April 14, 2021

How One Billionaire Started 5, Billion Dollar Companies, Dan Gilbert’s Empire & Talking With Warren Buffett (#169) | My First Million Podcast with Sam Parr and Andrew Wilkinson

Check out the My First Million Podcast Page and episode notes

The strategy of Bradley Jacobs: the Man who Built 5 Billion-dollar Companies
- Select industries that are highly fragmented and have many profitable small businesses that lack capital to grow further
- Buy small businesses and bring the capital to grow them
  - Treating well the employees of acquired companies is essential to not make them leave
- Hire hungry salespeople with strong incentives programs
- Bradley’s strategies are outlined in SEC filings and Q&A sessions with potential investors
Dan Gilbert, the capitalist Batman
- He owns the Cleveland Cavaliers, other sports franchises, and Rock Ventures, an investment firm with a varied portfolio of companies
- He invests a lot in revitalizing Detroit
- Dan takes big risks investing in ideas with the potential to improve the world
“What’s the point of making a bunch of money if you’re not gonna try to make cool stuff with it” Andrew Wilkinson

Hosts: Sam Parr (@theSamParr) and Andrew Wilkinson (@awilkinson)
In this chat, Andrew and Sam discuss the stories of billionaire entrepreneurs Bradley Jacobs and Dan Gilbert

When Bradley Jacobs was 23 he started Amerex Oil Associates, an oil brokerage firm
- After only 4 years, the company was brokering $4.7 billion of oil
- After a few years, he sold that business for $1 billion
A few months later, he started an oil trading company, which was later sold again for over $1 billion
His next venture was a waste management company, United Waste Systems
- It became the fifth largest solid waste business in the US
- His strategy was to buy landfills and trucking companies in small markets, scale them and optimize them
- 8 months after starting it, he took the company public and later sold his shares for $2.5 billion
After only a month, he started United Rentals
- After only 5 years, the company grew to $4 billion in revenues
After a few years, he started XPO Logistics, a supply-chain company
Bradley Jacobs’ strategy
- Select industries that are highly fragmented and have many profitable small businesses that lack capital to grow further
- Buy small businesses and bring the capital to grow them
  - Treating well the employees of acquired companies is essential to not make them leave
- Hire hungry salespeople with strong incentives programs
- Bradley’s strategies are outlined in SEC filings and Q&A sessions with potential investors
For each new business, Brad’s raised a lot of money
- That doesn’t mean it’s always a good strategy
- We only tend to hear the stories of people who become successful

2 years ago Dan Gilbert was worth $6-7 billion and today he’s worth $57 billion
“Overnight success thirty years in the making” Dan Gilbert
- He started with nothing and at 23 he started RockFinancial.com
- In 2000 Intuit acquired RocketFinancial for $90M
  - Dan later bought it back for $20M as Quicken Loans
  - Rocket Companies, the parent company of Quicken Loans recently went public and now has a market cap of $44B
Today he owns the Cleveland Cavaliers, other sports franchises, and Rock Ventures, an investment firm with a varied portfolio of companies
Dan focuses massively on culture
- He still personally onboards every single employee
Barbell strategy
- Dan owns a conservative company bringing a steady cash flow
- He also makes extremely risky bets
“He’s like a capitalist Batman” Andrew Wilkinson
- He invests a lot in revitalizing Detroit
  - Dan owns around 20% of Downtown Detroit
  - He recently announced he will pay $300M of property taxes for Detroit residents
- Dan takes big risks investing in ideas with the potential to improve the world
- “What’s the point of making a bunch of money if you’re not gonna try to make cool stuff with it” Andrew Wilkinson
- “Anyone who dies with money in the bank is a failure” Dan Gilbert

As Andrew wanted to learn more about philanthropy, a friend of his introduced him to Warren Buffet
- Warren Buffet’s secretary instructed Andrew to “just call him”
- Andrew spoke to Warren Buffet for 1 hour and a half
Sometimes there’s a fear to “meet your heroes” because they will let you down
- Warren Buffet was exactly as Andrew expected him to be

Is it worth having a public profile?
- Andrew wrote a viral tweet about how he lost $10M on a company he started
- Despite the vulnerable story, he was attacked by many people
Having a public profile often involves negative emotions
- The bigger your presence the more stuff you’ll have to deal with
- Andrew knows of large Twitter accounts often receiving death threats
Could you still have a public profile without sharing too much personal information?
- Balaji predicts that anonymous public profiles will be the norm
- Check out the notes from his appearance on the Tim Ferris Show where he discusses anonymity in more depth
In a similar way, being a billionaire involves lots of pressure and responsibility

As a manager, if you solve people’s problems all the time, they’ll keep asking you
- If you give them a few hours, they might just figure out a solution
- You can train people such that you don’t respond unless it’s an emergency

billionaire, entrepreneurship
Notes By Giorgio Parlato