A (2:59)

Yeah.

B (2:59)

But if you don't get the long term trend right, you're kind of in trouble. So you gotta figure that one out. You gotta say what's going on here? You need context, you need to see what's happening, what did happen, what is happening and what will likely happen in the future. And what are the different future states that could happen and what's the probabilities for each one of those. And then you have your risk management. So yeah, the converse of that is if you get the major trend wrong, you can do a thousand things right. You're still going to lose, you're not going to create alpha, you're not going to create value there. So, yeah, that was a big lesson from him.

A (3:35)

The other thing that I love is you were 23 years old, you're having lunch with him on a very frequent basis. Like you just said, he's much older, he's one of the most successful people in the world. He's taking an interest in you, and yet you were still comfortable to unload your stresses and your problems. And he would sit there patiently listening and then I love his response where he's just like, yeah, business is problems. One of the, I think most important lessons is like, problems. There's a line from Henry Kaiser, who was in his day was as famous as say an Elon is today or you're becoming. And he started 100 different companies. He built the Hoover Dam, he built Liberty ships for the Allies in World War II. And I've read a bunch of biographies on him because he was one of Charlie Munger's favorite founders. And he said a line in the biography that's in multiple life stories about him that problems are Just opportunities in work clothes. And so I read your recounting in your book of some of your lunches with Mr. Justafen and I was like, oh, he had the exact same. He essentially gave you the same advice.

B (4:31)

Yeah. So in the book I talked about a specific episode when I was having lunch with him and I was kind of down and glum and he said, what's going on? And I was talking about this problem and this thing. I was just kind of down, you know. And he said, well, don't stay in the business world if you're going to get down on this stuff. These are the things you should get up from when you have problems, when you have challenges, you have obstacles, by addressing those. That's how you make money. You make money. So the more problems you have, as long as you can solve them, as long as you figure out how to address them and remove the problem, that's how you're creating value. That's a wonderful way to go through life. Number one, it's a great way to make money. Because you're not always down. Cause you always have incoming missiles when you're in the business world. You have problems with employees, with competitors, with regular. I mean just all day long you have incoming missiles, you have great stuff too. But in between that is punches to the face. And if you're gonna get beaten up by that, you're not gonna be successful. And secondly, you're not gonna be happy. So you're gonna go through life like glum. You see, sometimes you see these like multi billionaire guys and they always look like this, well, what's the point of all the money? Seriously. So I would not want to be one of these zillionaire guys who's like frowning all the time and upset and angry and depressed. That's much more important to me in the right frame of mind. And to go through the short time we have in life happy, reasonably happy. I don't have a perfectionist standard. I have to be like in ecstasy and bliss 24 hours a day, seven days a week. But generally happy.

A (6:02)

Did you ever meet Sam Zell when he was alive?

B (6:04)

I did, yeah, I'm sure, many times.

A (6:05)

Okay, so he, great guy. He, he had the same thing. I was lucky enough to have a two hour, very intense lunch with him. He said the same very similar thing to you. He's just like, I know all the rich guys. He's like, you wouldn't believe how many are, are miserable. He's like, don't do that. He's like, I wake up every single day. You guys have a lot of similarity where I'll spend time with you. The very first time I met you, when I went to your book launch party, I just remember, oh, this guy's got crazy energy. And I had already read your book by then. But something that you talk about over and over again in your book is problems are just opportunities. It reminded me of. There's this line from. In Jeff Bezos's. There's several books on him, but one of his main biographies is a book called the Everything Story, Everything Store. And they said that Jeff, you would tell him problems about his business and he would get excited.

B (6:49)

Yeah.

A (6:49)

Because he's like, oh. And he talks about the shareholders like, oh, this is like, these are problems. If I solve these problems, this is going to increase the enterprise value of the company that I'm building. These are actually good things to identify and embrace instead of avoid. One of the most important things that I learned from Brad Jacobs is the importance of working with the smartest and most talented people you can. Brad says the most important thing that a CEO does is recruit superlative people. Brad recruits the smartest people he can find and says there's no substitute for smarts. Steve Jobs believed that this was important too. Steve said, I think that I've consistently figured out who the really smart people were to hang around with. You must find extraordinary people. The key observation is that in most things in life, the dynamic range between average quality and the best quality is at most 2 to 1. But in the field that I was interested in, I noticed that the dynamic range between what an average person could accomplish and what the best person could accomplish was 50 or 100 to 1. You need to build a team that pursues the A plus players. That is the end of the Steve Jobs quote, and that is exactly what Ramp has done. RAMP has the most talented technical team in their industry. Becoming an engineer at RAMP is nearly impossible. In the last 12 months, they hired only 0.23% of the people that applied. That means when you use Ramp, you now have top tier technical talent and some of the best AI engineers working on your behalf 24,7 to automate and improve all of your business's financial operations. And they do this on a single platform. That means the longer they use Ramp, the more efficient your company becomes. This is important because as Sam Walton said in his autobiography, you can make a lot of different mistakes and still recover if you run an efficient operation, or you can be brilliant and still go out of business if you're too Inefficient. Ramp helps you run an efficient organization from a customer's perspective. What does a team of a players sound like? It sounds like this customer review that I read which said ramp is like having a teammate who you never need to check in on because they have it handled. Go to ramp.com to learn how they can help your business save time and money. Today, that is ramp.com I do have a question on your long term reputation. Okay, so there's this line. Do you remember when Buffett got involved in all that trouble with Solomon Brothers and he's like, listen, you can lose money, that's fine, but you lose a shred of reputation.

B (9:07)

I'll be ruthless.

A (9:08)

I'll be absolutely ruthless. It was a very jarring experience for me at your book launch party because first of all, I was the only one that didn't show up in a suit. So I rectified that today.

B (9:18)

Right?

A (9:19)

And then everybody else was just like, you know, I've known Brad for three decades. Like, basically everybody there was like, how do you know Brad? It's like, you know, I was an investor of his. You know, he made all this money for this pension fund that we run and everything else. And like, the stories that I've heard at the party and then since I released the episode is just like, you have a fantastic long term reputation. Do you have any advice on how you were able to maintain that and how important it was for other people to do the same thing?

B (9:44)

Reputation is really important. Your personal brand is extremely important because based on that, people are going to want to do business with you or they're going to want to not do business with you. So every day you're in the office and doing stuff, you're either raising your brand or you're lowering your brand. And that's the main thing you gotta work on. You gotta make sure that your brand reflects integrity and honesty and dependability and stability and people can count on you. This goes back to Mr. Jesselson. So Philip Brothers. This is before email. This is before. Actually, it was even before faxes. It was more Twixes and telexes, which took a few days to go through when they went through. So you could do a deal worth hundreds of millions of dollars on a handshake or on a phone call. There's no written confirmation of that for like days. In the meantime, maybe the price of whatever you were trading, oil or copper, had gone up a lot. You still had to have a deal. Otherwise, you know, the whole system doesn't work. So dependability is so, so. Trust is so, so important to do.

A (10:40)

How old were you when you. When he gave you that advice? Did you immediately start applying it?

B (10:45)

So you.

A (10:45)

You were optimizing for the long term, even when you were that young?

B (10:48)

Yeah, I think as you get older, you optimize long term more. I think. I think when you're young, you're just so ambitious and you want to get stuff done. You're in the now. As you get older, as you mature, you have more context. I think life in general is about getting more context, seeing things in proportion to other things.

A (11:06)

Can you say more about that?

B (11:08)

Well, you know, because we've talked about it a lot outside of your podcast. I'm into meditation, so a lot of the meditation I do is changing. Looking at space from different perspectives, not the normal perspective that we have right this minute. So I expand my mind from the Earth to the sun, to the solar system, to the galaxy, to the clusters of galaxies, to the universe, to the multiverse. Just go way, way, way, way, way, way high. And then bring it all the way back in. And then go into the molecule and the atom and the proton and the nucleus, and right in the middle of all that, and then go to strings, and I find that accordion making my mind like an accordion, getting really big and then really, really small. And they're doing the same thing with time, looking at time. Go back towards my life over the last few decades, and then go back centuries and millennia and just keep going way, way, way back, all the way back 13.8 billion years. Go back all the way to the Big Bang, and then go all the way forward. And, like, picture the world going forward. That time and space juxtaposition, for me at least, different things work for different people. Gives me context. It gives me humility, gives me humbleness. It shows that I'm just one thing right here in a major, major thing going on. I'm just one little tiny jet. At the same time, I'm part of that. So I'm very uplifted. I'm very inspired. I'm very motivated. Like, wow. I'm part of, like, a real big deal here.

A (12:28)

It's great.

B (12:28)

We all are. We're all part of this huge, huge, huge, huge thing. So I think context is really important. It gives you meaning, it gives you purpose, it gives you understanding, it gives you wisdom.

A (12:38)

I know you hate when I say this. Cause we've talked about this privately. It's like, you obviously know I study uncommon people for a living, right?

B (12:44)

They do a great job at It.

A (12:45)

I appreciate it. Maybe unique, Yeah, I appreciate it. But like, think about how crazy it is. Like, the people that I study on Founders is they were so good at their job. Somebody wrote a book about their life. Like, you're talking about very small, but most of their inner monologues. You're different. You have a much more positive energy. And like, there's almost like a. Let me. Let me give you some context here. We were together a few months ago at a mutual friend's birthday party in Miami. Our friend Rick. And at the. There's a bunch of interesting people at the party. One of them was Apolo Ohno. Okay. Apollo Ohno is the most decorated winter American Winter Olympian of all time. He's become a friend. I met him through the podcast and he walks up to me and this is one of the funniest things. And you know. Cause he has people think you're an Olympian. Like, he was training since he was a kid. His dad would make him get up at like 5 in the morning and run drills in the school parking lot. But he still comes from, like a very positive. He has a great relationship with his dad. Normally it's like, you know, not good when they're put under circumstances. So he was asking me. He's just like, I see this pattern in, you know, when you're reading all these hundreds of biographies about these great entrepreneurs that, like, there is something inside of them driving them. It's actually negative. It could be insecurity. It could be, you know, they grew up in poverty. It could be a bad relationship with their family. And he's like, are they all like that? And I. And you're like 20ft away. You see that guy over there? You know who that is? And he goes, no. I go, that's Brad fucking Jacobs. I was like, I guarantee you he's not driven by that. This is what I mean. You're uncommon amongst uncommon people. Because at least from the outside in the conversation I had, it's like, I think part of this impenetrable nature that you have in like, oh, yeah, businesses, problems. It's gonna come. What do you think we're doing here? You don't seem to be rattled by them. So what is your inner monologue? Like when you're doing huge fucking deals right now? You're doing all kinds of crazy stuff. You built eight separate billion dollar companies. You don't do that by accident. So how do you make. I'll stop talking there. What is your inner monologue like?

B (14:38)

So it goes Back to what, Ms. Jesslyn used to say is, problems are your friend. You don't want to just tolerate problems. You want. You want to embrace problems. You want to hug problems. Problems are the way you succeed. You want to run to the fire. You don't want to run away from the fire. Be brave and be courageous. Go into it. I think you can start with anything. That's anything. And in this case, in Apollo's case, he starts with. And other people he studied start with negativity, trauma, stress, insecurity, fear, anxiety, and then that's their motivator. They zero in on that, and then that makes them run faster.

A (15:14)

Was that ever your case?

B (15:15)

No, that's not my case.

A (15:17)

You're like a unicorn.

B (15:19)

So I don't know that I'm a unicorn. I don't embrace negativity. I'm okay with it, but I don't make a big deal about negativity. I'd much rather enjoy the positivity. I'm a sunny side up guy.

A (15:30)

But your inner monologue, are you nice to yourself? Your ongoing inner monologue?

B (15:34)

I'm reasonably nice. Yeah. I am.

A (15:37)

I am vicious. I. I sound like, you know, David Goggins. Is this like, oh, yeah, I was just.

B (15:42)

Someone was talking. Oz, the magician.

A (15:44)

Yeah, my inner monologue. My inner monologue sounds like David Goggins, where he's just like, you're not doing enough. This wasn't good enough. Like, I see the problems. So, like, I attack them. Like, it's like, oh, like, I'll listen to, like, a past podcast or something. Anything I've done, I was like, and all I see are the flaws. I don't see any of the good part.

B (16:01)

So let me comment on that. I think there's two different ways you can approach that. So, yes, as cognitive behavior therapy has taught everyone, we're born with a schema, a prism through which we see life. And that can be clouded by core beliefs of I'm inadequate, I'm weak, I'm defective, I'm unattractive, I'm unlovable, all kinds of negative stuff. Now, there's two ways you can approach on that. You can either dispute those things. First validate, then dispute. So say, well, of course I'm hearing this. I have executives who report to me over the years that have the exact same scheme as you just described, where they're always saying, oh, I'm no good at this. Oh, when people realize how bad I am, I'm just faking it. I'm wearing this mask, and I'm doing a bad job. I'm going to get fired. People are hiding stuff against me because they don't respect me. All this, like, negative self talk, it's a complete waste of time. But nevertheless, that's their reality. The reality is they have this steady drone of automatic negative thoughts. There's two ways to deal with that. Either you can dispute them, but first validate it. Don't start with the disputing. First validate and say, okay, yeah, of course I'm having all these negative thoughts because I got a tough job, for example, I have a big job. There's a lot of pressure, and I'm not perfect, so I'm not getting everything right. And so I do mess stuff up and I do get things wrong. And all that negative talk. And then you. You catastrophize on those negative things and make them into huge, huge issues when they really should be minimized. If you put in proper context. So you first validate it, but then dispute it and say, well, what does the evidence say here? Is this really a rational thought or is this my schema kicking in to me?

A (17:42)

When you say that, it's like, I think you have this gift to step outside of yourself, which now you're saying. But when I say you step out of outside of yourself, you're like, no, I'm in myself.

B (17:52)

I much prefer to be in myself, not myself. I like to come to center. I like to find the center. The first time that concept of centering came about was when I was. I went to enrichment camp at school in the summertime, and there was a book they gave out called On Centering. I don't remember who wrote it. And it had a picture of someone making pottery. And they were explaining in the book that it's all about finding the center of the pot you're making. So centering, finding that inner calmness, finding that zone where you're in the groove and everybody has it, everybody has that. You just gotta find it. And that's one of life's missions, is to find that center, find that intercommunication zone. And then when I went to college and I studied music under Bill Dixon, same concept came out. So. Oh, I'm familiar. They said, come back to the center. So we're playing improvisation, what he called black music. Some people might call it jazz. He didn't like the word jazz. Playing with some friends. And then you have to find the center, come back to center, back to the center, back to the center. So there'd be a center point in the music. You could go anywhere you Wanted in the music. You can improvise all over the place, but come back to center. And then everybody come back to their common center. So I've incorporated this concept of centering, of finding a center into my meditation practices, into my business practices, into my philosophy of life. So I like to find centers. But going back to what we were saying before, so you have this negative self talk coming. You can either take one of two paths. You can take the path of validating and disputing it and seeing it in a proper, rational way, or you can take the approach of just witnessing it, just enjoying it. And it is what it is. It's mindful acceptance of it. So acceptance of that. And I vacillate between those two. Sometimes I do the. You ask how I do it, my internal monologue. If negativity creeps in, of course it creeps in. I'm dancing with the ghosts of my ancestors just the way you and everybody else is dancing with the ghosts of the ancestors. Evolution works very slowly over generations, over long periods of time. So we always have the set of genes that were good for survival and procreation of our ancestors, but not necessarily now. We still have in the gene pool all these, like, irrational thoughts. So another way to look at it is just observe it. Kind of more of a Buddhist way. Just observe it. One of the ways the most simplest Buddhist meditation is just observe your breath. Observe your breath. I mean, how easy can that be? All you gotta do is.

A (20:19)

We just did this before we started recording. You're like, let's go through a miniature, like, meditation before we begin. Like, I don't ever do that. And I probably should start doing it. I just kind of wake up and go and just try to attack things that I feel like. And don't get me wrong, Like, I absolutely. I'm obsessed with what I do. I love my work. I'm working on seven days a week.

B (20:38)

But.

A (20:38)

But I wanted to be the best in the world at it. And that's where it's like, oh, you just see these deficiencies.

B (20:43)

So that sounds to me like perfectionism. So I suffered a lot from perfectionism when I was younger. I wanted to be perfect. Not only did I want to be perfect, I wanted everybody else to be perfect. Not only did I want myself and others to be perfect, I wanted the universe to be perfect. Everything just goes swimmingly well at my beck and call and command. Well, it turns out that's not reality, it's not nature. None of those three constituents are perfect.

A (21:05)

There's something that you said in your book. It's actually in this section that I was writing down. You're like, I'm not surprised when things don't go perfectly. That's the nature of the universe. The big problems can be where the best opportunities lie. And so obviously, you know, like, anytime I read something, it's not that I'm reading it. I think about how it relates to every single thing else I've experienced and all the other books I read. And I remember I got to have dinner with Charlie Munger. I spent three hours with him, you know, six months, eight months before he died. There's, like, a trend here, unfortunately, where it's, like, kind of dangerous. Remember, you're like, I don't know. I don't know if I'm gonna have dinner with you. But one of the things I loved it was the top note I left myself. Cause as soon as I left there, I just wrote down what I learned. And it said that Charlie has an almost complete indifference to problems. Troubles from time to time should be expected. This is inescapable, so why let it bother you? And it's like, one of the things I most admired about him. He's like, yeah, it's part of life. What's wrong with you? You know, he had 10 decades of life experience. He was way further down the line and obviously way wiser than I was.

B (22:03)

So I have two comments on that. One is, when you go back to the Big Bang, the current construct model of how the universe was created, it was actually created out of imperfection. There was like a slight imbalance between matter and antimatter. Just a slight imbalance. A lot of debate of what caused that. As a result of that, everything came out of that. Had there been perfection at the beginning of the universe, the Big Bang would not have happened. So we are imperfection. We are the children of imperfection. Imperfection is good, and imperfection is not bad. Expecting perfection is will cause you stress and strain and won't really work.

A (22:40)

When you were in your 20s, though, you said, hey, I wanted to be perfect. Not only do I want to be perfect, I want everybody around me to be perfect. I wanted the universe to be perfect. Like, how long did it take for you to learn what you just explained?

B (22:50)

So when I stepped down from United Rentals, I still stayed as chairman. When I stepped down as CEO of United Rentals and done it for about 10 years, and I want to do my next big thing. I want to do another startup. From the beginning, I was running a big company. I wanted to Start it from scratch. And there was a period of a couple years where I was trying to figure out what I was going to do, and I didn't find it. And then a great financial crisis came, and I was kind of lost. I was kind of. It was probably the only time in my life that I was depressed. I'm just not depressed. But that period of time, I was actually clinically depressed. I took the Beck Depression Inventory, and I came up, yep, depressed.

A (23:28)

Wow.

B (23:29)

So. So I found an amazing cognitive therapist, and I went to the guy twice a week, hour and a half a shot, for two years. It was fantastic. One of the best things I've ever done in my life. Because what we did was in a. In a. In an environment that was very safe and confidential and trusting with someone who was a professional at psychology, I was able to first of all identify and then notice more fully my automatic thoughts, the negative thoughts and irrational thoughts, unconstructive thoughts, and then first validate them, then dispute them, first join, and then lead to a more constructive way of looking at things. So that cognitive therapy approach of identifying the thoughts and then dealing with them really was the turning point in my life on this perfection thing, because after a few sessions, he said, I kind of know what's going on here. Now I've gotten your measure. You want to hear it? I said, yeah, I want to hear it. And he said, you're suffering from perfectionism. You want everything to be perfect, and it ain't. So we need to get over that. We need to reduce these demands, these musts, these shoulds, these commands that either I or you or the rest of the world is perfect, to preferences where I would like me to be better, I would like you to be better. I'd like things to go better, but they don't have to. I can still be happy. And frankly, they're not going to all the time. So I need to accept that. I need to radically accept that. I need to be in reality, not put these. Jeff, you mentioned Bezos. Bezos says a lot of cool stuff. One of the things he says often is, don't fight with reality, because reality always wins. So the reality of this is nothing's perfect. Like, literally nothing is perfect that I found.

A (25:13)

Yet he has another line, I think that's related. It's similar to the idea in your book where he's just like, if you don't want to be criticized and you don't want stress, then you don't do anything.

B (25:21)

Exactly.

A (25:22)

It's just like. Then just sit in a room and watch Netflix and order DoorDash or something. But you're not going to do anything that you can be proud of.

B (25:28)

So that's another irrational thought. You see, people have. I used to have this a lot, but I don't have it now because I went through that therapy thing and it turned a switch on in my brain. Is a demand that everybody likes me and everybody respects me and everybody says great stuff about me and I get good press and I get good reviews and the stock just goes up every single day. Well, that's not gonna happen. That's called perfectionism. That's not reality. So you just kind of modify that to. Well, sure, like everybody else, I'd like to people to say good stuff about me rather than bad stuff about me. But I don't really care if people say bad stuff about me. Then, okay, maybe there's some truth in it. Maybe some good thing I can learn from that. Or maybe they're just off and they don't know me and they're just kind of. They're imposing their distortions on me. But does that really change who I am? It really doesn't. If somebody is saying something bad about me, or does that really matter? It doesn't matter, really, at court. And again, goes back to context in the larger context of things. Most problems really don't matter. They just don't matter. Maybe at the time they seem like one, and maybe we're kicking in, magnifying those problems and making them into big catastrophes and dramas. But most problems really aren't a bad problem. Aren't a bad thing.

A (26:42)

I always say opportunity is a strange beast. It usually frequently appears after a loss.

B (26:46)

There's always a play. There's always no matter what happens. This goes back to the Justice League conversation. No matter what gets thrown in your face at the moment, it may seem ugly and bad. There's a play. There's a way to utilize that. There's a way to use that. There's a way to embrace that and turn that into success. Anything can be turned into positivity and success, even if it starts in a bad place.

A (27:10)

Something came to mind when you were talking. That's also unusual because most of the people that, like I read biographies about, they go through several different companies, so they find their life's work, but. But normally they were working on something for like, a very long time. Why do you keep starting so many companies? Like, what is going on?

B (27:28)

That's my thing. Everybody's got their thing, so everybody. So you're A great podcaster, you have a talent, your superpowers. You can consume a large amount of information and then distill it down to like boom. Here are the most important takeaways from that. It's really brilliant. That's your thing. That's why you're doing it, right? Cause that's what you're good at. You're not playing professional baseball or acting or singing, whatever. You're doing what you're good at doing. This is what I'm good at. I'm good at figuring out what's the right industry to consolidate. And secondly, I have a toolkit and it's the same old toolkit. It's not.

A (28:00)

You told me this last time. Can you explain this? I love the way you describe this toolkit of how you approach building your businesses.

B (28:05)

So first, I find the right industry. I find something that's large, I find something that's growing, I find something where it's fragmented, I find something where we can buy things at reasonable prices. I find things where technology could be used. It's not very tech forward industry. I find stuff that AI and automation are not going to disrupt anytime in the near future. So I find industries that have certain characteristics to it, whether it was garbage, whether it was construction, whether it was transportation or logistics, and now distribution, they all have the same characteristics, same traits. So that's point number one. Point number two is I then put together an amazing team. I put together a team of people who are generally smarter than me and who are more talented than me in what they do. So I have a great chro who knows everything there is to know about HR and compensation and talent recruitment and so forth. I have great M and a team who really know how to do deals and get deals done rather than turn them into dramas. I have great finance, accounting, people who understand everything there is to know agency about running a fast growing company and keeping the books clean. So et cetera. And I get the team together, then I get the compensation sorted out. So I make everybody my partner on the senior team and I give people tons of equity. But there's a catch. It could vest, but you can't sell it for five years and most of it vests in the last two years. So everyone is committed going back to long term relationships. Sure, people come and go for whatever personal reasons or people burn out or whatever. But generally speaking, most of the team stays for a while and you work together as a team and then I have certain rules of how we're going to interact with each other in A very respectful way, but in a way that encourages looking at things from different angles. So we disagree and we argue. Argue's too strong of a word. We present different ways of looking at a situation that partly overlap and partly conflict. And then we, in a very scientific way, figure out, well, let's risk, adjust these things, figure out what's right. It's a scientific experiment, an ongoing science experiment, like all day long, of trial and error and experimentation and ab experimenting. And so that culture that we create gives us a power. It gives us a power to attack the industry in a way without all the noise that a management team has. Very coherent team, like a superorganism, like a brain, like a very organized group. And then I have, between all those people, we have experience at our main job, which is to buy companies at reasonable prices, where there's a difference between what we can raise capital at and what we can deploy it at. And then we have a skill set to be able to improve the companies that we buy. These are the two main things we're good at, is buying companies in a disciplined way. Price is too high, we don't do it. Price is reasonable, doesn't have to be cheap. We're not trying to steal companies. Price is reasonable, we go for it with gusto. And secondly, the other talent that the team collectively has is we know how to improve the businesses. We know how to improve the pricing, improve the procurement, the HR element, the compensation systems, the technology, the whole tech stack, just everything from A to Z. We're just good at transformation. We're good at taking a company that is making a billion dollars of EBITDA of profit, and within three to five years, doubling the profit, doubling the ebitda. That's the main criteria I look at when I look at a company is purchase price. And secondly, can we double the profit in three to five years? And most of my main acquisitions, I've done that. So Conway, Norbert, Dante, Sangla, all these different ones, they were great companies. And everyone says, oh, they're working really well. Okay, well, three years later, we doubled the profit because we apply the toolkit, we apply the playbook. And it's the same playbook. Industry after industry. The playbook gets refined a little bit here in hybrid, it's the same playbook.

A (31:59)

So when you say, this is just what I do, like, to me, you now have figured out who you are as a person, right? I have this weird theory that I can't prove, but I believe. And there's like this myth of the genius young entrepreneur And I was like.

B (32:14)

Well, I don't know.

A (32:14)

If you study the history of entrepreneurship pretty intensely, you realize that people do most of the time their best work many decades into their career. And so there's all kinds of reasons. They're like, oh, they've had more experience, they're wiser, they have more resources, they have more practice. And I don't dispute that. That is all true. But I have this weird theory that they also know themselves way better. And I think the key to being a great entrepreneur is building a business that's. I used to say building a business that's authentic to you. And then I read Michael Dell's excellent autobiography, and he has a better line. He said he built a business that's natural to him. And there's a great story, I want your opinion on this in one second. But there's a great story where, you know, Michael starts in, his company was 19, he's in his 20s, and it's doing fabulously well. But he realized like, hey, I need some, like grown up, like some. I need some help here. And so he gets this guy, I think his name was Lee Walker, if I remember correctly. And he's about 20 years older than Michael, already started a bunch of companies, Rich, you know, didn't have to work anymore. But he saw an unusual once in a generation, talent. And Michael decides to help him. He lasts four years. And so I read the book, and then I was about to make the podcast on it. I go and see, I was like, I wonder whatever happened to this guy? And I found an interview that he did, and he's in his 80s and he's talking about that time. And he gave me some of the best context to really understand this story. And Michael's story is really story of you and everybody and all the people really are very similar people that we're studying. And he's just like, Michael starts his company with $1,000, says, I'm gonna take on IBM for my dorm room. IBM is the most valuable company in the world at the time, which I didn't know it was the first company to hit 100 billion market cap, which is nuts. And he's, you know, just the audacity to have that. And he's like, and the first few years, like, we're going against this behemoth. And I lasted four years, I started losing my hair, my back hurts, I can't sleep, I'm unhealthy. And he goes, but he goes, but Michael was energized by it. He built a business that was natural to him because, like, this is what I wanna do. I'm not losing my hair, I'm not depressed, my back's not hurting, I can't sleep. I'm like waking up every day, just getting after it. So is that the way you feel about just what you're doing is like, this is. It may seem weird cause it is in not a pejorative way. It's not weird in a negative way. I don't know another person that started eight separate billion dollar companies. So it's like almost like you can't help yourself. That's what I do.

B (34:35)

That's. I know how to do that.

A (34:37)

So it's just natural to you? This is just like.

B (34:39)

Yeah, I mean, I've done it many times before and I've made every mistake in the book over the decades, and I've learned from those mistakes and I've refined it and refined it. But I have a winning formula. I know how to execute on this, and the team I have knows how to execute on it. I don't want to underestimate the team. So one of the things about being the CEO and the founder is you get all the credit, but, like, there's a lot of people on the team who are doing these things, accomplishing these things.

A (35:02)

Yeah. You have a great line in your book, which I see over and over again. You said the CEO's most important job is recruiting superlative people.

B (35:08)

Totally.

A (35:08)

It's like, you're people. So my question to you though is like, what would it take to get you to stop?

B (35:16)

Yeah. I don't know, because I'm not. And I don't see that in my near future. I just started the company in the last few months.

A (35:22)

This is what I. No, but in general, like, so this is what I loved about, you know, most of the people I admire. It's like I can still remember this, you know, I put it into the Maximus. Like, if you love what you do, your extra strategy is death.

B (35:33)

Right.

A (35:34)

Like, it should be working on something. So, like, you know, Sam Zell told me, he's like, I'm gonna be doing deals till I died. Well, he was doing deals till he died. Munger, same thing. Like, I met him right after the Silicon Valley bank collapse. It was like he was like a kid in a candy shop. He just thought this was like the. He didn't want people to be hurt, obviously, but he's just like, you know how many financial panics that I've seen in my lifetime? Like, of course this is like nothing New. So I remember I was actually having dinner. I remember where it was. I was at Harry's Pizzeria in Miami in the Design District. And you know, I was supposed to be paying attention to my wife. And on our date and I was thinking about the podcast and all the shit I'm reading and I go and like take a bite into a piece of pizza. And I was like, people used to say, if you love what you do, you do it for free. And I go, no, there's a different level. If you love what you do, they couldn't pay you to stop there.

B (36:25)

You go.

A (36:25)

And I was like, how much money could you have gone to Steve Jobs? Like, hey, how much would it take for you to not work on Apple? That's not why he's doing it. It's that, that's not why they're doing it in. Enzo Ferrari, Estee Lauder, Edwin Land, Coco Chanel, all these other people, like, they just can't. Michael Ferrero, I just. The Michelin Brothers like this story over and over again. I get the same sense to you. It's just like if I said, hey, what price I'm going to pay you? And you can't do any work, you have to stay home. You can't. It's just like, there's no price.

B (36:54)

Everyone. You just named all those successful people, they were all in. They were a hundred percent in. They weren't like partly in and partly aren't. They're in, they're 100% in and completely focused and single mindedly concentrated on, on executing the plan. And that's important. And I want, you want to have people on your team who share that passion, that commitment.

A (37:14)

The best leaders in business are able to spot patterns, but you can't spot patterns if you can't see your data. And most businesses are only using 20% of their data because 80% of your customer intelligence is invisible, hidden in emails, transcripts and conversations. Unless you have HubSpot. HubSpot is where all of your data comes together so you can see the patterns that matter. Because when you know more, you grow more. And that is a pattern that never fails. Visit HubSpot.com today. That is HubSpot. Com that leads me to another great one of your. I don't even think you think it's a maximum, but it's how you differentiate between A, B and C players where you're like, I'm just gonna summarize this and jump in whenever you want. But you envision you do another thought experiment of okay, do you want to see if you have the absolute best people on your team? Just visualize that they're coming into your office and they're saying, brad, I quit. So then what happens next in this scenario?

B (38:11)

So I'm always interacting with my chro and going over talent and making sure everybody's happy and motivated.

A (38:17)

How much percentage of your like?

B (38:19)

A lot. I spend most of my time on people and talent issues.

A (38:24)

So most of your time there's a.

B (38:25)

Lot, not the most, but the most. If I did a pie chart of like, how I divide up my time, the largest percent is on people issues.

A (38:33)

There's a funny story about this. And then I don't want to interrupt, but I do. This is inside of me and I just has to come out all these stories because I find them fascinating. So there's two MBA students in Stanford in the late 90s, and in 97 they interviewed 16 technology company founders, since they're in Silicon Valley at the time. And they publish this book called in the Company of Giants. And everybody's in there, Bill Gates and Steve Jobs and everybody else. And they're telling Steve, they're like, well, you're the founder, of course, you don't have time to recruit people. And Steve's like, what? No, it sounds exactly what you said in your book. It's the most important. He goes, and he did a great way to demonstrate the point. He goes, let's say you're starting a company. You're in Silicon Valley. That's what you're doing over here. You pick your co founder. You should think long and hard about that. Your co founder is 50% of the company at that point. And then he goes. And then he goes, but you still goes out. Now you have to pick the 10th person. That person's 10% of your company. And you're saying you don't have time. Like, what else are you doing?

B (39:31)

It's all about the people. It's all about the people. You know, systems and tech and budgets and customers and sales. All these things are really, really important. But you can't achieve excellence in those things without fantastic people, without fantastic leaders. And I spend a lot of time, especially on the top few dozen people. I want to make sure everybody's in it to win it. Everybody is fully, fully engaged. And I do a mental exercise where I picture the person coming into my office and saying, brad, I quit. Like, this is not a conversation about you making me a counter offer. I'm done. I've already moved and so forth. This is about a Conversation about how do we make an orderly transition because I respect you, and I don't want to leave behind dry. And then I try to feel and visualize what would be my reaction if that person came into me and quit. If my reaction to that is yes, I don't want to smile. I don't want to act like I'm happy about this, but, you know, I didn't have. Nobody likes firing people. And I just didn't. You know, I just kept postponing firing that person. I shouldn't have, but I did. And this is great. I don't have to pay severance. And, you know, that solves that problem. No problem at all. We'll replace them. That's a C player. That's someone really, you should get the courage up to take. To get off the manage. Get off the team right away. And then on the second category, if my reaction to it is, you know, it kind of sucks, you know, it's what. I would have preferred that person stayed, but it's not the end of the world. We'll hire a headhunter. We'll get someone as good, maybe something better, and, you know, things will work out. That's a B player. But if. When I visualize that person quitting, my reaction to that is pure terror and absolute panic. And like, somebody took a baseball bat and just whacked me in the stomach and then punched me in the face. I'm going, oh, my God. Like, I'm never going to find someone as good as her. No way. Or I'm never going to have someone as talented as that person. I'm never going to have someone who brings to the table their particular superpower. I am. And I can't even hear what they're saying anymore because I'm just, like, having this internal panic dialogue going on. That's what you call an A player. So I want all A players around me. I want people whose relationship with me I value so much that if it was terminated, I would be lost. And I want them to feel the same way. I want to have mutual relationships. I want people who love being in a relationship with the team, with the company, and that we all are in it together to go conquer the world. I think I had neighbors. It's been two years, years since I wrote the book, but I think I had a chapter that said, how to kill the competition instead of killing each other. And that's, you know, it's kind of funny, but it's a serious title, is you don't want to have a dysfunctional management team. One of the most important things that has allowed us to create tens and tens of billions of dollars of value is the management team's coherent. We have the right people on the management team, and we have the rules of the road of how we're going to deal with each other in a respectful way that still encourages differences of opinion.

A (42:32)

First of all, I love the way you described because everybody says, oh, yeah, hire a players. It's really hard to differentiate. Like, what does that actually mean? And I think this thought experiment is perfect. It's like, we are fucked if this person leaves. That's an a player. That's a way to think about this. But this also goes down to your gift and why I think I've learned so much from you. One partially. It's like your ability to have very clear thinking and then put it in a memorable way. So you were just talking about, like, the relationships that you have with the people you work for. You have a line in the book where, like he says, an organization is like a party. You only want to invite people who bring the vibe up. My team and I spend a lot of time together, so it's a big deal that we like one another.

B (43:11)

Yeah, I agree with that. Who said that? That was a good one.

A (43:16)

Bezos has a line, and I think his shareholder letters just like, life is too short to work with people you don't admire. Like, it's same situation. It's like you're in charge. You get to choose. Again, this goes back to a woman gift of being. Being the CEO of being an entrepreneur. It's very rare that you get to literally choose who has access to who's around you. And I love this idea. It's like, hey, the organization is just like a party. You only want people to bring it to life.

B (43:37)

David, it's all about the people. It's all about the people. Because the people then create all the different processes and work streams and transformations and everything.

A (43:47)

This is very fascinating because, like, it's obviously, you know, business is people, right? You're not only just like the people that are building the product, but like all businesses. The best definition of business I've ever heard actually came from Richard Branson. He says all businesses is an idea that makes somebody else's life better. Right? And like, there's infinite. That's why there's always more opportunity. Cause there's infinite ways. We think technology is gonna, like, it changes things, but then it just usually opens up other ways to make other people's lives better. So just Focus on, like, if you're looking for an opportunity, how can I just serve other people? Another line that's very related to this is Henry Ford where he says, money comes naturally as a result of service. Like, I think those two ideas go together. The reason I was thinking about this, though, the best way I just. I've heard describe what you were just saying. It's all about people. Work with the best people you possibly can. The A players we're going to talk about. You have this great line about there's no substitute for brains. But before that, it's like the way that I've heard this described best, in my opinion, is from Ed Catmull, the founder of Pixar. Right. He would go around and give all these talks and he was actually, like, shocked that he would ask the audience, like, what's more important? People are ideas. He says every single time people got it wrong, they said it was the ideas. And he's like, no, it's the people. And so he has this great line where he's like, listen, if you give a mediocre idea, right, to a brilliant team, they're either going to fix it or they'll throw it out and come up with something better, something new. But if you give a great idea to a mediocre team, they're going to screw it up. So it's obviously because ideas come from people. So it's the people.

B (45:13)

So that's exactly what I'm trying to say.

A (45:15)

What he said, he says it in, like, just a great way. But you have a very explicit piece of advice in your book that I think is interesting, where you're like, screening for there's no substitute for brains. Screening for Superior intelligence eliminates 90% of all candidates. So it's the first thing I look at. There's no substitute for smarts. The CEO trait most closely correlated with organizational success is a high iq. Double down on hiring the brightest.

B (45:39)

Yeah, well, you want smart people, and I particularly want people who are smarter than me. I want people who are. Who uplift me, who teach me. I don't want to be.

A (45:48)

Do you want them specialized? Because you mentioned earlier, you said you want them smarter than you, but also better at their particular.

B (45:54)

The vast majority of them are specialized.

A (45:55)

Okay?

B (45:56)

They're a finance person, they're an investor person, They're a strategic person. They have something that they tech person, they bring to the table that they're really an inch wide and mile deep in. But you also want them to have certain human qualities that transcend what their Specialty is. And those are as or more important than the technical skills.

A (46:17)

Explain.

B (46:17)

Well, you want. You mentioned smart. You want people who are honest. You want people who are hard working. You want people who are collegial. You want people who are really in it. Like on the work life balance thing, boom. It's work. And their life is a lot. Their work. And they enjoy that. I don't have to hold them like a school teacher, a stick over their head, getting them to work late or come in early, work on weekends. They want to do that. They enjoy doing that. Their job, their career, their success, the collective success of the company is an important part of vickerstaalt. It's really important part of their being and their purpose.

A (46:48)

Was there ever a time. I don't mean it could be an opportunity, but this is fascinating and it's almost selfish to have this conversation. Cause, like, I get to ask you questions and learn from you. Was there ever a time where work wasn't where you were more balanced? When was the last time you were balanced? So when you started your first company at 23.

B (47:04)

I did. And I've been completely imbalanced since then. I've been working seven days a week.

A (47:07)

Yeah, because you very few vacations scaled like four years to, I don't know, like a couple billion doll. It was just an insane story for me.

B (47:13)

It's not work for me. It's like I'm really enjoying it. To me, it's a craft. It's a skill that I have. Were you. I enjoy doing it.

A (47:19)

Were you always honest with yourself that it was the top priority?

B (47:22)

I think so, yeah.

A (47:25)

I had a conversation with a friend of mine on the drive over here, and I think I'm lying to myself. So let me give you example. So, you know, in many cases, like you read these biographies of these people, and it winds up being a cautionary tale, you know? Cause they kind of like will sacrifice everything for professional success. Their health, their relationships, everything else.

B (47:43)

Well, that I'm not in favor of.

A (47:44)

No, no, no, you're still married. You're a good father. Like everything else. Yeah, for sure. But your main. It's not like you have a bunch an abundance of hobbies outside of work, from what I understand.

B (47:53)

But meditation and music, that's pretty much it.

A (47:55)

There you go. So for a long time, every single person I read about, I was like, okay, well, I even titled the episode my personal blueprint, which was Ed Thorpe. Right, Ed Thorpe. I'll give a short rundown real quick. First person to invent a quantitative Hedge fund. He invented the ability to count cards for blackjack. Writes this book in the 1960s called Being a dealer. Made more money than he'll ever spend. But if you read his book, you get to the end, it's like he was much more balanced. He also came from academia, and maybe this had played a role into that, but essentially lived a life of adventure because he truly loved what he did. Once he made more money than he could spend, he stopped trading more time for money. Had a good marriage till his wife passed away from cancer. Took care of his health, but much more of like a. Let's say there's five important things. And he kind of, like, divvied up. Maybe work was 50%, but the other four are other 50%. And I was like, oh, that's kind of my personal blueprint. And I said, on the driver, I go, no, I'm lying. It's like 90% of what I think about and how I spend my time is just work.

B (49:05)

That's a beautiful thing. So all the people you've mentioned so far, all these very, very successful people, I guarantee you, probably every single one of them, with few exceptions, if any, were all in. And what they were doing was their passion, and they were just so excited about it. They were in the flow. They were in the flow of being so absorbed on something that you'd lose track of time, and the whole rest of the universe is gone. You're just in it. You're just really into something that you do well, and you're with people that you really like, and you're likely to be successful because you're doing what you do.

A (49:37)

When I was thinking about the amount of research that you do that you explain before you get into an industry, before you start a company. It's like the way I describe your book is buy it, read it all the way through. And then what I really think it is, you put it close to your desk because it's a reference manual. Because you can just pick this up now and read one chapter that takes 10 minutes and get good ideas out of it.

B (49:58)

Do you know I'm writing a sequel?

A (50:00)

Last time you told me, it was like, I only had one book in me. I have nothing else.

B (50:02)

So I wrote the book, and I got so much feedback of what people thought about it. And people asked, well, you should really talk more about this. This. At first I said, I'm never writing another book.

A (50:11)

Yes, I remember.

B (50:12)

Well, it takes a lot of time to write a book, and I don't have a lot of Time. But I had so many people ask me similar questions. Okay, I'm going to write a sequel that addresses those particular questions. You know what the title's going to be? That was how to Make a Few Billion Dollars. This one's going to be called how to Make a Few More Billion Dollars. That great award.

A (50:28)

Yes. Let me get an early copy, please. You were very nice to send me an early copy of this one. But I think what ties all this together, when I think about your research process, the way you go after life, all the people we've been talking about, from Steve Jobs to Jeff Bezos, this is like mediocrity is always invisible until passion shows up and exposes it.

B (50:44)

Love it.

A (50:44)

I think that is what animates me. It's just like, you see this? You're talking about even when you buy great companies, good companies, what else could you do? It's like, there's always more because you can always infuse passion into what you're doing. Obsession, work with the best people. Of course, you can keep getting better and better results.

B (51:01)

Yeah, well, I agree with that. I think. So what you just said, you buy a company, it's doing very well, and then three, four years later, you've doubled the profit. What did you do? You went in with a toolkit and you went into the attack the pricing using algorithms and elasticity analysis. You've tacked the compensation so you've got the salespeople made partners rather than pupils to the parent authoritarian figure at corporate. You put in technology that frees up time, that allows people to spend time doing, selling and doing their job rather than trying to find information. You're sharing information in very good ways. So you apply a certain toolkit, Boom, you double profit.

A (51:40)

So wait a minute. This brings up something interesting, and I've been talking about lately the different archetypes there is in founders and CEOs, right? Everybody thinks like, oh, there's kind of one archetype, and especially the ones that are popularized now, it's like essentially like the Steve Jobs dictator make, you know, almost all the decisions.

B (51:53)

I don't like that.

A (51:53)

Yeah, so exactly. I just heard the pupil part.

B (51:56)

So who am I to criticize Steve Jobs? No, no, no, no. That's not my style.

A (51:59)

It's not a criticize criticism. It's just like. That's the beauty of entrepreneurship is like, you get to do it.

B (52:03)

I wouldn't be able to do that.

A (52:04)

So what is your archetype? What is like. Let me back up before I ask you a question, because I've been having long conversations with Daniel Ek, the founder of Spotify, who's become a good friend. And that's his whole thing where we actually might be writing something together about. He's concerned that there's gonna be young entrepreneurs out there that are like, I'm not like Elon, or I'm not like Steve, or I'm not like all these people, so therefore I can't be an entrepreneur. He's like, there's multiple archetypes. He's like, I'm not like that. He says he thinks he's a better coach than he is a player. And essentially he has discovered, it's almost like this. He recruits some of the best talent in the world to the point where he's like, I used to be the best at product. That guy's better at product. He should do it. That guy's a better designer, that person's a better hr. That person's everything. So he's like, the way I look at it is like much more of a coach than a player. What is your archetype?

B (52:52)

So you want to get the right people in place, you want to get the compensation aligned, and then you want to be communicating with each other in a very constructive way, in a very prolific way. So Friday we had our second mor monthly operating review for this company. We had bought Beacon. And how did we come up with the agenda? It was ten hour meeting, two breaks, one was ten minutes, one was five minutes. Nobody was distracted, nobody was on phones or devices. Those are all shut off. We were very concentrating on the one person that had the proverbial microphone at a time and listening very carefully and intently of what that person was saying, and then debating each point and each action point. How did we come up with the agenda? Here's. How did I, the CEO, come from above and say, here's the agenda? That I think is an important thing. I'm smarter than all of you, and here's what we should be doing. No, how pompous and arrogant and kind of ineffective, really, to do that. What I do is just the opposite. I send around a question pro, an app, and we say, here's all the materials pre read for the meeting. We don't do PowerPoints and go through all that nonsense where everyone tells each other how great they're doing. It's just the silliness that you see a lot in corporate America. We send all those decks out ahead of time, we have everybody read them, and then we have everybody fill out the app say based on everything I Read, here are my main takeaways and here are the main questions that I think are so important in terms of creating value that we should, the whole team, all 25 of us who were in that meeting, spend time debating and discussing around the table in the limited time we've got. Because 10 hours goes by like that. And then I send back out the takeaways. And I send back out the questions. People rank them on a scale of 1 to 10. Again, we have an app for this. And then I send people the takeaways. Here's how they were rated, here's what people thought were the most important takeaways. Very valuable. Now you've got the benefit of everybody's perspectives on the same data. So people have seen the same charts, the same data, the same metrics and KPIs but. But they've seen it from a little different angle. It's very enlightening. Then I've got the questions. I tell everybody, rate the question 1 to 10 and then all the questions that are rated 8, 9 and 10, between 8 and 10. That's the agenda, David. That's what we talked about. So we just went. Then we put them in categories. Everything about tech that was rated 8 or above. Here they are. Everything that was on comp or people, everything that was on strategic, everything was on M and A. All the different categories, only the ones that the group voted on, at least innate. Now what is the consequence of that? Number one, we have an amazing meeting. Like, it's a good agenda, much better than I could come up with because now it's got everybody's angle on it, it's group sourced. Secondly, everybody's involved in it because the boss didn't come down. And like, here's the agenda. It's like we collectively made the agenda so people realize the truth of the matter is we really respect each other's opinions. There's no one person who's the authoritarian figure, who's like teaching everybody else. It's a group. I've created a group. I've created a superorganism. I've created like a beehive or an ant colony or a brain or a human body. Superorganisms, things that are a collection of people, that the sum is greater than the collection of the parts and the whole is greater than each individual. We have a holistic, powerful approach to that. That's how I run the business.

A (56:12)

How many people would be in a meeting like that?

B (56:14)

So I've experimented with this over the years. I used to have larger meetings with 40 or 50 people, and it just didn't work. And so those meetings, those monthly operating reviews, which are the most important meeting of the month, then the most senior people in the company come together and do the exercise I just mentioned for 10 hours with almost no breaks, almost no breaks at all, that I have 25 people and I limit it to 25. I don't want more than 25. I don't know what's so magic about 25, but 20 to 25 is the ideal group. You have enough people that you get diversity of opinion and you have dialectical discussions, meaning looking at issues from multiple perspectives, then analyzing those and synthesizing them and finding the truth. But you don't have so many people that you're, you know, people are peacocking and trying to impress each other and don't want to be vulnerable. You want people to be vulnerable. You want people to be. To trust the other people in the room so much that you've created a safe zone to say, you know what? I've been thinking this and thinking this, but the more I'm listening to you and the more I'm hearing about this, I may be wrong. Maybe I got this thing completely upside down. I'm starting to come around to looking at it like this with one little twist. Now I think what we should do is xyz. And then what do you all think of that? That's a fantastic conversation. When you have leaders of the company feeling it's safe to show that, hey, I was wrong, I was thinking things wrong. And I model that, I role model that myself all the time. Be flexible in thinking, don't be rigid in thinking, don't be black and white dichotomous thinking. But be open minded, be receptive to be willing to learn and to be challenged. And that's okay to be proven wrong. It's actually a good thing we're learning together.

A (57:45)

Two questions on that. What percent of the meeting are you speaking in a situation like that?

B (57:51)

So I open up usually and I ramble on for like an hour, maybe even more than an hour of the State of the Union from my perspective. And I try not to just mention things that I form conclusions on, but I try to frame things of these are the most important successes of the company. But these are the things where we need to improve. And here are the issues that in my view, after reading everybody's votes and everything I think are the things we should attention, direct, we should spend most amount of time solving because I think those will create the most amount of value. And I try to keep it balanced. The good stuff and the bad stuff. Yes, I do. Atta boys and atta girls and rah rahs. That's a good thing to do for leadership. But I, in equal measure, do. Look, we gotta keep it real. We gotta keep it honest. Here's things that we said by this deadline, we're gonna do it. We're a couple weeks behind on this. Let's get going here. What's going on? Here's we thought this outcome was gonna happen, and we're only 92% there. How can we get to 100%? So I try to start off with a balance, but then I try to shut up. And then I try to let the mechanical going through the questions, where I just go down the questions by categories and then go around the room and hear everyone's opinion. And you don't want the leader talking a huge amount of time.

A (59:01)

Yeah. So you basically start with an hour. In this case, nine hours. The nine hours for us. A meeting.

B (59:08)

Everyone else.

A (59:08)

Everyone else.

B (59:09)

And I'll talk to, but not inordinately. I've already used up my hour, for God's sake.

A (59:13)

Yeah. This is one of the things I felt, and I've seen this with a lot, with, like, really remarkable people, is how many people. Like when we had this intense breakfast at your house a few months ago, you had a notepad and you were. I'm talking and you're taking notes. Like, what the hell is going.

B (59:27)

It's reverse. It's really cool stuff.

A (59:28)

No, but it should be the reverse. In fact, I have a story about this. And then I want another question for you. Was Mitch Rales, obviously one of the founders of Danaher great company? Oh, incredible. And Dana, her way.

B (59:40)

He.

A (59:41)

Yeah, he's actually a mentor of two close friends of mine. So I get insights from them about him and just one of the most remarkable things that he did. But he was at this vertical market software conference. There was only like 40 people there recently. And a friend of mine, I was going for a walk in New York City about this, and he says, I don't understand. The guy sat in the front row. He's the most successful person there by far. And he was just taking notes the whole time. I was like, that is why he's successful. It's not the reverse. It's not that you go and you build a $200 billion company, whatever it is, and then take notes. He was like that his whole time, just relentless. Like you have valuable information. Great. I just did this Episode in Jimmy Iovine. He's a very fascinating person. And he's this great line. He's like, great can come from anywhere. And then you have this other thing. I'll get back to the question. Great can come from anywhere. He's in the music business. His point was that he was trying to help. He was partners and a mentor of Dr. Dre, who's one of the greatest hip hop produced. Several times. Dre didn't have an artist to work with. They wind up getting this. This demo tape from Eminem. And at the time, he's this poor kid in Michigan living in a trailer park. Right? No. Like, no resources at all. And yet they're like, we weren't looking for, you know, somebody to be controversial. We were looking for great. And guess what? It can come from anywhere. It came from this kid that was obsessed sitting in a fricking trailer park saying, I want to do this thing, and I'm going to do this to the best of my ability. I want to talk about. I'm going to go back to this question I have, but you have. I love this idea of grabbing information, which is really fascinating. There's multiple examples in your book, and I find these in other books where it's just like, it's so nuts that especially when companies get big and older, they stop asking information from people from the front line. So you're like, often when we buy a company, we discover that the frontline employees, middle managers, and even some senior executives have never been asked, what would you do to improve the company? You would think owners would want to know that. And then you have this great thing that I think is actually good for business, but also personal relationships. You ask, what is the stupidest thing we're doing and what is the smartest thing we're doing? This ability to. Like, you just almost described it in these. In these meetings, like, hey, we're going to disperse and ask these questions and see what comes back. And then we'll rank the information.

B (61:50)

So the end of those operating reviews once we've gone through all the lists. Now we do human interactions. That's where the fun starts. So we work really hard solving all these problems and debating all these issues. Now we put that aside, and I ask a series of questions. I modify them a little bit every month, but I have a list of a few dozen questions. I pick which ones I want to ask each time. Usually, one of the first ones is, what is something somebody said today that you have a different opinion on? What is something that somebody said you disagree with and you get a chance to talk about it. I just go around one by one to each person. That's a wonderful thing. Many management teams can't do that because everyone will get upset here. It's like, great. And then we have a nice, honest event. I ask everyone, what's your single biggest takeaway from today? What is something that 10 hours ago you didn't understand about how we're going to make money and how we're going to serve customers better and how we're going to improve employee engagement and how we're going to kill the competition? What is something you didn't know? What is something you learned? And just go around one by one by one by one. And then I ask them, when I think about people, not in this room, but people in the organization out there in the field, who's an mvp, who's the most valuable player, who's somebody who's going above and beyond, that you really respect, you really admire, you really think is amazing. Wish we had thousands more like that person and why. And I sent an email to them afterwards saying, hey, I was in a meeting with the leaders of the company and you were nominated as an mvp because XYZ people love it. Sometimes they start crying. There's a lot of times it's really, really emotional things. Really, really nice thing, validating the field. And then I bring it inwards and I say, who around this table today, in your mind, did their star go up? The star already might have been high because everyone loves each other, but even higher. And why. What is something that somebody said today in the meeting that impressed you, that made you go, aha? I made you say, damn. That's a good insight. That's a good perception. I really like that. Who was it and what did they say? We go around everything like that. And I have a few other questions like that. And then I bring it down to the person themselves, and I say, finish the sentence. I resolve to improve the company by. Just go one by one. And each person stands up and says, I resolve to improve the company by. And then they say what they want to say. It's a great thing. What I didn't get a chance to do Friday because we ran out of time. What I often do is then we go into another room. We get out of the boardroom, get out of the conference room, and then we stand in a circle and just silently look at each other for the first couple minutes. A couple minutes is a long time to be, like, looking around everybody else. A lot of People that's uncomfortable. It's not uncomfortable if you all like each other and look at each person and say, I admire this person. Because, like, what are the strengths? What are the qualities? What are the traits? What are the skills? What are the things that they do that you really are impressed with? You really like that person a lot. And just go one by one, look at each person and just identify that. And then after a minute or two is going by, I say, okay, now let's do the same thing. Look at each person and say, I really. So we've already said why I'm grateful they're on the team. So now I want to say, so it was gratitude. Gratitude's a wonderful leadership technique. And then the second thing is, I really wish that person great success in the company. And I can picture this company five years from now accomplishing xyz. And I send nice vibes. I send love vibes to that person. Just go around one by one, all silently, nothing out loud, just one by one by one by one. And you start seeing people smile, like always. I've done it so many times. You start seeing people smile. You start looking at people. You see. Looking at people in a very positive, uplifting way and appreciative way. And then I say, okay, now we've concluded the day, and I declare the day a success, and congratulations. Then we just clap. And we clap. Sometimes just clapping goes on for, like, five minutes. And that's, like, really, really goes on. But it's a very. And people levitate home. Go to the airport and go home.

A (65:42)

How much of your. The way you run your company is, like, guided by intuition? Like, you seem like a very intuitive person to me.

B (65:49)

Maybe not as much as you think. No, not. Yes. There's always instinct. There's always intuition. You're always going by your gut.

A (65:56)

But, like, how would you even know? Like, this is. This is an unusual. Like, what you just described. Like, how did you learn that?

B (66:02)

So I've experimented over time, okay? I've experimented with different things. I've read a lot. I've studied positive psychology. I've studied cognitive therapy. I've studied a lot of stuff. I read a lot of stuff. I meditate a lot. I do things that worked for me. So I think of things that have worked for me on my path, my evolution of feeling gratitude and all the happiness that comes from feeling gratitude by feeling appreciation, by problem solving, all the different things. And I try to imbibe that to other people. And then if it works, so feedback loops. One of the Key tenets of all my companies is we have intense, voluminous feedback loops. Feedback loops between the senior team, feedback loops between the senior team and mid level management, senior feedback loops between senior medium and frontline management. Feedback loops with customers, feedback loops with vendors, feedback loops with investors, all the constituents of the constellation that make a corporation, that make a company. We have to be communicating, we have to be communicating very intensely with each other in an honest way and then sharing that information. I share information much more widely in my organisms, in my organizations than most companies. Most companies, they're afraid to share it. They're afraid to share, they're afraid to share the good information. They think a competitor's gonna hear about it. Okay, well, they will. But let them try to copy us. They don't have all the ingredients to do that. Or they say, we don't wanna share the bad stuff because then the market's gonna hear our weaknesses. Okay, well, that's kind of true too. That's so much overshadowed by the benefit of we're learning where we have to improve. We're learning how to become better.

A (67:44)

I read something Jeff Bezos said that changed my perspective on the importance of high quality sleep. He said that he makes sure he gets eight hours of sleep a night and as a result, his mood, his energy and his decision making is improved. His point was that you get paid to make high quality decisions and you can't do that if you're sleeping terribly. And the product that has made the biggest impact on my quality of sleep for years is eight Sleep. I'm lucky enough to be friends with the founder of eight Sleep, Mateo, and we live in the same city. A few months after I started using 8 sleep, I randomly ran into Mateo at a restaurant and I was with some friends. So I go over and say hi. When I got back to my table, my friend asked me who was I talking to. And I said, that's Mateo, the founder of eight Sleep. And my friend replied, he looks like he gets good sleep. Mateo is living and breathing his product. I had never had the ability to change the temperature of my bed before I had an eight sleep. I had no idea how much that would improve the quality of my sleep. I keep my eight Sleep ice cold. It's cold before I get into bed, so I fall asleep faster and wake up less during the night. That feature alone is worth 10 times the price. There are very few no brainer investments in life and I believe eight Sleep is one of them. That is why elite founders like Mark Zuckerberg and Elon Musk have all said publicly that they use 8 sleep. I would recommend getting the pod 5 which is the newest generation of their signature product. It is a smart mattress cover that you place on top of your existing mattress and it is next level sleep tech. It automatically regulates your body temperature throughout the night independently for each side of the bed. The result is you get up to a full hour of additional quality sleep per night. Make the no brainer investment in your sleep by going to 8sleep.comsenra and use the code senra to get $350 off. You can try it for 30 days at home and return it if you don't like it. But I'm confident you will love it. I will never let anyone take my eight sleep from me. Make sure you get yours@eightsleep.com Senra so this is what you were describing earlier. This like almost a constant iterative trial and error process.

B (69:44)

Absolutely.

A (69:45)

And just keeping the information flowing through the company. There's an idea that I think when I thought of, you know, idea is like hey, we're going to buy the company. We're going to ask like what would you do if you were running the company? What's the stupidest thing we're doing? What's the smartest thing we're doing? I as you know like very. I'm not interested. I'm interested in timeless principles. Not timely. Right. And when I read that in your book, what I thought of was not you building your company. I thought of Jim Casey building UPS a hundred years ago and what he learned. Because a lot of these things, that these ideas have survived for a long period of time. They're not dependent on the company. They really depend on human nature because like history doesn't repeat. Human nature does. Right. Human nature is kind of constant, doesn't really change. And so what Jim realized is the more successful he became, the more successful his company became. His executives. Their incentives were to like hide the bad news and just tell him good things. Cause then it's like everything's great in the company, Jim. And so like and I was the one that made that great. And so pay me more and like make sure I keep this great job I have. And Jim realizes like, oh, I need to have constant unfiltered access from the people that are delivering the service to my customers. So what he would do is like he would instruct his driver every time we see a brown UPS truck, you are to pull over and he would get out no matter how successful he was. And he would talk to the driver.

B (70:55)

I love it.

A (70:56)

Unfiltered information, same thing. People would go and they try to meet Sam Walton in Bentonville, Arkansas, right? They'd show up. They even have an appointment on the books. And they'd walk into the office and they're like, hey, I'm here to meet Sam for, you know, 7am meeting. And his secretary's like, he hopped on because he used to fly his own plane. He left at 5am this morning, and he went to, you know, this Walmart over here. And he's hanging out and, like, greeting customers and talking to the people stocking the shelves and everything else. But this constant. I think there's a lot of wisdom in what you said in your book, basically, is what I'm saying. It's like you see this over and over again. They want unfiltered access from the front lines. They don't want the information to be, you know, massaged or presented in a manner that seems good.

B (71:35)

So Todd Combs is one of Warren Buffett's managers. And we were talking on a Saturday about, I don't know, 10 years ago, eight, nine, 10 years ago, when he was getting on the JP Morgan board and he was kind of moving up in the world, stuff like that. I lost touch with him. But really great guy, really smart guy. And he said, what are you doing? I said, I'm reading employee surveys. I'm reading all the employee surveys from the whole company of. We ask him two questions. What's your single best idea to improve the company and rate your job satisfaction? Scale of 1 to 10? And sometimes we add a third one of what it will take to make an attempt. And I just go through all these one by one because I feel like I'm talking to every employee and learning on that. That's amazing. So what's so amazing about that? So I was just talking to Bezos, and Bezos was reading customer survey. Reading customer survey. So I'm talking. So it's this. So he's talking to customers, I'm talking to employees. But it's the same concept. You need feedback loops. You don't know how you're doing unless you have radar, like sending beep, beep out there and seeing how it comes back. You have to have this very intense feedback loop.

A (72:35)

This is why I'm so obsessed with what I'm doing, because nothing we're doing is new. You had all these people that ran all these kind of experiments for centuries, and they built great companies. And just because they passed on and maybe the company's not around anymore. It's like there's a treasure trove of data in there. So like Bezos idea, I love where he would publicize. He used to publicize in the very early days of Amazon. Jeffazon.com, email me. And he read one of the reasons that he figured out, he's like, oh, we can't just sell books. Like I could sell anything people. He'd be like, he would send emails to, I think like the top thousand customers, like, what else would you buy? And one guy, he had this epiphany because, you know, they'd be like, hey, I want toilet paper. I want, you know, groceries, whatever. One guy's like, I want windshield wipers. And he's like, windshield wipers. If this guy wants windshield wipers, I'm going to be able to sell everything. Like it is a true everything store. But I was, I was thinking about this recently because I just read this book translated from French about the Michelin family dynasty, which starts out in 1891, selling tires in France. You're selling tires, there's like 350 cars on the road, for God's sake. But there's a line in the book that is related to all this where they start. The two brothers have to take over this failing factory and they don't know what to make because most of the products that they're manufacturing are unprofitable. They're on the bankruptcy, their one profitable product, which. So they eliminate everything else and they focus on the one profitable product which is a rubber brake pad for horse drawn carriages.

B (73:52)

Say that again though.

A (73:53)

A rubber brake pad for horse drawn carriages. This is 1888. And so it takes them like a year or two to figure out like, hey, we should manufacture rubber. And there's two twin phenomenons you talk about. Get, remember what justice said, get the major trend, right?

B (74:05)

Yeah.

A (74:06)

They're like, well, horse drawn carriage has been around for a while. You know what's going way faster? Bicycles and then cars. Even from a small number, like, we need to go to where the technology's going. But the point being is like, so we need to make more products, we need to make rubber tires. And the guy took over a factory, he's like, I don't know how to do that. So his answer was he would go, and it sounds just like, what'd you do? He only had like 50 employees that were making the rubber brake pads. And he would just ask questions. He's like, I came to them and I admitted my ignorance. I go know Nothing about rubber manufacturing. Why'd you do that? Can you explain to me?

B (74:36)

Can we.

A (74:36)

What if we did? And not in like, what you just said. You said something about like, not like coming down from on high. It's like a peer almost like, teach me.

B (74:43)

Yes.

A (74:43)

And he's like, it was wildly effective. And he's got a great line in that book. He's like, it turns out the guy that handles the material for eight hours a day while the co's in the office has something to teach you. He's going to understand something about that process because you have a bird level view. He has a very particular job and he found it very instructive. And he's like, it was a wonderful way to learn the business. And then that led him to like, oh, now I know how to make things. And then from there to grow and grow and grow. And I just absolutely love this idea. It's like you should have this unfiltered access, unfiltered information over and over and over again.

B (75:17)

Completely. All the different constituents in an organization need to be talking to each other, needs to have feedback loops to know how they're doing. If you're not asking your customers how you're doing, you may think you're doing a lot better than you really are.

A (75:30)

Or how do you figure out how you're doing in your position?

B (75:33)

I ask all day long and we have different modalities of anonymous surveys and 360 reviews and we're. I'm interacting with the teams nonstop all day long. I'm walking in people's offices. What's going on? What do you think of this? What do you think of that?

A (75:47)

You like the. You have this great line in your book where it says, I love working with outrageously talented people to deliver outside returns for shareholders in public stock markets.

B (75:57)

I love that.

A (75:58)

This constant feedback from the public market.

B (76:01)

It's fantastic.

A (76:02)

You love it.

B (76:02)

Yeah. I don't always agree with it, but some of it, there's always some truth in it. You get free advice from the smartest people in the world, the global allocators, people who have raised billions of dollars from pensions and endowments and sovereign wealth funds. And now they're analyzing what you're doing and they're giving you advice. They're telling you, this is what I like. This is what I don't like. Okay, you don't have to actually, you mathematically can agree with it all because a lot of times you get conflicting advice. People saying, you're going right, you should be going left the Other guy saying, you go. You should go left even more. So it's good to hear all this stuff. It's good to hear what people are saying. But then you have to go within yourself, and you got to make the decision. You have to be an adult. You take in tons and tons of information and opinions and beliefs and data as much as possible. Then you've got to kind of just ignore all that. Just go inside and say, this is what I want to do. You got to make the call. That's what a CEO does. It's what a leader does, is you make the call. But you have to get all that input. Otherwise, you're in a. You're just in a bubble chamber, echo chamber. You're just hearing your own thoughts instead of others. You want people challenging your thoughts all the time.

A (77:13)

I think for a long time, like, one big goal was like, starting a company and then taking it public. And now I talked to a lot of founders and even the ones that raise a lot of money and they don't want to ever go public. Do you have any.

B (77:24)

I love being public.

A (77:25)

What would, like, what advice would you give to somebody that's, say, 30 years younger than you? They're trying to build a great company. They've raised a bunch of money, but they don't want to go public.

B (77:33)

Well, they have to be at a level of maturity of the company to go public. They have to be preferably profitable.

A (77:38)

But there's a bunch of them, like.

B (77:41)

Never want to go public.

A (77:42)

Yeah, yeah. That reach that criteria and are choosing not to.

B (77:46)

You know, it'd be interesting to ask them why. What's the reason why you don't want.

A (77:49)

I think people think. Yeah. I can't speak for them, but I think they're like, maybe the scared of the public scrutiny, the hassle.

B (77:55)

But that goes back to what we were talking about an hour ago is. So they might have a core belief saying, I need everybody to always be saying great stuff about me, which is never going to happen. And they may think that, gee, if I go public. When you're public at any moment in time, you have people in favor of you and people who are naysayers. You have people who are selling and buying. The people who are selling think you're overvalued. People are buying. Get the joke? And they understand you have a real, real business plan here that's going to create more, much more value. So you always have those two different things going. Maybe those people don't want to hear the naysayers. Maybe those people don't understand that naysayers sometimes can help you correct your own path. Can tell you, gee, you know, maybe I'm cutting costs too much. People come in and say, you're cutting costs too much. I visited one of your locations, I didn't think the service was so great. Oh, wow, I didn't know that. Thank you for telling me that. So now I have to invest more rather than cut costs. You have other people who say, you know, I'm looking at your numbers here. Your margins are growing, which is great. That's only half the half the situation here. The other situation is what are you doing with your top line? What are you doing with your price and volume? What are you doing with your organic growth? In my business and all my businesses, the only two things I had to do in the end in order to get great valuations and create shareholder value were grow the top line faster than the competition, faster than the market, be taking share, and grow, growing the margins, increasing the margin, increasing the profit margins. If I did those two things, everything else flowed. Everything else flowed from that. But those are the two main things. In order to do those accomplish those two things, you want as much input as possible. You want as many, many chef, many chefs in the kitchen as you possibly can. The public gets you hundreds and thousands of voices. So it's amazing data. It also being public allows you to build a brand much faster and much more voluminously.

A (79:35)

Explain that part.

B (79:36)

So, so you want to be a magnet for talent, for drivers, for people in the branches, for people in mid level management. You want to be going back to what you said before. You always want great talent coming in. Well, if nobody knows who you are, they're a little skeptical about joining your company. If you have research written about you by bunches of firms and you have press releases and a public website and you're very well known what you're doing, it's very clear what you're doing. People say, okay, I get it, you're a known quantity and I like this, I buy into it, I like what you're doing. I want to join the company. So in order, and then you can pay them, you compensate them with stuff, they can look on their iPhone every day and see the value of the compensation. If you're private, you give people these phantom shares or whatever the compensation plan is, they don't really know the value of it until they sell it someday. And it may be very different than what they thought it was all along. So from a compensation point of view, which is a Big element of success in these high growth business plans. Being public is fantastic.

A (80:29)

Was there ever a time in your career where you're like, maybe I should do, should do a private company instead? Or you were pretty much all in on it.

B (80:35)

I've been doing public since 1992 and I'm non stop and I like it, I enjoy it. I find it very helpful, very constructive. I like the pressure. I like the ability to hear what the street says and then agree with what I agree with, but disagree with what I think is wrong. What I feel passionately and have evidence to support, they're wrong. So sometimes the street, particularly like the hedge funds, they're very focused on like this quarter, like the next 90 days. That's a terrible thing. Long term, you don't want to be focusing on just what's good for the quarter. You end up, you see these public companies that go out and they cut costs in the field, that hurts customer service or hurts employee morale and they're understaffed, which is even worse than being overstaffed, which is bad. And here it's a completely different story. So, yeah, I like being public.

A (81:22)

You said something interesting. I like the pressure.

B (81:24)

I do thrive on it.

A (81:26)

What do you mean by that?

B (81:27)

So many people give you the money, whether it's a retail individual, whether it's a high net worth family, whether it's, it's a sovereign wealth fund, whether it's a pension plan, whether it's an endowment. All these people are investing long only funds, mutual funds. All these people are giving, they're wiring money to buy your shares. This is a intense pressure. This is a, this is probably the biggest pressure I have in life is to make sure that I do everything I possibly can to make sure I give them back more money than they gave me, make sure that they invest in the company. And like if you look at my neighbors and my friends, I don't know the exact number, but I would guess over 90% of them are invested in the company. And that's what it's been over time. Well, that's pressure, man. That's like, wow, I don't want to disappoint them. These are my relatives, these are my friends. These are people I really love. These are people. People come to me and say, look, I believe in you so much, I put two thirds of my retirement plan in your stock. Just single. No to forget. There's reversification. Boom. I'm going all in on Brad and his team. Well, that's a lot of pressure. I like that pressure. I enjoy that pressure that motivates me, that inspires me, that makes me feel I have something to do here that's important.

A (82:35)

I think that's so important to put that out because we were talking about the negative self talk and just living a pretty crazy life where it's like, you want to work seven days a week, or you're just completely all in. And the way, again, this goes back to. You can hear a sentence and just be like, oh, I feel that way too. And it kind of changes the way you approach things. And I remember reading about Herb Kelleher, which is the founder of Southwest Airlines. You know, it's such a crazy story that, like, in an industry where bankruptcy is the most common, you know, outcome the guy had, his company was profitable for 40 straight years. Just nuts. And he's like a nut job. He's drinking a fifth of bourbon every day. He's chain smoking cigarettes.

B (83:12)

Not me. No, no. He's like, I don't advocate that. No.

A (83:15)

He wouldn't sleep. He's like. It was just hilarious stories in his life. And I thought he was like. He just lived on the edge and completely all in. There's a great story about this where they tried to get him. You know, he chain smoke and then drink a fifth of bourbon every day. And they're like. But then he had, like, prostate cancer or something like that. And, like, you should stop smoking. He's like, I don't smoke with my prostate. But that's not the thing that I remember, the thing that I loved in an interview one time, they're like, you deal with a ton of stress. How do you handle it? He goes, I don't handle it. I like it. He wanted the stress. He's like, I wanna be in the game. He was an attorney. He just started his company. It was his first company. He was an attorney until he was 35 years old, and then decides, hey, I'm gonna try to do an interstate or intrastate airline. And then it was like four years of legal fights before he could even take his first flight. He's just like, I love this shit. This is what I want. I want the pressure, passion. What I love about this is it's in your book. You constantly talk about the other people, the other entrepreneurs, other investors, other CEOs that you learn from. Then acknowledgements, all these maxims from all these other brilliant people you talk about. Obviously, Ludwig Justison. I do want to talk about. I read something on LinkedIn about other. I want to talk about the other people that You've learned from the other founders, CEOs, executives that you admire. I want to start with Fred Smith. Since he passed away. I read his biography probably like four or five years ago, and tell me if I'm wrong. You know more about this industry than I do. It seems like FedEx had to be one of the most difficult operational companies to ever invent. Like, an unbelievable. Talking about somebody who wanted pressure. Yeah. The complexity you wrote on LinkedIn, you. You never missed an opportunity to spend time with them, and you admired them. Could you just tell, like, why?

B (85:04)

So Fred endorsed my book.

A (85:05)

Yeah, I saw, and I was very.

B (85:06)

Touched he did that. He was a competitor, literally. Wall street competitor endorsed my book. So Fred was amazing guy. I mean, this is a very special. You meet people in life that are just special, that are certain integrity. So I met Fred for the first time in 2013, and I was doing a bunch. I came out of nowhere from this industry. I got into 2011, but I really started doing a bunch of acquisitions out of nowhere. And suddenly I was on the front pages of the trade journals. And I was in Atlanta at the national association of Manufacturers NAM Conference, and Fred was the keynote. So I was in the audience watching him, and somebody said, what do you think of Brad Jacobs? I go, oh, my God. My heart starts being, oh, my God, Fred Smith's about to, like, destroy me. My brand is going to be completely crushed. The icon of the industry is going to say, oh, yeah, I don't believe he's really. And he said, I really like watching that guy work. He said, he is coming into this industry with courage and buying things left and right and has big goals and big ambitions, and I'm going to keep an eye on that guy. And I cried. I said, wow, Fred Smith, like, saying crazy stuff. So I went up to him afterwards, after his speech was over, And I said, Mr. Smith, I'm Brad Jacobs. I really appreciate what you want. You said, well, first of all, I'm Fred. And that was the beginning of a great, great friendship. And we got together many, many times. Of course, he was on the Business Council. He was the longest serving member of the Business Council, over a quarter of a century. Oh, wow. And I go to every Business Council meeting I possibly can to meet other CEOs and to hear what other people are thinking. He was just a generous guy. This was a guy who had vision, he had passion. Talk about grit. I mean, maybe he was flying around all the time, everywhere. Vietnam, he was decorate. He was flying helicopters with people shooting bullets at him to Go get Marines who had been. He was a Marine, Yeah. Marines who had been killed. But you don't leave any Marine behind. He'd go in there, he's risking his life with bullets. Like, shy of reshooting at him to go get the remains of a dead Marine, putting his own life online. He got a Purple Heart. He got silver. He got. I mean, serious, serious, serious, courageous, high integrity guy. And everybody, everybody loved. Everybody loved Fred. Everybody loved Fred.

A (87:22)

The opening paragraph of his biography is the craziest opening paragraph I ever heard. I'm just gonna, like, paraphrase it essentially. Like, you know, he's in debt. He ran through, like, his dad's Greyhound bus. Millions. I think he burned through, like, 15 or 20 million. His planes are about to be confiscated. They just got fired by his board. The FBI is investigating him.

B (87:46)

He goes to Vegas.

A (87:47)

Yes. And then they're like, he thought. He thought. And he was like, 30 years old at the time, so still young. But he refused to let his Federal Express dream die. And the line was just like, he thought of suicide. And then the next paragraph is like. But the idea of Fred jumping out a window is ludicrous. He's more likely to throw somebody out of a window. He's just like a guy that you like. He was like the Terminator. You couldn't stop. He just wouldn't stop coming. There's a few lines.

B (88:10)

Well, I don't recognize that in him. So. Throwing something out the window.

A (88:13)

I mean, I'm just at 30. I think he might have been a little different.

B (88:16)

Well, maybe, yeah. But I was a direct competitor of him in transportation and logistics and intermodal. Not in package, because we didn't do package. But pretty much all the other lines of business, we competed against him. He was generous. He was charitable. He would always take a meeting with me. He used to come to my house. We'd spend hours and hours and hours talking about everything.

A (88:34)

This is what is so special. I know it's part of humanity in general, but entrepreneurship in particular is just like. You see this over and over again, just how generous these people are with the cause. They know how fucking hard it is. They just went through all this. And now we might be 15, 20, 30 years, different in age, but it's like. Just like Ludwig Jesselson did when you were 23. And in many cases, like, what you did with the book, like, the idea. Like, think about Sam Walton, right? He wrote his autobiography. His cancer was all over his body. He was in pain. He knows his time is towards the end. And what does he do? He spends a big chunk of the last time he had left saying, this is what I Learned in my 6 decade long career. That is a gift to future generations. And then in the book, they're like, somebody. I love this part because they're in the book. They're like, people ask me all the time, could another Walmart story happen? He's like, yeah, it's probably happening right now. And it was Jeff Bezos going around with his copy of the book, writing it, annotating it, giving it to the executives, the early executives of Amazon. It's such a beautiful thing that Fred would do that. It's a beautiful thing you did for.

B (89:34)

Your But Fred and Amazon didn't get along.

A (89:35)

No, no, no. I'm saying. But like in general. Yeah, obviously. Well, yeah, I can see why, but my point being is the transfer of, even for competitors. Fred was your competitor, but he's transferring knowledge to you.

B (89:46)

Absolutely.

A (89:47)

That is, I don't think people understand how much that goes. I'm glad you just said that because. Yeah, you can see it in the books. You hear stories like that. Exactly. You hear stories like that all the time in private. And for you to say that, I think it's really important. There's a few things that pulled out from his biography that just remind me of you. And I'm curious if, like you, if you agree with some of these things. One, the amount, if it's about Fred.

B (90:08)

Smith, if I don't have that trait, I should work on getting it.

A (90:12)

Okay, well, perfect. The amount of information. So like, think about it like he started FedEx in 60s, I think something like that. No, after Vietnam. So maybe early 70s, but in the 80s. He says that he estimated during the 1980s he spent four hours a day reading. He says he found he relied quite heavily on his own vision backed by assimilating information, which you've mentioned multiple times so far from many different disciplines at once. You've talked about it in meetings, you've talked about in trade journals. You talked about all the research you do. Right. This is his quote though, that I wanted to read to you. The common trait of people who supposedly have vision is they spend a lot of time reading and gathering information and then synthesize it until they come up with an idea. That sounds like you to me.

B (90:51)

I like that. Yeah. Going back to what I was saying before, you don't want to be rigid in your thinking. You want to be open minded, you want to be flexible. You want to be scientific about it. That if new evidence comes along that disproves your theory, then modify your theory, go by the evidence, go by the facts. And you want to interact with people who you respect and you want to be picking their brain all the time.

A (91:11)

But you're also like a lot. The way to describe it is like you're also alive and paying attention. Like the story in your book where you're like reading a magazine in bed on a Sunday morning and you read about these waste management companies making $500 million in profit. You're like, whoa, what? Like they're picking up trash from one spot and bring it to another. I need to learn about this industry. But that's my point. Like you're, you're people like Fred, people like you. I think, you know there's a ton of people that have the same thing where it's like they're. The whole world is like a classroom if you're actually paying attention. Like you can pick up ideas all over the place.

B (91:43)

So the waste management business I contrasted to the oil business. The oil business was a lot more complex. We were negotiating complicated long term contracts and chartering vessels and negotiating processing agreements with big major oil companies and hedging and I mean it's very complicated, complex business. When I read that about the garbage business, I said that is so much easier picking up. That's a simple business. And move some garbage and send out an invoice. I definitely think I can do that. And it seems like they make a lot of money and the trend seemed, seemed in the right direction. So yeah, you want.

A (92:15)

And the application of technology, which is. I love how at the end of your book you have essentially what are all the key technology developed by humans starting back 300,000 years ago and you move forward. I thought that was a beautiful way to just put that in the.

B (92:29)

So I got that from Kurzweil, by the way. Ray Kurzweil. So Ray Kurzweil, huge mentor of mine. Only met him once, met him for about six hours. But I've read every book he's written. I've read every article about him. I see every YouTube. He's, I mean, a Ray Kurzweil fan. I mean I really. And what I read in the Singularity is near. In 2005, 2006, when that book came out was amazing. Where was a chronology of the universe going? You know, my meditation, I go back to space and time. Said kindred spirit here. This somebody who thinks in large scale of time. And one of the key things that have happened over the last 13 billion years and reducing that down to a couple hundred points. I thought that was real helpful. So I modified it a bit and made it more specific to business, things that would be applicable to business. But the main trend, going back to Mr. Jefferson about, you got to get the main trend right. The main trend for the last 2 million years had been humans creating tools, aka technology, to do things, to outsource to those things that do better than us, that free up our time. So whether it was fire, whether it was a wheel, whether it was the printing press, and more recently all the digital electronic stuff we've done and all the Internet and now artificial intelligence and robotics and nanotechnology, this is the trend. The main trend in life and therefore in business is technology outsourcing our senses, outsourcing our memory, outsourcing now our intellect, our speech to computers, to the cloud. This is big. This is really, really big. So when I looked at 55 different industries before I picked up building products, I ruled out a bunch of them. So this looks like an interesting industry. But I think AI and automation are going to kibosh every day. And I didn't do it. And I mentioned in the book there was one particular online education company, it was called Chegg. And I said, I don't know, it seemed like you got a good business, but I think these, these AI is going to come in basically do that for free. Well, you know, and I said, I think the stock might come down. Well, stock came down a lot, came down from 50 to single digits. So fortunately I made a good prediction there. As Yogi Berra said, predictions are difficult, particularly when they're about the future. That turned out to be a good prediction. Why was that a good prediction? Because to me I'm looking at it saying the main trend, the long term trend is to use technology to do things that we've been doing ourselves. And so I'm always trying to look at these different work streams and say, is that something that can be automated? Is that something that's going to be AI or robotics going forward? And then capitalizing on that and the.

A (95:04)

Opportunity to always do something slightly better, which is, and invent tools to do so. Technology even starts out when you were talking about collecting, sometimes a lot better, not slightly better. But the good thing is this is not exclusive to the time we live in. It's a constant throughout our experience. You can go and look at the, like when you guys were collecting all this is you said before fax, before email, you were collecting all the information for Amurex.

B (95:28)

Yes, yeah.

A (95:28)

You know, 40 years ago.

B (95:30)

Yeah.

A (95:30)

And then the waste management, when you're like, hey, how? Like, I should get into this. And then you realize, wait, they're not even using technology to figure out the most efficient route. And this constant application to technology is one of the things. I'm glad it was on my notes, but I'm glad you brought, like, directed the conversation there, because the way I thought about this has really crystallized my mind. When I read Andrew Carnegie's autobiography, Right. Which is probably written 130 years ago, and for whatever reason, if you talk to somebody today, they don't think of the production of steel as technology, which is a crazy thing. At the time, it was like they literally invented a new and a better way, and then everything in the world was gonna be made out of this. And so what I do is, when I'm finished reading a book again, we go back to this idea that you and I share. We have to distill it. You're not gonna remember 250 pages, but you'll remember a paragraph or sentence if you can. And Andrew's a young person getting into an existing industry. It's a new industry, but it's still an existing industry. Most of his competitors were much older and they were very resistant, to your point. Resistant to change. You cannot be resistant to change. You have to embrace the major trend, which is what your mentor told you. And so I was hearing the criticism that his competitors, almost like when you were in that business and the guy took you out to lunch, and it's like, slow down. I used to be the first, now I'm the second. That's a terrible way to do business. Take your competitor out to lunch and be like, stop being better than me motivates you. Yeah, it's not going to work. But the way I would summarize the main theme from Andrew Carnegie's book that then reappears over and over again on these stories is invest in technology. The savings compound. It can give you an advantage over slower moving competitors and can be the difference between a profit and a loss. And you see that over and over and over again. It doesn't matter if it's steel waste management software. Over and over again, it's like, the best entrepreneurs, the best CEOs, the best executives, they're not scared of technology. If you're scared of it, you're going to get destroyed by it. They embrace it and they invest heavily in it. And again, the benefit I have is like, I'm reading about a chocolate company that was started 80 years ago, and they have some of the most advanced robots making chocolate. I'm reading about a tire company from 150 years ago. They watch their costs and they're very efficient in how they spend their time and their money. But they invest heavily in technology. No one thinks of Walmart as a technology company, but if you go back in 1979, right, Sam's in his 60s and they're like, hey, we're doing everything by hand. Our business is getting way too complex. We have all these distribution centers. Think about the logistics. You would know all this moving all this material where it needs to be at the right time. We need to invest in computers. And Sam at first suck. He heard computer, he heard overhead, he heard expense. I can't do that. And then he was slowly allowed himself to be convinced by the talented people on his team. And he wind up when he decided to invest, he didn't like dabble. He invested $500 million in $1979. Who knows what that would be today in the most advanced computer system to handle his logistics and distribution. And that was an edge that not another retailer on the planet had, or at least in America had. That he had the technological edge over the rest of his competitors.

B (98:44)

In business, you always want to be finding waste because there always is some and eliminate it. You always want to find inefficiencies, and there always are. You want to reduce them. Technology helps you with that. Walmart's a big tech company. So my chief supply chain officer came out of Walmart. Very, very sophisticated guy. It's all about technology, all about using tech in order to get the data and then being very data driven.

A (99:05)

I would argue that if anybody. I don't think you could be the leader in any industry and not also, we don't think of them as tech companies because we think tech has to be like Google or Facebook. It's like, no, they're all tech companies. I just did. I wanted to do more than just like American entrepreneurs because, you know.

B (99:22)

We have an outsized share of entrepreneurs.

A (99:24)

Everybody's like, you should do more xyz. It's just like, why are they all American? And that's that. I understand that. And my point being is like, if you think about entrepreneurship in like the market economy, it's only a couple hundred years old. It's like, well, America's kind of dominated there. So it makes sense if 75 or 80% of my episodes are about that. But I did one on one of the most successful entrepreneurs in Europe named amancio. Ortega. And I didn't know anything about him. All I know is that his H and M. Zara.

B (99:49)

Oh, Zara. Inditex.

A (99:51)

Inditex, yeah, yeah. And then you're reading about this and you're like, it's not a fashion company, it is a technology company. What does that mean? He built the logistics and the system to say me and you can walk out on the street right now and we can see, oh, there's a trend here where all these ladies are wearing dresses with whatever, you know, red flowers on them. And he can take that idea and put it through his system and he can have manufacture dresses with red flowers in eight, you know, 25 different countries in seven days. That is technology, he says it's like we're a technology company with a chain of stores attached to it.

B (100:23)

So Zara Indutex is a big customer of GXO Logistics, one of the companies we spun off from XPO and GXO runs a lot of their warehouses in Europe. And it's exactly what you're saying. It's E commerce. It's trying to do things very efficiently and very quickly and very accurately. And you need technology to do that. You need robots and you need AI. Every business, every single business is going to see more automation and more AI. People have to get on the program on that or they're going to be dinosaurs.

A (100:49)

100%. I want to go back to Fred Smith. He says something that sounds.

B (100:52)

Fred was in detect, of course, in a big way.

A (100:55)

Of course.

B (100:56)

He's always talking about this new invention he just did in the removing packages and robots. And we were trying to figure out some way you could use automation. LTL because he was a big LTL. FedEx is the biggest action. LTL and XPL is big LTL. The automation is not there yet to get because all the closed spaces and all the people still involved in that. But it's going to be package. You have automation now. Packaged automation is much further ahead.

A (101:17)

Yes. So there's something we haven't touched on. And I have a question for you. And this is a quote from Fred in his biography says you have to be absolutely brutal in the management of your time.

B (101:27)

Oh, yes.

A (101:29)

Do you have any insights?

B (101:31)

If you want someone to disagree with that, you'll have to talk to somebody else. I 100% agree with that.

A (101:35)

I'm curious how you do this though.

B (101:36)

So time. So when you're a CEO, when you're an executive, you only got two things. You got time and you got capital and how you Deploy that time and how you deploy that capital equals results. So it's your time and it's the time of the people, the organization. So when I was running XPO, we had about 150,000 a little more employees worldwide. Each one of those worker, the senior management worked long hours, but the average worker worked eight hours a day. So you had eight times but 1.2 million hours a day of work getting done. If you've got people very focused and very motivated and very well trained and feel good about the company and feel good about their job, that productivity of that 1.2 million hours a day is going to be a lot more than if the conditions I just mentioned are not present. So managing people's time, putting them in the right priorities and ranking what people should be spending their time on is very, very, very, very important success. Now, how do I spend my time? I spend my time deliberately and consciously and intentionally on the things that I think make most amount of value for the, for the company.

A (102:47)

How many things at any given time are you having to focus on?

B (102:50)

No fair amount. So if you're CEO, you're managing, you know, 15, 20 different things, always. You're managing people, you manage technology, you're managing budgets, you're managing investors, you're managing infrastructure, you're managing transportation, you're managing logistics, you're managing pricing, you're managing, you're managing procurement with the vendors, you're managing customer relations, you're managing sales. There's. You're managing salesforce excellence. I mean, it's just, there's about 20 things that are your life like that's what a, that's what a good CEO does. The problem with a lot of CEOs is they've come up through just sales or operations and they're good at that, but they kind of just delegate the other 15 things. That's really part of the CEO job. You look at the great CEOs, the CEOs have created a lot of alpha, a lot of shareholder value. They've been in each one of those 20 or so things. You talk to a Dave Cody, or you talk to an Ed Breen, or you talk to Larry Culp, you can talk about any of those 20 things and they have things to say and you can learn from them. You talk to CEOs who haven't created a lot of value, who are not really good at this game, they'll know four or five or six, even half of those 20 things, but they don't do the other. They don't do the Other part, you got to be in all of them, but you're not in all those things in equal measure. Some things you don't have to spend as much time on the people things and compensation things I actually spend a lot of time on. So that's core, that's critical to get right. That's something that if you get wrong, you waste it budgeting. I spend a lot of time going on the budget. Customer satisfaction, I spend a lot of time on that. The employee engagements, going out to the field, doing the town halls, doing the zooms. I'm all in on that.

A (104:22)

But when you say that the CEOs that you think might not be doing the best they could, are they delegating too much?

B (104:28)

Yeah, they're, they're, they're not, they're, they're afraid to do the in jet. I'm making generalizations. There's always exceptions, but generally speaking what I find is they gravitate to the stuff they like and that they're good at and they kind of just don't do the stuff that they don't like or they don't aren't very good at. And you can't, you've got to, you've got to be. If you want to be a good CEO and have a high performing, performing company and be in the top, and be in the top decile of, of stock performance like United Rentals and XPO were both top 10 stock performers last decade. That's not random that both those companies were because it was the same principles, same structures. You've got to have CEOs and they did that are in the whole thing. Understand from A to Z what running a business is and how you create shareholder value and see the whole picture of the levers. So I always tell friends who are, and I have a lot of friends who are portfolio managers or analysts on the buy side. I said when you bring a management team in, you need to ask them what's your stock price going to be five years from now and what are the levers that I have to believe that's going to get you there? And if that CEO tells you that's a great question, I'll get back to you. Short that stock or at least don't buy that stock because that's the first thing the CEO has to know. First thing is a CEO and the senior management team has to know with great specificity, here's where we are right now, the stock price. We want to get massive outperformance and get to here. That's Great. That's just the beginning. Here are the levers of how I get there. Here are the levers of the things that we must do as an organization that will improve our profitability, improve our multiple, generate free cash flow. Just how are we going to get to there? And in my case, it's not that hard because when you do the graph, the first two bars, when you do the levers comprise the vast majority of what you have to do to create the value. And those are buying companies. Right. Meaning being very disciplined in what you pay and looking at lots of acquisition candidates at the same time. So you don't fall in love with any one of them. And so you have alternatives and you don't.

A (106:35)

What's the distribution there? So you've done over 500 acquisitions throughout your.

B (106:38)

My teams, and I have. I like to give credit to my team.

A (106:41)

Yeah, you and your team, for sure. So you. You and your team have done over 500 acquisitions. You've looked at how many thousands and thousands.

B (106:48)

Many thousands.

A (106:49)

Like 100,000. You think it'd be that?

B (106:51)

I've lost count.

A (106:52)

Okay.

B (106:52)

I don't know if it's a hundred thousand when I say look looked at in depth. Yeah, yeah. But in the thousands, many thousands.

A (106:58)

Okay. Going back to the time management, though, I think especially in, like, the age that people are growing up in, like, where, like, there's a shortened attention span, a lack of focus, in my opinion, and, like, really easy to give into distraction. Like how you sound like you're almost not impervious to distraction. That's not the right way to put it because I know how you're. You're going to be humble when you describe yourself, but how do you avoid being pulled into things that are not prioritized?

B (107:24)

So many, many people know Warren Buffett. I barely know Warren Buffett. I met him a few times, but he's not a close personal friend. I wish he was, but he's not. But I know a lot of people who are close to me who are close to him, and most of them have the same story, so you must tell this to everybody. He tells people, I'm the richest person. I'm the wealthiest person in the world. And I say, well, Mr. Buffett, you work for one period of time, but I think you're number four or whatever. He says, no, no, no. I can prove that I'm the wealthiest person in the world. I say, why is that? And he reaches in, he brings out his daytime or his calendar, and he says, Monday, I have one appointment. Tuesday, I have no appointments. Wednesday. I have no appointments. Because he controls his time. Yeah, he controls his time, and he has no problem saying no and refusing people time.

A (108:07)

I think I have a problem saying no, though. Like, this is why I'm asking you.

B (108:10)

Well, you solve that problem. That's a problem you've identified. That's great. That's half of the solution to the problem. Now you need to work on it.

A (108:15)

He has that great line where he's like, the difference between successful people and really successful people. It's really successful people say no to almost everything. So, like, you have 20, you know, whatever the numbers. Yeah, so whatever the number is, like, you have 20 things that. That you. You know, you're focused on the CEO level at this moment. You know where you want to spend your time, what you're best at. We talked about incentives and then recruiting talent, but, like, you also are one of the most. And you're not gonna like this, but, like, one of the most famous and wealthiest people in the world, you have an unbelievable amount of people that want your time. How do you stay disciplined? Like, you seem to be disciplined from the outside of saying no to a lot of things. Like, how is that something you learned in the last, like, five years, 10 years? Were you liked it when you were younger?

B (108:58)

So, first of all, I'm not that famous. I'm well known in the.

A (109:02)

In the business community.

B (109:03)

The business community.

A (109:04)

That's the only community I care about.

B (109:05)

But, like, you know. No. The average person.

A (109:07)

Yeah, for sure.

B (109:09)

And I'm not one of the richest people in the world. There's many people who are vastly richer than I am. But in my own modest way, I've created some level of recognition and some of wealth. And more importantly, you should see my.

A (109:21)

Inbox when it comes to you. But that's fine. That's fine.

B (109:23)

Well, I appreciate that, but I just. Context.

A (109:26)

It's funny.

B (109:27)

Cause people, the way you said it is a little grandiose. I don't think I am.

A (109:30)

This is why every time I say these things to you, you say things.

B (109:33)

Well, because I want to correct the record. I don't want to get grandiose in the wrong.

A (109:36)

No, it's a smart move. But the funny thing is, when I did the I Had Breakfast with Brad Jacobs episode, now, people were like, flooded. Like, can you introduce them? Like, no, you had to figure out to get to them yourself.

B (109:46)

You can't. So when I was researching after xpo, I was looking for my next thing. No, excuse me. After United Rentals, I was looking for my Next thing, and I was looking at asset management and I went to Chicago and I wanted to get an appointment with Ken Griffin, who now I've met, now I know, and he's a neighbor down in Florida. I don't know well, know him well enough. And, you know, I think he'd return my call if I called him, but he would turn down the meeting. He wouldn't take the meeting. Said, wow, that's kind of humbling. But you can't even like spent an hour says, no, Ken is a very. And I think you. You interviewed him, right?

A (110:21)

No, not yet. I did a.

B (110:22)

You should. You definitely should.

A (110:23)

I want to meet him. I want to meet him. Sir, if you can introduce me, please.

B (110:26)

He could be President of the United States someday.

A (110:27)

He's incredible. So this is a good thing about when I do remember, most of the people I study are dead. When I do episodes on people that are living. This is why I was asking you some of the questions. Because, like, I'll do this episode, it reaches a very valuable community and they're really helpful. And then I get all these crazy stories about this guy's even more remarkable than your episode. It's like, and I got it about you and I got it about Ken. And then I was like, oh, I got it. Like, I definitely want to meet Ken.

B (110:50)

Ken's in a different league than I. Ken is like way, way up there.

A (110:53)

He's a very fascinating person.

B (110:55)

You should definitely do something on him. You asked how I manage my time. So I have a chief of staff. He used to work in the Oval Office and manage the most important person in the world's calendar. I mean, he's always very good. And more importantly, he understands what I'm doing, he understands my priorities, and he understands what I was talking to you before, like, the two most important things that I gotta do are have organic revenue growth better than the competition, and a margin expansion, and everything falls. He understands that. He understands that in order to do that, I have to focus on people, I have to focus on technology. He understands the different levers to do that.

A (111:30)

So you run every decision between those two?

B (111:33)

Yeah, that's my framework in business. My framework is because I've learned if I do those two things, and it takes 100 different things to do those two things well. But if I do those two things well, I will create dramatic shareholder value if I buy companies at significant lower multiples of profit than I trade at. Monday morning at 7 o', clock, after we announce the acquisition, I've already created Alpha for My shareholders. That's a nice way to start the week. Number two, if I then double the profit over the next three to five years, then I'll get a nice multiple. And if I generate, those are the two main things I need to focus on. He understands that. Now. What he also understands is all the components, because in the monthly operating reviews and all the correspondence, we're very good at communicating with each other what's important and what's not important. So he knows my priorities, and therefore he's a great gatekeeper.

A (112:24)

Is there anybody that could tell you when you're getting off track from what you're professed to say?

B (112:28)

Everybody around me. So if I'm spending too much time on, like, I'm going to catch heck for being on this podcast.

A (112:35)

Dude, you're the man for doing this, by the way.

B (112:38)

No, I love doing it.

A (112:40)

And it will also get to, like, I do think, you know, one of the things that you obviously accomplished with the book and like, I try to help amplify with my work. It's like just millions of people are going to benefit from your lived experience. You have almost 50 years, let's say 40 years of experience as an entrepreneur. It's like, how many people that have ever lived life that have done that? Most people, you know, unfortunately, they quit or they fail or whatever the case is. Like, you have so much to teach the world.

B (113:03)

Can I comment on something about the time?

A (113:05)

Yeah, go ahead.

B (113:05)

There's a phrase I used to use and you brought it out on me, so I'm going to start using it again. I haven't used it recently. Is wat wamb. What w o t, w o N. Okay, Waste of time, waste of money. So when people are brainstormed, let's do this, let's do that. Someone can say wadwomp. Everyone goes, that's a waste of time, waste of money. Like, how does that. How does what you're suggesting we do influence directly or even indirectly growing organic revenue growth or increasing the margin? And if it doesn't wa, it's a waste of time. Waste of money. You only, you have limited time and you have limited capital. You've got to be directing that time and deploying that capital, the things that have the greatest returns. Otherwise, it's wat wam.

A (113:47)

And I'm so glad, first of all, it's hilarious. I'm glad that you said that you actually have other people around you doing this too. Cause I am kind of skeptical that no human can hit their goals and what they want to do. 100% of the time. I can't imagine the complexity of running FedEx. And this guy's just like, no, you have to be brutal. He picks it. Absolutely brutal is the word. Absolutely brutal. Time management. I think there's a lot of things. There's another thing that Fred Smith said that again, like when I'm reading about Fred, when I was going through and rereading all my highlights from his biography, I wasn't really thinking about Fred. I was thinking about you. You know, like this to me feels like a lot of what I've learned from you. And this is a direct quote from Fred. He says, I believe that a man who expects to win out in business without self denial and self improvement stands as about as much a chance as a prize fighter would stand if he started a ring battle without having gone through intensive training. Natural ability, even when accompanied by the spirit, to win is never sufficient. If I look at the way you were building businesses when you were 23 compared to, you know, you can pick first billion dollar company, then you look at the second or the third or the fourth or the fifth or the seventh, it's like you're not even. Like you'd go back and kick that dude's ass because of all the stuff you have learned since then.

B (115:02)

Well, you do get better as you keep with experience, like in anybody in anything. But the principles are pretty the same. If you look at all my companies, the essential concepts are the same. That you want to have fantastic people, that you want to have rules of engagement with those people where you get along and go kill the competition instead of killing each other. That you want to have fair compensation so that everybody's in on the action here. So that.

A (115:27)

When did you kept repeating that? When did you understand the power of incentives? Because you talk about compensation incentives a lot.

B (115:33)

Very early, very early in the oil brokerage days because I used to have, we had tables, like 10 brokers at a table. And every month we pay people monthly. I'd meet with everyone and say, look, we made so much this month in the bonus pool. What percent do you think you contributed to it? And then I would add it up and it would always come to like 300% and never added up to 100%. So I had to have these difficult conversations and people said, look, you know, you think you're inflated with how much. But I, what I realized very early on is people are coming to work not because they love me. They might love me, I might love them. But that's not their main motivation. The main Motivation, why they're coming to work is to make money and make money for themselves and more often to make money for others, to make money for their families, for their spouses, their kids or whoever. And that's important to understand. The motivation of the other person is really, really important. It's called theory of mind. When you understand, and a child gets that after a few years, they don't have it at first. And there's been a lot of psychological studies done on that. It's important to look at things from what's motivating the other person, what's driving the other person, what's important to that other person. That's good in deal making, that's good in compensation, that's good in building teams, that's good in customer relations, that's good with vendor relations. You need to understand their point of view. You can't just be in your mind, you can't just say, here's what I want, here's what's important to me and I'm a bully, I'm going to go get it. Because people are going to stick their tongue out on you. They're going to turn away and do something else. You have to have a partnership. You have to be trading with people all the time. You gotta be figuring out what will help them, what's good for them, and how can we make money together? Not me at your expense or you at my expense, but how can we go conquer the world together?

A (117:09)

I think you're a faster learner than me because like I don't think I ever thought about incentives. I think episode like 97. So this is probably like six years ago I'd read. That means I read 96 biographies before this. I get to poor Charlie Salmanak and he's really the one that got. Charlie was the one that really put into my mind about how important this was because I thought he was one of. I still think he's the wisest person I ever met and probably one of the most brilliant people. And he said something fascinating in that book where he's like, I've been in the top 5% of my age cohort my entire life of understanding the power of incentives and how it drives human behavior. And there's not a year that goes by, and he's probably in his 60s when he said this. There's not a year that goes by where I don't underestimate the power of incentives. And you would repeat over and over again, you show me the incentive, I will show you the outcome.

B (117:55)

Remember I told you minutes ago that I give everyone on the top level of the company a bunch of equity.

A (118:00)

Yeah.

B (118:01)

But it's locked up for five years. So I meet with my chro, who's fabulous regularly, usually twice a month, and she shows me a spreadsheet of how much the equity is going to be worth at $50 a share, at $75 a share, at $100 a share. And I look at that, look at the numbers and I say, okay, this person has something to work for. This person's on the team. This person. That's something. I see them working really hard to get those numbers or icg. Somehow or another we messed up the comp and maybe we got to top the person up or wow, I can't take anything back. But maybe I gave too much equity, whatever. But at least I know where everyone's head is at because I know what's in it for them. There's always that joke. I listen to radio station wifm. What's in it for me? And people are generally, they don't care about you and me, David. They care about them, which is normal. That's capitalism. That's free markets. That's a good thing.

A (118:48)

Yeah. I don't feel it's a negative thing at all. It's like we're all self obsessed. But I do think you have a great line in the book where you're like, money. He's like, I built businesses all over the world. When you have 150,000 employees, they're spread throughout. People think, oh, it's all different cultures. Like, oh, guess what? Money animates people everywhere for the whole point. You have a great line in the book. They're not coming to work to make Brad Jacobs more money.

B (119:09)

Not at all.

A (119:09)

They're doing it for their, their families. I love this idea of, I think it's really important to have a. I think it's tied to your obsession with like the public markets too. And what you said in your book about being very proud of building wealth not just for yourself, but for school, teachers, pension plans, nurses, firemen and everything else is like the, the importance of having a, a mission bigger than yourself. I think like if you just live a completely selfish life, first of all, you would have stopped way a long time ago, but like, you didn't need to in general, people, you wouldn't have to do this. And I've seen this in a couple different places where like Jeff Bezos, we talked about him a few times today where his idea was when he started Amazon. He's Like I want to build the world's most customer centric company. So I want to be an example not just to our employees and our customers, but to other companies to see, look how you can, over the long term you can align the interest of the customer and the shareholder. Perfectly aligned. They just have to be done, done so over the extremely long term. But this idea of like going like, it drives me. It's like I want to build wealth, you know, so my kids are proud of me and like, and I show them like what it's like to like chase after something and be deeply committed to it and be passionate about it and love it and also make something that's better for other people. And if you do that automatically, you know, the family will prosper and everything else. So I think that's like, I think that was one of my favorite parts of your book.

B (120:29)

Do you know, I think Amazon modified that mission statement now something with employee engagement too. Something about workplace, great workplace environment or something like that. The best workplace environment in the world.

A (120:41)

It is funny when you think about it because it's one I have in this conversation actually last night I went to dinner with our mutual friend Patrick o'. Shaughnessy. He texted me this morning. He's like, make sure you say, tell Brad out.

B (120:51)

That's like the best.

A (120:52)

Yeah, 100%. And he was with us when we had breakfast here a few months ago and we were having this discussion at dinner with his family. I was like, what is the most impressive company built in our lifetime? And so me and him were born in the 80s. Cause he's like, what about Microsoft? Microsoft is in the 70s. It was before us. And I would say it's like for me the answer is like Amazon started in 97. Like I can't think of another company started in the 90s in terms of like as impressive as a big success story as what Jeff has built. By reading your book, listening to your interviews, talking to you now you kind of, for me personally, you kind of remove any self imposed limit that I have where I'm like, oh, I don't think Brad has a limit to what he thinks he can achieve. He thinks on a big scale automatically. You operate in a very big and ambitious way where I think a lot of people have, there's self imposed ceilings that are most likely invisible in many cases. Right. If you want to build more wealth, you want to grow great companies, just find more customers to serve. Like, it's pretty straightforward process. But I do think one of the things that I absolutely love is. And it's the way I ended the episode. It's the way you ended the book. And I would summarize what I'm about to say here as go all in. You only get one shot at life. And I think this is a perfect spot to, like, wrap our discussion. And so I'm just going to read from your book to you. And you said. The summer after 8th grade, I attended the Rhode Island Governor's School for the Gifted in Art and Music, a summer enrichment program that for kids who've been nominated by their schools. I wasn't sure what to expect. On the first night, I was captivated by a speech given by one of the leaders. I remember goosebumps rising on my arms as he spoke. This program is a special opportunity, but it's up to you to take advantage of it. You have a choice. You can waste the next couple of months and not accomplish that much, or you can go all in. This is an opportunity to go deep on a project and do the best work you've ever done. But you have to decide if you want it. I learned what it meant to go all in. The magical connection between intensity of focus and the end result. This is, to me, the punchline. I love this. If I put my whole heart and soul into a project, I had it in me to create really cool stuff. Can you talk about the passion and going all in and the advice that you'd have for other people?

B (123:05)

Listening to this, I'm reliving the goosebumps, literally. But physically, I'm feeling the tingling, my sensation, because that was a critical moment in my life where I understood that it's up to you. You can diddle daddle through life and just kind of sleepwalk and then die. Or you can live life. You can embrace life. You can have big dreams and go all in and find your passion, which for most people is not going to be business or making money. But whatever it is, that's what it is and really achieve something fantastic. And for me, that's big motivator.

A (123:37)

This is a perfect place to end. Thank you very much for writing the book. Thanks for taking the time. Brad. I really admire you. I've learned a lot from you and now I'm very humbled and privileged to call you a friend. I really appreciate it. Thank you very much.

B (123:48)

All the best.

A (123:49)

I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review and make sure you listen to my other podcast founders. For almost a decade, I've obsessively read over 400 biographies of history's greatest entrepreneurs, searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through founders.