team of b and c players.

So then he is going to talk about how to build outrageously talented team. And he feels his most valuable member. Sir said, hey, I think one of those things that did was I fired out who the really more people hung around them try to hire them.

I built incredibly, outrageously talented teams, brad said. Screening for super superior intelligence eliminates ninety percent of all candidates. So that's the first thing I look for. There's just no substitute for smarts. There is no substitute for brains. The CEO trade most closely, according ted, with organization success, is a high I Q double down on hiring the the when he is interviewing people, he will ask himself, can this person think dialectically, i'm going to define that for us because I love this definition of dialectically.

The ability to think dialect ally is the ability to view issues from multiple perspectives to arrive with the most economical and reasonable, reconciling ation of seemingly contradictory information that so important, the ability to view issues from multiple structures to arrive at the most economical and reasonable reconciler tion of seemingly contradictory contradictory information canadas person think dialectically, that is, are the capable thinking from multiple perspectives and reconciling streams of information that seem to flow in different directions. And second, second question, are they capable of changing their opinion, rigid thinkers at any level of intelligence are less valuable because they're mired in their own points of view. More advice.

You should hire ambitious people who want to accomplish big things and make a lot of money. More advice. IT is Better to be slightly understated ed.

I find that slightly understated ed teams, or more focused and spend less time doing redundant, busy work. Brad is big on vibe. I think he calls IT the love vibe and he says, my team and I spend a lot of time together.

So the big deal that we like one another, an organization, is like a party. You only want to vite people who bring the vibe up. And so he talks about listening.

I have advice for you. This is how you're going to different rate between the A, B and c players and your team. His old thing is that you cannot have sea players ever.

And when you figure out b players, it's inevitable that you're gonna have some, but you can have c players. And at all point as that, if you if you hire b players, they are likely to higher sea players. So you can be very careful to b players too.

But organization scales, you can have all a players is something Steve jobs said that pigs are when you had forgn n foreign employees is the first team of all the players had ever said in his life. And he said, you, apple, I think that time had three thousand people is like impossible. Have a team, have a company with, uh, three thousand a players.

So of course you can have some b players, but you ve got to be careful because they love hiring sea players and c players. Sock, this is how you different change between A, B and c players. And he does this in his mind.

Again, thought experiment. I imagine this person coming into my office and quitting without warning, just by imaging the scenario, I can immediately tell for my own inner response whether this person is an A B C player. If my first thought is I was gonna fire, this person sooner later says, no big deal, that's a sea player.

If my reaction is, I don't like this, but I can live with that. The transition period might be a little bumpy bubble. Find somebody else, maybe even somebody Better.

We are talking about to be player. But if my reaction is an internal dialogue of panic and IT sounds like worth so screwed. How did we get into the situation? There is no way we're going to find somebody as fantastic as this person that is an a player.

And what do you do with a players? You overpay the hell out of them because here's a think. The reason you should overpay them is because you the reason overpay for talent is because it's nearly impossible to overpay for talent.

Think about what Steve jobs said earlier, right in in some fields, the, the, the best person is not choices. good. There are hundred times is good.

Think about when Steve jobs came back to apple, apple bought next for almost a half a billion dollars, right? The way to think about that is apple paid half a billion dollars to rehire Steve jobs and they got the deal of the century IT is almost impossible to overpay for talent and bread talks about this a lot of things that motives people but you you're silly if you don't think compensation yeah they had to believe in the mission. They have d like to do to find the as you chAllenging there is a later team.

They also should be paid odders and odds of money. So he says there's one hundred and twenty four thousand employees, uh, out of all the three companies that he currently chairs. Not a single one of them shows up for work because they want to make money for brad Jacobs.

They come because they want to make money for themselves and their families. Money animates people everywhere. 所以 i have employed all of the world， does not just a united states thing.

Money animates people everywhere. That's why i've overpaid coron quote almost every direct report i've ever had to ensure I had top team people in place overpay for talent. IT is nearly impossible to overpay for talent that such a important thing to remember, never, ever, ever forget the dynamic range of humans.

IT makes no financial sense to skip on salary and centres to save one hundred thousand a year when hiring a second best candidate may cost you millions of dollars in lost profit. Oh, this guy is good. He's in a player.

Let me, I can save money. Hate people, try to like obvious ly, huge. What's what's the two bigger themes in history?

Interpreter ursy, right. Focus and watch your costs. That's a repeated over over again by by the vast majority of people united.

Watching your cost does not count when you're doing talent. That's now it's like, oh, I have a great a player, but I can hire the a for the same job. I can have A B pair player for a hundred thousand years no, it's not one hundred thousand or less.

You lost millions, millions and receive hot case. If they didn't hire them, what if they said they had off from? I think I was at four seventy.

What was that deal? Four hundred seventy million, something that this is said? No, no, it's only be two hundred million, whatever IT is.

They try a short changing by a couple hundred million years come back. Apple, what's apple pride of business? Apple pride doesn't exist this day. Never, ever, ever forget the dynamic range of human beings. And overpay for talent because it's nearly impossible to overpay for talent.

And I don't want to close on what I feels almost like a manifesto that it's incredible honour and a good thing for the world to build products and services that make up the people's lives Better, to create jobs for hundreds of thousands of people in reject case, to create wealth for your shareholders um and really is a text ment to the all important entrepreneur spirit. I love being A C O. There's a joy creating value and in even greater joy in knowing that so many people beyond our organization are benefiting from our accomplishments.

The best way to perform our duty is to fill an unmet need in the economy with a strong business model and a responsible organization. We create a healthy workplace environment for our people, and we pay them well. We hamper our customers, and we approach chAllenges with practical optimism that open our minds to solutions.

The grain majority of the tens of billions of dollars of value that my teams and I have created have flowed outside of my companies. I am extremely proud that our company could be counted on to create value. This is only possible because we Operate in free markets where creating prosperity is a virtue.

I want to share a personal experience I had with a small business owner who is work ethics and customer focus echo the value system that I am still in my own companies. The small business under his name is Steve. Steve handles the h.

Vx system at my home. Steve had originally worked for the large h. VC company that had installed the system, but that company was sold, and Steve decided to set out on his own.

So again, the all important entrepreneur spirit, Steve is a hard working, take pride in your work entrepreneur who puts his customers first. He cares a great deal about doing his job the way should be done. He told me.

His selfish steem goes up and down with his customer satisfaction scores. Naturally, he also measures his worth by how much money he's making to support his family. There's a fair amount of criticism being voice about profit seeking these days.

Some people are embarrassed to talk about the importance of money, but Steve is totally comfortable IT. And in his pursuit of happy customers and a good living for his family, he built a successful business. As a result, customers flocked him.

Steve is the face of the entrepreneurs rit I wrote to spoke with people like him in mind, people who want to work their tails off, who want to out smart the competition, who want to put their customers on a pedestal, and who want to make a lot of money for their families. The summer after eighth grade, I attended the road island governor school for the gifted in art and music, a summer enrichment program for kids who'd been nominated by their schools. I wasn't sure what to expect on the first night, I was captivated by a speech given by one of the leaders.

I remember goose bomb rising on my arms as he spoke. This program is a special opportunity, but it's up to you to take advantage of IT. He said.

You have a choice. You can waste next couple months and not accomplish much, or you can go all in. This is an opportunity to go deep on a project and do the best work that you've ever done.

But you have to decide if you want IT. He said he was there that I learned what I meant to go, all in that magical connection between intensity of focus and the end result. If I put my whole heart and soul into a project, I had IT in me to create really cool stuff.

We have IT in our own hands to either make life meaningful or just past time until we die. That's up to us. I hope you inspire to run hard and making a few billion dollars or achieving some other big dream.

And I wish you the exhilaration i've seeing IT through to success. And that is, well, leave IT highly, highly, highly recommend buying the book. As I said before, I really do think it's a reference. I'd read IT through all of the uh I read IT all way through and that keep IT close at hands references pending. H has a bunch of thought experiment.

This is really interesting history of technology, timely because it's a huge influence in the way broad approaches business because the megatron in universe, he's get interview questions for job candidates, recommended books, how to conduct meetings that the pens is like full of h you could buy the book just for the pentax, obviously read the whole thing. But anyways, if you buy the book using the link that isn't the shown notes, you'll be supporting the podcast at the same time. That is warm up three hundred, three hundred and thirty five books on one thousand ago, and not started again soon.