How Cleveland Cavalier's Owner, Dan Gilbert, Got So Rich

So yeah, my guy is, um, Dan Gilbert. Um, and the reason I thought he was super interesting, I've talked about him a little bit in the past, but this guy has had a freaking massive year. So, uh, you know, 2 years ago or something, he was worth like $6, $7, $8 billion, uh, baby billionaire. Now he's worth $57 billion. Wait, 5, 7, 5, 7, 57. He's number 21, one of the wealthiest people in the United States. And he's had a crazy couple years. So I think it was about 2 years ago, he had a massive stroke. So he was on the golf course with a friend, and the friend just happened to be a doctor. And he said, "Oh, that's weird. I'm having these symptoms." So his doctor got him to the hospital, and he had a stroke in the hospital. And in the hospital, they were able to do this special procedure that if he hadn't been in the hospital, he might have died or it might have been way worse. So he got super lucky and as lucky as one can be having a stroke, horrible thing. And now he's been basically rehabilitating himself and getting back on his feet for the last 2 years. And so he's had this horrible personal tragedy, but at the same time he's become worth 6x as much. And I bet he would give it all away to not have had the stroke or whatever. So it's super fascinating. This guy, he described it really well. When they IPO'd, they just IPO'd his mortgage business. He said, this is a 30-year— or sorry, an overnight success 30 years in the making. So this guy's been at it for a really long time. I think he's super interesting because he started with nothing. His dad owned a struggling Detroit bar. He worked in pizza delivery. He just kind of stumbled into hustling and was a good salesperson, and he started a business. And that business was a company called Rock Financial, which became Quicken Loans, which I'll talk about in a second. One of the reasons I think he's really interested— interesting is that he's invested into revitalizing his home city. So his mission is to revitalize Detroit and get it back on its feet because it's struggled a lot. He's like a capitalist Batman in Detroit. And I'll talk about some of the cool stuff he's done. And one of the things I like about him as well is that he, He does a lot of stuff that might not work. He takes big swings, takes big risks that he thinks can make the world better. And he invests in all sorts of crazy ideas. He also has 5 kids, which I think is pretty freaking cool. I love to see that with these billionaires. They're not just like miserable by themselves and they care about kids and stuff and seems pretty family focused. And then, you know, he's been through these personal challenges, the stroke, and then also his eldest son was born with this disease called neurofibromatosis, which is like super rare. And he's poured a bunch of money, his own money, into funding research around that disease. So it's been fascinating. So he said, there's a quote, he said, when I, when we grew up, all I wanted to do was do two things, own a sports team and a casino. And now he owns both. So this is kind of like a childhood dream. And his companies are Quicken Loans, which is the largest home mortgage lender in the United States. They're bigger than Wells Fargo, which is freaking crazy. He owns the Cleveland Cavaliers, the basketball team, and a few other sports franchises. Until recently, he owned a casino. I think it was called Jack, which owned a whole bunch of casinos, but I think he sold it. And then he also owns Rock Ventures, and Rock Ventures is where all the big swings happen and all the philanthropic stuff happens. So they own a ton of real estate, almost all in Detroit, and then they do venture capital, and they've invested in everything from restaurants to, you know, real estate businesses, hotels, crazy tech companies, and all sorts of other stuff. He owns Robb Report, which is—

Can I tell you one more thing? Can I tell you a few more things that he owns that's interesting? So he owns— I think he owns Fathead. Do you know Fathead?

Yeah, yeah. I believe sports— it's like those like big hands and stuff and like, yeah, weird bloggers.

If you're a kid and you want to put like a, like the face of Michael Jordan on your wall, it's like a decal that you put on your wall. I think he owns the whole thing. He just bought dictionary.com and thesaurus.com.

Totally random. We were actually, we helped him. I know him. I'll talk about that a little bit, but we helped him with that acquisition a little bit.

Oh, no way. So you know about it. It was like a, it's like a $20 million revenue thing or more maybe. It's been doing that for like 10 years. I mean, I don't have any insider information. These are guesses. And am I right?

Yeah. Yeah. He owns dictionary.com and thesaurus.com. Um, and like when you talk to him about why he bought it, he's just like, you know, I think this is cool. Like, he's just like, I had all these ideas of things I could do with it. He's not like going, oh, I bought it for X times EBITDA and I'm going to make a 20% return. And this is what I find so cool about this guy is he'll just say yes. So he owns like Robb Report, which is like a magazine for rich people. Dictionary.com. Um, he owns— or has a very large stake in Shinola. So Shinola has this like insane hotel in Detroit. They make watches. Uh, he owns, uh, StockX, which is like a— it's basically like a stock market for sneakers and watches, which is awesome.

I'm in on that because like, dude, he co-founded it. He's like in his— how old is he, in his 70s yet?

He's like 50, 50-something, 56, I think.

He's that young.

Wow.

Okay. That's still a little bit older than like a sneakerhead. Uh, and he totally, he's a co-founder. I didn't know that.

So he was, he, he's got investments in esports, like just all sorts of stuff. And then he's also a large LP in a lot of venture funds kind of quietly. Like he's the largest LP in Ludlow Ventures. He's got his own venture fund. And so you, you look at it and he's got this barbell, right? He's got a really kind of dull, boring, you know, mortgage business, which is really innovative in and of itself. Just what he's done is kind like Brad, what he's done is like basically taken this fragmented, crappy industry run by banks and small lenders and like built out this massive structure and been very innovative around culture and other stuff. So let me, let me just give the history of what happened though. So basically in 1985, him and his little brother start Rock Financial, which is basically an independent mortgage lender. So when someone You know, needs a house or whatever it is, they go to them, they figure out, um, they basically make them an offer, uh, to lend them the money. And then I think they go sell the risk. So they would lend them the money and then they would sell it off to a bank over time. Um, and basically in the late 1990s, company grew into a huge business, one of the largest, uh, independent in the United States. And with the dot-com boom, they launched an internet strategy. Where they just made Rock Financial. I think it was rockfinancial.com or digitalmortgage.com or something like that. And in 2000, what was it? No, 1997 or something, Intuit acquired their business because they were like, oh my God, this is like, you know, this huge disruptive digital finance thing. And so what ended up happening is the dot-com boom blew up. And in 2002 he came back and he bought his business back. So he sold it for a ton of money. Intuit—

I think the first sale was $90 million.

Okay.

Is that right?

He basically— I don't know. I don't have the exact number here, but something like that. So, you know, the guy made a lot of money, especially for the '90s, but he wasn't like a crazy billionaire yet. Then he raised money from investors. So himself and some friends went back to Intuit, Bought it back. I don't know what the number was. And what's interesting is they kept the Quicken Loans name. So Intuit owns Quicken, the financial personal finance software, and they branded it Quicken. And so now there's this weird other business they own called Quicken Loans, even though that's an Intuit brand. So it's kind of a funny thing. And it just kept— he basically took it, took it back, got rid of all the crap that Intuit had added and started growing it again. This whole time, he's living in Detroit and watching his own city totally fall apart. So in the financial crisis, Detroit, I think, went bankrupt, and he, meanwhile, is super rich and living out in the suburbs. He says, "Fuck it. We're moving back into Detroit," and he moves his entire team into Detroit. So he had 4,000 or so employees, They literally bought— if you actually go to Detroit, there's this, it's called Campus Martius or something, and it's right in the center of downtown, this huge building. And he moved everyone there and he basically said, for my own employees and for the city, we're just going to fix it. And so he built casinos. He built like a private security firm. So if you walk around, there's like normal police and then there's like Dan's police. Um, he bought billions of dollars of derelict buildings. Uh, you know, literally like you go there and there's like skyscrapers and he's just, it's like going to Chicago and he's like, oh yeah, I own the Sears Tower and this and this. And like basically all of downtown Detroit, he owns like 20, 30% of. And, um, he also just announced that he's going to pay off $300 million in property taxes for Detroit residences. So this guy really, really cares about Detroit. And since he started it, it's now become the largest independent mortgage business in the United States. They've gone public, they had this huge IPO, and it's been a crazy story. What I love about this guy is just he's got such a crazy collection of businesses.

I think if I remember correctly, I think I'm right. but I believe he sold it for $90. He bought it back for like $20, and I think he took it public. Did he take it public like either recently or right away?

Quite recently. Like it was like, like, uh, 6 months ago.

And he owned most of it when it went public.

He owned like 85 or 90% of it.

And it went public.

It's totally crazy.

What's the market cap now?

The market cap is, let's Let's see here. Market cap's $46 billion. Wow. So yeah.

Where's the other $10 billion come from? Just as other stuff, just as other stuff.

Well, he owns a lot. Yeah. A lot of real estate. You think the Cavaliers are probably worth, you know, $500 million to a billion.

Oh, we forgot about that whole part.

Real estate, casinos, you know, all these StockX is worth, I think a couple billion dollars now. So he's just got this crazy collection of stuff. And, and so Chris and I got to meet him. The other cool thing about this guy is he's just a wild card. So I read about him in the New York Times. They did this profile of him. And I have this habit of just cold emailing people I think are interesting. And 95% of the time I just don't hear back. But I wrote him an email at 1 in the morning and said, hey, I'd love to meet you. And I get an email back like 5 minutes later and he's just like, yeah, sure. and then I got a follow-up from his assistant, and we ended up flying to Detroit. And it, you know, sometimes when you go and meet these billionaires, they're like, whatever, you know, you walk in, you get 20 minutes with them, that's that. He was like incredible. They like planned this whole tour of Detroit. It was like this 2-day thing. Like, they set us up in their hotel, um, and then Dan spent like 2 hours with us, and he's just this super nice guy. He's deeply interested in what we're doing and super engaged. And every business I mentioned to him, he'd be like, how does that work? How can we get involved? What can we do? How can we do it? He wants to say yes to ideas, which I always find really inspiring, right? Because I think some of these people have gotten really rich. They've gotten rich by being hyper-disciplined and just saying no to everything. But he says yes before no.

That's really interesting. That's what Sean acts like. And I usually say no to everything. Sean says yes to everything. And my joke is that I'm I'm like, my success is probably going to be quite predictable and it will be really good. Shawn's success is he's going to go completely broke and die, like die young, or he's going to become a billionaire, super fat. Like, you know, it's like a, it's a high risk, high reward type of thing. And that's not the reality, but that's my joke. I put my all in it like no days off. On the road, let's travel, never looking back.