Shaan Puri entrepreneur frameworks | My First Millions

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

Key Takeaways

  • 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

Intro

  • 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 

Bradley Jacobs: the Man who Built 5 Billion-dollar Companies

  • 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

Dan Gilbert, The Capitalist Batman

  • 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

Talking to Warren Buffet

  • 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

The Double-Edged Sword of Publicity

  • 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?
  • In a similar way, being a billionaire involves lots of pressure and responsibility

Additional Notes

  • 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
My First Million : ,
Notes By Giorgio Parlato

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