#190 Brad Jacobs: How To Build a Billion Dollar Company
The Knowledge Project with Shane Parrish
Farnam Street
4.7 • 2.9K Ratings
🗓️ 19 March 2024
⏱️ 100 minutes
🧾️ Download transcript
Summary
Brad Jacobs doesn't just build big companies – he builds industry giants. As the founder of eight multibillion-dollar companies, he's cracked the code on scaling businesses from zero to billions. In this conversation, the secrets he's earned over decades.
You'll discover where billion-dollar opportunities are hiding in plain sight, how to spot massive trends years before your competitors, and the most crucial factor determining a company's success.
Currently serving as Chairman and CEO of QXO, Jacobs brings a mathematician's precision and a musician's creativity to scaling businesses. His track record speaks for itself: every company he's founded has reached billion-dollar status or beyond.
(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 | So I looked at that org chart and said, |
| 0:02.0 | this is a messed up org chart, which is great for making money. |
| 0:05.0 | If you can find something that's messed up |
| 0:08.0 | and easy to un-mess up, |
| 0:10.0 | boo-ya, there's your money. |
| 0:11.0 | There's your opportunity to make a lot of money. |
| 0:13.0 | You've made a few billion dollars. |
| 0:15.0 | What lessons have you learned about money |
| 0:18.0 | and spending money and living with money |
| 0:20.0 | that you wish you knew sooner. |
| 0:21.6 | You know, essentially, you throw me off a little bit with the question. |
| 0:23.6 | When you look at the numbers, the real growth has been through M&A, through acquisitions. |
| 0:28.6 | What's been my secrets on acquisitions? |
| 0:30.6 | Here's the gist. |
| 0:31.6 | A lot of people have a rigid business plan that's spelled out for many years and that's it and it's very, it doesn't usually |
| 0:38.5 | work. Why? Because life changes, markets change, economies change. And if you're rigid, if you're just |
| 0:44.2 | rigid thinking, you're going to have things come your way to make money for shareholders and feel |
| 0:48.4 | well, it's nice, it's great, but it's really not our thing. That's a bad way of thinking. |
| 0:52.2 | You said you can get a lot of things wrong if you get the big trend right. |
| 0:56.0 | What major trend are you most interested in right now? |
| 1:00.3 | I'm most interested in. |
| 1:02.7 | Because it is the trend. |
... |
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