My Conversation with Brad Jacobs
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
This episode of "David Senra" features an in-depth conversation with serial entrepreneur Brad Jacobs, who has built eight separate billion-dollar companies over his four-decade career. (00:56) The discussion covers Jacobs' unique approach to business building, his philosophy on problems and opportunities, and the crucial lessons he learned from mentors like Ludwig Jesselson. (02:14) Key topics include his systematic approach to company building, the importance of recruiting exceptional talent, and his methods for maintaining high-performance teams through innovative compensation structures and meeting methodologies.
- Main Theme: Brad Jacobs shares his proven methodology for building billion-dollar companies, emphasizing the critical importance of embracing problems as opportunities, recruiting A-players, and maintaining long-term relationships built on integrity and mutual benefit.
Speakers
David Senra
David Senra is the host of the acclaimed "Founders" podcast, where he has obsessively studied over 400 biographies of history's greatest entrepreneurs for nearly a decade. He has now launched a new show called "David Senra" featuring conversations with the greatest living founders.
Brad Jacobs
Brad Jacobs is a serial entrepreneur who has built eight separate billion-dollar companies over his four-decade career, including United Rentals and XPO Logistics. He's the author of "How to Make a Few Billion Dollars" and is known for his systematic approach to industry consolidation and value creation through disciplined acquisitions and operational improvements.
Key Takeaways
Embrace Problems as Your Greatest Opportunities
Brad learned from his mentor Ludwig Jesselson that "business is problems" and successful entrepreneurs should run toward challenges, not away from them. (04:55) Jesselson taught him that problems are how you make money - the more problems you can solve, the more value you create. This perspective transforms how you view setbacks and obstacles, seeing them as pathways to success rather than roadblocks. Brad emphasizes that if you're going to get beaten down by problems, you won't be successful or happy in business.
Get the Major Trend Right
One of the most important maxims Brad learned from Ludwig Jesselson is to "get the major trend right." (03:03) As a commodity trader, Jesselson understood that you could do thousands of things correctly, but if you missed the major trend, you'd still fail. Brad applies this by looking at long-term technological and societal trends when selecting industries to enter, ensuring he's building businesses that align with where the world is heading rather than fighting against inevitable change.
Recruit Superlative People Above All Else
Brad considers recruiting top talent the CEO's most important job, stating "there's no substitute for smarts." (51:14) He uses a mental exercise where he visualizes each team member quitting - if his reaction is pure terror and panic, that's an A-player he can't afford to lose. He deliberately seeks people smarter than himself and structures compensation with significant equity that vests over five years to ensure long-term commitment. This approach creates what he calls a "superorganism" where the collective intelligence far exceeds individual capabilities.
Apply the Same Proven Toolkit Across Industries
Brad has developed a repeatable methodology for building billion-dollar companies that works across different industries. (28:06) He looks for large, growing, fragmented industries where technology can create advantages and AI won't disrupt in the near future. Once he identifies the right industry, he assembles an exceptional team, aligns compensation through equity partnerships, and applies systematic improvements to acquired companies - typically doubling their profits within 3-5 years through better pricing, technology, and operational efficiency.
Build Intense Feedback Loops Throughout Your Organization
Brad emphasizes creating "voluminous feedback loops" between all constituents - employees, customers, vendors, and investors. (67:08) He regularly conducts employee surveys asking what single idea would improve the company and reads customer feedback personally. His monthly operating reviews involve 25 senior leaders for 10 hours with minimal breaks, using crowd-sourced agendas based on what the team collectively believes are the most important issues to address. This constant flow of unfiltered information prevents echo chambers and ensures rapid identification and resolution of problems.
Statistics & Facts
- Brad Jacobs has built eight separate billion-dollar companies over his four-decade career, with his teams completing over 500 acquisitions while evaluating thousands of potential targets. (106:43)
- When running XPO Logistics, Brad managed approximately 150,000 employees worldwide, representing about 1.2 million hours of work per day that needed to be optimally managed and motivated. (102:00)
- In Brad's monthly operating reviews, he limits attendance to exactly 25 senior people in 10-hour sessions with minimal breaks, having experimented with larger groups of 40-50 people and finding them ineffective. (56:20)
