#373 Breakfast with Brad Jacobs + How To Make A Few Billion Dollars

**David Senra** (0:00)
One of the most important things that I learned from Brad's book, and we spoke about this when I had Breakfast with Brad as well, was the importance of working with the smartest and most talented people that you can. Brad says that the most important thing that a CEO does is recruit superlative people. And Brad will recruit the smartest people he can find. And he actually talks about this. Brad says there's no substitute for smarts. And that reminded me of something that Steve Jobs said in this interview I read that Steve gave in the late 1990s. And this is what Steve said. I think that I've consistently figured out who the really smart people were to hang around with. You must find extraordinary people. The key observation is that in most things in life, the dynamic range between the average quality and the best quality is at most 2 to 1 But in the field that I was interested in, I noticed that the dynamic range between what an average person could accomplish and what the best person could accomplish was 50 or 100 to 1 Given that, you are well advised to go after the cream of the cream. You need to build a team that pursues the A-plus players. And this is exactly what Ramp did. Ramp has the most talented technical team in their industry. Becoming an engineer at Ramp is nearly impossible. In the last 12 months, they hired only 0.23% of the people that applied. That means when you use Ramp, you now have top-tier technical talent and some of the best AI engineers working on your behalf, 24-7, to automate and improve all of your business' financial operations. And all of this happens on a single platform. The longer you use Ramp, the more efficient your company becomes. And this is important because as Sam Walton said in his autobiography, you can make a lot of different mistakes and still recover if you run an efficient operation, or you can be brilliant and go out of business if you're too inefficient. Ramp helps you run an efficient organization. In the end of that interview, Steve Jobs added, he said, a small team of A-plus players can run circles around a giant team of B and C players. From a customer's perspective, what does a team of A-plus players sound like? It sounds like this customer review that I read, which said, Ramp is like having a teammate who you never need to check in on because they have it handled. Ramp gives you everything you need to optimize all of your financial operations, all on a single platform. Ramp's website is incredible. Make History's Greatest Entrepreneurs proud by going to ramp.com to learn how they can help your business today. That is ramp.com.
So I want to tell you what I learned when I had the opportunity to have a two-hour breakfast with Brad Jacobs a few weeks ago. So Brad Jacobs is without a doubt one of the most talented living entrepreneurs. In case you aren't familiar with him, he has started eight different billion dollar or multi-billion dollar businesses. He's done over 500 acquisitions. He's raised over 30 billion dollars. Now that number is even higher. He started his first company at 23 and he is 68 years old today. And he's the most energetic person I think I've ever been around. I don't think he has any plans to retire or to stop doing deals and to stop building companies or really any plans to slow down at all. So about a year ago, he published his life story, which is called How to Make a Few Billion Dollars. It was one of my favorite books that I've read in the last year. And the episode that I made about the book, almost a year ago actually, was one of the most popular episodes of Founders this year. And one of the most remarkable things is the fact that Brad listens to Founders. In fact, he sent me a message. He said he's addicted to these book reviews that I do. So coming from someone like Brad, you can imagine that fired me up. And Brad was actually kind enough to invite us and to host us in his home. So it was me and my friend, Patrick O'Shaughnessy from the Invest Like the Best podcast, and then Brad's head of comms, Joe Checkler, who was a super nice guy, and I'm really glad I got to meet, who also listens to Founders. So the idea was I want to go over just a few things that I learned from speaking to Brad for two hours. And I guess the first story I should tell you actually happens on the flight up to see Brad. So maybe like an hour and a half into the flight, the guy sitting next to me turns to me and he goes, do you want to be a billionaire? And I was taken aback by his question. I go, excuse me? Like, keep in mind, these are the first words that he has said to me. So he repeats it. He goes, do you want to be a billionaire? And so he points at me and he goes, because I have never seen someone go through a book like that. And so I look at what he's pointing at and on my lap was my copy of Brad's book. And so this guy sitting next to me sees the title, How to Make a Few Billion Dollars, and they also had seen me going for like the last hour and a half, going through all of my highlights and rereading my highlights. And I have every single book I read, obviously has a ton of post-it notes sticking out of it. And so he assumed because I was reading it and I had all these notes that I assumed that this book was an instruction manual on how to make a few billion dollars. And I found that funny because it kind of is an instruction manual to some degree. If anything, it's an counting of how Brad Jacobs made a few billion dollars. And so after my breakfast with Brad, I organized all my notes into basically seven lessons. And these are lessons that I want to remember for myself. And I think by making it into a podcast, it'd be beneficial to you. So the first one is go to school on everybody. I have lost count how many of History's greatest founders that you and I study in this podcast are described at some point in their life as a sponge. If you listen to last week's episode about Amancio Ortega, people around him literally describe him, they use that word that he is a sponge. Amancio Ortega is one of the wealthiest people on the planet. He's been building up his company for over 60 years. He dropped out of school at 12 years old, but his dedication to lifelong learning and to being sponge-like and to going to school on everybody never ceased. And I thought of this because when I got to Brad's house, I was actually surprised at what Brad was doing. So he was at the table, next to him was a stack of papers, probably 500 pages high. Brad had printed out my personal website. So if you go to davidsenra.com, and if you're on my email list, you already know this. But basically what I do is I just, I try to whittle down all my notes and highlights from every book I read to like 10 sentences, as concise as possible. And then for every book I read, very simple, I just send that list out. And so Brad printed out my entire site, and you can just go through these books really fast. It's a way to like actually, really good way to review the lessons on the podcast, because you have 10 concise ideas for every single book. And this absolutely, this is like a relentless drive to learn. This total dedication to lifelong learning is a trait that Brad shares with nearly every single, I can't think of a single person that you and I have studied. He shares it with every single one of History's Greatest Founders. And the reason I called this Going to School on Everybody, is I actually got that idea in a biography of Jeff Bezos, because Jeff is definitely like this as well. There's a biography of Jeff called The Everything Store. I last covered this episode on, I covered the book on episode 179, and I want to read you a section from that book that seared this idea into my brain, and it's somebody that knew Jeff really well, and he said, he went to school on everybody. I don't think there was anybody Jeff knew that he didn't walk away from with whatever lessons he could. Jeff Bezos went to school on everybody. Brad Jacobs goes to school on everybody. Mitch Rails, the co-founder of Danahere, goes to school on everybody. So Mitch founded this company called Danahere. Danahere is like $170 billion market cap company today. A friend of mine was just telling me a story. He was at this small intimate conference with Mitch recently, and he was actually blown away by how focused Mitch was. So the entire time that Mitch was listening to the speakers, he was taking pages of notes. And my friend had the thought where he couldn't understand, he's like, why, he didn't verbalize this, but he was thinking this is like, Mitch, why are you, you're more successful than anybody else here? Why are you taking notes? And when my friend was telling me this story, I go, no, wrong answer. There is a great line in Bill Walsh's book, which is called The Score Takes Care of Itself. And I think this line is very important related to this. And Bill Walsh talks about this. He says, champions behave like champions before they are champions. I guarantee you, Mitch Rales did not build a $170 billion company and then start taking notes. I guarantee you that Mitch was doing that way before he was quote unquote the most successful person in the room. The entire time I was speaking to Brad, he had a notebook and a pen with him, and he would jot down notes when he heard something that he thought was interesting or valuable. And if you read Brad's book, you know that Brad was like this from an early age too. One of my favorite excerpts from the book, from Brad's book, How to Make a Few Billion Dollars, I want to read to you. It is about the amount of research that he does before entering an industry. This part blew my mind. And so Brad writes, I'm obsessive when learning about an industry. I start by reading everything I can get my hands on. Journals, periodicals, newspapers, trade publications, employee reviews on web-based recruiting sites. You name it. I look at all the websites and social media of the major players and the up and comers in the industry. I watch lots of interviews with CEOs. I use paid services like Bloomberg, AlphaSense, and Root and Reuters. I look at analysis from CellSide and Bicide Analysis, or an analyst rather, and search the SEC database, which has large amounts of information on every publicly traded US company, including IPO documents, financial reports, and proxies. I scope out the most valuable industry conferences and attend them. CellSide conferences are an opportunity to meet management teams face-to-face and hear the questions investors are asking. Trade associations have a wealth of industry data experts. I interview experts. I seek out people who live and breed the industry I'm considering. This phase is more about getting face-to-face and listening intently. I love talking to CEOs. In addition to CEOs, I seek out investment bakers who are most active in the industry and know it deeply. I also talk to venture capital firms, because they spend a lot of time looking at the big trends in different industries. And I tap buy-side institutions and successful fund managers who have battle scars from investing in the industry. Industry vendors are also a good source. They have a sense of the trends that could drive changes in the market environment. Shareholder activists often have important insights as well. And I reach out to journalists who know the industry, because by nature they are a skeptical bunch and I want to hear their perspectives. That is the end of the quote from Brad's book. What he's describing here, this is one of my favorite parts, because this is all effort and enthusiasm. This is just collecting more information. This is applicable to every domain. There is a maxim for this, and it comes from David Olguby. And David Olguby says, the good ones know more. David Olguby wrote about this in this book called Confessions of an Advertising Man, which I think was published in 1965 or something like this. And this is the advice he was giving. He said, set yourself to becoming the best informed person in the agency on the account to which you are assigned. If, for example, it's a gasoline account, read books on oil geology and the production of petroleum products, read the trade journals in the field, spend Saturday mornings in service stations talking to motorists, visit your clients' refineries and research laboratories. At the end of your first year, you will know more about the oil business than your boss, and you'll be ready to succeed him. That's the end of the David Olguby quote. And the reason I think this is the first thing I wanted to bring up is, collecting more information and putting forth more effort is still a competitive advantage today. And it always will be. This is not a matter of intelligence or talent. This is a matter of effort. So go to school on everybody. Number two, the importance of clear thinking and being easy to understand and easy to interface with. So I want to read something from this book called Insanely Simple, which was written by an advertising executive who worked very closely with Steve Jobs. And he talks about in the book how different Steve's, Steve's clear, and all the people have studied, Steve is the clearest thinker out of anybody I've ever come across. And this advertising executive also noticed this, and he compares and contrasts Steve with some of his other clients. And this is a great description of why this is so important. It says, clarity propels an organization. Not occasional clarity, but pervasive. 24 hour in your face, take no prisoner's clarity. Never underestimate the degree to which people crave clarity and respond positively to it.