#408 How to Make a Few MORE Billion Dollars: Brad Jacobs

**David Senra** (0:00)
Two years ago, Brad Jacobs wrote a book called How to Make a Few Billion Dollars. I covered it all the way back on episode 335 In the two years since the book has come out, Brad has made a few more billion dollars. So his new book has the appropriate title of How to Make a Few More Billion Dollars. Brad was kind enough to send me an early copy of the book so I could read it and do an episode on it, so I want to jump right in the introduction. In the introduction, he talks about why he wrote this book. He said, after the first book, I started getting inquiries from people on topics that I didn't cover enough or at all. This sequel provides answers to those questions. And he states why he would be qualified to write such a book. He says, I start companies from scratch, assemble teams capable of extraordinary success, and turn abstract ideas into billions of dollars of tangible value. But this is my favorite thing about Brad, is how much he talks about managing his mind and how over his nearly five-decade career, he has learned the tools to turn an imperfect mind into a mind capable of building billions of dollars of value. And so he says, but I'm far from perfect. Psychologist Albert Ellis nailed it when he said, we're all fallible, fucked up human beings. Well, count me among them. And so in the introduction, there's a series of what I would call like standalone ideas from Brad. I just made a list and I just want to share some of those with you. First is this great description of just the magic of company building. So he says, for me, creating shareholder value isn't just financial. It's about bringing something extraordinary into existence from absolutely nothing. Imagine this one moment, you've got an idea and before you know it, you're looking at 150,000 employees, billions in profit and a soaring stock price on the New York Stock Exchange. It is the ultimate feat of business alchemy. Another standalone idea from the introduction, he says, this is a very crucial thing. You've got to think extraordinarily big from day one. Nobody achieves massive success by thinking small and hoping to become big. And then the next idea is the one that I've personally benefited the most. I've spent a bunch of time with Brad. Not only did I read his first book, I got invited to have breakfast at his house. I've recorded a new conversation for my new show with Brad Jacobs. That was actually shot and filmed at his house. If you haven't seen that, just search my name David Senra and whatever podcast player you're listening to, and you can watch our two-hour conversation. And I've also spent time with Brad since then at a few events. And the biggest change for me was rearranging my, I say inner monologue, into a much more positive mindset. One of my favorite lines in his first book is, so much of success in business comes from keeping your head in a good place. So in this book, this is what he says, and I'll explain how he helped me change the way I think, literally, the way I think, literally. A proper mindset is essential. The ability to rearrange your brain and create that mindset is entirely within your grass. And so Brad has slowly had an influence on me. One time we were at a friend's mutual birthday party in Miami. I was talking to Apollo Ono. Apollo Ono is the most decorated winter Olympian of all time. And Apollo listens to a bunch of episodes of Founders, and he asked me that question. He's like, you know, most of the people that you cover on the podcast, they are extremely driven, but usually that source is because they had a really bad childhood, they had issues with their parents, they didn't want to be poor anymore. There was some kind of negative fuel source that they then channeled into this extreme drive and persistence and focus. And Apollo asks, he's like, have you ever come across anybody where the fuel source is actually positive? And standing, I don't know, like 20 feet away, I go, hey, you see that guy? I go, do you know who that guy is? And I pointed at Brad, and Apollo didn't know who he was. I go, that's Brad Jacobs. He started eight separate billion dollar companies. And he has some of the most positive, maybe the most positive infectious energy of any human I've ever been around. And Brad started out with that. He talks about that in, a little bit in this book, but a lot in his first book as well. That he used to just beat himself up. He used to have this, he used to expect perfection, and we didn't reach perfection. His inner monologue was so negative. And one of the things I learned from talking to Brad and observing Brad is like, over time, it's fine if you start out with a negative fuel source. Most people do. But it is possible to move to a positive or a more generative one. And so over the past few months, it's like, hey, my fuel source isn't what I want it to be now, is the fact that I love my work. I love reading biographies. I like making podcasts. I'm obsessed with making podcasts. Now I like talking to some of the greatest living entrepreneurs. So much so that after some of these conversations I have, I can't even sleep. I don't do any drugs, but I have to imagine this is what it feels like when you take ecstasy. I am completely wired, and so what Brad has really influenced me, and it made me a lot, I would say, just nicer to myself. My inner monologue is a lot nicer now. It's like I moved to a generative source of motivation, where my drive creates more energy, creates more ideas, it creates more momentum the more it is used. Where if you have a negative, or even if you have like a goal base, like say, okay, I didn't want to be poor anymore, and now I made X amount of money, it's possible to deplete that fuel source. And the remarkable thing about observing Brad and what I'm working towards too is like the work itself fuels the drive. And so now with a more positive mindset, you actually motivated, your motivation is increased by building, by solving problems, by learning new things, by making something better. Could be your individual product that you're making better, or your entire company you're making better. And this generative drive builds on itself where the motivation and the drive compounds over time. And so instead of needing like constant validation of some kind of external, like money, praise, status, something like that, the act of creation itself generates its own feedback loop. I learned that from Brad. And again, I'm not perfect. I still, if I make a mistake or if I listen to a past podcast and I didn't like what I did, I can still critique myself and be kind of mean, but it is way more generative. And I'm actually shocked at how fast that changed. So in this book, he's going to talk a lot about his actually, like the way he builds his company, the way he raises money, the way he integrates his acquisitions, how he designs his organizations. But just like the first book, I think some of the most valuable chapters are actually on how he has improved his mind over time. So back to the introduction, he says, there's always something urgent happening when you're trying to build a giant company. There's always problems popping up. He says, I channel that pressure into a relentless drive. One of my favorite stories I've ever heard, and that came to mind when I read this, it comes from Herb Kelleher, who's the founder of Southwest Airlines. It was the most successful airline ever created. I think they were profitable for 40 straight years. And he was asked one time, how do you handle stress? He says, I don't handle the stress, I like it. And so Brad says something very similar here. I'm comfortable with a little bit of anxiety, even fear, when facing a decision that has huge consequences, because I believe that's a healthy trait in our leader. And then another piece of advice, you've got to love what you do. I love being a CEO. I get up early and work seven days a week. If there were eight days in a week, I'd happily work another day. It is a blast. And then the last thing from the introduction, I want to go to chapter four. I'm going to jump around. I really view Brad's books as reference manuals. You can keep the book on your desk. You don't have to read in chronological order if you don't want to. Go to the table of contents, see whatever subject matter pops out at you and what's most important, where you are in your career at that point, and read that chapter. And so the first chapter I want to get into is chapter four, which is raising tons of money. But before we get there, it says a lot of this comes down to striving for clarity and reducing my own bias. And so before we get into chapter four, raising tons of money, I want to tell you about the presenting sponsor of this podcast, and that is Ramp. I've seen Brad Jacobs up close. He is personally involved in every step of the process as he builds these companies. Brad loves details. That is something that Brad has in common with a lot of History's Greatest Founders. They know their business from A to Z and their costs down to the penny. And Ramp makes doing this effortless. Ramp gives you easy to use corporate cards for your entire team, automated expense reporting, bill payments, accounting and cost control. And they do this all on a single platform. Ramp's corporate cards are fully programmable. You can set limits so the spending of your team never gets out of hand. Most companies only find out about excessive spending after the fact. With Ramp, you can stop it before it happens. The Chief Accounting Officer of Notion just said this about Ramp. Ramp is the only vendor that can service all of our employees across the globe in one unified system. They handle multiple currencies seamlessly, integrate with all of our accounting systems, and thanks to their customizable card and policy controls, we're compliant worldwide. Matt Paulson, who is the founder of Merkabee, recently switched to Ramp, and this is what he said about it. Ramp is the best. The amount of money you will save from unwanted renewals and employees who think company credit card equals buy whatever you want will far exceed the best credit card rewards program. Matt told me that Ramp has helped him save $420,000 a month. Take the time and set up a demo of the product, and you will see why many of the world's top founders are running their company on Ramp. Go to ramp.com to learn how they can help your business today. That is ramp.com. Okay, so let's jump into the chapter where Brad outlines all the different ways that he's raised money. He says, I'm a big fan of capital markets. My teams and I have utilized them to fuel our growth strategies for decades. We've raised about $50 billion in total capital to fund M&A and organic growth. We've worked with every investor category, ultra high net worth family offices, private equity funds, sovereign wealth funds, pension plans, university endowments, long-only mutual funds, retail investors, passive ETFs and hedge funds, as well as my own friends and family. There are pros and cons to raising money from each of these investor types. I will lay out how I think about sourcing capital and how to stay aligned with your major investors once they're on board. So I just want to pull out a couple of the different types of investors that he's raised money from and how he thinks about them. Before we get there, he talks about being a massive fan of running public companies. I like running publicly traded companies. Being public makes it easier to build something big and lasting. It gives me deep access to capital markets on non-ownerous terms. No coupons, no covenants and usually no board seats. In a matter of days or even hours, my team and I can raise hundreds of millions or even billions of dollars. There are more advantages to being a public company than just funding. For one thing, it keeps your management team sharp. Every 90 days, the quarterly earnings release is a public report card for all to see. We share our perspectives on the quarter and analysts model our decisions in real time, poking holes in those results. That's fair. Results that repeatedly hit or exceed the mark can earn a higher valuation multiple. So investors naturally want to know what's driving those numbers. Being public is also a free form of marketing. I've had acquisitions come to the table because someone saw our earnings report or read a note from a sell side analyst. Now, this is wild. Brad sent me an early copy of his book. He didn't tell me that he wrote about Founders Podcasts in that book. And so this is what he said, which is a true story, by the way. While most of the investors in QXO are repeat investors for my previous companies, two of our current top 20 shareholders had never heard of me until I was profiled by David Senra on his Founders Podcast, Brad, inadvertently.