#335 How To Make A Few Billion Dollars: Brad Jacobs

Key takeaways

Mistakes are valuable learning opportunities that can lead to future successes.
Maintaining a positive mindset and emotional control is crucial for making sound business decisions.
Viewing problems as opportunities is vital for creating value in business.
In-depth research and investment in technology are essential for achieving competitive advantage.
Hiring the right talent and fostering a strong company culture are paramount to organizational success.

Summary

Lessons from Mistakes

The podcast features insights from Brad Jacobs, a successful entrepreneur who candidly discusses the numerous mistakes he's made throughout his four-decade career. Despite his missteps, including overpaying for acquisitions and hiring the wrong people, he emphasizes the need for growth and learning from failures. This section summarizes Jacobs' journey from starting a small oil brokerage to creating multi-billion dollar companies, showcasing how blunders can lead to valuable lessons that contribute to success.

Mindset and Inner Dialogue

A significant theme of the episode is the importance of maintaining a positive mindset and the ability to manage one's thoughts and emotions. Jacobs shares insights on how entrepreneurs often oscillate between euphoria and terror, highlighting the need to control inner dialogues to make sound, high-quality decisions. He stresses the necessity of 'rearranging your brain' to view problems as opportunities rather than obstacles, which aligns with Peter Thiel's advice on finding value in unexpected places.

Embracing Problems as Opportunities

Jacobs presents a framework for viewing problems as integral to business, insisting that successful entrepreneurship revolves around problem-solving. He recounts a pivotal lunch with his mentor, where he learned that embracing problems can ultimately lead to significant value creation. This section provides relatable analogies from other successful entrepreneurs, reinforcing Jacobs' belief that obstacles should not only be accepted but actively pursued to foster growth.

The Importance of Research and Technology

Throughout his career, Jacobs has emphasized the need for thorough research before venturing into new business opportunities, particularly recognizing major technological trends. He shares key insights into how his relentless examination of industry data and the acquisition of tech-oriented companies allowed him to stay ahead of competitors, setting the stage for exponential growth in his various businesses. Jacobs believes that investing in technology is crucial for sustainable competitive advantage.

Talent Acquisition and Company Culture

Jacobs concludes by underscoring the significance of hiring the right talent, asserting that perfection in recruitment is imperative to avoid costly mistakes. He discusses strategies for distinguishing between A, B, and C players and recommends always opting for the highest caliber of talent. Additionally, he reflects on the importance of fostering a positive organizational culture where employees feel valued, allowing for operational excellence and substantial productivity.

Show notes

What I learned from reading How To Make A Few Billion Dollars by Brad Jacobs.
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(0:01) I'm what's called a moneymaker. I've started five companies from scratch—seven if you include two spin-offs and turned them all into billion dollar or multibillion-dollar enterprises.
(2:00) I love working with outrageously talented people to deliver outsized returns for shareholders in public stock markets.
(5:00) All of the successful people I know have rearranged their brains to prevail at achieving big goals in turbulent environments where conventional thinking often fails.
(5:00) The single most powerful pattern I have noticed is that successful people find value in unexpected places and they do this by thinking about business from first principles. — Zero to One: Notes on Startups, or How to Build the Future by Peter Thiel (Founders #335)
(7:00) So much of success in business comes from keeping your head in a good place.
(8:00) I'm an ambitious person by nature and a dealmaker by inclination.
(9:00) Episode #295: I Had Dinner With Charlie Munger
(13:00) Listen to Think Big and Move Fast: Brad Jacobs on Invest Like the Best
(14:00) Setting the Table: The Transforming Power of Hospitality in Business by Danny Meyer. (Founders #20)
(15:00) If you want to make money in the business world, you need to get used to problems, because that's what business is.
(20:00) I am not surprised when things don’t go perfectly. That is the nature of the universe.
(21:00) Listen to this incredible conversation between Charlie Munger and John Collison on Invest Like The Best.
(28:00) Invest in technology. The savings compound, it gives you an advantage over a slower moving competitor, and can be the difference between a profit and a loss. (Lesson from Andrew Carnegie)
(31:00) How Larry Gagosian Reshaped The Art World by Patrick Radden Keefe. (Founders #325)
(36:00) While the rental industry overall was slow to computerize, the larger regional players were more tech-savvy. By 1997, nearly all of them were running on software developed by a company called Wynne Systems.
I bought Wynne.
Owning Wynne accomplished two things.
We had an industry-best platform that we could continue to develop internally for our own use, and the acquisition gave us access to aggregated, anonymized data on macro-trends across the industry.
This gave us a high-level view of emerging market trends, such as equipment gluts or shortages in the making. We could proactively adjust our pricing and asset management, while the rest of the industry was being reactive.
(40:00) The deals I've avoided have contributed more to my success than the deals I've done.
(42:00) I love these questions for a business and a family:
“What's your single best idea to improve our company?"
and
"What's the stupidest thing we're doing as a company?"
(47:00) There are few mistakes costlier than hiring the wrong person. An empty seat is less damaging than a poor fit.
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Get access to the World’s Most Valuable Notebook for Founders by investing in a subscription to Founders Notes
----
Come and build in-person relationships at the Founders Only conference
----
“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested, so my poor wallet suffers.” — Gareth
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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth
Be like Gareth. Buy a book: All the books featured on Founders Podcast