Ernie Garcia - Disrupting the Auto Buying Experience - [Founder’s Field Guide, EP. 45]

**Patrick O'Shaughnessy** (0:00)
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Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Founder's Field Guide. Founder's Field Guide is a series of conversations with founders, CEOs and operators building great businesses. I believe we are all builders in our own way and this series is dedicated to stories and lessons from builders of all types.
Founder's Field Guide is part of the Colossus family of podcasts and you can access all of our podcasts, including edited transcripts, show notes and resources to keep learning at joincolossus.com.

**SPEAKER_2** (2:02)
Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.

**Patrick O'Shaughnessy** (2:27)
My guest today is Ernie Garcia, co-founder and CEO of online used car platform, Carvana. Ernie launched Carvana in 2012 And less than a decade later, the business commands a $60 billion valuation while selling a used car every other minute. Our conversation covers a lot of ground. We discussed effective decision-making, what it means to be a long-term thinker and what Ernie sees as the defining features of attractive markets.
We then went deep on Carvana itself, covering the original insight, logistics operations and counter-intuitive decisions Carvana took as they set about building their brand. I think you'll find Ernie's insights and energy infectious. I hope you enjoyed this great conversation with Carvana CEO Ernie Garcia.
So Ernie, I've been toying with where to begin our discussion. And when we talked on the phone last, there was this great idea of comparing sort of this, I think you call it physics envy that investors have, trying to always cram things into formulas. One powerful formula in investing is this concept of seven powers. Like how is your company competitively advantage versus others? And you said this really interesting line, which is that really what's important is the average decision quality inside of a business. And I'd love to start there, like what that concept means to you, average decision quality and how you as a leader think about engendering that into the culture of the business.

**Ernie Garcia** (3:45)
To me, it's not about an investor era. I think it's about a human era. I think all of us love narratives and love tight logic that explains the world around us. And I think that we seek that.
And we seek the simplicity and the comfort that comes with feeling like we understand everything. And just observationally, being inside of a single company and then having conversations with investors and seeing where sometimes my view diverges a bit from theirs. I just think oftentimes spreadsheet versus reality is another way to collapse it. And I think that the truth is going from idea to something successful that works at scale is just a really long path with a lot of things you have to figure out along the way. There's a lot of hard times and there's just so many lessons that you've learned. There's so many decisions that you make and so many of them are right. And so many of them are wrong. And I just think that in my experience to me, if I had to pick a direction that I think many people from the outside make in terms of their errors, I just think that they try to oversimplify and that really like accompanies thousands and thousands of decisions that get made over time. And the sum of those decisions gets you to the spot where you are.