#4 How to Make a Few Billion Dollars (Pt. 1)

During my 44 years as a career CEO and serial entrepreneur, I think I've made every possible mistake in business. I've overpaid for acquisitions and botched integrations. I've run operations for cash when I should have invested for growth. I've delegated tasks I should have done myself. Sometimes I've hired the wrong people or made strategic bets that didn't pay off. And yet my teams and I have managed to create tens of billions of dollars of value for our shareholders. This book is about what I've learned from my blunders and how you can replicate our successes. This book is a guide for anyone who wants to achieve wealth creation through through free markets or pursue their personal version of the American dream. If you have a burning passion to make enormous amounts of money in business or want to turbocharge your chances in the sports, the arts, politics, philanthropy, or any other part of your life, read on. I just read an excerpt from how to Make a Few Billion Dollars by Brad Jacobs. And before we get into this episode, I wanted to shout out to my friend Ben Greenfield. He sent me a book called how to Read a Book and I'm actually really excited because I didn't know there was an art to reading. And, and so I just really want to say I'm really grateful and thankful for amazing friends. And I just want to shout out, Ben, thank you, Ben. I love what you're doing, man, and just really wanted to just thank you for that. How to Read a Book is going to be a great book. I really believe that and I think will further enhance everyone listening to this podcast episode and, and help not just me, but, and not just me for the rest of my life, but everyone on this podcast. So really appreciate that, Ben. Thank you. And now we're gonna get in how to make. We're gonna get into the book how to Make a Few Billion Dollars by Brad Jacobs. So kind of I want to give like a quick history and this is just a short life of Brad Jacobs, kind of what he's done. And, and so the crazy thing is he started seven companies, so that's five companies in, two spinoffs. But basically they're just all like companies and they're all at least $1 billion or multibillion dollar enterprises. So that's crazy. So we're going to get into this. He has started Amurex Oil. It was worth 4.7 billion by the time he was 27 years old. That's insane. Like, I'm 17, that's 10 years from now that that's a billion dollar company 10 years from now. Hamilton Resources, another billion dollar company. United Waste Systems, United Rentals, XBO Logistics, GXO and RXO and xbo. GXO and RXO kind of all fit in the same category and they've done enormously well. Crazy how well they've done. And he has raised over $30 billion just total. And that's in debt and equity, but that's the amount he's raised. I think that's insane. I. I feel really privileged to read this book, how to make a few billion dollars. Because, you know, you look at. I would really recommend buying this book. And if you look at like what he's done, he is like the founder, co founder of Home Depot. Just like you go down the list. Williams Sonoma, best buy, Motorola, US Steel, FedEx. Just the people that have rated this book are insane. So I would definitely recommend buying this book. It was a great book. But first, let's, let's go through this podcast episode. So here's a quote by Brad I've come to know a lot of extremely successful people in my life. They all have one thing in common. They think differently than most people. You can learn, too. You can learn to think differently, too. Making a few billion dollars doesn't just happen, but it's possible with intense focus and a willingness to transform how you use your mind. So this is kind of chapter one, and it's called rearranging your brain. And so what I really love about this book is that Brad has like these little boxes and they're like little quotes or like little kind of main takeaways of each section that he talks about. So he'll have like, when we get to it, like the M&As, which is merger and acquisition, he'll have like a little box of how to treat new people that you're merging into your company. And there's little things like that where they're just like really great sayings. And so that's kind of what I'm pulling from in most of this book. And that's kind of what I'm going by. And they're really great, really useful. And so one of them is, I love what he says here. So much of success in business comes from keeping your head in a good place. And I was thinking about this just based off of the knowledge that I have with reading other documents and books like this. And this was related to the Mr. Beast Handbook where he says, when you start to get into this, it's really easy to get lost in the weeds when you work. And I was thinking about that. Like, this is what Brad says, right? Like, when you keep your head in a good place when you're in business, part of that is just not getting lost in the weeds. Because when you get lost in the weeds, all of a sudden you kind of forget what you're doing and you forget the power that you have. And so it's really easy. I think about it as like a journey, right? You start on this mountaintop, right? And you can see everything, and you look out and you can see the whole map. And then once you start going down and down and you get into that deep, dark forest, you can't see anything. And you get lost. And that's kind of how I see it, right? When you get lost in the weeds, you forget your why, you forget your how, you forget your what, but most importantly, your why. And so it is really easy. When you have success in business, you forget why you made that money in the first place. Or when you don't have success in business, you know, you need to have your head in a good place. And I thought that was a really good reminder from Brad. I really appreciated that because it is really easy to get bogged down by what you're doing and to kind of resurface as a certain skill that most people need nowadays, because it is really easy to get bogged down. And then another thing that Brad mentioned was embracing the problem. So life can be uncomfortable, but you can accomplish a lot if you can figure out how to reframe the uncomfortable things in ways that allow you to utilize them. And what I love about this is that he's basically saying, problems are an asset. I love this because basically, bigger ambitions often lead to bigger problems. And instead of getting frustrated over those problems, you need to shift your mindset, shift your mind into a mindset of success. And I love this. I think it was Charlie Munger or Warren Buffett that said this, or one of those guys, and they said that a problem is just an opportunity dressed in work clothes. And I love that because it's like, that's what. That's what all these people, you know, have in common that most people don't. Where they look at problems as an asset and a utility. They don't look at it as a problem. When. When you think of it a problem, right? You think, oh, no. Like that. That's your main response, right? Oh, no, I. I like. That's not good. That's bad, all that stuff, right? But when you look at this, it's like, no, a problem is just an opportunity dressed in work clothes. Like, problems. If you have bigger ambitions, there's going to be even bigger problems. And so if you, you know, if you can kind of get to that point where the problems. You can. You're a really good problem solver. That is another step to becoming more successful. And so the thing is, you don't. Another step to this also is you don't only embrace the problem, but you accept it, but you also capitalize on it. You. You make sure that you get the most out of it. And so I know Jeff Bezos talks about this a lot, where Jeff will say that I would rather have a lot of problems. I would rather hear the bad news first than the good news. And so there was another guy, I believe the founder of ikea, that he would go around all these stores and when people would congratulate him and say, hey, good job, man. Like, I love what you're doing. Keep it up, he'd say, yes, that's great. But what. What am I doing wrong? Like, what are the problems? Like, what can I be doing better? And I think that's a really important mindset. And so another thing that Brad talks about is if I had to do everything I wanted to do, I would never have accomplished anything big. Narrow your focus to your most important dreams and tune out everything else. I love this idea because, you know, you may have 10 or 20 massive ideas, but if you tune out what the world says and do what you want to do and you have a passion for, and you stick with that one thing, then you are going to be way more successful. It will definitely take time to grow, but you will be way more successful in that thing to the point where you will be unmatched. Because there is a lot of pe. A lot of people that, you know, they're serial entrepreneurs or they're. They have a hand in so many things that at this point, you look at it and you're like, oh, that's great. But then you realize, hey, they got a lot of good ideas, but they're not actually getting anything done. And so that's why, you know, with. This applies to Walt Disney, right? He tuned out everyone around him. This is the guy. Disney's Land, right? What we were going through in our last book, Disney's Land, he tuned out everyone around him, even though they were telling him, hey, you can't do this, that this is not going to be possible. And he created what he loved, which was Disneyland. And I think what I Love, like, I just. I think this is such a good idea that we need to hone in on. In whatever you are doing right now. Because the thing is, you could do, you know, 10, 20, 30, 40, 50 different things. You may have, like 10 dream jobs that you may have. But I think it's like, okay, what can I do to bring the most value to people? Have fun doing it myself, and eventually make, you know, make money off of it. And I think it's not even about the money. It's about. It's about what you're doing for other people. Are you creating value for them and for you. Do you love to do what you do, but you're also creating value for other people? So much so that it is in demand and that people want to pay you for it and people want to sign up for a list or whatever. And so I love that by Brad. And so that's what I would really encourage, you know, you guys with, is that when you're. When you're trying to find an idea or a job or just anything, don't just find something to find something, actually figure out what you love to do and try to get into that industry. And so the next thing is that what Brad brings up is that thinking, you know, it all is a trap, because you don't. If you stay humble, you'll keep advancing. For me, that is very applicable because that's why I'm doing this podcast, right? I know that I don't know all, and I. That sounds counter. Count counterintuitive, but I'm not going to be able to learn everything. But if I can try to learn as much as possible from these great people that gave us these ideas and businesses, if I can learn from those people and provide value for you guys, that is more important to me. And that, that's why it's like, you got to remember that you don't know everything because it is a trap. And part of, you know, success is being humble. And so this is the journey for all of us, right, to keep on learning and growing from the greats who came before us. And now we get into, like, chapter two, and this is how to get the major trend right. And Brad Jacobs has a mentor, and he says you can mess up a lot of things in business and still do well as long as you get the big trend, right? And so in this chapter, Brad is talking about kind of like what he does to find these and spot these big trends in an industry. And why this is really important for us, right, is if you're looking into this industry, just any industry that you're interested in, there might be a lot of unknown potential that could be known to you if you just do the right things. And it could end up, you might be the only one that notices that at that time. And so you might have a uncapitalized, you might have, you know, you might have potential that only you know about. And so if you just start that one company or you start that one thing, it could go, it could be a major hit or a major trend in that industry that no one else could have spot could have spotted but you. And so what Brad does to find these big trends is he gets obsessed when it comes to learning, especially about any industry that he's interested in. And so trend spotting is part of that learning where. And we get into this, you know, if you want to make a lot of money in any industry, you have to invest. So this is one of them. You had to invest heavily in technology. So this was like Sam Walton in Walmart, because Sam Walton invested heavily in computers. And that led to Walmart having a great success getting through their years. Jeff Bezos and Amazon Early Technology. But something that I really want to focus on is like, that's all good, but how do you conduct your research into an industry? So once you get obsessed about learning about an industry, how do you conduct that research? And Jeff or Brad kind of lays it out. And what I saw was two different ways. So you need to educate yourself as thoroughly as possible. And what that means is this, this can be done by reading as many things as possible. So this could be going to conferences, talking to people who have a good track record in your industry. This is reading newspapers, watching videos like they're reading books. There's so many different ways to get into an industry. And if you are really fascinated into an or in it about an industry, you need to be obsessive. And I think that also is a, a sign that shows that you really love an industry. If you're willing to do a ton of research about it, then I think that that definitely means that you're willing to get into that industry and invest a lot of time into it. And so I think that was a good way. That was one of the steps. And then another step that really stood out to me was asking good questions. So where do I think this industry will be in 10 years from now? And just certain things like that and, and what I really like about this type of thinking is it's like Amazon, right? Jeff Bezos has the story where when he was thinking of Amazon, he was thinking, all right, what are two things that I know customers will want in 10 years? And he came up with, he came up with the two things and it was free shipping and lower prices in the next 10 years and pretty much forever, everyone will want low shit, free shipping and low prices. And I think that's kind of a good way of thinking about your industry, right? Where do I think, where do I think this industry will be in 10 years from now? Where do I think this certain thing will be in five years? Like, what will my company look like? What will my life look like in five years from now if I go down this path? Kind of what will happen if I continue? And so I thought that was really interesting because it's like, how do you conduct your research into an industry that you want to learn more about? And something that Brad helps him use is. Yeah, something that Brad uses is AI. And he uses AI to help him condense all that information and make sure it's a good idea. And that's what he really loves. And so that, that's like something I would advise you guys in, where it's like, all right, use AI to figure out, all right, what are the best ways to learn and grow and like, who should I listen to in this atmosphere in this industry and all these different parts. And then another thing that he used was leveraging information sharing. So at amorex, his oil company, Jacobs pioneered an information sharing approach. So whenever an Amarex employee learns something useful about buyer or seller activities of oil prices or just oil prices, they would enter it into a database. And this allowed the company to share information quickly with brokers around the world, enabling objective insights into global oil supply, demand and pricing trend and how we spotted this trend. So this is like an example, right? He at amorex, before there was a database, an online database, there was newspapers. Just imagine that, newspapers. Do you think, just imagine how slow that is. You get something in the newspaper. Let's say you're in New York, right? Or let's say you're in California. And the newspapers print from New York and they get shipped around like, say it takes like seven days to get to you and by the time you read it, it has taken 10 days, right? That is so long in the, just any industry nowadays or especially in their days, which was like the 80s or 90s. And now he, he had the genius insight of saying, hey, now we're going to move this onto an online database. And that's how he was able to make $4.7 billion, create a company that was worth $4.7 billion by the time he was 27. Because he just had a, like an instant idea that was like, oh, you know, we're going to make this so much better. And so I think that's what, that's the type of things you need to be looking out for. It's little things like that that can make a huge difference. And now we notice it and we think, oh, yeah, that's not so little. That's like a big thing. It's like, yeah, we notice that now. But, you know, it's really hard nowadays to be that type of change in a world that's ever growing, especially with information and knowledge and all this. It's like, how can you stand out from, you know, AI or how can you stand out from all these different things that's affecting us? And so what I really appreciate about this is like, he spotted this trend and we're going to be going through, like, United Waste, United Rentals, all these different companies he worked on that actually showed how he spotted the trends. And so I would really advise you to be looking out for ways that you can take this knowledge and take that and just apply a little bit of or like tweak what the industry you're really interested into or find that little niche that would really elevate people's lives. And so let's get into United Ways. So United Waste was this kind of garbage, this garbage collecting company that Brad Jacobs started, and they would collect waste and they make money off of it, actually a lot of money. They, they could, they were a billion dollar company, so they made tons of money. But Brad did something that was really smart. So Brad Jacobs recognized the potential to increase efficiency by optima, optimizing the waste routes. And what that means is by reducing the number of trucks needed and increasing stops per hour. So he, he reduced the number of trucks needed and then he increased the stops per hour. The company could significantly lower costs and then increase the profit margins. That's just a little thing that it's like, oh, yeah, that makes sense. But no one, no one in the industry. There was only like, probably like, you know, a handful of companies that were in that industry. He was like the only one out of all those companies that was able to say, oh yeah, we're going to do that. And I think it's like little details like that where it's like, all right, how it's what David SRA talks about all the time on his founders podcast, where it's like being obsessive over your costs, right? What is the, what is the way we can do this to the lowest amount? So it costs us the lowest amount. But. But also it's. Well, it's saving us money, but also we can increase profits. And so this is what Brad did and no one else did that in that time. And so I like, this is another example of spotting the trend. So I like, I would really encourage you guys to find the trend in your industry and figure out what you can do that is so different from everyone else. But it's just a little detail that's different, that's so minor that it makes it seem like a whole different way of looking at things. And then another crazy thing that he did was at United Rentals. So he. It was a service first model at United Rentals. So basically United Rentals was like a contracting company or like they would have. So like if you need to rent out like a tractor or something for builders, they would basically work on just machinery. It would be like you rent out machinery. And so people didn't need to own it. They would just, they would just rent it out from United Rentals. And so United Rentals built its credibility on delivering reliable service. And that was kind of the trust aspect. But this is. Their success hinged on maximizing returns through smart rental rate. And that's kind of the. Just like what they did in general. But the really smart thing was they got into this industry. So Brad takes over this and they had a great idea. United Rentals. So all right, not too much different, but this is one of the most genius moves I've ever seen. So Brad Jacobs, he made this strategic acquisition of wine, or it's spelled W Y N N E. And it was a move that served multiple purposes. So by acquiring this company, Jacob gained access to the industry, to an industry best platform. What I mean by that is Jacobs, Brad Jacobs bought the platform that every single competitor, his main competitors were using. He got access to all their data. And then I can't remember if he got access to all their data and then like stop letting them use it or if he got access to all their data and then use that to find all the trends. So think about this was like a bid, a big analytic machine. So it knew all the, the industry trends because all these different competitors would put in their information to kind of keep track of like, you know, you know, all their stuff, like, and everything. And then Jacobs buys that to get all their data and to improve his company. So literally gave him the macro trends of across the industry. And it was invaluable for that strategic planning that like he, he created. Like it was a smart way to gain their data and get the trends. That like, that is literally a way to get the trends of your industry. That's like if every single influencer was using a certain platform and so someone just bought that platform and got all the data and then knew how to use it to the point where every time they made a video or every time they made something, it would go viral because they knew all the trends and they knew what to post on. That's insane. That's basically what he did for but for rent, renting companies and it's a billion dollar company nowadays. That's insane. That's a genius move. Like I, I don't know of anything like that. That is so smart that it's like, like it really takes time to like sit down and say, all right, how can I make a move like that? Because this is like, that's just crazy that it makes a lot of sense when you think about it. But people don't think about it like that. That's the thing. And so that again, like, look for, look for parts or moving pieces in your industry that you can capitalize on that it just skates by a regular competitor's eye. But you can really take advantage of that and say, all right, no, I'm going to use this and try to make a business out of it or try to make something out of this that no one else notices. And so that, that's really important. And now we get into chapter three and this is how to do a lot of high quality M and A is without imploding. And an M and A is mergers and acquisitions. And basically a merger and an acquisition is when you're acquiring a company or you're merging your companies together. And so my, my key takeaways are the number one thing to look for in a business plan is the scalability of it. And even if you're running your own business, right, you want to look for the scalability of your own business even if you're not doing an M and A. And so look to find ways to scale your business or in your business plan to have a scalable, to have a scalable business plan. And you know, if you, even if you have a small chunk of a huge growing industry, that's still a pretty big piece. Brad brings this up where that, that's what he says, right? Where if you do have a small chunk of a huge, like he would Rather have a small chunk of a huge growing industry because it's still a pretty big piece. Like, think about it, if you had like a small piece of AI or the AI industry and it grew as like a stock or money, that's still a big, pretty big piece. Or if you had like a small piece of AI back in the day or sorry, bitcoin, that would still be a huge piece nowadays. That'd be worth a lot of money. And so if customers see immense value in doing business with your company, they'll happily wire money from their bank account to yours. What I love about what Brad says here is that you, you strive to create like what we need to be striving for is to create value for the customer. This could be in the details or just in the product or just in the customer experience. A company that I really love is reigning champ. And reigning champ is like a clothing company, but literally one of their logos or one of their kind of one liners is master this simplicity. And what I really love about that is like, it's a really simplistic but also kind of elegant customer experience where like you get this nice, elegant white label, you know, bag and that, that's just like, that's in every single order. Or you order something from the Nike or Jordan brand nowadays and if it's a really nice shoe or clothing piece of clothing, it's going to be a great customer experience, great product. And so I think it's little things like in the details, if we can strive to, to create value for our customers, that, that could be in anything. And that's what I love about what he says here. So, yeah, if they see immense value in doing business with your company, they'll happily wire money from their bank account to yours. Another idea that I really like is faster is almost always better. And what I really appreciate about this is that this is like when you buy a business or you're just running operations, if you can become faster than the competition, then you always be better. Because when you're faster to mess up, or you're faster to learn from mistakes, or you're faster to do anything, then you're going to be far better and you're going to be far ahead more than your competitors. And something that I've seen on just YouTube or just on social media is Kobe's story, Kobe Bryant's story about practicing four times a day. And when you do that kind of like, so basically Kobe has this story online where when Kobe, Kobe would say, you know, why would I work out Once or twice a day when I could work out four times a day. One from like 4am to 6am, one from 9am to 10am, one from 1A 1pm to 3pm and then another one from 7 to 9pm and then go to bed and then wake up back at like three. And if you do that for like, you know, a couple years or seven years, you're going to be so far ahead than your competitors. And so that's kind of the basic gist of being faster. You get to learn from your mistakes more. You get to learn from all these different things way faster than your competitors. So I love that. And then another thing is have a mind of, have a mind, try to cultivate a mind where you try to envision the future. This is kind of what we were talking about when we were in like chapter two and spotting the major trends. But ask the questions, you know, like, where will my company be five years from now? What can I do to get there? And this is just like what I, what I mentioned previously with the bet, Jeff Bezos type thinking, you know, what do I know for my industry that will not change in the next 10 years? Or what will everybody want in the next 10 years? And Brad Jacobs brings up this quote from Mike Tyson, everyone has a plan until they get punched in the face. I love this because this is a totally different kind of topic than, you know, lower prices, but everyone has a plan until they get punched in the face. Be ready to expect problems and that your plan is not going to work out a hundred percent just because you have your whole day scheduled out for you. Yeah, you have your whole day scheduled out and a problem happens and then your whole day is messed up. You're going to need to expect that or your whole week is planned out and you were going to do this one day and this the next day, and then a problem messes up half the week. It's like you need to expect that your plans are not going to work out 100%. And Mike Tyson's, you know, the perfect example for that. You know, everyone has a plan until they get punched in the face. So who are you when you get knocked down and do you rise back up? Are you uncommonly excellent in what you do? You know, are you perfect in the details? Are you focused on the details? Who are you when your plans get messed up? You know, do you get frustrated or do you really focus on. No, I'm going to control my, you know, control who I am and try to work this out. So I think That's a big thing. Like Mike Tyson and Brad Jacobs. We can learn from a lot of. And then Brad talks a lot about feedback loops. And what I love about this and what a feedback loop is, is a feedback loop is when it comes to a company is he would send out like, you know, surveys or questions to his co workers or employees and he would say, hey, what's one thing we could do to make this business a better place? Or what could we be doing better to provide more value for our customers? Or just simple questions like, and some of the people that when they would do M&As or they would merge with other companies, is that people, most employees he came across never came across this. They would never have a feedback loop. And this is, I think, one of the most important parts that contributes to Brad's success. Right. What is a feedback loop? And the. So a feedback loop is they. They'll answer and you kind of get a bunch of information from people and you learn how to make your business better. And not only can you improve your business, but you can even improve your personal life. And this could be like, what do you think the business could be doing better? But also just for your personal life, what do you think I could be doing better at? You know, like, whether that's just like personal things or if you're focused more on business or just in school or just what in whatever you do. What, like asking the people around you what can I be doing better at? That's something I need to work on. And I like, you know, I just thinking about, like, how can I set up practical feedback loops within my family or within people I know, you know, or between people I know that could really benefit me and benefit them. It might be, you know, unnormal or abnormal at first, but, but it, it could be in like one of the most potential, has most. Has some of the best potential to actually benefit you and others and your business if you have a business. So. And the thing is, most people in business are never asked that question. And this is, I think, what separates Brad from pretty much every other business, business person in the world or business people in the world. Right. So in your personal life, you should be setting up feedback loops so that you can improve every day, whether that's in business or your personal life. I would really recommend that that's something I need to be doing, something I should look into doing and I should do. But I really recommend getting kind of focusing that idea on feedback loops. And then I just want to end on this story. It's a really funny story on. I don't know if you guys know about Hertz, but Hertz is like a rental company, so kind of like United Rentals. And I believe Hertz, where I've seen him, is like a car rental company. But this is a really funny story. So the founder of Hertz wanted to have lunch with Brad Jacobs. And because they were in the same industry, and I think this was pretty early on. And so, yeah, Hertz wanted to have lunch with them. And basically Hertz wanted to have lunch with him to tell Jacobs to slow down and stop making money. That was the lunch because Jacob's company was beating Hertz, and Hertz didn't like it. But Hertz try to make it like, you know, all fluff and just like, say, oh, no, that doesn't really matter. No, like, you're gonna destroy the whole entire industry. This isn't gonna work. Like, what are you doing? And so, you know, something that is really interesting is Brad ignored him, and today Hertz is worth $1.5 billion, and United Rentals is worth $6.8 billion. That's insane. So I. I think it's just a. Like a cool and quick thing to point out. Like, you know, don't listen to your competitors, number one. And number two, you know, you're probably doing something right. If your competitor wants to meet, meet with you and say, hey, you're doing something. Like, you know, I. Like, you're doing something. Slow down. Try not to do what you're doing. You're making too much money. You're taking too much business away from us. Like, if they're saying that, at that point, you just, like, keep on doing what you're doing and just ignore them. A competitor is never going to tell you, hey, I have your best interests in mind, and let me tell you what to do. No, they are most likely trying to run you off a cliff. And so the biggest thing is just like, this is part one of how to make a Few billion dollars. I cannot wait for the next episode of this. This is going to be a great book. This is a great book. There's so many practical little things that you can learn from you. Even just like the Mike Tyson quote, you know, everyone has a plan until they get punched in the face. It's like, that is so applicable to everything that you do, literally everything you can get punched in the face with. And so that's a really important thing. I hope you guys enjoyed this podcast episode. Please go buy the book if you haven't it is a great book, really recommend you getting it but just great. Great book. Also my premium feed is out. Just launched it and it is still is still in this description. Would love for you guys to sign up. Get immense value. So grow with me and learn and just get immense value from this podcast. Take it a step beyond and you can elevate what you're learning here and take it even deeper. It's only $5 a month, which is not that bad. It is great. I can't wait to keep adding more information to it and just would love that. Thank you guys for listening to this podcast episode. Thank you for just listening and I'll talk to you again soon.