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How Brad Jacobs Built 8 Billion-Dollar Companies — Transcript

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0:02- I'm ready when you are, man.
0:03- Let's go. - I'm in the zone. I'm in the zone, man.
0:06- We're going to pick up right... I hope we start with this. I love your energy.
0:09This is what I always tell people when, you know, I did the episode on your book.
0:12Right?
0:12And since then,
0:13thousands, and this is not an exaggeration, thousands of people
0:16have sent me messages.
0:17But what I try to explain to people, they're like,
0:19"Well, what's so different about Brad?" I was like, "Well, first of all,
0:21how long do you have?
0:22Second of all,
0:23he's got the best energy, and the most energy
0:25of any person I've ever been around."
0:28So, like, I really appreciate you taking the time
0:29and agreeing to do this.
0:31One of my favorite things is your affinity and relationship that you had.
0:35You had a bunch of mentors,
0:36but one of your most important ones
0:37that you mentioned I think four times in the book
0:38is Ludwig Jesselson.
0:40You have a list of maxims, in the very beginning of the book,
0:44that you learned from other people.
0:46The maxim that you listed for him was,
0:49"Get the major trend right." So, if you could just talk about
0:52your relationship with him, and what he meant to you.
0:54I think that's a perfect place to start.
0:56- He meant a lot.
0:57So Mr. Jesselson...
0:58I never called him Ludwig.
0:59- Mr. Jesselson. - Yeah.
1:01He was, you know, significantly older than me, and
1:02much more accomplished than me, so,
1:04I showed him respect by calling him Mr. Jesselson.
1:06Mr. Jesselson was a special guy.
1:09This was someone who was deep, very profound,
1:12and had lived life fully, and by principles.
1:15And he was a religious guy,
1:18but I wouldn't say he was, like, ultra-religious.
1:20He was more taking the morality of Judaism,
1:24the do's and don'ts, and ethical behavior, and honesty and so forth,
1:27and that became the core of his life.
1:29That became the core of his personal life, and his business life.
1:31Relationships, deep relationships, long-term relationships,
1:36honest relationships, relationships you can keep coming back to.
1:40And sometimes one person has the leverage,
1:42sometimes the other person has the leverage,
1:44doesn't matter, you don't take advantage of that.
1:45It's long-term relationships.
1:47And he had about a few dozen deep principles.
1:53And one of them is the one you just mentioned, which is
1:57because he was a trader.
1:58- Mm-hmm.
1:58- He ran the largest commodity trading firm in the world, Philipp Brothers.
2:01It was, you got to get the long-term trend right.
2:03You can get a lot of other stuff right.
2:05- Yeah.
2:05- But if you don't get the long-term trend right, you're kind of in trouble.
2:09So, you got to figure that one out. You got to say, "What's going on here?"
2:13You need context.
2:14You need to see what's happening, what did happen,
2:18what is happening, and what will likely happen in the future,
2:21and what are the different
2:23future states that could happen,
2:24and what's the probabilities for each one of those?
2:26And then you have your risk management.
2:28So, yeah.
2:29The converse of that is,
2:30if you get the major trend wrong,
2:33you can do a thousand things right,
2:35you're still going to lose.
2:36You're not going to create alpha. You're not going to create value there.
2:38So yeah, that was a big lesson from him.
2:41- The other thing that I love is you were 23 years old.
2:43You're having lunch with him on a very frequent basis.
2:45Like you just said, he's much older.
2:47He's one of the most successful people in the world.
2:48He's taking an interest in you.
2:49And yet, you were still comfortable to unload your
2:52stresses and your problems,
2:54and he would sit there patiently listening.
2:56And then I love his response
2:58where it's just like, "Yeah, business is problems."
3:00Like, one of the, I think, most important lessons was just, like,
3:02problems are...
3:03There's a line from Henry Kaiser who was, you know, in his day, was as famous as,
3:07say, like, an Elon is today, or you're becoming,
3:09and, you know, he started 100 different companies.
3:11He built the Hoover Dam.
3:13He built Liberty ships for the Allies in World War II.
3:16And I read a bunch of biographies on him, because he was
3:19one of Charlie Munger's favorite founders.
3:21And he said a line in the biography,
3:23that's in multiple life stories about him,
3:24that problems are just opportunities in work clothes.
3:26And so, I read your recounting in your book
3:29of some of your lunches with Mr. Jesselson.
3:33And it's like, oh, he essentially gave you the same advice.
3:37- Yeah.
3:38So, in the book, I talked about a specific episode when
3:42I was having lunch with him, and I was kind of down and glum, and
3:45he said, "What's going on?" I was talking about this problem, and
3:48this thing, and I was just kind of down, you know?
3:50And he said, "Well,
3:53don't stay in the business world if you're going to get down on this stuff.
3:56These are the things you should get up from."
3:57- Yeah.
3:58- When you have problems, when you have challenges, when you have obstacles,
4:00by addressing those, that's how you make money.
4:03You make money. So, the more problems you have,
4:05as long as you can solve them,
4:07as long as you figure out how to address them, and remove the problem,
4:10that's how you're creating value.
4:11That's a wonderful way to go through life.
4:13Number one, it's a great way to make money.
4:15- Mm-hmm. - Because you're not always down.
4:16Because you always have incoming missiles when you're in the business world.
4:19You have problems with employees, with competitors, with regular...
4:23I mean, just all day long, you have incoming missiles.
4:25You have great stuff too, but
4:27in between that is punches to the face.
4:29And if you're going to get beaten up by that,
4:32you're not going to be successful. And secondly,
4:35you're not going to be happy.
4:36So, you're going to go through life, like, glum.
4:38Sometimes you see these, like, multi-billionaire guys
4:41and they always look like this.
4:42Well, what's the point of all the money?
4:43If they're...
4:45Seriously.
4:46So, I would not want to be one of these zillionaire guys who's, like,
4:50frowning all the time, and upset, and angry, and depressed.
4:54That's much more important to me to be in the right frame of mind,
4:57and to go through the short time we have in life-
4:59- Mm-hmm.
5:00- ... happy, reasonably happy.
5:01I don't have a perfectionist standard where I have to be, like,
5:04in ecstasy and bliss 24 hours a day, seven days a week, but generally happy.
5:08- Did you ever meet Sam Zell when he was alive?
5:10- I did. Yeah, I'm sure many times.
5:11- Okay. - Great guy.
5:13- He had the same thing.
5:14I was lucky enough to have a two-hour very intense lunch with him.
5:16He said the very similar thing to you. He's just like,
5:19"I know all the rich guys."
5:20He's like, "You wouldn't believe how many are miserable."
5:23He's like, "Don't do that."
5:24He's like, "I wake up every single day."
5:26You guys have a lot of similarity where, like, I'll spend time with you.
5:29You know, the very first time I met you when I went to your book launch party.
5:31- Right? - Yeah.
5:32- I just remember like, "Oh, this guy's got crazy energy."
5:35And I'd already read your book by then,
5:36but something that you talk about over and over again in your book
5:39is just, like, problems are just opportunities.
5:41It reminded me of there's this line from Jeff Bezos'...
5:45There's several books on him, but one of his main biographies
5:47is this book called "The Everything Store."
5:49And they said that
5:51Jeff, you would tell him problems about his business, and he would get excited.
5:55- Yeah.
5:55- Because he's like, "Oh."
5:56And he talks about it in the shareholder letters.
5:57It's like, "Oh, this is like, these are problems.
5:58If I solve these problems,
5:59this is going to increase the enterprise value
6:02of the company that I'm building.
6:03These are actually good things
6:04to identify and embrace instead of avoid."
6:07One of the most important things that I learned from Brad Jacobs is the
6:10importance of working with the smartest and most talented people you can.
6:13Brad says
6:14the most important thing that a CEO does is recruit superlative people.
6:18Brad recruits the smartest people he can find,
6:20and says there's no substitute for smarts.
6:22Steve Jobs believed that this was important too.
6:25Steve said,
6:26"I think that I've consistently figured out
6:28who the really smart people were to hang around with.
6:30You must find extraordinary people.
6:32The key observation is that in most things in life,
6:35the dynamic range between average quality,
6:37and the best quality is at most two to one.
6:40But in the field that I was interested in,
6:42I noticed that the dynamic range between what an average person could accomplish,
6:46and what the best person could accomplish,
6:48was 50 or 100 to one.
6:51You need to build a team that pursues the A+ players."
6:55That is the end of the Steve Jobs quote,
6:57and that is exactly what Ramp has done.
7:00Ramp has the most talented technical team in their industry.
7:02Becoming an engineer at Ramp is nearly impossible.
7:05In the last 12 months, they hired only .23% of the people that applied.
7:09That means when you use Ramp,
7:11you now have top tier technical talent,
7:13and some of the best AI engineers working on your behalf 24/7
7:17to automate and improve all of your business' financial operations.
7:21And they do this on a single platform.
7:23That means the longer they use Ramp, the more efficient your company becomes.
7:27This is important, because as Sam Walton said in his autobiography,
7:30"You can make a lot of different mistakes
7:32and still recover if you run an efficient operation,
7:34or you can be brilliant
7:36and still go out of business if you're too inefficient."
7:39Ramp helps you run an efficient organization.
7:41From a customer's perspective, what does a team of A+ players sound like?
7:44It sounds like this customer review that I read,
7:47which said,
7:48"Ramp is like having a teammate
7:49who you never need to check in on because they have it handled."
7:52Go to ramp.com
7:54to learn how they can help your business save time and money today.
7:56That is ramp.com.
7:58I do have a question on your long-term reputation, okay?
8:02So, there's this line, do you remember when Buffett got-
8:05- I remember it.
8:06- ... in all that trouble with Salomon Brothers.
8:09- And he's like, "Listen. - Right.
8:10- You can lose money. That's fine.
8:11But you lose a shred of reputation-
8:13- "I'll be ruthless."
8:14- ... I'll be absolutely ruthless." - Yeah.
8:16- It was a very jarring experience for me at your book launch party.
8:20Because first of all, I was the only one that didn't show up in a suit.
8:23So, I rectified that today, right?
8:24And then everybody else was just like, you know,
8:27"I've known Brad for three decades."
8:29Basically, everybody there was like, "How do you know Brad?"
8:31It's like, you know, I was investor of his, you know,
8:34he made all this money for this pension fund that we run,
8:36and everything else. And, like,
8:37the stories that I've heard at the party,
8:39and then since I released the episode, it's just like,
8:41you have a fantastic long-term reputation.
8:43Do you have any advice on how you were able to maintain that,
8:46and how important it was for other people to do the same thing?
8:49- Reputation is really important. Your personal brand is extremely important,
8:53because based on that, people are going to want to do business with you,
8:56or they're going to want to not do business with you.
8:58So, every day you're in the office and doing stuff,
9:02you're either raising your brand, or you're lowering your brand.
9:05And that's the main thing you got to work on.
9:06You got to make sure that your brand reflects integrity, and honesty,
9:10and dependability, and stability, and people can count on you.
9:12This goes back to Mr. Jesselson.
9:14So, Philipp Brothers, this is before email,
9:18actually, it was even before faxes.
9:20It was more TWXs and Telexes.
9:22So, which took a few days to go through,
9:24when they went through. Sometimes they didn't go through.
9:26So, you could do a deal worth hundreds of millions of dollars
9:29on a handshake, or on a phone call.
9:31There's no written confirmation of that for, like, days.
9:34In the meantime, maybe the price of whatever you were trading, oil or copper,
9:37had gone up a lot.
9:40You still had to have a deal.
9:41- Yeah.
9:41- Otherwise, you know, the whole system doesn't work. So, dependability is so...
9:45Trust is so, so important to do.
9:46- How old were you when you...
9:48When he gave you that advice, did you
9:49- ... immediately start applying it? - In my 20s.
9:50- So, you were optimizing for the long term even when you were that young?
9:54- Yeah. I think as you get older, you optimize for the long term more.
9:57I think.
9:58I think when you're young, you're just so ambitious, and you want to get stuff done,
10:02you're in the now.
10:04As you get older, and as you mature,
10:05you have more context.
10:07I think life, in general, is about getting more context,
10:10seeing things in proportion to other things.
10:12- Can you say more about that?
10:14- Well, you know, because we've talked about it a lot outside of your podcast.
10:18- Yeah. - I'm into meditation.
10:19- So, a lot of the meditation I do is changing...
10:22Looking at space from different perspectives,
10:24not the normal perspective that we have right this minute.
10:26So, I expand my mind from the earth, to the sun,
10:29to the solar system, to the galaxy,
10:31to the clusters of galaxies, to the universe,
10:33to the multiverse. Just go way, way, way, way, way high.
10:36And then bring it all the way back in,
10:39and then go into the molecule, and the atom, and the proton, and the nucleus,
10:43and right in the middle of all that, and then go to strings.
10:45And I find that making my mind like an accordion, getting really big, and then
10:51really, really small.
10:52And then doing the same thing with time,
10:54looking at time, go back towards my life
10:57over the last few decades,
10:58and then go back centuries, and millennia,
11:01and just keep going way, way, way back, all the way back
11:0313.8 billion years, go back all the way to the Big Bang,
11:05and then go all the way forward.
11:07And, like, picture the world going forward, forward, forward, forward.
11:11That time and space juxtaposition, for me, at least,
11:14different things work for different people,
11:16gives me context.
11:17It gives me humility. It gives me humbleness.
11:19It shows that I'm just one thing right here in a major, major thing going on.
11:24I'm just one little, tiny jet. But at the same time, I'm part of that.
11:28So, I'm very uplifted, I'm very inspired, I'm very motivated. Like,
11:31"Wow, I'm part of, like, a real big deal here."
11:34It's great. We all are.
11:35- Yeah.
11:35- We're all part of this huge, huge thing.
11:37- So, I think context is really important.
11:40It gives you meaning, it gives you purpose,
11:42it gives you understanding, it gives you wisdom.
11:44- I know you hate when I say this, because we've talked about this privately.
11:47It's like, you obviously know I study uncommon people for a living, right?
11:50- You do a great job at it.
11:51- I appreciate it. - Maybe unique.
11:52- Yeah. I appreciate it. But, like, think about how crazy it is.
11:54Like, the people that I study on "Founders" is
11:57they were so good at their job, somebody wrote a book about their life.
11:59Like, you're talking about very small.
12:00But most of their inner monologues, you're different.
12:04You have a much more positive energy.
12:07And, like, there's almost like a... Let me give you some context here.
12:10We were together a few months ago at a mutual friend's birthday party,
12:13in Miami.
12:14Our friend, Rick.
12:17There was a bunch of interesting people at the party.
12:18One of them was Apolo Ohno, okay?
12:20Apolo Ohno is the most decorated American winter Olympian of all time.
12:25He's become a friend. I met him through the podcast.
12:28And he walks up to me, and this is one of the funniest things.
12:31And, you know, because he has...
12:33People think you're an Olympian. Like, he was training since he was a kid.
12:36His dad would make him get up at 5:00 in the morning and run
12:38- ... drills in the school parking lot. - Yeah.
12:40- But he still comes from, like, a very positive...
12:42He has a great relationship with his dad.
12:44Normally, it's like, you know, not good, when they're put under the circumstances.
12:47So, he was asking me, he's just like,
12:49"I see this pattern in,
12:50you know, when you're reading all these hundreds of biographies
12:52about these great entrepreneurs that, like,
12:54there is something inside of them, driving them
12:56that is actually negative." It could be insecurity, it could be, you know,
12:59they grew up in poverty, it could be a bad relationship with their family.
13:02And he's like, "Are they all like that?"
13:04And you were, like, 20 feet away, "You see that guy over there?"
13:07He goes, "Yeah." And I go, "You know who that is?"
13:09He goes, "No." I go, "That's Brad f****** Jacobs."
13:11I was like, "I guarantee you he's not driven by that."
13:14This is what I mean.
13:15You're uncommon amongst uncommon people, because,
13:17at least from the outside, and the conversation we had, it's like,
13:20I think part of this impenetrable nature that you have
13:23in like, "Oh, yeah, business is problems.
13:25It's going to come.
13:26What do you think we're doing here?"
13:28Like, you don't seem to be rattled by them.
13:30So, like, what is your inner monologue?
13:32Like, when you're doing huge f****** deals right now.
13:36You're doing all kinds of crazy stuff.
13:37You've built eight separate billion-dollar companies.
13:39You don't do that by accident.
13:40So, how do you... I'll stop talking there.
13:43What is your inner monologue like?
13:44- So, it goes back to what Mr. Jesselson used to say is,
13:47"Problems are your friend."
13:49- Mm-hmm.
13:49- You don't want to just tolerate problems.
13:52You want to embrace problems.
13:53You want to hug problems.
13:54Problems are the way you succeed.
13:56You want to run to the fire.
13:57You don't want to run away from the fire.
13:59You want to be brave, you want to be courageous, go into it.
14:01I think you can start with anything that's anything.
14:05And in this case, in Apolo's case,
14:06he starts with, and other people he's studied start with,
14:09negativity, trauma, stress, insecurity, fear, anxiety,
14:14and then that's their motivator.
14:15They zero in on that,
14:18and then that makes them run faster.
14:20- Was that ever your case though? - No.
14:21- That's not my thing.
14:23- You're like a unicorn.
14:25- I don't know that I'm a unicorn. I don't embrace negativity.
14:29I'm okay with it, but I don't make a big deal about negativity.
14:32I'd much rather enjoy the positivity. I'm a sunny side up guy.
14:35- But your inner monologue, are you nice to yourself?
14:39- Your ongoing inner monologue? - I'm reasonably nice. Like, yeah, I am.
14:43- I am vicious.
14:44I sound like... You know who David Goggins is?
14:47- Oh, yeah. Oz the Mentalist was talking about him.
14:51- My inner monologue sounds like David Goggins.
14:53Where it's just like, "You're not doing enough.
14:55This wasn't good enough."
14:56Like, I see the problems, so, like, I attack them.
14:59It's like, oh, I'll listen to a past podcast or something,
15:03anything I've done where it's like...
15:04And all I see are the flaws. I don't see any of the good part.
15:07- So, let me comment on that.
15:08I think there's two different ways you can approach that.
15:11So, yes, as cognitive behavior therapy has taught everyone,
15:15we're born with a schema,
15:17a prism through which we see life,
15:19and that can be clouded by core beliefs of,
15:24"I'm inadequate, I'm weak, I'm defective, I'm unattractive, I'm unlovable."
15:29All kinds of negative stuff.
15:31Now, there's two ways you can approach on that.
15:33You can either dispute those things.
15:37First validate, then dispute.
15:39So say, "Well, of course I'm hearing this."
15:41I have executives who report to me over the years
15:43that have the exact same schema as you just described,
15:46where they're always saying,
15:47"Oh, I'm no good at this. Oh, when people realize how bad I am,
15:52I'm just faking it. I'm wearing this mask, and
15:55I'm doing a bad job. I'm going to get fired.
15:57People are hiding stuff against me, because they don't respect me."
16:00All this, like, negative self-talk.
16:02It's a complete waste of time. But nevertheless, that's their reality.
16:05- Mm-hmm.
16:05- Their reality is they have this steady drone of automatic negative thoughts.
16:09There's two ways to deal with that.
16:11Either you can dispute them,
16:13but first, validate it.
16:15Don't start with the disputing.
16:16First, validate it and say, "Okay, yeah,
16:18of course I'm having all these negative thoughts, because
16:21I got a tough job," for example.
16:23"I have a big job. There's a lot of pressure,
16:25and I'm not perfect, so I'm not getting everything right.
16:27And so, I do mess stuff up, and I do get things wrong,"
16:30and all that negative talk. And then,
16:32you catastrophize on those negative things, and make them into
16:35huge, huge issues when they really should be minimized,
16:38if you put them in proper context.
16:39So, you first validate it,
16:41but then dispute it, and then say, "Well, what does the evidence say here?
16:44Is this really a rational thought, or is this my schema kicking in?"
16:48- To me, when you say that, it's like,
16:50I think you have this gift to step
16:51outside of yourself, which now you're saying...
16:53But when I say, "You step outside of yourself,"
16:55you're like, "No, I'm in myself."
16:57- I much prefer to be in myself,
16:59- Okay. - ... than out of myself.
17:00- I like to come to center.
17:01- Okay.
17:02- I like to find the center.
17:03The first time that concept of centering came about was
17:06when I went to enrichment camp at a school in the summertime,
17:11and there was a book they gave out called "On Centering."
17:15I don't remember who wrote it.
17:16And it had a picture of someone making pottery.
17:19And they were explaining in the book that it's all about
17:22finding the center of the pot you're making.
17:25So, centering, finding that inner calmness,
17:27finding that zone where you're in the groove,
17:30and everybody has it.
17:31Everybody has that. You just got to find it.
17:33And that's one of life's missions is to find that center,
17:36find that inner calmness zone.
17:38And then,
17:39when I went to college and I studied music under Bill Dixon,
17:41same concept came out. I said, "Oh, I'm familiar with this." He said,
17:44"Come back to the center." So, we're playing improvisation,
17:47what he called black music.
17:48- Mm-hmm.
17:49- Some people might call it jazz. He didn't like the word jazz.
17:51Playing with some friends, and then
17:54you have to find the center, come back to center,
17:56back to the center, back to the center.
17:58So, there'd be a center point in the music.
18:00You could go anywhere you wanted in the music.
18:02You can improvise all over the place,
18:04but come back to center,
18:05and then everybody would come back to their common center.
18:08So, I've incorporated this concept of centering, of finding a center
18:12into my meditation practices, into my business practices,
18:15into my philosophy of life.
18:16So, I like to find centers.
18:18But going back to what we were saying before,
18:19so you have this negative self-talk coming.
18:21You can either take one of two paths.
18:23You can take the path of validating, and then disputing it,
18:27and seeing it in a proper, rational way.
18:29Or, you can take the approach of just witnessing it, just enjoying it, and
18:34just it is what it is.
18:36It's mindful acceptance of it. So, acceptance of that.
18:39And I vacillate between those two. Sometimes I do the...
18:44- You asked how I do it. - Yeah.
18:45- My internal monologue, if negativity creeps in, and of course it creeps in.
18:49I'm dancing with the ghosts of my ancestors,
18:52just the way you and everybody else are dancing with the ghosts of the ancestors.
18:55Evolution worked very slowly over generations,
18:58over long periods of time.
19:00So, we always have this set of genes
19:02that were good for survival, and procreation of our ancestors,
19:05but not necessarily now.
19:07- Mm-hmm.
19:07- We still have in the gene pool all these like, irrational thoughts.
19:10So, another way to look at it is, just observe it.
19:14Kind of more of a Buddhist way. Just observe it.
19:16Like one of the ways...
19:18The most simplest Buddhist meditation is just observe your breath.
19:21- Mm-hmm. - Just observe your breath.
19:22- I mean, how easy can that be? All you got to do is close your...
19:24- We just did this before we started recording.
19:26Where you're like, "Let's go through a miniature meditation before we begin."
19:29And like, I don't ever do that.
19:31And I should probably should start doing it.
19:33I just kind of wake up and go,
19:36and just try to attack things that I feel like...
19:38And don't get me wrong, like I absolutely am obsessed with what I do.
19:41- You are. - I love my work.
19:42I work on it seven days a week.
19:44But I wanted to be the best in the world at it,
19:46and that's where it's like, "Oh, you just see these deficiencies."
19:49- So, that sounds to me like perfectionism.
19:50So, I suffered a lot from perfectionism when I was younger.
19:53- I wanted to be perfect. - Yeah.
19:55- Not only did I want to be perfect,
19:57I wanted everybody else to be perfect.
19:59Not only did I want myself and others to be perfect,
20:01I wanted the universe to be perfect.
20:03I wanted everything just to go swimmingly well at my beck and call, and command.
20:07Well, turns out, that's not reality.
20:09- It's not nature's way. - None of those three-
20:10- ... constituents are perfect.
20:11- There's something that you said in your book.
20:13It's actually in this section that I was writing down.
20:16You're like, "I'm not surprised when things don't go perfectly.
20:18That's the nature of the universe.
20:19The big problems can be where the best opportunities lie."
20:22And so, obviously, you know, like any time I read something,
20:24it's not that I'm reading it.
20:25I think about how it relates to every single thing.
20:27else I've experienced, and all the other books I read.
20:30And I remember I got to have dinner with Charlie Munger.
20:32I spent three hours with him, you know,
20:34six months, eight months before he died.
20:36There's like a trend here unfortunately, where it's like-
20:38- Uh-oh. - ... kind of dangerous.
20:39- Remember? You're like, "I don't know if I'm going to have dinner with you."
20:43But one of the things I loved, it was the top note I left myself.
20:47Because as soon as I left there, I just wrote down, like, what I learned.
20:50And it said that, "Charlie has an almost complete indifference to problems.
20:53Troubles from time to time should be expected.
20:55This is inescapable, so why let it bother you?"
20:58And it's like one of the things I most admired about him.
21:00He's just like, "Yeah, it's part of life. What's wrong with you?"
21:02Like, you know, he had 10 decades of life experience.
21:06He was way further down the line, and obviously way wiser than I was.
21:10- I have two comments on that.
21:11One is, when you go back to the Big Bang.
21:14- Mm-hmm.
21:15- The current construct model of how the universe was created,
21:18it was actually created out of imperfection.
21:20There was like a slight imbalance between matter and anti-matter.
21:24Just a slight imbalance. A lot of debate of what caused that.
21:27As a result of that, everything came out of that.
21:30- Mm-hmm.
21:30- Had there been perfection at the beginning of the universe,
21:33the Big Bang would not have happened.
21:34So, we are imperfection. We are the children of imperfection.
21:38Imperfection is good. Imperfection is not bad.
21:41Expecting perfection will cause you stress, and strain,
21:44and won't really work.
21:45- When you were in your 20s, though, you said, "Hey, I wanted to be perfect.
21:48Not only do I want to be perfect, I want everybody around me to be perfect."
21:51- Yeah.
21:51- "I wanted the universe to be perfect."
21:52Like, how long did it take for you to learn what you just-
21:55- ... explained? - So, when I stepped down
21:58from United Rentals as CEO, I still stayed as chairman.
22:00When I stepped down as CEO of United Rentals,
22:03had done it for about 10 years, and
22:04I wanted to do my next big thing.
22:05I wanted to do another startup from beginning.
22:07I was running a big company. I wanted to start it from scratch.
22:10And there was a period of a couple years where
22:13I was trying to figure out what I was going to do,
22:15and I didn't find it.
22:17And then the great financial crisis came, and I was kind of lost.
22:20I was kind of...
22:21It was probably the only time in my life
22:23that I was depressed. I'm just not depressed.
22:27But that period of time, I was actually clinically depressed.
22:30I took the Beck Depression Inventory, and I came out, yep, depressed.
22:34- Wow.
22:34- So, I found a amazing cognitive therapist, and I went to the guy
22:38twice a week, hour and a half a shot, for two years.
22:42It was fantastic.
22:43One of the best things I've ever done in my life,
22:44because what we did was, in an environment that was very safe,
22:48and confidential, and trusting,
22:50with someone who was a professional at psychology,
22:54I was able to, first of all,
22:57identify, and then
22:58notice more fully my automatic thoughts,
23:01the negative thoughts.
23:02- Mm-hmm.
23:03- And irrational thoughts, unconstructive thoughts.
23:05And then,
23:07first validate them, then dispute them.
23:09First join, and then lead to a more constructive way of looking at things.
23:13So, that cognitive therapy approach of identifying the thoughts,
23:17and then dealing with them,
23:20really was the turning point in my life on this perfection thing.
23:22Because after a few sessions, he said,
23:24"You know, I kind of know what's going on here now.
23:27I've gotten your measure.
23:28You want to hear it?" I said, "Yeah, I want to hear it."
23:30And he said,
23:32"You're suffering from perfectionism."
23:34Like, "You want everything to be perfect, and it ain't."
23:37So, we need to get over that.
23:39We need to reduce these demands,
23:42these musts, these shoulds, these commands that-
23:44- Mm-hmm.
23:45- ... either I, or you, or the rest of the world is perfect to,
23:49you know, preferences.
23:50Where I would like me to be better,
23:53I would like you to be better, I'd like things to go better, but
23:55they don't have to.
23:56I can still be happy, and frankly,
23:58they're not going to all the time. So, I need to accept that.
24:00Need to radically accept that.
24:02I need to be in reality, not put these...
24:04You know, you mentioned Bezos.
24:07Bezos says a lot of cool stuff.
24:08But one of the things he says often is,
24:11"Don't fight with reality, because reality always wins."
24:13- Yeah.
24:14- So, the reality of this is nothing's perfect.
24:17Like, literally nothing is perfect, that I've found yet.
24:20- He has another line that I think is related.
24:21It's similar to the idea in your book, where he's just like,
24:24"If you don't want to be criticized, and you don't want stress,
24:26then you don't do anything."
24:27- Exactly.
24:28- It's just like, then just sit in a room and watch Netflix,
24:30and order a DoorDash or something,
24:31but like you're not going to do anything that you can be proud of.
24:34- So, that's another irrational thought you see people have.
24:36And I used to have this a lot, but I don't have it now,
24:38because I went through that therapy thing, and
24:41it turned a switch on in my brain,
24:42is a demand that everybody likes me, and everybody respects me,
24:48and everybody says great stuff about me, and I get good press,
24:50and I get good reviews,
24:52and the stock just goes up every single day.
24:53Well, that's not going to happen. That's called perfectionism.
24:57That's not reality.
24:58So, you just kind of modify that to,
25:01"Well, sure,
25:02like everybody else, I'd like
25:04people to say good stuff about me, rather than bad stuff about me, but
25:07I don't really care.
25:08If people say bad stuff about me, then,
25:10okay, maybe there's some truth in it.
25:12Maybe there's some good thing I can learn from that.
25:14Maybe they're just off,
25:15they don't know me, and they're just kind of
25:16imposing their distortions on me."
25:18But does that really change who I am? It really doesn't.
25:21If somebody is saying something bad about me,
25:24does that really matter? It doesn't matter really at court.
25:28And it, again, goes back to context.
25:29In the larger context of things, most problems really don't matter.
25:35They just don't matter.
25:36Maybe at the time they seem like one, and maybe we're kicking in,
25:39magnifying those problems, and
25:42making them into big catastrophes, and dramas, but
25:45most problems really aren't a bad thing.
25:48- I always say opportunity is a strange beast. It frequently appears after a loss.
25:52- There's always a play.
25:54No matter what happens...
25:55This goes back to the Jesselson conversation.
25:58No matter what gets thrown in your face,
26:01at the moment, it may seem ugly and bad.
26:04There's a play.
26:05There's a way to utilize that. There's a way to use that.
26:08There's a way to embrace that, and turn that into success.
26:11Anything can be turned into
26:13positivity and success, even if it starts in a bad place.
26:16- Something came to mind when you were talking, that's also unusual,
26:19because most of the people that, like, I read biographies about,
26:22they go through several different companies
26:24until they find, like, their life's work.
26:26But normally, they're working on something for, like, a very long time.
26:29Why do you keep starting so many companies?
26:31Like, what is going on?
26:34- That's my thing. Everybody's got their thing.
26:36- So, you're a great podcaster. - Yeah.
26:38- You have a talent.
26:39Your superpower is you can consume large amount of information
26:42and then distill it down to like, boom,
26:44here are the most important takeaways from that.
26:45It's really brilliant. That's your thing.
26:47- Yeah. - That's why you're doing it, right?
26:48- Yeah, yeah. - Because that's what you're good at.
26:49- Yeah.
26:50- You're not playing professional baseball
26:52or, you know, acting or- - Yeah.
26:53- ... singing or whatever.
26:54- You're doing what you're good at. - Yeah.
26:55- This is what I'm good at.
26:56I'm good at figuring out what's the right industry to consolidate.
27:00- Mm-hmm.
27:01- And secondly,
27:02I have a toolkit, and it's the same old toolkit.
27:05- You told me this last time. Can you explain this?
27:07I love the way you described this toolkit
27:09of how you approach building your businesses.
27:11- So, first, I find the right industry.
27:13I find something that's large. I find something that's growing.
27:16I find something where it's fragmented.
27:17I find something where we can buy things at reasonable prices.
27:20I find things where technology could be used.
27:24It's not very tech-forward industry.
27:26I find stuff that
27:27AI and automation are not going to disrupt anytime in the near future.
27:31So, I find industries that have certain characteristics to it,
27:35whether it was garbage, whether it was construction,
27:37whether it was transportation, or logistics, and now distribution.
27:41They all have the same characteristics, same traits.
27:45So, that's point number one.
27:46Point number two is I then put together an amazing team.
27:50I put together a team of people who are generally smarter than me,
27:53and who are more talented than me in what they do.
27:56So, I have a great CHRO who knows everything there is to know about HR, and
28:00compensation, and talent, recruitment, and so forth.
28:03I have great M&A team, who really know how to do deals,
28:07and get deals done, rather than turn them into dramas.
28:10I have great finance accounting people who understand
28:13everything there is to know A to Z about running a fast-growing company,
28:17keeping the books clean.
28:18So, et cetera.
28:19And I get the team together,
28:21then I get the compensation sorted out.
28:23So, I make everybody my partner on the senior team.
28:26And I give people tons of equity,
28:28but there's a catch.
28:29You can invest, but you can't sell it for five years.
28:31- Mm-hmm.
28:32- And most of it invests in the last two years.
28:33So, everyone is committed, going back to long-term relationships.
28:37Sure, people come and go for whatever personal reasons, or
28:39people burnout, or whatever. But generally speaking, most of the team
28:42stays for a while.
28:44And you work together as a team.
28:48And then I have certain rules of how we're going to interact with each other
28:52in a very respectful way,
28:55but in a way that encourages looking at things from different angles.
28:58So, we disagree, and we argue.
29:00Argue is too strong of a word.
29:02We present different ways of looking at a situation
29:05that partly overlap, and partly conflict.
29:08And then we, in a very scientific way, figure out, well,
29:11let's risk-adjust these things, and figure out what's right.
29:14It's a scientific experiment, an ongoing science experiment,
29:17like all day long of trial and error, and experimentation, and
29:20A/B experimenting.
29:22And so, that culture that we create gives us a power.
29:26It gives us a power to attack the industry in a way,
29:29without all the noise that a management team has.
29:33We're a very coherent team, like a superorganism, like a brain,
29:36like a very organized group.
29:38And then I have, between all those people,
29:42we have experience at our main job,
29:44which is to buy companies at reasonable prices,
29:47where there's a difference between what we can raise capital at,
29:51and what we can deploy it at.
29:52And then,
29:53we have a skillset to be able to improve the companies that we buy.
29:57These are the two main things we're good at,
29:59is buying companies in a disciplined way.
30:01Price is too high, we don't do it.
30:03Price is reasonable, doesn't have to be cheap.
30:05We're not trying to steal companies.
30:06If the price is reasonable, we go for it with gusto.
30:09And secondly,
30:10the other talent that the team collectively has is
30:13we know how to improve the businesses. We know how to improve the pricing,
30:16improve the procurement,
30:17the HR element, the compensation systems,
30:20the technology, the whole tech stack,
30:23just everything from A to Z.
30:25We're just good at transformation.
30:26We're good at taking a company that is making a billion dollars of EBITDA
30:31- of profit, - Mm-hmm.
30:32- ... and within three to five years, doubling the profit, doubling the EBITDA.
30:36That's the main criteria I look at when I look at a company,
30:40is purchase price, and secondly,
30:43can we double the profit in three to five years?
30:45And most of my main acquisitions have done that.
30:47So, Con-way, Norbert Dentressangle, all these different ones.
30:51They were great companies, and everyone says, "Oh, they're working really well."
30:53Okay. Well, three years later, we doubled the profit.
30:56- Yeah. - Because we apply the toolkit.
30:57- We apply the playbook.
30:59And it's the same playbook
31:00industry after industry.
31:01The playbook gets refined a little bit here and there,
31:03but it's the same playbook.
31:05- So, when you say, "This is just what I do,"
31:07to me, you now have figured out who you are as a person, right?
31:11I have this weird theory that I can't prove,
31:14but I believe. And, you know, there's like this myth
31:17of the genius young entrepreneur. And I was like, "Well, I don't know."
31:20If you study the history of entrepreneurship
31:22pretty intensely, you realize that, like, people do, most of the time,
31:25their best work many decades into their career.
31:27And so, there's all kinds of reasons. They're like, "Oh, they've had
31:29more experience. They're wiser. They have more resources.
31:32They have more practice." And I don't dispute that.
31:34That is all true. But I have this weird theory that they also
31:39know themselves way better. And I think the key to being
31:43a great entrepreneur is building a business that's...
31:45I used to say building a business that's authentic to you, and then I read
31:49Michael Dell's excellent autobiography. And he has a better line.
31:52He said he built a business that's natural to him.
31:56And there's a great story. I want your opinion on this
31:57in one second. But there's a great story where, you know,
32:00Michael starts his company when he's 19. He's in his 20s and it's doing
32:04fabulously well, but he realized, "Hey, I need some grown up,
32:06I need some help here." And so, he gets this guy,
32:09I think his name is Lee Walker if I remember correctly,
32:11and he's about 20 years older than Michael, already started
32:15a bunch of companies, rich, you know, didn't have to work anymore.
32:18But he saw an unusual, once in a generation talent
32:21in Michael, decides to help him. He lasts like four years.
32:24And so, I read the book and then I was about to
32:26make the podcast on it, I go and see. I was like,
32:27"I wonder whatever happened to this guy."
32:28And I found an interview that he did, and he's in his 80s,
32:31and he's talking about that time. And he gave me some of
32:35the best context to really understand this story.
32:37And Michael's story is really a story of you and everybody,
32:40and all the people really, you know, very similar people that were studying.
32:43And he's just like, "You know, Michael starts this company with $1,000."
32:47He says, "I'm going to take on IBM from my dorm room."
32:49IBM is the most valuable company in the world at the time,
32:51which I didn't know. It was the first company
32:53to hit $100 billion market cap, which is nuts. And, you know,
32:56just the audacity to have that. And he's like, "And the first few years,
32:59we're going against this behemoth. And I lasted four years.
33:03I started losing my hair. My back hurts. I can't sleep. I'm unhealthy."
33:09And he goes, "But Michael was energized by it. He built a business
33:13that was natural to him." - Yeah.
33:14- "Because this is what I want to do. I'm not losing my hair. I'm not,
33:18you know, depressed. My back's not hurting.
33:20I can't sleep. I'm like waking up every day just getting after it."
33:23So, is that the way you feel about just, like,
33:27what you're doing? And it may seem weird,
33:30because it is... in not a pejorative way. It's not weird in a negative way.
33:35I don't know another person that started eight separate
33:37billion-dollar companies. So, it's almost like
33:39you can't help yourself. - But that's what I do.
33:41- Yeah. - I mean, I know how to do that.
33:42- So, it's just natural to you. This is just like...
33:45- Yeah. I mean, I've done it many times before.
33:48And I've made every mistake in the book over the decades.
33:50And I've learned from those mistakes. And I've refined it and refined it,
33:53but I have a winning formula. I know how to execute on this.
33:56And the team I have knows how to execute on it.
33:58I don't want to underestimate the team. So, one of the things about being the CEO,
34:02and the founder, is you get all the credit. But like,
34:04there's a lot of people on the team who are doing these things
34:06and accomplishing these things.
34:08- Yeah. You have a great line in your book,
34:09which I see over and over again. You said, "The CEO's most important job
34:12is recruiting superlative people." - Totally. Totally.
34:16- So, my question to you though, is what would it take to get you to stop?
34:22- Gee, I don't know. Because I don't see that
34:24in my near future. - This is what-
34:26- I just started the company in the last few months.
34:28- This is what I... No, but in general, like, so this is what I loved about,
34:31you know, most of the people I admire. It's like, I can still remember this.
34:35You know, I put it into the maxim. It's like, "If you love what you do,
34:38your exit strategy is death," right?
34:40It's like you should be working on something...
34:43So like, you know, Sam Zell told me, he's like, "I'm going to be doing deals
34:45until I die." Well, he was just doing deals until he died.
34:48Munger, same thing. Like, I met him right after
34:50the Silicon Valley Bank collapse. - Oh, yeah.
34:53- It was like [unintelligible]. He was like a kid in a candy shop.
34:55He just thought this was like the... He didn't want people to get hurt,
34:57obviously. But he's just like, "You know how many
34:59financial panics that I've seen in my lifetime?
35:01Like, of course, this is like nothing new."
35:03So I remember I was actually having dinner.
35:06I remember where it was. I was at Harry's Pizzeria
35:08in Miami, in the Design District. And, you know, I was supposed
35:11to be paying attention to my wife on our date.
35:14And I was thinking about the podcast and all the s*** I'm reading.
35:18And I go and, like, take a bite into a piece of pizza.
35:21And I was like, "People used to say, 'If you love what you do,
35:24you'd do it for free.'" And I go, "No. There's a different level.
35:28If you loved what you do, they couldn't pay you to stop."
35:31- There you go. - And I was like,
35:32"How much money could you have gone to Steve Jobs and be like,
35:34'Hey, how much would it take for you to not work in Apple?'"
35:37That's not why he's doing it. That's not why they're doing it.
35:41And Enzo Ferrari, Estée Lauder, Edwin Land, Coco Chanel,
35:45all these other people, like, they just can't...
35:47Michele Ferrero, the Michelin brothers.
35:50Like, there's this story over and over again.
35:52And I get the same sense to you. It's just like, if I said, "Hey,
35:54what price I'm going to pay you, and you can't do any work.
35:57You have to stay home. You can't work." It's just like,
35:59there's no price. - Everyone you just named,
36:01all those successful people, they were all-in.
36:03- Yeah. - They were 100% in.
36:04They weren't like partly in, and partly aren't.
36:06They're in. They're 100% in, and completely focused,
36:09and single-mindedly concentrated on executing the plan.
36:13And that's important, too. And you want to have people
36:15on your team who share that passion, that commitment.
36:20- The best leaders in business are able to spot patterns,
36:23but you can't spot patterns if you can't see your data.
36:26And most businesses are only using 20% of their data,
36:28because 80% of your customer intelligence
36:31is invisible, hidden in emails, transcripts, and conversations,
36:34unless you have HubSpot.
36:37HubSpot is where all of your data comes together, so you can see
36:39the patterns that matter. Because when you know more,
36:42you grow more. And that is a pattern
36:43that never fails.
36:45Visit hubspot.com today. That is hubspot.com.
36:50That leads me to another great one of your...
36:52I don't even think you think it's a maxim, but it's how you differentiate between
36:55A, B, and C players, where you're like... I'm just going to summarize this,
37:00and jump in whenever you want. But, you envision, you do another
37:03thought experiment. - Yeah.
37:05- Of, okay, do you want to see if you have the absolute best people
37:08on your team? Just visualize that they're coming into your office
37:12and they're saying, "Brad, I quit." - Yeah.
37:14- So, then what happens next in this scenario?
37:17- So I'm always interacting with my CHRO- - Mm-hmm.
37:20- and going over talent and making sure everybody's happy and motivated and-
37:23- How much percentage of your... - A lot. I spend most of my time
37:28on people, and talent issues. - So most of your time?
37:31- Yeah. - There's a funny-
37:31- Well, no, not the most, but the most... If I did a pie chart of, like,
37:35how I divide up my time, the largest percent
37:37is on people issues. - There's a funny story about this,
37:40and then I don't want to interrupt, but I do.
37:43This is inside of me, and it just has to come out,
37:45all these stories, because I find them
37:46fascinating. So, there's two MBA students in Stanford in the late '90s, and in '97,
37:52they interview 16 technology company founders,
37:55since they're in Silicon Valley at the time, you know,
37:57and they publish this book called "In the Company of Giants."
37:59And everybody's in there, you know, Bill Gates, and Steve Jobs,
38:02and everybody else. And they're telling Steve,
38:04they're like, "Well, you know, you're the founder. Of course
38:07you don't have time to, you know, recruit people." And Steve's like,
38:11"What?" Like, "No, it's the most..." It sounds exactly like what you said
38:14in your book. "It's the most important." And a great way to demonstrate the point.
38:17He goes, "Let's say you're starting a company, right?
38:19You're in Silicon Valley. Like, this is what
38:20you're doing over here. You pick your co-founder.
38:22You should think long and hard about that. Your co-founder is 50% of the company
38:26at that point." - Right.
38:27- And then he goes, "But it still goes out.
38:29Now you have to pick the 10th person. That person's 10% of your company,
38:33and you're saying you don't have time?" Like, "What else are you doing?"
38:37- It's all about the people. It's all about the people.
38:39You know, systems, and tech, and budgets, and customers,
38:43and sales, all these things are really, really important, but you can't achieve
38:47excellence in those things without fantastic people,
38:50without fantastic leaders. And I spend a lot of time
38:53especially on the top few dozen people. I want to make sure everybody's
38:56in it to win it. Everybody is fully,
38:58fully engaged. And I do a mental exercise where
39:01I picture the person coming into my office and saying,
39:04"Brad, I quit." Like, "This is not a conversation
39:06about you making me a counteroffer. I'm done. I've already moved,
39:09and it's over with. This is about a conversation
39:12about how do we make an orderly transition,
39:13because I respect you, and I don't want to leave you
39:15high and dry." And then I try to feel, and visualize, what would be
39:20my reaction if that person came in to me and quit?
39:23If my reaction to that is, "Yes!" I don't want to smile.
39:28I don't want to act like I'm happy about this, but,
39:30you know, I didn't have...
39:32You know, nobody likes firing people. And I just didn't, you know...
39:36I just kept postponing firing- - Yeah.
39:37- that person when I shouldn't have, but I did,
39:40and this is great. I don't have to pay severance. And, you know,
39:43that solves that problem. No problem at all.
39:45We'll replace them. That's a C player.
39:47That's someone, really, you should get the courage up
39:50to get off the team right away. And then, on the second category,
39:55if my reaction to it is, "You know, it kind of sucks.
39:58You know, I would have preferred that person stayed, but it's not
40:02the end of the world. We'll hire a headhunter.
40:05We'll get someone as good, maybe someone even better,
40:07and, you know, things will work out." That's a B player. But if when I visualize
40:12that person quitting, my reaction to that is pure terror, and absolute panic,
40:18and like somebody took a baseball bat and just whacked me in the stomach,
40:22and then punched me in the face, I'm going, "Oh my God!" Like,
40:25"I'm never going to find someone as good as her-"
40:27- Yeah. - "No way."
40:28Or, "I'm never going to have someone as talented as that person.
40:30I'm never going to have someone who brings to the table
40:33their particular superpower." - Yeah.
40:35- And I can't even hear what they're saying anymore,
40:38because I'm just like having this internal panic dialogue going on.
40:40That's what you call an A player. So, I want all A players around me.
40:44I want people whose relationship with me I value so much that if it was terminated,
40:51I would be lost. And I want them to feel the same way.
40:55I want to have mutual relationships. I want people who love being
41:00in a relationship with the team, with the company, and that we all
41:04are in it together to go conquer the world.
41:06I think I named it... It's been two years
41:08since I wrote the book. But I think I had a chapter
41:10that said, "How to Kill the Competition Instead of Killing Each Other."
41:14- Mm-hmm. - And, you know,
41:16it's kind of funny, but it's a serious title,
41:18is you don't want to have a dysfunctional management team.
41:21One of the most important things that has allowed us to create
41:25tens and tens of billions of dollars of value
41:28is the management team's coherent. We have the right people on
41:31the management team, and we have the rules of the road
41:33of how we're going to deal with each other in a respectful way, that still encourages
41:37differences of opinion.
41:38- First of all, I love the way you described.
41:40Because everybody says, "Oh yeah, hire A players."
41:42And I'm like, it's really hard to differentiate, like, what does
41:45that actually mean? And I think this
41:46thought experiment is perfect. It's like, "We are f*****
41:49if this person leaves." That's an A player.
41:51That's a way to think about this. But this also goes down to your gift,
41:55and why I think I've learned so much from you.
41:58One, partially, it's like your ability to have very clear thinking,
42:01and then put it in a memorable way. So, you were just talking about, like,
42:04the relationships that you have with the people you work for.
42:07You have a line in the book where you're like,
42:09"An organization is like a party. You only want to invite people
42:12who bring the vibe up. My team and I spend
42:14a lot of time together, so it's a big deal
42:16that we like one another."
42:17- Yeah. I agree with that. - Yeah. Well, there's another-
42:21- Who said that? That was a good one.
42:22- Bezos has a line in, I think, his shareholder letters, just like,
42:24"Life is too short to work with people you don't admire."
42:27Like, it's the same situation. It's like, you're in charge.
42:29You get to choose. Again, this goes back to the gift of being a CEO,
42:32of being an entrepreneur, is like, it's very rare that
42:34you get to literally choose who has access to you,
42:36who's around you. And I love this idea.
42:38It's like, hey, the organization
42:40is just like a party. You only want people who-
42:42- David, it's all about the people. - bring up the vibe.
42:45- It's all about the people, because the people then
42:48create all the different processes, and work streams, and transformations,
42:52and everything.
42:53- This is very fascinating, because like, it's obviously...
42:56You know, business is people, right? Not only just like the people that are
42:59building a product, but, like, all of business is.
43:01The best definition of business I ever heard actually came from
43:03Richard Branson. He says, "All business is, is an idea
43:05that makes somebody else's life better." Right? And, like,
43:08that's why there's always more opportunity,
43:10because there's infinite ways. We think technology's going to, like...
43:13It changes things, but then it just usually opens up other ways
43:15to make other people's lives better. So, just focus on, like, if you're
43:17looking for an opportunity, how can I just serve other people?
43:20Another line that's very related to this is Henry Ford, where he says,
43:25"Money comes naturally as a result of service."
43:27Like, I think those two ideas go together. The reason I was thinking about this,
43:31though, the best way I've heard described what you were just saying,
43:34it's all about people, work with the best people
43:35you possibly can, the A players. We're going to talk about...
43:38You have this great line about, "There's no substitute for brains."
43:41But before that, it's like, the way that I've heard this
43:43described best, in my opinion, is from Ed Catmull,
43:46the founder of Pixar, right? He would go around
43:50and give all these talks, and he was actually, like,
43:51shocked that he would ask the audience, "What's more important, people or ideas?"
43:55He says every single time, people got it wrong.
43:58They said it was the ideas. And he's like, "No, it's the people."
44:01And so, he has this great line where he says like, "Listen,
44:02if you give a mediocre idea, right, to a brilliant team, they're either
44:07going to fix it, or they'll throw it out and come up with something better,
44:11something new. But if you give a great idea to a mediocre team,
44:14they're going to screw it up." So, obviously, because ideas
44:17come from people, so it's the people.
44:20- That's exactly what I'm trying to say.
44:21What he said. - He says it in just a great way.
44:23But you have a very, like, explicit piece of advice
44:26in your book that I think is interesting,
44:27where you're like, "There's no substitute
44:29for brains. Screening for superior intelligence eliminates
44:3390% of all candidates. So, it's the first thing I look at.
44:35There's no substitute for smarts. The CEO trait most closely correlated
44:41with organizational success is a high IQ. Double down on hiring the brightest."
44:45- Yeah. Well, you want smart people. And I particularly want people who are
44:48smarter than me. I want people who uplift me, who teach me.
44:52I don't want to be- - Do you want them specialized?
44:54Because you mentioned earlier, you said you want them smarter than you,
44:57but also better at their particular...
45:00- The vast majority of them are specialized.
45:01- Okay. - They're a finance person,
45:03they're an investor person, they're a strategic person.
45:08They have something that they... Tech person, they bring to the table that
45:11they're an inch wide and a mile deep in. But you also want them to have certain
45:16human qualities that transcend what their specialty is.
45:19And those are as, or more important, than the technical skills.
45:22- Explain. - Well, you want...
45:24So, you mentioned smart. You want people who are honest.
45:25You want people who are hardworking. You want people who are collegial.
45:28You want people who are really in it, like on the work-life balance thing, boom,
45:32it's work. - Yeah.
45:33- And their life is a lot of their work. And, you know, that they enjoy that.
45:37I don't have to hold them like a school teacher
45:40with a stick over their head, getting them to work late,
45:41or come in early, or work on weekends. Like, they want to do that. Like,
45:44they enjoy doing that. Their job, their career, their success,
45:48the collective success of the company is an important part of their gestalt.
45:51It's a really important part of their being and their purpose.
45:54- Was there ever a time... I don't mean to keep
45:55interrupting you, but this is fascinating, and it's almost selfish to have
45:58this conversation, because like, I get to ask you questions,
46:00and learn from you. Was there ever a time
46:03where work wasn't... Where you were more balanced?
46:07- No. No. - When was the last time
46:07you were balanced? - No.
46:08- So, you started your first company at 23.
46:10- I did. And I've been completely imbalanced
46:12since then. I've been working seven days a week.
46:13- Yeah, because you- - Very few vacations.
46:14- You guys scaled in, like, four years to, I don't know,
46:16like, a couple billion dollars. It was just, like, an insane story
46:18in the book. - But for me, it's not work.
46:20For me, it's like, I'm really enjoying it.
46:21To me, it's a craft, it's a skill that I have
46:24that I enjoy doing it. - Were you always honest
46:25with yourself that it was the top priority?
46:28- I think so. Yeah. I've been honest with myself.
46:31- I had a conversation with a friend of mine, on the drive
46:34over here, and I think I'm lying to myself.
46:37So, let me give you an example. So, you know, in many cases,
46:41like, you read these biographies of these people and it winds up
46:42being a cautionary tale, you know, because they kind of, like,
46:44will sacrifice everything for professional success.
46:47Their health, their relationships, everything else.
46:49- Well, that I'm not in favor of. - No, no, no. You're still married,
46:52you're a good father, like everything else.
46:53Yeah, for sure. But your main... It's not like you have an abundance
46:57of hobbies outside of work- - No.
46:58- from what I understand. - Meditation and music,
47:00that's pretty much it. - There you go.
47:02So, for a long time, every single person
47:05I read about was like, okay, well, I even titled the episode
47:08"My Personal Blueprint," which was Ed Thorp, right?
47:11Ed Thorp, I'll give a short run-down real quick.
47:13He's the first person to invent a quantitative hedge fund.
47:19He invented, you know, the ability to count cards
47:21for blackjack, writes this book in the 1960s called "Beat A Dealer,"
47:25you know, made more money than he'll ever spend.
47:27But if you read his book, you get to the end,
47:28it's like he was much more balanced, right?
47:31He also came from academia, and maybe this had played
47:33a role into that. But he essentially, like, lived a life of adventure,
47:36because he truly loved what he did. Once he made more money
47:39than he could spend, he stopped trading
47:41more time for money. He had a good marriage
47:46until his wife passed away from cancer, took care
47:48of his health. But, like, much more of a...
47:51Let's say there are five important things,
47:53and he kind of, like, divvied up. Maybe work was 50%,
47:57but the other four are other 50%. And I was like, "Oh, that's kind of
48:01my personal blueprint." And I said on the drive over,
48:03I go, "No, I'm lying." - Yeah.
48:05- It's like 90% of what I think about, and how I spend my time, is just work.
48:11- That's a beautiful thing. So, all the people you've
48:13mentioned so far, all these very, very successful people,
48:16I guarantee you probably every single one of them,
48:18with few exceptions, if any, were all-in.
48:22- Yes. - And what they were doing
48:24was their passion, and they were just so excited about it.
48:26They were in the flow. They were in the flow
48:28of being so absorbed on something that you, like, lose track of time
48:31and the whole rest of the universe is gone.
48:33You're just in it. You're just really
48:35into something that you do well and you're with people that
48:37you really like, and you're likely to be successful because you're
48:41doing what you do.
48:43- When I was thinking about the amount of research that you do that you explain,
48:47before you get into an industry, before you start a company, it's like...
48:50The way I describe your book is buy it, read it all the way through, and then
48:54what I really think it is, you put it close to your desk,
48:56because it's a reference manual. Because you can just pick this up now,
48:59and read one chapter that takes 10 minutes,
49:02and get good ideas out of it.
49:04- Do you know I'm writing a sequel? - Last time you told me this. Like,
49:06"I only had one book in me, I have nothing else."
49:08- So, I wrote the book, and I got so much feedback of what people thought about it.
49:13And people asked, "Well, you should really talk more about this, this,
49:15and this." At first I said, "I'm never writing another book."
49:17- Yes, I remember. - It takes a lot of time
49:19to write a book, and I don't have
49:20a lot of time. - Yeah.
49:20- But I had so many people ask me similar questions.
49:23Okay, I'm going to write a sequel that addresses
49:25those particular questions.
49:26You know what the title's going to be? That was "How to Make
49:28a Few Billion Dollars." - Yeah.
49:30- This one's going to be called "How to Make a Few More Billion Dollars."
49:33Is that great or what? - Yes. Let me get an early copy, please.
49:36You were very nice to send me an early copy of this one.
49:38But I think what ties all this together, when I think about your research process,
49:41the way you go after life, all the people we've been
49:43talking about, from Steve Jobs, to Jeff Bezos, it's like mediocrity
49:46is always invisible until passion shows up and exposes it.
49:50- Love it. - I think that is what animates me.
49:52It's just like you see this. You're talking about like
49:55even when you buy great companies, good companies, they're like,
49:58"What else could you do?" It's like there's always more.
50:01- Always. - Because you can always
50:02infuse passion into what you're doing, obsession, work with the best people.
50:05Of course you can keep getting better and better results.
50:07- Yeah. Well, I agree with that. I think... So, what you just said,
50:11you buy a company, it's doing very well. And then three, four years later,
50:15you've doubled the profit of it. What did you do? You went in
50:18with a toolkit, and you tapped the pricing using algorithms and elasticity analysis.
50:24You've tapped the compensation, so you've got the salespeople
50:26made partners, rather than pupils to the parent authoritarian figure
50:31at corporate. You've put in technology that frees up time, that allows people
50:36to spend time doing selling, and doing their job,
50:38rather than trying to find information. You're sharing information
50:42in very good ways. So, you apply a certain toolkit.
50:44Boom, you double profit.
50:46- So, wait a minute, this brings up something interesting that I've been
50:48talking about lately, the different archetypes there are in founders
50:51and CEOs, right? Everybody thinks like, oh, there's kind of one archetype,
50:54and especially the ones that are popularized now,
50:55it's like essentially like the Steve Jobs dictator,
50:57make, you know, almost all the decisions.
50:58- I don't like that. - Yeah.
50:59- No. - Exactly.
51:01I just heard the pupil part. - Now, who am I to criticize
51:03Steve Jobs? - No, no, no, no, no.
51:04- That's not my style. - It's not a criticism.
51:06It's just like, that's the beauty of entrepreneurship is like
51:08you get to do it- - I wouldn't be able to do that.
51:10- So, what is your archetype? What is... Like, let me back up before I ask you
51:13a question, because I've been having long conversations with Daniel Ek,
51:16the founder of Spotify, who's become a good friend.
51:17And that's his whole thing, where he... Like, we actually might be
51:21writing something together about... Like, he's concerned that there's
51:25going to be young entrepreneurs out there
51:27that are like, "I'm not like Elon, or I'm not
51:29like Steve, or I'm not like all these people, so therefore
51:31I can't be an entrepreneur." He's like, "There's multiple archetypes."
51:33He's like, "I'm not like that." He says he thinks he's a better coach
51:37than he is a player. And essentially,
51:38he has discovered... It's almost like this.
51:41He recruits some of the best talent in the world
51:43to the point where he's like, "I used to be the best at product.
51:45That guy's better at product, he should do it.
51:48That guy's a better designer. That person's a better HR.
51:51That person's everything." So, he's like, "The way I look at it
51:53is like I'm much more of a coach than a player."
51:55What is your, like, archetype?
51:57- So, you want to get the right people in place,
52:01you want to get the compensation aligned, and then you want to be communicating
52:04with each other in a very constructive way,
52:06in a very prolific way.
52:07So, Friday, we had our second MOR, monthly operating review,
52:11for this company we had bought, Beacon. And how did we come up with the agenda?
52:16It was a 10-hour meeting, two breaks. One was ten minutes, one was five minutes.
52:20Nobody was distracted, nobody was on phones,
52:22their devices were all shut off. We're very concentrating on
52:25the one person that had the proverbial microphone
52:29at a time, and listening very carefully and intently what that person was saying,
52:32and then debating each point, and each action point.
52:35How did we come up with the agenda?
52:37Here's how. Did I, the CEO, come from above and say,
52:41"Here's the agenda that I think is the important thing.
52:44I'm smarter than all of you, and here's what we
52:46should be doing"? - Yeah.
52:47- No. - Yeah.
52:47- How pompous, and arrogant, and kind of ineffective really to do that.
52:50- Yeah.
52:51- What I do is just the opposite. I send around a QuestionPro, an app,
52:55and we say, "Here's all the materials, pre-read for the meeting."
52:59We don't do PowerPoints, and go through all that nonsense
53:03where everyone tells each other how great they're doing.
53:05- Yeah. - It's just a silliness
53:06that you see a lot in corporate America. We send all those decks out ahead of time.
53:10We have everybody read them, and then we have everybody
53:13fill out the app, say, "Based on everything I read, here are
53:18my main takeaways, and here are the main questions that I think are
53:22so important, in terms of creating value, that we should, the whole team,
53:26all 25 of us who were in that meeting, spend time debating and discussing
53:29around the table, in the limited time we've got." Because 10 hours
53:32goes by like that. And then I send back out the takeaways, and I send back out
53:37the questions. People rank them on a scale of 1 to 10. Again,
53:40we have an app for this. And then I send people
53:43the takeaways. Here's how they were rated. Here's what people thought were the most
53:47important takeaways. Very valuable. Now you've got the benefit of
53:49everybody's perspectives on the same data. So, people have seen the same charts,
53:53the same data, the same metrics, same KPIs, but they've seen it
53:56from a little different angle. It's very enlightening.
53:58And then I've got the questions. I tell everybody, "Rate the question
54:011 to 10," and then all the questions that are rated 8, 9, and 10,
54:05and between 8 and 10, that's the agenda, David.
54:08That's what we talked about. - Mm-hmm.
54:09- So, we just went... Then we put them in categories. Everything about tech
54:12that was rated eight or above, here they are.
54:14Everything that was on comp or people, everything that was on strategic,
54:18everything that was on M&A, all the different categories.
54:21Only the ones that the group voted on at least an eight.
54:24Now, what is the consequence of that? Number one, we have an amazing meeting.
54:28Like, it's a good agenda. Much better than I could
54:33come up with. Because now it's got
54:34everybody's angle on it. It's group-sourced.
54:36Secondly, everybody's involved in it, because the boss didn't come down
54:41and like, "Here's the agenda." It's like we collectively made
54:43the agenda. So, people realize the truth of the matter is
54:46we really respect each other's opinions. There's no one person who's
54:50the authoritarian figure who's like teaching everybody else. It's a group.
54:54I've created a group. I've created a superorganism.
54:57I've created like a beehive, or an ant colony-
55:01- Yeah. - or a brain, or a human body.
55:02Superorganisms. - Mm-hmm.
55:03- Things that are a collection of people that the sum is greater
55:07than the collection of the parts. And the whole is greater
55:11than each individual. We have a holistic, powerful approach to that.
55:16That's how I run the business.
55:18- How many people would be in a meeting like that?
55:20- So, I've experimented with this over the years. I used to have
55:22larger meetings with 40 or 50 people, and it just didn't work. And so,
55:26those meetings, those monthly operating reviews, which are
55:28the most important meeting of the month.
55:30- Okay. - It's when the most senior people
55:31in the company come together, and do the exercise I just mentioned
55:35for 10 hours, with almost no breaks, almost no breaks at all.
55:38That, I have 25 people, and I limit it to 25.
55:41I don't want more than 25. I don't know what's so magic
55:43about 25, but 20 to 25 is the ideal group. You have enough people that you get
55:48diversity of opinion, and you have dialectical discussions, meaning
55:51looking at issues from multiple perspectives,
55:53and then analyzing those, and synthesizing and finding
55:56the truth. But you don't have so many people that, you know,
56:00people are peacocking, and trying to impress each other,
56:02and don't want to be vulnerable. You want people to be vulnerable.
56:05You want people to trust the other people in the room so much that you've created
56:09a safe zone to say, "You know what?
56:12I've been thinking this, and thinking this,
56:13but the more I'm listening to you, the more I'm hearing about this,
56:15I may be wrong. Maybe I got this thing completely upside down, and I'm starting
56:19to come around to looking at it like this with one little twist. Now, I think
56:22what we should do is X, Y, Z. And then what do y'all think of that?"
56:26That's a fantastic conversation. When you have leaders of the company
56:29feeling it's safe to show that, "Hey, I was wrong."
56:33- Yeah. - "I was thinking things wrong up to..."
56:34And I model that, I role model that myself all the time.
56:37Be flexible in thinking, don't be rigid in thinking.
56:39Don't be black and white, dichotomous thinking,
56:43but be open-minded, be receptive, to be
56:45willing to learn and to be challenged. And that's okay to be proven wrong.
56:49It's actually a good thing. We're learning together.
56:51- Two questions on that. What percent of the meeting
56:54are you speaking, in a situation like that?
56:57- So, I open up usually, and I ramble on for like an hour,
57:00or maybe more than an hour, of the state of the union
57:03from my perspective. And I try not to just
57:06mention things that I form conclusions on, but I try
57:09to frame things of, "These are the most important successes of the company,
57:12but these are the things where we need to improve.
57:15And here are the issues that, in my view, after reading
57:19everybody's votes and everything, I think are the things we should
57:22attention direct, we should spend the most amount of time solving.
57:24Because I think those will create the most amount of value."
57:27And I try to keep it balanced, the good stuff and the bad stuff.
57:30Yes, I do atta boys and atta girls and rah rahs. That's a good thing to do
57:33for leadership. But I, in equal measure do,
57:36"Look, we got to keep it real. We got to keep it honest.
57:38Here's things that we said by this deadline we're going to do it.
57:40We're a couple weeks behind on this. Let's get going here. What's going on?
57:44Here's where we thought this outcome was going to happen, and we're only
57:4792% there. How can we get to 100%?" So, I try to start off with a balance,
57:51but then I try to shut up, and then I try to let the mechanical going through
57:55the questions, where I just go down the questions by categories,
57:59and then go around the room and hear everyone's opinion.
58:03You don't want the leader talking a huge amount of time.
58:06- Yeah, so you basically start with an hour, then the next, in this case,
58:11the nine hours for the rest of the meeting,
58:13you're- - Everyone else.
58:14- Everyone else. - And I'll talk, too,
58:15but not inordinately. I've already used up
58:17my hour, for God's sake, you know?
58:18- Yeah, this is one of the things that I've felt...
58:20And I've seen this with a lot, with like really remarkable people,
58:23is how many people, like when we had this intense breakfast at your house
58:27a few months ago, you had a notepad, and I'm talking, and you're taking notes.
58:32I'm like, "What the hell is going on?"
58:33It's the reverse. - Well, you were saying cool stuff.
58:34- No, it should be the reverse. In fact, I have a story about this,
58:37and then I have another question for you, was Mitch Rales, obviously one of
58:41the founders of Danaher.
58:43- Great company. - Oh, incredible.
58:45- The Danaher way. Yeah. - He's actually a mentor
58:48of two close friends of mine. So, I get like insights from them,
58:52about him, and just what... One of the most remarkable things
58:54that he did. But, he was at this vertical market software conference.
59:01It was only like 40 people there, recently. And a friend
59:03of mine, I was going for a walk in New York City
59:05about this, and he's just like, "I don't understand. The guy sat
59:07in the front row. He's the most successful person there by far, and he was just
59:10taking notes the whole time." I was like, "That is why
59:13he's successful. It's not the reverse. It's not that you go and you build
59:16a $200 billion company or whatever it is, and then take notes. He was like that
59:19his whole time." Just the relentless, like, you have valuable information.
59:23I just did this episode on Jimmy Iovine, who's a very fascinating person,
59:26and he has this great line. He said, "Great can come from anywhere."
59:29- Yes. - And then you have this other thing.
59:31I'll get back to that in a question. - I love that.
59:32- Great can come from anywhere. - Great can come from anywhere.
59:33- And he's in the music business. His point was that he was
59:36trying to help...He was partners and a mentor of Dr. Dre,
59:39who's one of the greatest hip hop producers of all time.
59:41Dre didn't have an artist to work with. They wind up getting this demo tape
59:45from Eminem. And at the time, he's this poor kid in Michigan,
59:48living in a trailer park, right? Like, no resources at all,
59:53and yet they're like, "We weren't looking for, you know, somebody
59:55to be controversial. We were looking for great." And guess what?
59:58It can come from anywhere. It came from this kid
1:00:00that was obsessed, sitting in a fricking
1:00:01trailer park saying, "I want to do this thing,
1:00:03and I'm going to do this to the best of my ability."
1:00:04I want to talk about... I'm going to go back
1:00:06to this question I have, but you have... I love this idea of grabbing information,
1:00:11which is really fascinating. There's multiple examples
1:00:13in your book, and then I find these in other books where it's just like,
1:00:16it's so nuts that especially when companies get big and older,
1:00:23they stop asking information- - It's bad.
1:00:25from people from the front line.
1:00:26- It's bad. - So, you're like,
1:00:27"Often when we buy a company, we discover that the frontline employees,
1:00:30middle managers, and even some senior executives have never been asked,
1:00:33'What would you do to improve the company?'
1:00:36You would think owners would want to know that."
1:00:37And then you have this great thing
1:00:38that I think is actually good for business,
1:00:40but also personal issues. You ask, "What is the stupidest thing we're doing?
1:00:44And what is the smartest thing that we're doing?"
1:00:45- Yes.
1:00:46- This ability to like... You just almost described it in these meetings.
1:00:49It's like, "Hey, we're going to disperse and ask these questions, and see
1:00:53what comes back, and then we'll rank the information."
1:00:56- So, the end of those operating reviews, once we've gone through all the lists,
1:00:59now we do human interactions. That's where the fun starts.
1:01:02So, we work really hard solving all these problems,
1:01:05and debating all these issues.
1:01:07Now we put that aside, and I ask a series of questions.
1:01:10I modify them a little bit every month,
1:01:11but I have a list of a few dozen questions,
1:01:13and I pick which ones I want to ask each time.
1:01:16Usually one of the first ones is,
1:01:18"What is something somebody said today that you have a different opinion on?
1:01:21What is something that somebody said, you disagree with,
1:01:25and you didn't get a chance to talk about it?"
1:01:27And I just go around one by one to each person.
1:01:29That's a wonderful thing.
1:01:30Many management teams can't do that, because everyone would get upset.
1:01:33- Yeah. - Here, it's like, "Great!"
1:01:34And then we have a nice, honest debate.
1:01:36I ask everyone, "What's your single biggest takeaway from today?
1:01:39What is something that, 10 hours ago,
1:01:41you didn't understand about how we're going to make money,
1:01:43and how we're going to serve customers better,
1:01:45and how we're going to improve employee engagement,
1:01:46and how we're going to kill the competition?
1:01:48What is something you didn't know? What is something you learned?"
1:01:51And you just go around, one by one by one by one.
1:01:53And then I ask them, "When I think about people not in this room,
1:01:58but people in the organization out there in the field, who's an MVP?
1:02:02Who's the most valuable player?
1:02:03Who's somebody who's going above and beyond that you really respect,
1:02:07you really admire, you really think is amazing?
1:02:09I wish we had a thousand more like that person, and why?"
1:02:12And I send an email to them afterwards saying,
1:02:14"Hey, I was in a meeting with the leaders of the company,
1:02:16and you were nominated as an MVP because X, Y, Z."
1:02:19People love it. Sometimes they start crying.
1:02:21There's a lot of times - Oh, wow.
1:02:21it's a really, really emotional thing.
1:02:23- It's a really, really nice thing, validating the field.
1:02:25And then I bring it inwards, and I say,
1:02:28"Who around this table today, in your mind, did their star go up?"
1:02:33And the star already might have been high,
1:02:34because everyone loves each other,
1:02:35but even higher, it went up, and why?
1:02:37What is something that somebody said today in the meeting that impressed you,
1:02:41that made you go, 'Aha!' or made you say,
1:02:43'D***, that's a good insight. That's a good perception.
1:02:46I really like that.'
1:02:47Who was it, and what did they say?"
1:02:49We go around, everything like that.
1:02:50And I have a few other questions like that.
1:02:52And then I bring it down to the person themselves, and I say,
1:02:55"Finish the sentence. 'I resolve to improve the company by...'"
1:03:01Just go one by one, and each person stands up and says,
1:03:04"I resolve to improve the company by..." and then they say what they want to say.
1:03:09It's a great thing.
1:03:10What I didn't get a chance to do Friday, because we ran out of time,
1:03:12what I often do is then we go into another room.
1:03:15We get out of the boardroom, get out of the conference room,
1:03:17and then we stand in a circle,
1:03:19and just silently look at each other for the first couple minutes.
1:03:23And a couple minutes is a long time to be, like, looking around everybody else.
1:03:26- Yeah. - You know, for a lot of people,
1:03:27that's uncomfortable.
1:03:28It's not uncomfortable if you all like each other.
1:03:30- Yeah. - And look at each person and say,
1:03:34"I admire this person because..."
1:03:36Like, what are the strengths, what are the qualities,
1:03:38what are the traits, what are the skills,
1:03:41what are the things that they do that you really are impressed with,
1:03:44you really like that person a lot?
1:03:46And just go one by one, look at each person, and just identify that.
1:03:50And then after a minute or two has gone by, I say,
1:03:52"Okay, now let's do the same thing.
1:03:54Look at each person and say, 'I really...'"
1:03:57So, we've already said why I'm grateful they're on the team.
1:04:00So, now I want to say...
1:04:01So, it was gratitude. - Mm-hmm.
1:04:03- Gratitude is a wonderful leadership technique.
1:04:05- And then the second thing is,
1:04:07"I really wish that person great success in the company,
1:04:10and I can picture this company five years from now accomplishing X, Y, Z."
1:04:13And I send nice vibes, I send love vibes to that person.
1:04:18Just go around one by one, all silently. Nothing out loud.
1:04:21Just one by one by one by one. You start seeing people smile.
1:04:24Like, always, I've done it so many times.
1:04:26You start seeing people smile.
1:04:27So, you're looking at people, you see them looking at people
1:04:28in a very positive, uplifting way, an appreciative way.
1:04:32And then I say, "Okay, now we've concluded the day,
1:04:34and I declare the day a success, and congratulations."
1:04:38Then we just clap. And we clap...
1:04:40Sometimes this clapping goes on for, like, five minutes.
1:04:42And it, like, really, really goes on, but it's a very...
1:04:44Then people levitate home.
1:04:46Then they go to the airport and go home.
1:04:48- How much of the way you run your company is, like, guided by intuition?
1:04:52Like, you seem like a very intuitive person to me.
1:04:55- Maybe not as much as you think. - No?
1:04:57- Yes, there's always instinct. There's always intuition.
1:05:00You're always going by your gut.
1:05:02- But, like, how would you even know? Like, this is an unusual...
1:05:05Like, what you just described, how did you learn that?
1:05:08- So, I've experimented over time. - Okay.
1:05:09- I've experimented with different things. I've read a lot.
1:05:12I've studied positive psychology, I've studied cognitive therapy.
1:05:15I've studied a lot of stuff. I read a lot of stuff.
1:05:17I meditate a lot. And I do things that worked for me.
1:05:21So, I think of things that have worked for me on my path,
1:05:24on my evolution of feeling gratitude,
1:05:26and all the happiness that comes with feeling gratitude,
1:05:29by feeling appreciation, by problem solving,
1:05:32all the different things, and I try to imbibe that to other people.
1:05:36And then if it works...
1:05:37So, feedback loops.
1:05:39One of the key tenets of all my companies
1:05:42is we have intense, voluminous feedback loops.
1:05:45Feedback loops between the senior team,
1:05:47feedback loops between the senior team and mid-level management,
1:05:52feedback loops between senior, medium, and front-line management,
1:05:56feedback loops with customers, feedback loops with vendors,
1:05:59feedback loops with investors.
1:06:01All the constituents of the constellation that make a corporation,
1:06:06that make a company. We have to be communicating.
1:06:09We have to be communicating very intensely with each other,
1:06:11in an honest way, and then sharing that information.
1:06:14I share information much more widely in my organisms,
1:06:18in my organizations, than most companies.
1:06:21Most companies, they're afraid to share it.
1:06:24They're afraid to share the good information.
1:06:27They think a competitor's going to hear about it.
1:06:28- Yeah. - Okay, well, they will,
1:06:30but let them try to copy us.
1:06:31They don't have all the ingredients to do that.
1:06:34Or they say, "We don't want to share the bad stuff,
1:06:37because then the market's going to hear our weaknesses."
1:06:40Okay, well, that's kind of true too, but that's so much overshadowed
1:06:43by the benefit of we're learning where we have to improve.
1:06:47We're learning how to become better.
1:06:50- I read something Jeff Bezos said that changed my perspective
1:06:52on the importance of high quality sleep.
1:06:54He said that he makes sure he gets eight hours of sleep a night,
1:06:57and as a result, his mood, his energy, and his decision-making is improved.
1:07:02His point was that you get paid to make high quality decisions,
1:07:06and you can't do that if you're sleeping terribly.
1:07:08And the product that has made the biggest impact
1:07:11on my quality of sleep for years is Eight Sleep.
1:07:14I'm lucky enough to be friends with the founder of Eight Sleep, Matteo,
1:07:16and we live in the same city.
1:07:18A few months after I started using Eight Sleep,
1:07:20I randomly ran into Matteo at a restaurant, and I was with some friends.
1:07:24So, I go over and say hi.
1:07:25When I got back to my table, my friend asked me, who was I talking to?
1:07:28And I said, "That's Matteo, the founder of Eight Sleep."
1:07:30And my friend replied, "He looks like he gets good sleep."
1:07:33Matteo is living and breathing his product.
1:07:36I had never had the ability to change the temperature of my bed
1:07:40before I had an Eight Sleep.
1:07:41I had no idea how much that would improve the quality of my sleep.
1:07:44I keep my Eight Sleep ice-cold.
1:07:46It's cold before I get into bed, so I fall asleep faster,
1:07:50and wake up less during the night.
1:07:51That feature alone is worth 10 times the price.
1:07:54There are very few no-brainer investments in life,
1:07:56and I believe Eight Sleep is one of them.
1:07:58That is why elite founders like Mark Zuckerberg and Elon Musk
1:08:01have all said publicly that they use Eight Sleep.
1:08:03I would recommend getting the Pod 5,
1:08:05which is the newest generation of their signature product.
1:08:08It is a smart mattress cover that you place on top of your existing mattress,
1:08:12and it is next-level sleep tech.
1:08:15It automatically regulates your body temperature throughout the night,
1:08:18independently for each side of the bed.
1:08:20The result is you get up to a full hour of additional quality sleep per night.
1:08:24Make the no-brainer investment in your sleep by going to EightSleep.com/SENRA,
1:08:29and use the code SENRA to get $350 off.
1:08:32You can try it for 30 days at home, and return it if you don't like it,
1:08:36but I'm confident you will love it.
1:08:37I will never let anyone take my Eight Sleep from me.
1:08:41Make sure you get yours at EightSleep.com/SENRA.
1:08:46So, this is what you were describing earlier,
1:08:47this almost like constant iterative trial and error process.
1:08:51- Absolutely. - And just keeping the information
1:08:52flowing through the company.
1:08:53There's a idea that I think, when I thought of your ideas, like,
1:08:56"Hey, we're going to buy the company. We're going to ask, like,
1:08:58'What would you do if you were running the company?
1:09:00What's the stupidest thing we're doing? What's the smartest thing we're doing?'"
1:09:02I, as you know, I'm interested in timeless principles, not timely,
1:09:06- Mm-hmm. - Right?
1:09:06- And when I read that in your book,
1:09:08what I thought of was not you building your company.
1:09:10I thought of Jim Casey building UPS 100 years ago.
1:09:13And what he learned... Because a lot of these things,
1:09:16these ideas that survive for a long period of time,
1:09:18they're not dependent on the company, they're really dependent on human nature.
1:09:20Because history doesn't repeat. Human nature does, right?
1:09:22Human nature's kind of constant, doesn't really change.
1:09:24And so, what Jim realized is the more successful he became,
1:09:26the more successful his company became,
1:09:28his executives, their incentives were to hide the bad news,
1:09:31and just tell him good things, because then it's like,
1:09:34"Everything's great in the company, Jim.
1:09:35And so, I was the one that made that great,
1:09:37and so pay me more, and make sure I keep this great job I have."
1:09:40And Jim realized, he's like, "Oh, I need to have constant,
1:09:44unfiltered access from the people that are delivering the service to my customers."
1:09:49So, what he would do is, like, he would instruct his driver,
1:09:53"Every time we see a brown UPS truck, you are to pull over."
1:09:57And he would get out, no matter how successful he was,
1:09:59and he would talk to the driver. - I love it.
1:10:01- Unfiltered information. - Love it.
1:10:03- Same thing. People would go and they'd try to meet Sam Walton
1:10:05in Bentonville, Arkansas, right?
1:10:07They'd show up. They even have an appointment on the books.
1:10:09And they'd walk into the office, and they're like,
1:10:11"Hey, I'm here to meet Sam for our, you know, 7:00 a.m. meeting."
1:10:14And his secretary's just like, because he used to fly his own plane,
1:10:18"He left at 5:00 a.m. this morning, and he went to, you know, this Walmart over here,
1:10:21and he's hanging out and greeting customers,
1:10:24and talking to the people stocking the shelves, and everything else."
1:10:26But this constant...
1:10:27I think there's a lot of wisdom in what you said in your book,
1:10:29basically, is what I'm saying is, like, you see this over and over again.
1:10:31They want unfiltered access from the front lines.
1:10:35They don't want the information to be, you know, massaged or presented
1:10:39in a manner that seems good.
1:10:41- So, Todd Combs is one of
1:10:42Warren Buffett's managers. - Yeah.
1:10:44-And we were talking on a Saturday about,
1:10:48I don't know, 10 years ago, 8, 9, 10 years ago,
1:10:51when he was getting on the JP Morgan board,
1:10:54and he was kind of moving up in the world, stuff like that.
1:10:55I lost touch with him, but really great guy, really smart guy.
1:10:58And he said, "What are you doing?"
1:11:00I said, "I'm reading employee surveys.
1:11:03I'm reading all the employee surveys from the whole company of...
1:11:05We ask them two questions,
1:11:06'What's your single best idea to improve the company?'
1:11:09And rate your job satisfaction, scale of 1 to 10."
1:11:11And sometimes we add a third one of what it will take to make it a 10.
1:11:14I just go through all these, one by one,
1:11:15because I feel like I'm talking to every employee and learning on that."
1:11:18He said, "That's amazing." I said, "What's so amazing about that?"
1:11:20He said, "I was just talking to Bezos, and Bezos was reading customer surveys.
1:11:25Reading customer survey.
1:11:28So, he's talking about customers, I'm talking about employees.
1:11:30But it's the same concept. You need feedback loops.
1:11:32You don't know how you're doing unless you have radar,
1:11:35like, sending beep beeps out there, and seeing how it comes back.
1:11:38You have to have this very intense feedback loop.
1:11:41- And this is why I'm so obsessed with what I'm doing,
1:11:42because nothing we're doing is new.
1:11:45Like, you had all these people that ran all these kind of experiments
1:11:47for centuries, and they built great companies.
1:11:49And just because, you know, they passed on,
1:11:50and maybe the company's not around anymore,
1:11:52it's like there's a treasure trove of data in there.
1:11:54So, like Bezos' idea, I love where he would publicize it.
1:11:58He used to publicize the very early days of Amazon, "[email protected], email me."
1:12:01And he read...
1:12:03One of the reasons that he figured it out,
1:12:04he's like, "Oh, we can't just sell books. I could sell anything."
1:12:09He would send emails to the, I think, like, top thousand customers like,
1:12:11"What else would you buy?" And one guy, he had this epiphany,
1:12:14because, you know, they were like,
1:12:15"Hey, I want toilet paper, I want, you know, groceries," whatever.
1:12:17One guy's like, "I want windshield wipers."
1:12:18And he's like, "Windshield wipers?
1:12:20If this guy wants windshield wipers, I'm going to be able to sell everything."
1:12:22Like, it is a true everything store.
1:12:24But I was thinking about this recently,
1:12:26because I just read this book translated from French
1:12:28about the Michelin family dynasty,
1:12:30which starts out in 1891, selling tires in France.
1:12:33They're selling tires. There's, like, 350 cars on the road for God's sake.
1:12:36But there's a line in the book that is related to all this,
1:12:38where the two brothers have to take over this failing factory,
1:12:44and they don't know what to make,
1:12:46because most of the products that they're manufacturing are unprofitable.
1:12:49They're on the brink of bankruptcy.
1:12:50Their one profitable product...
1:12:53So, they eliminate everything else,
1:12:54and they focus on the one profitable product,
1:12:55which is a rubber brake pad for horse-drawn carriages.
1:12:58- Say that again?
1:12:59- A rubber brake pad for horse-drawn carriages.
1:13:01- Okay. - Remember, this is 1888.
1:13:03And so, it takes them like a year or two to figure out,
1:13:05"Hey, we should manufacture rubber."
1:13:07And there's two twin phenomenons.
1:13:08You're talking about, remember what Jesselson said,
1:13:10"Get the major trend right?" - Yeah.
1:13:12- They're like, "Well, horse-drawn carriages have been around for a while.
1:13:15You know what's growing way faster?
1:13:16Bicycles, and then cars, even from a small number.
1:13:18Like, we need to go to where the technology's going."
1:13:20But the point being is like, so we need to make more products.
1:13:24We need to make rubber tires.
1:13:25And the guy took over a factory, he's like, "I don't know how to do that."
1:13:28So, his answer was, he would go...
1:13:30And it sounds just like what you do.
1:13:32He only had like 50 employees that were making the rubber brake pads,
1:13:35and he would just ask questions.
1:13:36He's like, "I came to them, and I admitted my ignorance.
1:13:38I know nothing about rubber manufacturing.
1:13:40Why'd you do that? Can you explain to me? What if we did..."
1:13:42And not in like, what you just said,
1:13:44you said something about not like coming down from on high.
1:13:46It's like a peer almost like, "Teach me."
1:13:49- Yes. - And he's like, it was wildly effective,
1:13:50and he's got a great line in that book.
1:13:52He's like, "It turns out, the guy that handles the material for eight hours a day
1:13:57while the CEO's in the office, has something to teach you."
1:14:00Like, he's going to understand something about that process,
1:14:03because you have like a bird-level view.
1:14:06He has a very particular job.
1:14:07And he found it very instructive. - Mm-hmm.
1:14:09- And he's like, "It was a wonderful way to learn the business."
1:14:12And then that led him to like, "Oh, now I know how to make things."
1:14:14And then, from there, to grow and grow and grow.
1:14:16And I just absolutely love this idea.
1:14:17It's like, you should have this unfiltered access,
1:14:20unfiltered information over and over and over again.
1:14:23- Completely. All the different constituents in an organization
1:14:27need to be talking to each other,
1:14:28need to have feedback loops to know how they're doing.
1:14:31If you're not asking your customers how you're doing,
1:14:33you may think you're doing a lot better than you really are.
1:14:37- How do you figure out how you're doing in your position?
1:14:39- I ask all day long. And we have different modalities
1:14:43of anonymous surveys, and 360 reviews.
1:14:46And I'm interacting with the teams non-stop all day long.
1:14:50I'm walking in people's offices, "What's going on?
1:14:52What do you think of this? What do you think of that?"
1:14:53- Do you like the...
1:14:54You have this great line in your book, where it says,
1:14:57"I love working with outrageously talented people
1:15:00to deliver outside returns for shareholders in public stock markets."
1:15:03- I love that.
1:15:04- This constant feedback from the public market.
1:15:07- It's fantastic.
1:15:07- You love it?
1:15:08- Yeah. I don't always agree with it.
1:15:10But some of it, there's always some truth in it.
1:15:13That you get free advice from like the smartest people in the world.
1:15:18The global allocators.
1:15:19People who have raised billions of dollars from pensions,
1:15:24and endowments, and sovereign wealth funds.
1:15:26And now they're analyzing what you're doing, and they're giving you advice.
1:15:30They're telling you, "This is what I like. This is what I don't like."
1:15:33Okay. You don't have to...
1:15:34Actually, you mathematically can't agree with it all,
1:15:36because a lot of times you get conflicting advice.
1:15:38- Yeah. - People saying,
1:15:39"You're going right. You should be going left."
1:15:41The other guy's saying, "You should go left even more."
1:15:43So, it's good to hear all this stuff.
1:15:45It's good to hear what people are saying.
1:15:47But then you have to go within yourself, and you have to make the decision.
1:15:52You have to be an adult.
1:15:53You're taking tons and tons of information, and opinions,
1:15:56and beliefs, and data, as much as possible.
1:16:00Then you've got to kind of just ignore all that.
1:16:02Just go inside and say, "This is what I want to do."
1:16:05You've got to make the call. That's what a CEO does.
1:16:07It's what a leader does, is you make the call.
1:16:08But you have to get all that input.
1:16:10Otherwise, you're just in a bubble chamber,
1:16:13- Yeah. - echo chamber,
1:16:14where you're just hearing your own thoughts instead of others.
1:16:16You want people challenging your thoughts all the time.
1:16:19- I think for a long time, one big goal was like starting a company,
1:16:23and then taking it public.
1:16:24And now I talk to a lot of founders,
1:16:25and even the ones that raised a lot of money,
1:16:27and they don't want to ever go public.
1:16:29Do you have any... - I love being public.
1:16:31- Like, what advice would you give to somebody,
1:16:32let's say, 30 years younger than you?
1:16:34They're trying to build a great company.
1:16:36They've raised a bunch of money, but they don't want to go public.
1:16:39- Well, they have to be at a level of maturity for the company to go public.
1:16:42- Yeah. - They have to be preferably profitable.
1:16:44- But there's a bunch of them now. - Just never want to go public.
1:16:48- Yeah, yeah. That reach that criteria, and are choosing not to.
1:16:52- You know, it'd be interesting to ask them why.
1:16:54What's the reason why you don't want...
1:16:55- I think people think... Yeah, I can't speak for them,
1:16:57but I think maybe they're scared of the public scrutiny, the hassle.
1:17:01- But that goes back to what we were talking about an hour ago is,
1:17:04so they might have a core belief saying,
1:17:06"I need everybody to always be like saying great stuff about me,"
1:17:09which is never going to happen.
1:17:10And they may think that, "Gee, if I go public..."
1:17:12When you're public, at any moment in time,
1:17:15you have people in favor of you, and people who are naysayers.
1:17:18You have people who are selling, and buying.
1:17:19The people who are selling think you're overvalued.
1:17:21The people who are buying get the joke,
1:17:23and they understand you have a real business plan here
1:17:25that's going to create much more value.
1:17:27So, you always have those two different things going.
1:17:29Maybe those people don't want to hear the naysayers.
1:17:31Maybe those people don't understand that naysayers
1:17:34sometimes can help you correct your own path, can tell you,
1:17:37"Gee, you know, maybe I'm cutting costs too much."
1:17:39People come in and say, "You're cutting costs too much.
1:17:42I visited one of your locations. I didn't think the service was so great."
1:17:44"Oh, wow. I didn't know that. Thank you for telling me that."
1:17:47So, now I have to invest more, rather than cut costs.
1:17:49You have other people who say, "You know, I'm looking at your numbers here.
1:17:52Your margins are growing, which is great, but that's only half the situation here."
1:17:56The other situation is, what are you doing with your top line?
1:17:59What are you doing with your price and volume?
1:18:00What are you doing with your organic growth?
1:18:01In my business, in all my businesses,
1:18:03the only two things I had to do in the end,
1:18:06in order to get great valuations and create shareholder value,
1:18:09were grow the top line faster than the competition,
1:18:12- Mm-hmm. - faster than the market,
1:18:14be taking share, and growing the margins, increasing the profit margins.
1:18:19If I did those two things, everything else flowed,
1:18:21everything else flowed from that.
1:18:22But those are the two main things.
1:18:24In order to accomplish those two things, you want as much input as possible.
1:18:28You want as many chefs in the kitchen as you possibly can.
1:18:32The public gets you hundreds and thousands of voices.
1:18:35So, it's amazing data.
1:18:36It also, being public, allows you to build a brand
1:18:39much faster and much more voluminously.
1:18:41- Explain that part.
1:18:42- So, you want to be a magnet for talent, for drivers, for people in the branches,
1:18:47for people in mid-level management.
1:18:49Going back to what you said before, you always want great talent coming in.
1:18:52Well, if nobody knows who you are,
1:18:54they're a little skeptical about joining your company.
1:18:56If you have research written about you by bunches of firms,
1:18:59and you have press releases, and a public website,
1:19:02and so you're very well known what you're doing.
1:19:04It's very clear what you're doing.
1:19:05People say, "Okay, I get it. You're a known quantity, and I like this.
1:19:09I buy into it. I like what you're doing. I want to join the company."
1:19:12And then you can pay them.
1:19:13You can compensate them with stuff they can look on their iPhone every day,
1:19:16and see the value of the compensation.
1:19:18If you're private, you give people these phantom shares,
1:19:20or whatever the compensation plan is,
1:19:22they don't really know the value of it, until they sell it some day,
1:19:25and it may be very different than what they thought it was all along.
1:19:28So, from a compensation point of view,
1:19:30which is a big element of success in these high-growth business plans,
1:19:33being public is fantastic.
1:19:34- Was there ever a time in your career where you were like,
1:19:36"Maybe I should do a private company instead?"
1:19:39Or you were pretty much all in on it?
1:19:41- I've been doing public since 1992, and I'm nonstop.
1:19:44And I like it. I enjoy it.
1:19:47I find it very helpful, very constructive.
1:19:49I like the pressure.
1:19:51I like the ability to hear what the street says,
1:19:54and then agree with what I agree with, but to disagree with what I think is wrong
1:19:59when I feel passionately and have evidence to support they're wrong.
1:20:01So, sometimes the street, particularly like the hedge funds,
1:20:04they're very focused on, like, this quarter,
1:20:06- Yeah. - the next 90 days.
1:20:08That's a terrible thing long term.
1:20:10You don't want to be focusing on just what's good for the quarter.
1:20:13You see these public companies that go out
1:20:14and they cut costs in the field that hurts customer service,
1:20:18or hurts employee morale, and they're understaffed,
1:20:20which is even worse than being overstaffed, which is bad.
1:20:23And here, it's a completely different story.
1:20:25So, yeah, I like being public.
1:20:28- You said something interesting. "I like the pressure."
1:20:30- I do. I thrive on it.
1:20:31- What do you mean by that?
1:20:33- So, many people give you the money, whether it's a retail individual,
1:20:38whether it's a high-net-worth family, whether it's a sovereign wealth fund,
1:20:42whether it's a pension plan, whether it's an endowment,
1:20:46long-only funds, mutual funds.
1:20:49All these people are wiring money to buy your shares. This is a intense pressure.
1:20:55This is probably the biggest pressure I have in life,
1:20:57is to make sure that I do everything I possibly can
1:21:00to make sure I give them back more money than they gave me.
1:21:04Make sure that they invest in the company and...
1:21:06Like, if you look at my neighbors and my friends,
1:21:08I don't know the exact number,
1:21:09but I would guess over 90% of them are invested in the company.
1:21:12And that's what it's been over time.
1:21:15Well, that's pressure, man.
1:21:16That's like, "Wow, I don't want to disappoint them.
1:21:18These are my relatives, these are my friends,
1:21:20these are the people I really love."
1:21:22People come to you and say, "Look, I believe in you so much,
1:21:24I put two-thirds of my retirement plan in your stock."
1:21:28Forget there's diversification. Boom! I'm going all in on Brad and his team.
1:21:32Well, that's a lot of pressure.
1:21:34I like that pressure. I enjoy that pressure.
1:21:36That motivates me, that inspires me,
1:21:38that makes me feel I have something to do here that's important.
1:21:41- I think that's so important to put that out,
1:21:44because we were talking about the negative self-talk
1:21:46and, you know, just living a pretty crazy life,
1:21:49where it's like you want to work seven days a week,
1:21:51or you're just completely all in.
1:21:52And again, this goes back to you can hear a sentence, and just be like,
1:21:56"Oh, I feel that way, too."
1:21:57And it kind of changes the way you approach things.
1:21:59And I remember reading about Herb Kelleher,
1:22:01which is the founder of Southwest Airlines.
1:22:03You know, it's such a crazy story that, like,
1:22:06in an industry where bankruptcy is the most common,
1:22:08- Yeah. - you know, outcome,
1:22:11his company was profitable for 40 straight years, which is nuts.
1:22:14- And he's like a nut job. He's drinking a fifth of bourbon every day.
1:22:16He's chain-smoking cigarettes.
1:22:17- That's not me, but yes. - No, no, no.
1:22:19- I don't advocate that. - No, he wouldn't sleep.
1:22:23Just hilarious stories in his life.
1:22:25And I thought he just lived on the edge, and completely, like, all in.
1:22:29There's a great story about this, where they tried to get him...
1:22:31You know, he would chain-smoke, and then drink a fifth of bourbon every day.
1:22:36But then he had, like, prostate cancer, or something like that.
1:22:38And they're like, "You should stop smoking."
1:22:39He's like, "I don't smoke with my prostate."
1:22:43But that's not the thing that I remember.
1:22:45The thing that I loved, in an interview one time,
1:22:47they were like, "You deal with a ton of stress.
1:22:51How do you handle it?"
1:22:52He goes, "I don't handle it. I like it."
1:22:55- Yeah. - He wanted the stress.
1:22:56- Yes. - He's like, "I want to be in the game."
1:22:58- Yes. - He was an attorney.
1:22:59He didn't start his company... It was his first company.
1:23:02He was an attorney until he was 35 years old, and then he decides,
1:23:04"Hey, I'm going to try to do a intrastate airline."
1:23:07And then he had, it was, like, four years of legal fights
1:23:10before he could even take his first flight.
1:23:12He's just like, "I love this shit. This is what I want.
1:23:14I want the pressure." - Passion.
1:23:16- What I love about this is... It's in your book.
1:23:18You constantly talk about the other people, the other entrepreneurs,
1:23:23other investors, other CEOs that you learned from.
1:23:26The acknowledgments to all these maxims from all these other brilliant people.
1:23:29You talk about, obviously Ludwig Jesselson.
1:23:34I read something on LinkedIn about other...
1:23:36I want to talk about the other people that you've learned from,
1:23:38the other founders, CEOs, executives that you admire.
1:23:41I want to start with Fred Smith, - Oh.
1:23:43- since he passed away. - Yeah.
1:23:45- I read his biography probably, like, four or five years ago.
1:23:50And tell me if I'm wrong,
1:23:53you know more about this industry than I do,
1:23:54it just seems like FedEx had to be
1:23:55one of the most difficult operational companies to ever invent.
1:24:00- Yeah. - You're talking about somebody
1:24:01who wanted pressure. - And complex. Yeah.
1:24:02- Yeah, the complexity.
1:24:04You wrote on LinkedIn that you never miss an opportunity to spend time with him,
1:24:07and that you admired him. Could you just tell why?
1:24:10- So, Fred endorsed my book.
1:24:11- Yeah, I saw.
1:24:11- And I was very touched that he did that.
1:24:13- Yeah. - Because he was a competitor.
1:24:14- Yeah. - Literally the Wall Street competitor,
1:24:16- Yeah. - and he still endorsed my book.
1:24:17- So, Fred was an amazing guy. I mean, this is a very special...
1:24:20You meet people in life that are just special,
1:24:23that have certain integrity.
1:24:26So, I met Fred for the first time in 2013.
1:24:30And I came out of nowhere from this industry.
1:24:33I'd gotten in in 2011,
1:24:34but I really started doing a bunch of acquisitions out of nowhere.
1:24:37And suddenly, like, I was on the front pages of the trade journals.
1:24:40- Mm-hmm. - And I was in Atlanta
1:24:42at the National Association of Manufacturers, the NAM Conference,
1:24:46and Fred was the keynote.
1:24:48So, I was in the audience watching him.
1:24:50And somebody said, "What do you think of Brad Jacobs?"
1:24:53I go, "Oh my God." My heart starts beating.
1:24:55It's like, "Oh my God, Fred Smith's about to, like, destroy me.
1:24:59My brand is going to be completely crushed.
1:25:01You know, the icon of the industry is going to say,
1:25:02'Oh yeah, I don't believe he's really...'"
1:25:04And he said, "I really like watching that guy work."
1:25:09He said, "He is coming into this industry with courage,
1:25:12and buying things left and right, and has big goals and big ambitions,
1:25:17and I'm going to keep an eye on that guy."
1:25:19And I cried.
1:25:22I said, "Wow, Fred Smith's, like, saying great stuff."
1:25:24So, I went up to him afterwards, when the speech was over,
1:25:27and I said, "Mr. Smith, I'm Brad Jacobs. I really appreciate what you said."
1:25:31He said, "Well, first of all, I'm Fred, not Mr. Smith."
1:25:34And that was the beginning of a great, great friendship.
1:25:36And we got together many, many times.
1:25:37Of course, he was on the business council.
1:25:39He was the longest serving member of the business council,
1:25:42over a quarter of a century.
1:25:43- Oh, wow. - And I go to every
1:25:44business council meeting I possibly can,
1:25:46to meet other CEOs, and to hear what other people are thinking.
1:25:49He was just a generous guy.
1:25:50This was a guy who had vision, he had passion. Talk about grit.
1:25:54I mean, he was flying around all the time everywhere.
1:25:57Vietnam, he was flying helicopters with people shooting bullets at him,
1:26:02to get Marines who had been...
1:26:05He was a Marine. - Yeah.
1:26:06- Marines who had been killed, but you don't leave any Marine behind.
1:26:08He'd go in there. He's risking his life
1:26:10with bullets, like, shooting at him, to go get the remains of a dead Marine.
1:26:14- Yeah. - Putting his own life on the line.
1:26:16He got a Purple Heart, he got a Silver, he got a Bronze.
1:26:19I mean, he's a serious, courageous, high-integrity guy.
1:26:22And everybody loved Fred. Everybody loved Fred.
1:26:28- In the opening paragraph of his biography is the craziest
1:26:32opening paragraph I ever heard.
1:26:33I'm just going to, like, paraphrase it.
1:26:34Essentially, like, you know, he's in debt,
1:26:38he ran through, like his dad's Greyhound bus millions.
1:26:42I think he'd burned through, like, $15 or $20 million.
1:26:44His planes were about to be confiscated. He just got fired by his board.
1:26:49The FBI is investigating him.
1:26:52- He goes to Vegas.
1:26:53- Yes. And then they're like, "He thought..."
1:26:56And he was, like, 30 years old at the time,so still young,
1:26:58but he refused to let his Federal Express dream die.
1:27:00And that line was just like, "He thought of suicide."
1:27:03And then the next paragraph is like,
1:27:04"But the idea of Fred jumping out of window is ludicrous.
1:27:08He's more likely to throw somebody out of a window."
1:27:10He was just like a guy that you could...
1:27:11He was like The Terminator. Like, he just wouldn't stop coming.
1:27:15There's a few lines... - No, I don't recognize that in him.
1:27:18- Okay. - So, throwing someone out the window.
1:27:20- At 30, I think he might have been a little different.
1:27:21- Well, maybe. - Yeah.
1:27:23- But I was a direct competitor of him
1:27:25- Yeah. - in transportation, and logistics.
1:27:28- Not in package, because we didn't do package,
1:27:29- Yeah. - but pretty much all the other
1:27:30lines of business, we competed against him.
1:27:33- He was generous. He was charitable.
1:27:34He would always take a meeting with me.
1:27:36He used to come to my house,
1:27:37we'd spend hours and hours and hours talking about everything.
1:27:39- This is what is so special. I know it's part of humanity in general,
1:27:42but entrepreneurship in particular, is just,
1:27:45like, you see this over and over again,
1:27:46just how generous - Yeah.
1:27:47- these people are with their...
1:27:48- Because they know how f****** hard it is.
1:27:50- It is, yeah. - They just went through all this,
1:27:51- Yeah. - and now we might be 15, 20, 30 years
1:27:54different in age, but it's just like, Ludwig Jesselson did when you were 23,
1:27:57and in many cases, like what you did for the book.
1:28:01- Like, think about Sam Walton, right? He wrote his autobiography.
1:28:04Cancer was all over his body. He was in pain.
1:28:07He knows his time is towards the end. And what does he do?
1:28:10He spends a big chunk of the last time he had left saying,
1:28:14"This is what I learned in my six decade long career."
1:28:16That is a gift - Yes.
1:28:17- to future generations. - Yeah.
1:28:19- And then, in the book, they're like, somebody...
1:28:21I love this part, because in the book, they're like,
1:28:23"People ask me all the time, could another Walmart story happen?"
1:28:26He's like, "Yeah, it's probably happening right now."
1:28:28And it was Jeff Bezos going around with his copy of the book,
1:28:32writing it, annotating it, giving it to the executives,
1:28:34the early executives at Amazon.
1:28:36It's such a beautiful thing that Fred would do that.
1:28:38It's a beautiful thing what you did for your book.
1:28:40- So, Fred and Amazon didn't get along.
1:28:41- No, no, no. I'm saying, but, like, - Yeah.
1:28:43- in general. Yeah, obviously. - Yeah.
1:28:44- Well, yeah. I can see why. But my point being is the transfer of...
1:28:48Even for competitors.
1:28:50Fred was your competitor, but he's transferring knowledge to you.
1:28:52- Absolutely.
1:28:53- I don't think people understand how much that go...
1:28:55I'm glad you just said that,
1:28:56because, yeah, you can see it in the books.
1:28:58You hear stories like that all... - He endorsed my book.
1:29:00- Exactly. You hear stories like that all the time in private.
1:29:02- Mm-hmm. Yeah. - And for you to say that,
1:29:03I think, is really important.
1:29:04There's a few things I pulled out from his biography that just remind me of you.
1:29:08And I'm curious if you agree with some of these things.
1:29:11One, the amount of... - If it's about Fred Smith,
1:29:15if I don't have that trait, I should work on getting it.
1:29:18- Okay, well, then perfect.
1:29:19The amount of information. So, like, think about this.
1:29:23He started FedEx in the '60s, I think, something like that.
1:29:25No, after Vietnam, so maybe early '70s.
1:29:27But in the '80s, he says that he estimated,
1:29:29during the 1980s, he spent four hours a day reading.
1:29:32He says he found he relied quite heavily on his own vision,
1:29:36backed by assimilating information,
1:29:37which you've mentioned multiple times so far,
1:29:39from many different disciplines at once.
1:29:41You talked about that in meetings, you talked about in trade journals,
1:29:42you talked about all the research you do, right?
1:29:44This is his quote, though, that I want to read to you.
1:29:46"The common trait of people who supposedly have vision
1:29:49is they spend a lot of time reading and gathering information,
1:29:53and then synthesize it until they come up with an idea."
1:29:56That sounds like you to me.
1:29:57- I like that, yeah.
1:29:58Going back to what I was saying before,
1:29:59you don't want to be rigid in your thinking.
1:30:01You want to be open-minded, you want to be flexible,
1:30:04you want to be scientific about it,
1:30:06that if new evidence comes along that disproves your theory,
1:30:09then modify your theory.
1:30:10Go by the evidence, go by the facts.
1:30:13You want to interact with people who you respect,
1:30:15and you want to be picking their brain all the time.
1:30:18- The way I describe it, it's like you're also alive and paying attention.
1:30:21Like, the story in your book where you're, like, reading a magazine in bed
1:30:24on a Sunday morning, and you read about these
1:30:26waste management companies - Yeah.
1:30:27- making, like, $500 million in profit.
1:30:29You're like, "Whoa, what?"
1:30:31Like, they're picking up trash - Right.
1:30:33- from one spot, and bringing it to another.
1:30:35- Right. - I need to learn about this industry.
1:30:37But that's my point is people like Fred, people like you, I think, you know,
1:30:41there's a ton of people that have the same thing
1:30:42where it's like the whole world is like a classroom,
1:30:44if you're actually paying attention.
1:30:46Like, you can pick up ideas all over the place.
1:30:49- So, the waste management business, I contrast it to the oil business.
1:30:52The oil business was a lot more complex.
1:30:54- Yeah. - We were negotiating complicated
1:30:56long-term contracts, and chartering vessels,
1:30:58and negotiating processing agreements with big major oil companies, and hedging.
1:31:03I mean, it was a very complicated, complex business.
1:31:05When I read that about the garbage business,
1:31:07I said, "That is so much easier, picking up..."
1:31:10That's a simple business.
1:31:12They move some garbage, and send out an invoice.
1:31:14So, I definitely think I can do that,
1:31:15and it seems like they make a lot of money.
1:31:17And the trend seemed in the right direction. So, yeah.
1:31:20- Oh, and the application of technology. - Right.
1:31:23Always. - I love how in the end of your book,
1:31:24you have essentially ordered some key technology developed by humans,
1:31:30starting, you know, back 300,000 years ago, and you move forward.
1:31:33I thought that was a beautiful way to just put that in the appendix.
1:31:35- So, I got that from Kurzweil, by the way.
1:31:37Ray Kurzweil. - Oh.
1:31:38- So, Ray Kurzweil, huge mentor of mine.
1:31:41Only met him once, but met him for about six hours to talk.
1:31:43- Yeah. - But I've read every book he's written.
1:31:46I've read every article about him. I see every YouTube he's...
1:31:49I mean, I'm a Ray Kurzweil fan.
1:31:52And what I read in "The Singularity is Near,"
1:31:55in 2005, 2006, - Mm-hmm.
1:31:57- when that book came out, was amazing,
1:31:59where it was a chronology of the universe going...
1:32:02- You know my meditation, - Yeah.
1:32:02- I go back to space and time.
1:32:04So, a kindred spirit here.
1:32:05- Yeah. - Someone who thinks
1:32:06in large scale of time.
1:32:08And one of the key things that has happened over the last 13 billion years,
1:32:13and reducing that down to a couple hundred points,
1:32:15I thought that was real helpful.
1:32:16So, I modified it a bit, and made it more specific to business,
1:32:19things that would be applicable to business.
1:32:21But the main trend, going back to Mr. Jesselson about
1:32:24you've got to get the main trend right,
1:32:26the main trend for the last two million years had been humans creating tools,
1:32:32AKA technology, to do things, to outsource to those things
1:32:37that do better than us, and free up our time.
1:32:41So, whether it was fire, whether it was a wheel,
1:32:43or whether it was the printing press,
1:32:45and more recently, all the digital electronic stuff we've done,
1:32:48and all of the internet, and now artificial intelligence,
1:32:50and robotics, and nanotechnology,
1:32:53this is the trend.
1:32:55The main trend in life, and therefore in business, is technology.
1:32:59Outsourcing our senses, outsourcing our memory,
1:33:02outsourcing now our intellect, our speech, to computers, to the cloud.
1:33:08This is big. This is really, really big.
1:33:10So, when I looked at 55 different industries,
1:33:12before I picked Building Products,
1:33:14I ruled out a bunch of them, and said, "This looks like an interesting industry,
1:33:17but I think AI and automation are going to kibosh it."
1:33:20- Uh-huh. - And I didn't do it.
1:33:22And I mentioned in the book,
1:33:23there was one particular online education company, it was called Chegg.
1:33:27And I said, "I don't know, it seems like you got a good business,
1:33:29but I think the AI is going to come in and basically do that for free."
1:33:35Well, you know, and I said, "I think the stock might come down."
1:33:38Well, stock came down a lot, you know,
1:33:39from 50 to single digits. - Yeah.
1:33:41- So, fortunately, I made a good prediction there.
1:33:43As Yogi Berra said, "Predictions are difficult,
1:33:45particularly when they're about the future."
1:33:48But that turned out to be a good prediction.
1:33:50Why was that a good prediction?
1:33:51Because, to me, I'm looking at it saying, "The main trend, the long-term trend,
1:33:56is to use technology to do things that we've been doing ourselves."
1:34:00And so, I'm always trying to look at these different workstreams and say,
1:34:03"Is that something that can be automated?
1:34:05Is that something that's going to be AI or robotics going forward?"
1:34:08And then capitalizing on that.
1:34:09- And the opportunity to always do something slightly better, which is
1:34:14- Sure. - and invent tools to do so, technology.
1:34:17- It even starts out when you were talking about collecting...
1:34:19- Sometimes a lot better, not slightly better.
1:34:20- But the good thing is, like, this is not exclusive to the time we live in.
1:34:24It's a constant throughout our experience. - Some years.
1:34:26- You can go and look at...
1:34:27Like, when you guys were collecting all...
1:34:29This is, you said, before fax, before email,
1:34:31you were collecting all the information for Amerex
1:34:34- Yes, yes. - you know, 40 years ago.
1:34:36Yeah. - And then the waste management,
1:34:38when you're like, "Hey, like, I should get into this." And then you realize,
1:34:41"Wait, they're not even using technology to figure out the most efficient route."
1:34:44- Yeah. - This constant application
1:34:46of technology is one of the things I'm glad you...
1:34:48It was on my notes, but I'm glad you directed the conversation there,
1:34:53because the way I thought about this was really crystallized in my mind
1:34:57when I read Andrew Carnegie's autobiography, right?
1:34:59Which was probably written 130 years ago.
1:35:02And for whatever reason, if you talk to somebody today,
1:35:04they don't think of, like, the production of steel as technology,
1:35:07which is a crazy thing.
1:35:08At the time, it was like they literally invented
1:35:10- Yeah. - a new and a better way,
1:35:12and then everything in the world was going to be made out of this.
1:35:15And so, what I do is, like, when I'm finished reading a book, again,
1:35:18we go back to this idea that you and I share, we have to, like, distill it.
1:35:21You're not going to remember 250 pages,
1:35:23but you'll remember a paragraph, or a sentence, if you can.
1:35:26And Andrew's a young person getting into an existing industry.
1:35:30It's a new industry, but it's still an existing industry.
1:35:32Most of his competitors were much older, and they were very, to your point,
1:35:36resistant to change.
1:35:37You cannot be resistant to change. - No, no.
1:35:39- You have to embrace the major trend, which is what your mentor told you.
1:35:41And so, I was hearing the criticism that his competitors...
1:35:47Almost like when you were in that business
1:35:49and the guy took you out to lunch, and he's like,
1:35:53"Slow down. I used to be the first, now I'm the second."
1:35:57You know, that's a terrible way to do business.
1:35:59It's like, take your competitor out to lunch and be like,
1:36:01"Stop being better than me."
1:36:03- It just motivates you.
1:36:04- Yeah, it's not going to work.
1:36:05But the way I would summarize the main theme from Andrew Carnegie's book,
1:36:08that then reappears over and over again in all these stories,
1:36:10is invest in technology, the savings compound.
1:36:13It can give you an advantage over slower-moving competitors,
1:36:16and can be the difference between a profit and a loss.
1:36:19And you see that over and over and over again.
1:36:21It doesn't matter if it's steel, waste management, software,
1:36:25over and over again.
1:36:26It's like the best entrepreneurs, the best CEOs, the best executives,
1:36:30they're not scared of technology.
1:36:32If you're scared of it, you're going to get destroyed by it.
1:36:34They embrace it, and they invest heavily in it.
1:36:36And again, the benefit I have is, like,
1:36:40I'm reading about a chocolate company that was started 80 years ago,
1:36:43and they have some of the most advanced robots making chocolate.
1:36:46I'm reading about a tire company from 150 years ago.
1:36:48They watch their costs, and they're very efficient
1:36:51in how they spend their time and their money,
1:36:55but they invest heavily in technology.
1:36:58No one thinks of Walmart as a technology company,
1:37:01- Mm-hmm. - but if you go back in 1979, right,
1:37:04Sam's in his 60s, and they're like, "Hey, we're doing everything by hand."
1:37:08"Our business is getting way too complex.
1:37:10We have all these distribution centers."
1:37:12Think about the logistics. You would know all this.
1:37:14Moving all this material where it needs to be at the right time.
1:37:17"We need to invest in computers."
1:37:18And Sam, at first, he heard "computer," he heard, "overhead," he heard, "expense."
1:37:23"I can't do that."
1:37:24And then he was slowly allowing himself to be convinced
1:37:26by the accounts people on his team,
1:37:27and when he decided to invest, he wouldn't dabble.
1:37:31He invested $500 million, in 1979 dollars.
1:37:35Who knows what that would be today
1:37:36in the most advanced computer system to handle his logistics and distribution.
1:37:41And that was an edge that not another retailer on the planet had,
1:37:45or at least in America had,
1:37:46that he had the technological edge over the rest of his competitors.
1:37:50- In business, you always want to be finding waste,
1:37:53because there always is some, and eliminate it.
1:37:55You always want to find inefficiencies, and there always are.
1:37:58You want to reduce them. Technology helps you with that.
1:38:01Walmart's a big tech company.
1:38:02So, my chief supply chain officer came out of Walmart,
1:38:05a very, very sophisticated guy.
1:38:06It's all about technology, all about using tech in order to get the data,
1:38:10and then being very data-driven.
1:38:11- I would argue that if anybody...
1:38:12I don't think you could be the leader in any industry and not also...
1:38:15We don't think of them as tech companies,
1:38:17because we think tech has to be like Google or Facebook.
1:38:19It's like, no, they're all tech companies. - Yeah.
1:38:22- I wanted to do more than just, like, American entrepreneurs,
1:38:25just because, you know...
1:38:28- But we have an outsized share of entrepreneurs in America.
1:38:30- Oh. Everybody's like, "You should do more X, Y, Z."
1:38:32It's just like, "Why are they all American?" And I understand that.
1:38:35And my point being is like, if you think about entrepreneurship
1:38:37in the market economy, it's only a couple hundred years old.
1:38:39It's like, well, America's kind of dominated there.
1:38:42So, it makes sense if 75% or 80% of my episodes are about that.
1:38:45But I did one on one of the most successful entrepreneurs in Europe
1:38:50named Amancio Ortega.
1:38:51- Yeah. - And I didn't know anything about him.
1:38:53All I know is that... - Is it H&M?
1:38:55- Zara. - Oh, Zara. So, Inditex.
1:38:57- Inditex. - Yeah.
1:38:57- Yeah, yeah. And then you're reading about this, and you're like,
1:39:00it's not a fashion company. It is a technology company.
1:39:03What does that mean?
1:39:04He built the logistics and the system to say...
1:39:06Me and you can walk out on the street right now, and we can see,
1:39:09"Oh, there's a trend here where all these ladies are wearing dresses with whatever,
1:39:12you know, red flowers on them."
1:39:14And he can take that idea and put it through his system,
1:39:16and he can manufacture dresses with red flowers in, you know,
1:39:2225 different countries in seven days.
1:39:24That is technology.
1:39:25And he says, "We're a technology company with a chain of stores attached to it."
1:39:29- So, Zara Inditex is a big customer of GXO Logistics,
1:39:32one of the companies we spun off from XPO.
1:39:34And GXO runs a lot of their warehouses in Europe,
1:39:37and it's exactly what you're saying.
1:39:40It's e-commerce.
1:39:41It's trying to do things very efficiently, and very quickly, and very accurately,
1:39:44and you need technology to do that.
1:39:45You need robots, and you need AI.
1:39:47Every business, every single business,
1:39:50is going to see more automation and more AI.
1:39:52People have to get on the program on that, or they're going to be dinosaurs.
1:39:55- 100%. I'm going to go back to Fred Smith.
1:39:56He says something that sounds...
1:39:58- Fred was into tech.
1:40:00- Oh, of course. - I mean, in a big way.
1:40:01- Yeah, of course. - He's always talking about
1:40:02this new invention he just did, removing packages, and robots.
1:40:06And we were trying to figure out some way we could use automation at LTL,
1:40:09because he was a big LTL.
1:40:11FedEx is the biggest, actually, in LTL, and XPO's a big LTL.
1:40:14The automation's not there yet, because all the closed spaces,
1:40:17and all the people still involved in that,
1:40:19but it's going to be.
1:40:20Package, you have automation though.
1:40:21Package automation is much further ahead.
1:40:23- Yes. So, there's something we haven't touched on,
1:40:25and I have a question for you.
1:40:27And this is a quote from Fred in his biography.
1:40:29It says, "You have to be absolutely brutal in the management of your time."
1:40:33- Oh, yes.
1:40:35- Do you have any insights into...
1:40:36- Look, if you want someone to disagree with that,
1:40:38you're going to have to talk to somebody else,
1:40:39- No, no. - because I'm 100% in agreement with it.
1:40:41I'm curious how you do this, though.
1:40:42- So, time. So, when you're a CEO, when you're an executive,
1:40:45you only got two things. You got time, and you got capital.
1:40:48And how you deploy that time, and how you deploy that capital equals results.
1:40:54- Mm-hmm. - So, it's your time,
1:40:57and it's the time of the people of the organization.
1:40:59So, when I was running XPO,
1:41:01we had about 150,000, a little more, employees worldwide.
1:41:06See, each one of those worked...
1:41:07The senior management worked long hours,
1:41:08but the average worker worked eight hours a day.
1:41:11So, you had eight times...
1:41:13You had about 1.2 million hours a day of work getting done.
1:41:17If you've got people very focused, and very motivated, and very well-trained,
1:41:21and feel good about the company, and feel good about their job,
1:41:25that productivity of that 1.2 million hours a day is going to be a lot more
1:41:30than if the conditions I just mentioned are not present.
1:41:34So, managing people's time, putting them in the right priorities,
1:41:38and ranking what people should be spending their time on,
1:41:42is very, very, very, very important to success.
1:41:44Now, how do I spend my time?
1:41:45I spend my time deliberately, and consciously, and intentionally
1:41:49on the things that I think make the most amount of value for the company.
1:41:52- How many things, at any given time, are you having to focus on?
1:41:56- A fair amount. So, if you're CEO,
1:41:57you're managing, you know, 15, 20 different things always.
1:42:01You're managing people, you manage technology,
1:42:03you're managing budgets, you're managing investors,
1:42:06you're managing infrastructure, you're managing transportation,
1:42:10you're managing logistics, you're managing pricing,
1:42:12you're managing procurement with the vendors,
1:42:14you're managing customer relations, you're managing sales.
1:42:17You manage Salesforce excellence.
1:42:18I mean, there's about 20 things that are your life.
1:42:21Like, that's what a good CEO does.
1:42:24The problem with a lot of CEOs is they've come up through just sales or operations,
1:42:28and they're good at that, but they kind of just delegate the other 15 things.
1:42:33That's really part of the CEO job.
1:42:34You look at the great CEOs, the CEOs who've created a lot of alpha,
1:42:38a lot of shareholder value.
1:42:39They've been in each one of those 20 or so things.
1:42:42You talk to a Dave Cote, or you talk to an Ed Breen, you talk to Larry Culp,
1:42:46you can talk about any of those 20 things, and they have things to say,
1:42:49and you can learn from them.
1:42:51You talk to CEOs who haven't created a lot of value,
1:42:53and are not really good at this game,
1:42:55they'll know four, or five, or six or even half of those 20 things,
1:42:59but they don't do the other.
1:43:00They don't do the other part.
1:43:01You got to be in all of them.
1:43:02But you're not in all those things in equal measure.
1:43:06Some things you don't have to spend as much time on.
1:43:08The people things and compensation things, I actually spend a lot of time on.
1:43:11So, that's core. That's critical to get right.
1:43:13That's something that if you get wrong, you're wasted.
1:43:17Budgeting, I spend a lot of time going on the budget.
1:43:19Customer satisfaction, I spend a lot of time on that.
1:43:21The employee engagements, going out to the field,
1:43:24doing the town halls, doing the Zooms, I'm all in on that.
1:43:28- But when you say that the CEOs
1:43:30that you think might not be doing the best they could,
1:43:32are they delegating too much?
1:43:33- Yeah. They're afraid to do the...
1:43:38I'm making generalizations, - Yeah, please.
1:43:39- because there's always exceptions. But generally speaking, what I find is
1:43:42they gravitate to the stuff they like, and that they're good at,
1:43:45and they kind of just don't do the stuff that they don't like,
1:43:48or they aren't very good at.
1:43:49And you can't. You've got to be...
1:43:52If you want to be a good CEO and have a high-performing company,
1:43:55and be in the top decile of stock performance...
1:43:59Like, United Rentals and XPO were both top 10 stock performers in the last decade.
1:44:04That's not random that both those companies were.
1:44:06Because it was the same principles, the same structures.
1:44:09You've got to have CEOs, and they did, that are in the whole thing,
1:44:14and understand from A to Z what running a business is,
1:44:18and how you create shareholder value, and see the whole picture of the levers.
1:44:24So, I always tell friends who are... And I have a lot of friends who are
1:44:26portfolio managers or analysts on the buy side.
1:44:29I say, "When you bring a management team in, you need to ask them,
1:44:33'What's your stock price going to be five years from now?
1:44:36And what are the levers that I have to believe that's going to get you there?'"
1:44:39And if that CEO tells you,
1:44:41"That's a great question. I'll get back to you."
1:44:43Short that stock. Please don't buy that stock,
1:44:45because that's the first thing the CEO has to know.
1:44:48First thing a CEO and the senior management team has to know
1:44:51with great specificity, "Here's where we are right now, the stock price.
1:44:56We want to get massive outperformance and get to here.
1:45:01That's great. That's just the beginning.
1:45:02Here are the levers of how I get there.
1:45:05Here are the levers of the things that we must do, as an organization,
1:45:08that will improve our profitability,
1:45:11improve our multiple, generate free cash flow,
1:45:14just how are we going to get to there?"
1:45:16And in my case, it's not that hard, because when you do the graph,
1:45:22- Mm-hmm. - the first two bars,
1:45:23when you do the levers, comprise the vast majority of what you have to do
1:45:28to create the value, and those are buying companies right,
1:45:31meaning being very disciplined in what you pay,
1:45:34and looking at lots of acquisition candidates at the same time,
1:45:37so you don't fall in love with any one of them,
1:45:39and so you have alternatives, and you don't...
1:45:41What's the distribution there?
1:45:42So, you've done over 500 acquisitions throughout your...
1:45:44- My teams and I have. I like to give credit to my team.
1:45:47- Yeah, you and your team. - They deserve it.
1:45:48- For sure. So, you and your team have done over 500 acquisitions.
1:45:51You've looked at how many?
1:45:53- Thousands and thousands. I mean, many thousands.
1:45:55- Like, 100,000? Do you think it'd be that huge?
1:45:57- I've lost count. - Okay, so you didn't count.
1:45:58- I don't know if it's 100,000. And when I say look, looked at in depth.
1:46:01- Yeah, yeah. - But in the thousands, many thousands.
1:46:04- Okay. Going back to the time management though,
1:46:07I think, especially in, like, the age that people are growing up in,
1:46:10where there's a shortened attention span, a lack of focus, in my opinion, and like,
1:46:17- Yeah. - really easy to give in to distraction.
1:46:21You sound like you're almost, not impervious to distraction,
1:46:23that's not the right way to put it,
1:46:24because I know how you're going to be humble when you describe yourself,
1:46:27but how do you avoid being pulled into things that are not prioritized?
1:46:30- So many, many people know Warren Buffett. I barely know Warren Buffett.
1:46:33- Yeah. - I met him a few times,
1:46:35but he's not a close personal friend. I wish he was, but he's not.
1:46:37But I know a lot of people who are close to me who are close to him,
1:46:40and most of them have the same story, so he must tell this to everybody.
1:46:43He tells people, "I'm the richest person. I'm the wealthiest person in the world."
1:46:47And they say, "Well, Mr. Buffett, you were for one period of time,
1:46:50but I think you're number four," or whatever.
1:46:51- Yeah. - He says, "No, no. I can prove that
1:46:53I'm the wealthiest person in the world."
1:46:55They say, "Why is that?"
1:46:56And he reaches in, he brings out his day timer, you know, his calendar.
1:46:59- Yeah. - And he says,
1:47:00"Monday, I have one appointment. Tuesday, I have no appointments."
1:47:04- Yeah. - "Wednesday, I have no appointments."
1:47:07Because he controls his time.
1:47:08- Yeah. - He controls his time,
1:47:09and he has no problem saying no and refusing people time.
1:47:12It's very difficult to... - No, I think I have
1:47:13a problem saying no, though.
1:47:14Like, this is why I'm asking you these questions.
1:47:16- Well, you need to solve that problem. That's a problem you've identified.
1:47:18That's great. That's half of the solution to the problem.
1:47:20Now you need to work on it. - He has a great line, where he's like,
1:47:22"The difference between successful people and really successful people
1:47:24is really successful people say no to almost everything."
1:47:27So, like, you have 20, you know, whatever the number is...
1:47:29- Some truth to that. - Yeah, so whatever the number is,
1:47:31like, you have 20 things that, you know,
1:47:32you're focused on at the CEO level at this moment.
1:47:36You know where you want to spend your time, what you're best at.
1:47:39We talked about incentives, and then recruiting talent.
1:47:43But, like, you also are one of the most, and you're not going to like this,
1:47:47but one of the most famous and wealthiest people in the world.
1:47:49You have an unbelievable amount of people that want your time.
1:47:54Like, you seem to be disciplined from the outside
1:47:56of saying no to a lot of things.
1:48:00Is that something you learned in the last, like, five years, 10 years?
1:48:02Were you like that when you were younger?
1:48:04- So, first of all, I'm not that famous.
1:48:06I'm well-known in the... - Yeah.
1:48:08In the business community, yeah.
1:48:09- The business community, I'm well-known.
1:48:10- That's the only community I care about, though.
1:48:11- I'd agree. - No, the average, yeah, for sure.
1:48:15- And I'm not one of the richest people in the world.
1:48:16- Yeah. - There's many people who are
1:48:18vastly richer than I am.
1:48:19But in my own modest way, I've created some level of recognition,
1:48:24and some wealth, and more importantly, wealth to others.
1:48:26- You should see my inbox when it comes to you.
1:48:28But that's fine. That's fine.
1:48:29- Well, I appreciate that. - Yeah.
1:48:31- But in context, it's not... - It's funny because people...
1:48:33- And the way you said it is a little grandiose.
1:48:35I don't think I am that. - I know.
1:48:36This is why every time I say these things to you, you say things like this.
1:48:39- Well, because I want to correct the record.
1:48:40- That's fine. - I don't want to get
1:48:41grandiose in the wrong...
1:48:42- No, it's a smart move.
1:48:43But the funny thing is when I did the
1:48:45"I Had Breakfast with Brad Jacobs" episode.
1:48:47Now, people are like, flooded me, like, "Can you introduce us?"
1:48:49I'm like, "No. You have to figure out how to get to him yourself.
1:48:52You can't do that." - So, when I was researching, after XPO,
1:48:58- Yeah. - I was looking for my next thing.
1:49:00- No, no, excuse me, after United Rentals,
1:49:02- Yeah. - I was looking for my next thing.
1:49:03- And I was looking at asset management.
1:49:05And I went to Chicago, and I wanted to get an appointment with Ken Griffin,
1:49:08- Yeah. - who now I've met, now I know,
1:49:09and he's a neighbor down in Florida.
1:49:11- I know him well enough. - Yeah.
1:49:12- And, you know, I think he'd return my call if I called him.
1:49:16But he turned down the meeting. He wouldn't take the meeting.
1:49:19I said, "Wow, that's kind of humbling."
1:49:21And, "But you can't even, like, spend an hour?"
1:49:24He says, "No." Ken is a very...
1:49:26And I think you interviewed him, right?
1:49:27- No, not yet. - Oh, you probably should.
1:49:29You definitely should. - I want to meet him.
1:49:30- Very interesting guy. - I want to meet him.
1:49:31- Very. - So, if you can introduce me, please.
1:49:32- He could be president of the United States some day.
1:49:35- So, this is the good thing about when I do...
1:49:36Remember, most of the people I study are dead.
1:49:38When I do episodes on people that are living,
1:49:41this is why I was asking you some of the questions,
1:49:42because like, I'll do this episode, it reaches a very valuable community,
1:49:46and they're really helpful, and then I get all these crazy stories about,
1:49:49"This guy's even more remarkable than your episodes."
1:49:51And I got it about you, and I got it about Ken.
1:49:54And then I was like, "Oh, I definitely want to meet Ken."
1:49:56- Ken's in a different league than I am.
1:49:57- Yeah. - Ken is like way, way up there.
1:49:59- He's a very fascinating person, yeah.
1:50:00- Oh, you should definitely do something on him.
1:50:03You asked how I manage my time.
1:50:04So, I have a chief of staff.
1:50:06He used to work in the Oval Office, and manage
1:50:08- Oh, yeah. - the most important person
1:50:09in the world's calendars. - Yeah.
1:50:10- I mean, he's always very, very good. - Yeah.
1:50:12- And more importantly, he understands what I'm doing.
1:50:16He understands my priorities,
1:50:18and he understands what I was talking to you before.
1:50:20Like, the two most important things that I got to do
1:50:23are have organic revenue growth, better than the competition,
1:50:26and a margin expansion, and then everything follows.
1:50:28So, he understands that.
1:50:29He understands that in order to do that,
1:50:31I have to focus on people, I have to focus on technology.
1:50:33He understands the different levers to do that.
1:50:36- So, you run every decision between those two...
1:50:39- Yeah, that's my framework. In business, my framework is...
1:50:42Because I've learned, if I do those two things...
1:50:44And it takes 100 different things to do those two things well.
1:50:47But if I do those two things well, I will create dramatic shareholder value.
1:50:50If I buy companies at significant lower multiples of profit than I trade at,
1:50:59Monday morning at 7:00, after we announce the acquisition,
1:51:02I've already created alpha for my shareholders.
1:51:03That's a nice way to start the week.
1:51:05Number two, if I then double the profit over the next three to five years,
1:51:09then I'll get a nice multiple, and if I generate...
1:51:11Those are the two main things I need to focus on.
1:51:13He understands that.
1:51:14Now, what he also understands is all the components.
1:51:18Because, you know, in the monthly operating reviews,
1:51:20and all the correspondence, we're very good at communicating with each other
1:51:24what's important and what's not important.
1:51:26So, he knows my priorities, and therefore he's a great gatekeeper.
1:51:29- Is there anybody that could tell you when you're getting off track
1:51:33from what you profess to say is important to you?
1:51:35- Everybody around me. So, if I'm spending too much time on...
1:51:38Like, I'm going to catch heck for being on this podcast with my team.
1:51:41- Dude, you're the man for doing this, by the way.
1:51:43I really appreciate it. - No, I love doing it, and I love you.
1:51:45- Yeah, yeah. Well, and we'll also get to, like...
1:51:47I do think, you know, one of the things that you obviously accomplished
1:51:49with the book, and like, I try to help amplify with my work,
1:51:52is like, just how millions of people are going to benefit
1:51:54from your lived experience.
1:51:55- Oh. - You have 40, almost 50 years,
1:51:57let's say 40 years, of experience as an entrepreneur.
1:52:00It's like, how many people that have ever lived life that have done that?
1:52:04Most people, you know, unfortunately, they quit, or they fail,
1:52:07or whatever the case is.
1:52:07Like, you have so much to teach the world.
1:52:09- Can I comment on something about the time?
1:52:11- Yeah, go ahead. - There's a phrase I used to use,
1:52:13and you brought it out of me, so I'm going to start using it again.
1:52:16I haven't used it recently. It's WOT-WOM.
1:52:17- What? - W-O-T-W-O-M.
1:52:19- Okay. - Waste of time, waste of money.
1:52:21So, when people are brainstorming, we're kind of,
1:52:23"Let's do this, let's do that,"
1:52:25someone can say, "WOT-WOM."
1:52:28Everybody knows that's a waste of time, waste of money.
1:52:30Like, how does what you're suggesting we do influence, directly or even indirectly,
1:52:36growing organic revenue growth, or increasing the margin?
1:52:39And if it doesn't, WOT-WOM.
1:52:41- Yeah. - It's a waste of time, waste of money.
1:52:42You have limited time, and you have limited capital.
1:52:45You've got to be directing that time, and deploying that capital,
1:52:50so that things have the greatest returns.
1:52:52Otherwise, it's WOT-WOM.
1:52:53- And I'm so glad... First of all, that's hilarious.
1:52:55I'm glad that you said that you actually have
1:52:57other people around you doing this, too.
1:52:59Because I am kind of skeptical that no human can hit their goals
1:53:03and what they want to do, you know, 100% of the time.
1:53:05I can't imagine, you know, the complexity of running FedEx.
1:53:10And this guy is just like, "No, you have to be brutal."
1:53:15"Absolutely brutal" is the word.
1:53:17Absolutely brutal in time management. - In time management, yeah.
1:53:19- Yeah. I think there's a lot of things.
1:53:20There's another thing that Fred Smith said that, again,
1:53:23like, when I'm reading about Fred...
1:53:25When I was going through and rereading all my highlights from his biography,
1:53:27I wasn't really thinking about Fred, I was thinking about you. You know?
1:53:29Like, this, to me, feels like a lot of what I've learned from you.
1:53:33And this is a direct quote from Fred.
1:53:34He says, "I believe that a man who expects to win out in business,
1:53:37without self-denial and self-improvement,
1:53:39stands as about as much a chance as a prize fighter would stand
1:53:43if he started a ring battle without having gone through intensive training.
1:53:47Natural ability, even when accompanied by the spirit to win, is never sufficient."
1:53:53If I look at the way you were building businesses when you were 23,
1:53:56compared to, you know, you can pick the first billion-dollar company,
1:53:59and then you look at the second, or the third, or the fourth, or the fifth,
1:54:01or the seventh, it's like you're not even...
1:54:03Like, you'd go back and kick that dude's a**
1:54:05because of all the stuff you have learned since then.
1:54:08- Well, you do get better as you keep...
1:54:10With experience, like, in anybody and anything.
1:54:12But the principles are pretty the same.
1:54:14If you look at all my companies, the essential concepts are the same,
1:54:17that you want to have fantastic people,
1:54:20that you want to have rules of engagement with those people where you get along and
1:54:24go kill the competition instead of killing each other,
1:54:27that you want to have fair compensation so that everybody's in on the action here.
1:54:33- You kept repeating that.
1:54:34When did you understand the power of incentives?
1:54:36Because you talk about compensation incentives a lot.
1:54:39- Very early. Very early in the oil brokerage days, because I used to have...
1:54:43We had tables. There were like 10 brokers at a table.
1:54:46And every month, we paid people monthly, I'd meet with everyone and say,
1:54:49"Look, we made so much this month in the bonus pool.
1:54:52What percent do you think you contributed to it?"
1:54:54And then I would add it up, and it would always come to like 300%.
1:54:57It never added up to 100%.
1:54:59So, I had to have these difficult conversations with people, and say,
1:55:01"Look, you know, I think you're inflated with how much of the..."
1:55:04But what I realized very early on is
1:55:07people are coming to work not because they love me.
1:55:10They might love me. I might love them.
1:55:11But that's not their main motivation.
1:55:13The main motivation why they're coming to work is to make money.
1:55:17Make money for themselves, and more often to make money for others,
1:55:19to make money for their families, for their spouses, their kids, or whoever.
1:55:23And that's important.
1:55:25To understand the motivation of the other person is really, really important.
1:55:28It's called theory of mind, where you understand...
1:55:31And a child gets that after a few years.
1:55:32They don't have it at first.
1:55:34And there've been a lot of psychological studies done on that.
1:55:37It's important to look at things from what's motivating the other person,
1:55:40what's driving the other person, what's important to that other person.
1:55:43That's good in deal-making. That's good in compensation.
1:55:46That's good in building teams. That's good in customer relations.
1:55:48That good with vendor relations.
1:55:50You need to understand their point of view.
1:55:52You can't just be in your mind.
1:55:54You can't just say, "Here's what I want.
1:55:55Here's what's important to me, and I'm a bully, and I'm going to go get it."
1:55:58Because then people are just going to stick their tongue out at you.
1:56:00They'll turn away and do something else.
1:56:02You have to have a partnership.
1:56:03You have to be trading with people all the time.
1:56:06You've got to be figuring out what will help them,
1:56:08what's good for them, and how can we make money together,
1:56:11not me at your expense, or you at my expense,
1:56:13but how can we go conquer the world together?
1:56:15- I think you're a faster learner than me,
1:56:17because, like, I don't think I ever thought about incentives.
1:56:20I think Episode 97...
1:56:22So, this is probably, like, six years ago,
1:56:24that means I'd read 96 biographies before this.
1:56:26I get to "Poor Charlie's Almanack," and he's really the one that got...
1:56:30Charlie was the one that really put into my mind about how important this was,
1:56:35because I thought he was one of...
1:56:37I still think he's the wisest person I ever met,
1:56:39and probably one of the most brilliant people.
1:56:41And he said something fascinating in that book where he's like,
1:56:43"I've been in the top 5% of my age cohort my entire life,
1:56:46of understanding the power of incentives,
1:56:49and how it drives human behavior, and there's not a year that goes by..."
1:56:52And he's probably in his 60s when he said this.
1:56:53"There's not a year that goes by
1:56:55where I don't underestimate the power of incentives."
1:56:58And he would repeat it over and over again.
1:56:59"You show me the incentive, I will show you the outcome."
1:57:01- Remember I told you a few minutes ago
1:57:02that I give everyone on the top level of the company a bunch of equity,
1:57:06- Yeah. -but it's locked up for five years.
1:57:09- So, I meet with my CHRO, who's fabulous, regularly, usually twice a month,
1:57:13and she shows me a spreadsheet of how much the equity is going to be worth
1:57:16at $50 a share, $75 a share, at $100 a share.
1:57:19And I look at that. I look at the numbers,
1:57:21and I say, "Okay, this person has something to work for.
1:57:24This person's on the team. That's something that I'm going to...
1:57:26I see them working really hard to get those numbers."
1:57:29Or I say, "Gee, you know, somehow or another we messed up the comp,
1:57:31and maybe we got to top the person up,"
1:57:33or, "Wow, I can't take anything back, but maybe I gave too much equity after."
1:57:37Whatever, but at least I know where everyone's head is at,
1:57:39- Yeah. -because I know what's in it for them.
1:57:41- You know, there's always that joke,
1:57:42I listen to a radio station WIFM, "What's In It For Me?"
1:57:46And people are generally...
1:57:48They don't care about you and me, David.
1:57:50- Yeah. - They care about them, which is normal.
1:57:52That's capitalism. That's free markets.
1:57:53That's a good thing.
1:57:54- Yeah, I don't feel it's a negative thing at all.
1:57:56It's like we're all self-obsessed. - It is what it is.
1:57:58- But I do think you have a great line in the book, where you're like,
1:58:01"I built businesses all over the world."
1:58:03When you have 150,000 employees, they're spread throughout,
1:58:06you know, people are like, "Oh, it's all different cultures."
1:58:07Like, well, guess what? Money animates people everywhere.
1:58:10- Yeah. - For the whole point,
1:58:11you have a great line in the book.
1:58:12Like, they're not coming to work to make Brad Jacobs more money.
1:58:15- Not at all. - They're doing it for their families.
1:58:17I love this idea.
1:58:19I think it's really important to have a...
1:58:20And I think it's tied to your obsession with, like, the public markets, too,
1:58:23and what you said in your book about being very proud of building wealth,
1:58:26not just for yourself, but for school teachers, pension plans,
1:58:29- Firemen. - nurses, firemen, and everything else.
1:58:31So, like, the importance of having a mission bigger than yourself.
1:58:37- Yes. - I think, like, if you just
1:58:38live a completely selfish life,
1:58:39first of all, you would have stopped a long time ago.
1:58:42Like, you didn't need to...
1:58:43And in general, you wouldn't have to do this.
1:58:46And I've seen this in a couple different places, where Jeff Bezos...
1:58:49We talked about him a few times today,
1:58:50where his idea was when he started Amazon, he's like,
1:58:52"I want to build the world's most customer-centric company.
1:58:56So, I want to be an example not just to our employees and our customers,
1:59:00but to other companies to see, look how you can, over the long term,
1:59:04align the interest of the customer and the shareholder, perfectly aligned.
1:59:08They just have to be done so over the extremely long term."
1:59:12But this idea of, like, going...
1:59:14It drives me. It's like, I want to build wealth, you know,
1:59:17so my kids are proud of me, and I show them what it's like
1:59:20to chase after something and be deeply committed to it,
1:59:22and be passionate about it, and love it,
1:59:24- Sure. - and also make something
1:59:25that's better for other people.
1:59:27And if you do that automatically, you know,
1:59:29the family will prosper and everything else.
1:59:31So, I think that was one of my favorite parts of your book.
1:59:35- Do you know? I think Amazon modified that mission statement now,
1:59:38something with employee engagement, too.
1:59:40- Do you remember what it was? - Something about workplace,
1:59:43great workplace environment or something like that.
1:59:44The best workplace environment in the world.
1:59:47- It is funny when you think about it, because it's one of...
1:59:50I had this conversation, actually, last night.
1:59:52I went to dinner with our mutual friend, Patrick O'Shaughnessy.
1:59:54He texted me this morning. He's like, "Make sure you tell Brad hi."
1:59:57- Invest Like the Best. - Yeah, 100%.
1:59:58And he was with us when we had breakfast here a few months ago.
2:00:02And we were having this discussion at dinner, with his family.
2:00:06I was like, "What is the most impressive company built in our lifetime?"
2:00:09And so, me and him were born in the '80s, because he said, "What about Microsoft?"
2:00:12I said, "Microsoft was in '70s." Like, it was before us.
2:00:14And I would say it's like, for me, the answer's Amazon.
2:00:16Like, it started in '97.
2:00:18I can't think of another company started in the '90s, in terms of like,
2:00:22- as impressive - A big success story.
2:00:24- as what Jeff has built.
2:00:27By reading your book, listening to your interviews,
2:00:29talking to you now, you kind of, for me personally,
2:00:33remove any self-imposed limit that I have, where I'm like, "Oh, like, there's no...
2:00:38I don't think Brad has a limit to what he thinks he can achieve.
2:00:41He thinks on a big scale automatically."
2:00:43Like, you just operate in a very big and ambitious way,
2:00:47where I think a lot of people have like self...
2:00:49There's like self-imposed ceilings,
2:00:50that are most likely invisible in many cases, right?
2:00:53If you want to build more wealth, you want to grow great companies,
2:00:55just find more customers to serve.
2:00:57It's a pretty straightforward process.
2:00:59But I do think one of the things that I absolutely love is,
2:01:02and it's the way I ended the episode, it's the way you ended the book,
2:01:04and I would summarize what I'm about to say here as,
2:01:07"Go all in. You only get one shot at life."
2:01:10And I think this is a perfect spot to wrap our discussion.
2:01:13And so, I'm just going to read from your book, to you, and you said,
2:01:16"The summer after eighth grade,
2:01:17I attended the Rhode Island Governor's School for the Gifted in Art and Music,
2:01:20a summer enrichment program for kids who've been nominated by their schools.
2:01:24I wasn't sure what to expect.
2:01:25On the first night, I was captivated by a speech given by one of the leaders.
2:01:29I remember goosebumps rising on my arms as he spoke.
2:01:32'This program is a special opportunity,
2:01:34but it's up to you to take advantage of it.
2:01:36You have a choice.
2:01:37You can waste the next couple of months and not accomplish that much,
2:01:40or you can go all in.
2:01:42This is an opportunity to go deep on a project
2:01:44and do the best work you've ever done,
2:01:46but you have to decide if you want it.'
2:01:49I learned what it meant to go all in,
2:01:51the magical connection between intensity of focus, and the end result."
2:01:57This is, to me, the punchline. And I love this.
2:01:59"If I put my whole heart and soul into a project,
2:02:02I had it in me to create really cool stuff."
2:02:06Can you talk about the passion and going all in,
2:02:09and the advice that you'd have for other people listening to this?
2:02:12- I'm reliving the goosebumps, literally.
2:02:14Physically, I'm feeling the tingling in my sensation,
2:02:16because that was in a critical moment in my life
2:02:18where I understood that it's up to you.
2:02:23You can diddle-daddle through life, and just kind of sleepwalk, and then die,
2:02:28or you can live life, you can embrace life,
2:02:31you can have big dreams, and go all in and find your passion,
2:02:35which for most people is not going to be business or making money,
2:02:37but whatever it is, that's what it is, and really achieve something fantastic.
2:02:41And for me, that's a big motivator.
2:02:43- That was a perfect place to end.
2:02:45Thank you very much for writing the book.
2:02:46Thanks for taking the time.
2:02:47Brad, I really admire you. I've learned a lot from you,
2:02:49and now, I'm very humbled and privileged to call you a friend.
2:02:53I really appreciate it. - Thank you, sir.
2:02:54- Thank you very much. - All the best.
2:02:55- I hope you enjoyed this episode.
2:02:56Please remember to subscribe wherever
2:02:58you're listening, and leave a review.
2:03:00And make sure you listen to
2:03:01my other podcast, "Founders."
2:03:02For almost a decade,
2:03:03I have obsessively read
2:03:04over 400 biographies
2:03:06of history's greatest entrepreneurs,
2:03:07searching for ideas
2:03:08that you can use in your work.
2:03:10Most of the guests you hear
2:03:11on this show first found me
2:03:13through "Founders."

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