Chapter 1: What inspired Brad Jacobs to write 'How to Make a Few MORE Billion Dollars'?
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 success.
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 valuable, fucked up human beings. will 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 Center, 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 grasp.
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Chapter 2: How has Brad Jacobs raised over $50 billion for his companies?
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 point 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-based, 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're 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 a 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.
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Chapter 3: What are Brad's strategies for mastering organizational integration?
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 effort.
One of my favorite stories I've ever heard that came to mind when I read this, it comes from Herb Kelleher, who is a founder of Southwest Airlines, 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 a 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 before I want to go to chapter four, I'm going to jump around. I really view Brad's books as reference manuals as 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 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 R.A.M.P. 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.
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Chapter 4: How does Brad Jacobs maintain a positive mindset in business?
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-onerous 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. 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 Podcast 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 from 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.
There's two people in the audience that didn't know who Brad was when I covered his book the first time, heard the episode, decided to look into this Brad Jacobs character, and have since invested $750 million into Brad's company. My friend John Coogan says that is the greatest podcast endorsement of all time. Brad put me in the book, and that was really cool.
The elevated profile that comes with being a public company is not all sunshine and roses, though. It also requires thick skin, which Brad definitely has. No matter how well a company performs against Outlook, there will be loud doubters in the wings telling the world why they think the stock is overvalued. I'm comfortable with that tradeoff. So then he gives you advice.
Your dilution should be strategic. Trading equity for capital sounds like pure upside until you realize you're selling off chunks of your company. New shares issues dilute the ownership percentage held by existing shareholders. You're essentially trading ownership for fuel. And if you don't think through the math carefully enough, you can end up giving away too much for too little.
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Chapter 5: What lessons does Brad share about the importance of mental clarity?
The good ones are thoughtful, patient, and entrepreneurial. Unlike other institutional investors, family offices are usually not burdened by rigid investment mandates when making decisions. If they believe in a venture, they can move fast. Another advantage of family offices is that they're sometimes run by former operators or investors with real-world know-how about building businesses.
They understand the grind. I have talked to a bunch of founders about this almost without exception. They said they would rather raise money from a fellow entrepreneur's family office than a professional VC fund. Family offices can offer strategic guidance and access to their network.
In some cases, the warm intro into a strategic customer or ideal executive candidate can be more valuable than the capital itself. Then Brad talks about private equity. Each of these he breaks down. You know, you can read them each in a few paragraphs. Obviously, I highly recommend buying the book.
And don't worry if you didn't read the first book, because what's cool about this book, there's like a 30 or 40 page summary of Brad's first book at the end of this book, too. So Brad does not sound like he is a fan of taking money from private equity. He says, I generally avoid taking money from them. However, I've made four exceptions and all four have turned out very well.
In general, though, I would advise against using private equity funds if you have the luxury to do so. As a group, they're entrepreneurial, but can be fair weather friends and their focus on self-interest can favor aggressive decision-making. That said, if you have an early stage company and need to raise a lot of money, private equity firms can be ready check writers.
The next category he talks about is sovereign wealth funds. These funds are some of the best investors on the planet, but they're not easy to land. They're serious and professional investors, and they think in decades, not quarters. They also come with global networks and huge influence. The downside is that they take a long time.
You have to start cementing the relationship brick by brick long before you need the capital. Before they invest, they'll perform 360 degree due diligence, not just on your numbers, but on how you think, how you lead, and whether you're the kind of person they want to partner with. Their backing can unlock opportunities you could never realize on your own. The next category is pension plans.
Pension plans are excellent sources of capital when you're looking for big checks and low drama. They're not after board seats or special terms. What they want are predictable returns over long horizons, which makes them a strong match for business models like mine that deliver value by compounding returns over time. Pension plans are not speedy investors.
Decisions typically have to be passed through consultants and layered approval chains of investment committees, board members and trustees. It's a very methodical risk evaluation process and the money doesn't move until every box is checked. But when they commit, their capital is sticky. They don't freak out during short term market fluctuations.
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Chapter 6: How does Brad Jacobs utilize meditation in his daily routine?
There are two catches. First, most long only funds only invest in large, well-established companies. And second, their investment attention span has come to resemble that of a hedge fund. 30 years ago, long only funds would buy my company stock and hold it for a decade. Today, some might hold it, but they're just as likely to sell it in a few months. That's a long maybe in my estimation.
Nevertheless, you're going to need good relationships with the major long only players because they're probably going to be your second largest source of capital eventually after index funds. And then he talks about retail investors. Retail investors are often overlooked, but they can be a powerful part of your shareholder base once your company is public.
Retail investors have their own advantageous trait. They talk, they post on Reddit, they share on X, and they swap ideas in group chats and forums. If they're excited about a stock, they'll become online crusaders for your company. All that positive exposure can create value because it shapes perceptions about your company and reaches existing and prospective investors, customers, and talent.
And then he gives a cautionary tale on hedge funds. He says, this one I learned the hard way. Hedge funds will tell you they're long-term investors and go on about alignment and conviction. But in my experience, most of them flip the stock as soon as the share price goes up. My team and I put together some pipes to raise money for QXO.
Deals I thought were well-structured as soon as they were permitted to. The hedge funds we let in immediately sold out. In fact, one of them sold the stock the day before it was permitted. Hedge funds aren't built for what my companies do. That's not a criticism. They have a business model and it's not about loyalty or patience. And then he ends the chapter talking about debt.
Issuing debt is a powerful tool for a public company. Unlike equity, it does not dilute existing shareholders because no new shares are created. The interest paid on debt is often tax deductible, making it a very efficient way to raise capital. Also, because debt must be repaid, it forces a company to be disciplined with its finances.
With that said, he says he usually targets a debt leverage ratio of about 1x to 3x EBITDA. I'd rather be slightly under-optimized on leverage and sleep at night than live quarter to quarter hoping nothing implodes. And then he's got two great standalone sentences here. The first one, the best investors don't just write checks. They open doors and sharpen your strategy.
The second one, which is my favorite sentence in the entire book, the most consequential decision you'll make in business and in life is who you surround yourself with. The very last sentence in this chapter is a great summary of Brad's point of view on this. Above all, remember that when someone wires money into your company account, they're trusting you to turn it into substantially more.
You own that expectation. OK, so let's move on to chapter five, which is mastering the integration playbook. He says most acquisitions do not create shareholder value.
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Chapter 7: What are the key frameworks Brad uses for emotional regulation?
There are probably only a few dozen CEOs who are truly knowledgeable about all the ingredients to make an acquisition successful. This is important because if you're not substantially improving the companies you buy, you're just moving capital around. As an industry consolidator, I stake my reputation on my ability to transform separate entities into a cohesive profit machine through integration.
If I focus solely on buying businesses and neglected to integrate them well, my companies would be a shamble of local branches with old branding, tech silos, and teams that don't talk to each other. Operations that are left to linger for months or years under legacy structures limit their profit opportunities, yet this happens all the time.
When we complete an acquisition, the very first step is simple but crucial. Ask questions and listen closely. In every acquisition, we ask what's working well and what could work better. The answers often come from the front lines where employees who have never been asked for their input reveal precisely what's working and what's broken.
That is where we start with respect for the wisdom already within the organization. For most acquirers, integration begins the day a deal officially closes. But for my companies, that's too late. I do something unusual. I negotiate explicitly for unrestricted access to the company from the moment we sign an agreement. immediate access to employees is an essential condition for us.
This is not commonplace in M&A. And so then he talks about how he does this. He says, we hold town halls and team meetings and visit field operations. I conduct face-to-face interviews with the top executives of the entity we're acquiring. So he wants to integrate right away.
He says, regarding the timing of this process, I generally take the bandaid approach and rip it off because I found the pros vastly outweigh the cons. Sure, there could be some kerfuffles when we do an integration quickly, but the sooner we get the operation running on our systems, the better. The same goes for business intelligence and dashboards.
Our dashboards display performance data in a graphical way to erase the barriers between levels of financial and operational sophistication. Everyone gets the same point without big swings in interpretation. And he gives an example from his recent past.
When QXO closed on the Beacon Buildings products deal, we sent out a Zoom town hall invite to everyone with a Beacon email address within minutes of the press release going live. I was happy that 3,600 people, the overwhelming majority of those invited, showed up on three hours notice. Instead of lecturing about ourselves from on high, I gave a brief introduction and moved right into Q&A.
It's essential to give new employees an open mic to share what's on their minds. And we respond just as openly. This starts to create an environment of trust. And so something he'll repeat over and over again is that an acquisition comes with talented employees full of untapped ideas. You should ask them what they would do to make the business better. It's not rocket science.
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Chapter 8: How can entrepreneurs apply Brad's insights to their own businesses?
What are we doing that should be stopped immediately? Where are we over-investing in this business? Where are we under-investing in this business? What are we doing that annoys our customers? What are we doing that delights our customers? Are we prioritizing the products and services that our customers value most? What are the biggest causes of waste or inefficiency in our operations?
Does your compensation structure incentivize you to keep doing better? Are we making decisions fast enough? Are we too bureaucratic? And then these answers to these questions, Brad says, this is when inherited issues usually come to light. We come away with a list of targeted actions that matter to our employees.
These get turned into work streams with named owners who are accountable for the deliverables. I am eager to meet anyone who interacts with a customer, either in sales or support. I ask questions, scribble down notes, and always end by extending an invitation to email me directly. This is well worth my time. Brad is also huge on employee surveys.
He says, quarterly, all employee surveys are one of my absolute favorite tools for running a business. We also sent a version of this survey immediately after we buy a business. It sets a respectful tone and communicates an important message that we want to hear the truth so we can act on it.
And then the important thing about the way you do these employee surveys, all you have to do is just ask three questions. We keep it simple with three questions derived from a longer list. Number one, what's working really well? Number two, what needs fixing? And number three, what's your single best idea to improve the company?
As a result, we end up with a set of clearly defined prioritizations, milestone targets, and end goals. It keeps everyone focused on the thing that moves the needle. And he also talks about how he does these integrations. One of the most important things is he always has a person that is responsible for every single line item. And he calls this a throat to choke.
A single integration can have thousands of specific line items. Each one is assigned a single throat to choke. An owner who is personally accountable for the outcome on a firm completion date. I want to jump to the next chapter, which is called organizational integration.
And so Brad says the first question to answer in organizational design is how is this business we're acquiring going to create value? I will start with the organizational chart. the blueprint for well-run companies. Over the years, I've reviewed thousands of organizational charts, some elegant and efficient, others chaotic.
I found that the org chart is often a good indicator of a company's focus. Get the people part right, and it can become your greatest competitive advantage. Get it wrong, And you'll spend years untangling dysfunction and losing money. And so he goes into designing the optimal organizational chart.
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