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The Knowledge Project with Shane Parrish

#190 Brad Jacobs: Building a Business Empire

The Knowledge Project with Shane Parrish

Farnam Street

Business, Investing, Entrepreneurship

4.72.9K Ratings

🗓️ 19 March 2024

⏱️ 96 minutes

🧾️ Download transcript

Summary

Throughout his tenure, Brad Jacobs has built multiple billion-dollar companies. While there is no "playbook" for growing a business, he focuses on a few factors above all else in every company he operates, and in this conversation, he reveals them all.

Shane and Jacobs discuss how to read anyone during an interview through a series of intentional questions, the exciting role of AI and technology in the future of business, and where money-making ideas hide in companies. Jacobs also shares how his training in math and music made him a better business operator, the one thing he focuses on to grow his businesses, how to spot big trends before everyone else, and the only thing a company should focus on for success.

Brad Jacobs has started five companies from scratch and led each to become a billion-dollar or multibillion-dollar enterprise. These include three publicly traded companies: XPO Logistics, where he serves as Chairman and CEO, United Rentals, and United Waste Systems. Before starting XPO in 2011, Jacobs founded United Rentals in 1997 and led the company as Chairman and Chief Executive Officer. In 1989, he founded United Waste Systems.
(00:00) Intro
(04:44) The future of AI
(07:21) How to think rationally
(08:48) The major trend
(10:57) The research process
(13:29) On asking better questions
(19:35) On rearranging your brain
(22:23) On music, math, simplicity, and business
(32:26) Leverage, debt, and optionality
(35:11) What it takes to take contrarian bets
(40:45) Confidence and parents
(50:21) Why negative-only feedback is detrimental for employees
(56:14) Money lessons
(58:13) A deep dive on M&A (Jacobs' secret sauce to growing his companies)
(01:07:51) Questions to immediately get to know anyone
(01:11:14) On boards and board meetings
(01:16:57) On decision-making
(01:23:37) The role of capital markets
(01:25:41) The type of person you don't want to hire
(01:31:16) The best capital allocators
(01:33:53) Biggest lesson Jacobs learned from the past year
(01:37:20) On success

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Transcript

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0:00.0

A lot of people have a rigid business plan that's spelled out for many years and that's it and it's very non-flexible.

0:10.0

That doesn't usually work. Why?

0:14.0

Because life changes, markets change, economies change.

0:18.0

So you need to improvise, you need to capitalize on that and to make money from that.

0:22.0

And if you're rigid, if you're just rigid thinking... on that and to make money from that.

0:25.0

And if you're rigid, if you're just rigid thinking,

0:48.3

you're going to lose opportunities. Welcome to the Knowledge Project, a podcast about mastering the best of what other people have already figured out so you can apply their insights to your life. I'm your host Shane Parish. A quick favor to ask before we start.

0:59.7

Most people listening on Apple Podcast or Spotify right now haven't yet hit the follow button.

1:05.8

If you can hit the follow button now, I would appreciate it. The more people who follow the show,

1:10.6

the better the guests we can get. Thank you and enjoy the conversation.

1:15.0

If you'd like access to the podcast before everyone else, special episodes just

1:21.0

for you, hand-edited transcripts, or you just want to support the show you love, join at FS.

1:26.7

blog slash membership. Check out the show notes for a link.

1:30.7

Today my guest is Brad Jacobs, Executive Chairman at XPO.

1:35.0

Brad is a career CEO and serial entrepreneur

1:39.0

with a unique track record of starting multi-billion dollar companies. I think he's up to seven of them by now,

1:45.0

which have created tens of billions of dollars in shareholder value.

1:49.1

His goal with all of its ventures is to generate outsized value for shareholders by hiring talented

1:55.0

people committed to thinking big.

1:57.4

He recently wrote a book called How to Make a Few Billion dollars, which is a playbook for creating outsized

2:02.4

value.

2:03.0

Now all of that sounds really simple,

...

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