Table of Contents
Discover the entrepreneurial wisdom from Brad Jacobs, who has built eight billion-dollar companies through 500+ acquisitions. Learn the seven key lessons from a personal breakfast meeting, including his "go to school on everybody" philosophy, radical problem-solving mindset, and the power of overpaying for talent to create lasting competitive advantages.
Key Takeaways
- "Go to school on everybody" - Successful entrepreneurs are described as "sponges" who never stop learning from everyone they encounter, regardless of status or industry
- Problems are assets, not obstacles - The most successful entrepreneurs get excited about problems because each one represents an opportunity to create massive value
- People follow power law distribution - The dynamic range between average and exceptional talent can be 50-100x, making it nearly impossible to overpay for top performers
- Getting the big trend right matters more than perfect execution - You can mess up many things and still succeed if you identify and ride major technological or societal shifts
- Radical acceptance enables better decisions - When facing losses or setbacks, see the world as it is, not as you wish it to be, and move forward decisively
- Authenticity beats perfection - Don't hide your eccentricities; embrace them because people respond more to genuine personality than polished facades
- Relationships and reputation compound over decades - Every interaction becomes part of your "file" that others keep, creating opportunities that multiply over time
Go to School on Everybody: The Relentless Pursuit of Knowledge
The first thing that struck me when I arrived at Brad Jacobs's house was what he was doing at the breakfast table. Next to him was a stack of papers about 500 pages high—Brad had printed out my entire personal website. For years, I've been distilling my book notes into 10 concise sentences per book and sharing them on my site. Brad had printed everything and was methodically going through the lessons from hundreds of books.
This absolutely embodies what I call "going to school on everybody"—a trait shared by virtually every great entrepreneur I've studied. The phrase comes from a biography of Jeff Bezos, where someone who knew him well said, "He went to school on everybody. I don't think there was anybody Jeff knew that he didn't walk away from with whatever lessons he could."
Brad exemplifies this mindset. Throughout our entire breakfast conversation, he kept a notebook and pen beside him, jotting down notes whenever he heard something interesting or valuable. This wasn't performative—it was instinctive behavior from someone who has spent over 40 years treating every interaction as a learning opportunity.
The pattern appears everywhere among exceptional entrepreneurs. When my friend recently attended a small conference with Mitch Rales, co-founder of Danaher (a $170 billion company), he was blown away by how focused Mitch was on taking notes during every presentation. My friend wondered why someone so successful was still taking notes. The answer illustrates Bill Walsh's principle: "Champions behave like champions before they are champions."
Mitch Rales didn't build a $170 billion company and then start taking notes. He was taking notes long before he was the most successful person in the room. This behavior created his success, not the other way around. The same is true for Brad Jacobs, who has been obsessive about learning since starting his first company at 23.
Brad's approach to industry research demonstrates this learning obsession at scale. Before entering any new sector, he conducts what can only be described as intelligence gathering worthy of a government agency. He reads everything: journals, periodicals, newspapers, trade publications, employee reviews on recruiting sites, company websites, and social media of major players and up-and-comers.
But he doesn't stop at reading. He attends industry conferences, interviews experts who "live and breathe" the industry, seeks out investment bankers active in the sector, talks to venture capital firms tracking big trends, taps buy-side institutions with battle scars from investing in the industry, consults with vendors who understand market dynamics, reaches out to shareholder activists for insights, and contacts journalists for their skeptical perspectives.
This comprehensive approach reflects David Ogilvy's maxim: "The good ones know more." In his 1965 book "Confessions of an Advertising Man," Ogilvy advised: "Set yourself to becoming the best informed person in the agency on the account to which you are assigned. If, for example, it's a gasoline account, read books on oil geology and petroleum production. Read trade journals. Spend Saturday mornings in service stations talking to motorists. Visit refineries and research laboratories. At the end of your first year, you will know more about the oil business than your boss, and you'll be ready to succeed him."
The principle remains as powerful today as it was 60 years ago. Collecting more information and putting forth more effort is still a competitive advantage. This isn't about intelligence or natural talent—it's about effort and enthusiasm. Anyone can choose to go to school on everybody, but few people actually do it consistently over decades.
Problems Are Assets: The Counterintuitive Path to Wealth
One of the most transformative lessons Brad learned came from his mentor Ludwig Jesselson, who ran the largest commodity trading company in the world. When Brad was in his 20s, burdened with business problems, he unloaded his frustrations during lunch with Jesselson. The older man's response changed Brad's entire approach to entrepreneurship.
"Look Brad," Jesselson said, "if you want to make money in the business world, you need to get used to problems, because that's what business is. It's actually about finding problems, embracing and even enjoying them, because each problem is an opportunity to remove an obstacle and get closer to success."
This radical reframing—that problems are assets, not obstacles—appears throughout the stories of exceptional entrepreneurs. Danny Meyer, the famous restaurateur, had a similar revelation when his mentor Stanley Marcus told him: "The road to success is paved with mistakes well handled. The definition of business is problems. Success lies not in the elimination of problems, but in the art of creative, profitable problem solving."
Jeff Bezos embodies this same mindset. In "The Everything Store," an employee describes bringing Bezos bad news about their business, and "for some reason he got excited." This wasn't sadism—it was recognition that problems represent opportunities to create competitive advantages. Bezos even wrote in a shareholder letter that he finds waste "incredibly energizing" because it represents "potential years and years of variable and fixed productivity gains."
The pattern extends beyond individual psychology to become a systematic approach to business building. Henry Kaiser, the legendary World War II-era entrepreneur, captured it perfectly: "Problems are just opportunities in work clothes." When you train yourself to see problems this way, you start running toward challenges that others avoid.
This explains why Brad could take a $500 million loss on road rental companies and treat it as valuable learning rather than devastating failure. When Congress allocated $600 billion for infrastructure spending that never materialized, Brad practiced what he calls "radical acceptance"—seeing the world as it is, not as you wish it to be. Rather than compound the mistake by holding onto hope, he sold the companies and moved forward.
The most successful entrepreneurs get genuinely excited when they discover problems because they understand that big problems create opportunities for big solutions. As Brad puts it: "If your initial reaction to a major setback is overwhelming frustration, that's counterproductive. Instead do this: Great! This is an opportunity for me to create a lot of value if I can figure out how to solve this problem."
This mindset becomes self-reinforcing. The more problems you solve, the more confident you become in your ability to solve future problems. Eventually, you start seeking out bigger challenges because you know they lead to bigger opportunities. The entrepreneurs who build billion-dollar companies aren't those who avoid problems—they're the ones who actively hunt for the biggest, most valuable problems they can find.
The Power Law of Human Performance
Brad Jacobs understands something that most leaders miss: talent doesn't follow a normal distribution. It follows a power law where the best performers aren't just slightly better than average—they're exponentially better. This insight shapes every hiring decision he makes and explains why he's willing to "overpay" for exceptional people.
Steve Jobs articulated this principle perfectly in an interview: "I think I've consistently figured out who the really smart people were to hang around with. You must find extraordinary people. The key observation is that in most things in life, the dynamic range between average quality and best quality is at most 2:1. But in the field that I was interested in, I noticed that the dynamic range between what an average person could accomplish and what the best person could accomplish was 50 or 100 to 1."
This dramatic difference in performance capability explains why Brad makes talent acquisition his highest priority. "The most important thing a CEO does is recruit superlative people," he writes. "Make sure your hiring choices are as perfect as they can be, because there are few mistakes costlier than hiring the wrong person."
His approach to compensation reflects this understanding. "I've 'overpaid' almost every direct report I've ever had to ensure that I had top-tier people in place," Brad explains. The quotation marks around "overpaid" are intentional—he doesn't actually believe you can overpay for genuine talent because the value they create far exceeds their cost.
The math is compelling. If an A-player can accomplish 50-100 times what an average person can accomplish, paying them even 5-10 times more represents extraordinary value. Brad illustrates this with a simple calculation: "It makes no financial sense to skimp on salary and incentives to save $100,000 a year when hiring the second-best candidate may cost you millions of dollars in lost profit."
Apple's acquisition of NeXT provides the ultimate example. Apple paid approximately $500 million for NeXT, but the real value was rehiring Steve Jobs. Given what Jobs accomplished during his second tenure—creating the iPod, iPhone, iPad, and transforming Apple into the world's most valuable company—that $500 million represents one of the greatest bargains in business history.
Brad has developed a simple thought experiment to categorize team members: "I imagine this person coming into my office and quitting without warning. Just by imagining this scenario, I can immediately tell from my own inner response whether this person is an A, B, or C player."
If his first thought is "I was going to fire this person sooner or later, so it's no big deal," that's a C player who should be removed immediately. If his reaction is "I don't like this, but I can live with it," that's a B player who's acceptable but not exceptional. But if his reaction is panic—"We're so screwed, how did we get into this situation, there's no way we're going to find somebody as fantastic as this person"—that's an A player who should be retained at almost any cost.
This framework extends beyond compensation to organizational structure. Brad keeps teams "slightly understaffed" because he's learned that "slightly understaffed teams are more focused and spend less time doing redundant busy work." When you have exceptional people, you don't need layers of management and bureaucracy—you need clear accountability and the freedom to execute.
The power law principle also applies to relationships and networking. Brad spends time with exceptional people not just because they're more capable, but because they attract other exceptional people. Quality compounds in human networks just as it does in business performance.
Getting the Big Trend Right
One of the most valuable pieces of advice Brad received from his mentor Ludwig Jesselson was that "you can mess up a lot of things in business and still do well as long as you get the big trend right." This insight has guided every company Brad has built over four decades.
Marc Andreessen explored this concept in a famous blog post analyzing what matters most for startup success: team, product, or market. His conclusion: "Market is the most important factor in a startup's success or failure. In a great market—a market with lots of real potential customers—the market pulls product out of the startup. Conversely, in a terrible market, you can have the best product in the world and an absolutely killer team, and it doesn't matter—you're going to fail."
Billy Durant, founder of General Motors, provides a perfect example of this principle. Before founding GM, Durant was one of the most successful manufacturers of horse-drawn carriages in America. He had the best product and the best team in that industry. But when the automobile trend emerged, none of that mattered. As Andreessen wrote, "In a terrible market, you can have the best product in the world and an absolutely killer team, and it doesn't matter—you're going to fail."
Durant eventually recognized the trend and pivoted to automobiles, building General Motors into one of the world's largest companies. But the lesson is clear: trends matter more than talent when it comes to fundamental business success.
Brad has identified major trends in every industry he's entered. In oil brokerage during the 1970s, he recognized that the lack of timely information was creating massive inefficiencies. While competitors relied on newsletters that arrived by mail, Brad built a crude version of the internet, allowing his team to share pricing data globally in hours instead of days.
In waste management during the 1980s, he identified two converging trends: landfill capacity was becoming scarce due to regulations, and the industry was ripe for consolidation. Most importantly, he saw that mom-and-pop operators were running routes inefficiently. By using technology to optimize truck routes, he could accomplish the same work with 20 trucks in 3 days that competitors needed 50 trucks and 5 days to complete.
In equipment rental, he spotted the trend toward technology adoption and made a brilliant strategic move: he bought the software company that most major players in the industry were using. This gave him not just the best platform for managing equipment, but access to aggregated, anonymized data on macro trends across the entire industry. As he explains: "We could now proactively adjust our pricing and asset management while the rest of the industry was being reactive."
The technology trend has been central to every business Brad has built. As he puts it: "If you want to make a lot of money in almost any industry, you have to plan to heavily invest in tech." This isn't a new insight—Andrew Carnegie was making the same point in the 1800s when building Carnegie Steel, investing heavily in new technologies while competitors clung to old methods.
Peter Thiel captures this perfectly in "Zero to One": "Properly understood, any new and better way of doing things is technology." Every company today is a technology company, whether they recognize it or not. The entrepreneurs who understand this and invest accordingly create sustainable competitive advantages over those who resist technological change.
Brad's approach is systematic: identify the major trends that could threaten or accelerate your business, then invest heavily in technology to capitalize on those trends. This combination of trend analysis and technological investment has enabled him to build eight separate billion-dollar companies across multiple industries.
Radical Acceptance and Clear Decision-Making
When Brad Jacobs lost $500 million on road rental companies, his response demonstrated what he calls "radical acceptance"—a principle that has enabled him to make clear decisions throughout his career, even in the face of devastating setbacks.
The loss occurred when Congress passed the Transportation Equity Act for the 21st Century, which was supposed to allocate $600 billion to rebuild America's infrastructure. Brad anticipated massive demand for road rental equipment—barricades, cones, striping equipment—and began acquiring companies in that sector. But only about a third of the allocated funding was actually spent, and it was disbursed slowly over time rather than in the large projects Brad had expected.
His response was immediate and decisive: "There was no point in compounding the mistake. We ended up selling those road rental companies at about a half-billion-dollar loss because it was the best way forward under those circumstances."
This demonstrates one of his core maxims: "See the world for what it is, not what you wish it to be." Radical acceptance means acknowledging reality without letting emotions or wishful thinking cloud your judgment. As Brad explains: "Radical acceptance quiets the noise created by yesterday's decisions and today's wishful thinking."
This mindset enabled one of Brad's most profitable decisions. In 2018, a short-seller published a report attacking XO Logistics, causing the stock to fall 26% in a single day. While most CEOs would focus on defending against the attack, Brad saw opportunity. "The short-seller crisis had made our stock extremely cheap, and instead of fixating on that as bad, we focused on achieving a good outcome."
When Brad proposed buying back $2 billion worth of stock, his advisors were horrified. They told him it was too high a percentage of the market cap and that no company had ever done something like that before. Brad's response perfectly illustrates his first-principles thinking: "Just because we were the first company to buy back such a high percentage of our stock in a similar situation didn't mean it was a bad idea."
The result vindicated his judgment completely. Those $2 billion worth of shares they bought back ended up being worth $6 billion a few years later, generating a $4 billion profit on that single transaction.
This ability to see opportunities in apparent disasters reflects a deeper pattern in Brad's thinking. When United Rentals was supposed to be sold to private equity firm Cerberus for $7 billion in 2007, the financial crisis caused Cerberus to default on the deal. Brad's stock plunged 31% in 24 hours and continued falling to $5 per share.
Rather than panic, Brad collected a $100 million breakup fee and decided not to seek another buyer. Today, United Rentals has a market cap of $38 billion. As Brad notes: "The deals I've avoided have contributed more to my success than the deals I've done."
This perspective requires emotional discipline. As Brad writes: "Inevitably, the process of running a business will test your bias towards hope or fear." When anxiety strikes, he asks himself two questions: "What's the worst that can happen and how would I cope with it?" and "If a friend had a similar worry, how would I advise them to handle it?"
The second question is particularly powerful because it creates psychological distance from the problem. When you treat your own challenges as if they belonged to someone else, you can think more objectively about positive outcomes and practical solutions.
Radical acceptance doesn't mean passivity—it means seeing reality clearly so you can respond effectively. By accepting what has happened without judgment, Brad can focus all his energy on what to do next rather than wasting time on regret or denial.
Authenticity Over Perfection
One of the most surprising aspects of my breakfast with Brad Jacobs was how quickly the conversation moved beyond business into personal territory. Within the first 30 minutes, we were discussing meditation, visualization, and childhood experiences. When my friend Patrick mentioned having difficulty with visualization exercises, Brad immediately offered to help and led him through a guided meditation right there at the breakfast table.
This authenticity—being genuinely himself rather than performing a corporate persona—is something Brad shares with other legendary entrepreneurs I've studied. When I had dinner with Charlie Munger or lunch with Sam Zell, they were exactly the same in person as they appeared in public. They didn't hide their eccentricities; they embraced them, and that authenticity was part of what created their cult-like followings.
Brad makes this point explicitly in his book when he talks about building teams: "My team and I spend a lot of time together, so it's a big deal that we like one another. An organization is like a party—you only want to invite people who bring the vibe up." He looks for what he calls "the love vibe" in potential hires because organizational culture matters enormously when you're trying to accomplish big things.
The conversation with Brad meandered through all kinds of unexpected directions. We talked about our childhoods, the idea that "you can always understand the son by the story of his father," marriage advice, and what to expect when children leave for college. I probably learned as much about Brad from these personal discussions as from the business content.
This approach runs counter to most executive behavior, where leaders try to project perfection and maintain carefully crafted professional images. But Brad understands something important: people respond more strongly to authenticity than to perfection. There are no perfect human beings, and pretending otherwise creates distance rather than connection.
The principle extends to how Brad approaches his own perceived weaknesses or unusual interests. The first chapter of his book is titled "How to Rearrange Your Brain" and focuses extensively on meditation, thought experiments, and mental management. Many business leaders would consider this too "soft" or unconventional to include in a business book, but Brad leads with it because it's central to how he actually operates.
When visitors come to Brad's house, he often incorporates dancing into the experience—something that might seem eccentric for a billionaire CEO. But as he told me about one young entrepreneur he mentors: "I love Jake Sloan. He's a young Brad Jacobs." The implication is that he sees himself clearly, eccentricities and all, and looks for similar authenticity in others.
This authenticity also appears in how Brad discusses failure and mistakes. Rather than presenting himself as infallible, he opens his book by saying: "During my 44 years as a CEO and serial entrepreneur, I've made every possible mistake in business." He then details specific failures, including the $500 million loss on road rental companies and various hiring and strategic mistakes.
This willingness to acknowledge imperfection creates trust and relatability. When someone has built eight billion-dollar companies and is still willing to discuss their failures openly, it makes their advice more credible, not less. It demonstrates the kind of intellectual honesty that enables continuous learning and improvement.
The lesson extends beyond personal branding to organizational culture. Teams perform better when leaders create environments where people can be authentic rather than forcing everyone into artificial professional personas. When people feel safe being themselves, they're more likely to share honest feedback, admit mistakes quickly, and contribute their best thinking.
As Brad puts it: "Don't hide your eccentricities—embrace them." The goal isn't to be perfectly polished; it's to be genuinely effective while remaining recognizably human.
Relationships Run the World
Warren Buffett once testified before Congress with advice that perfectly captures Brad Jacobs's approach to business relationships: "Lose money for the firm and I will be understanding. Lose a shred of reputation for the firm and I will be ruthless." This principle—that reputation takes decades to build and minutes to destroy—has guided Brad throughout his 40-year career.
The concept of reputation as compound interest appears throughout the biographies of successful entrepreneurs. David Ogilvy's biographer wrote about "the David file"—almost everyone who worked at the agency kept a collection of memorable David Ogilvy stories. These weren't formal evaluations; they were the accumulated impressions that shaped how people thought about him and whether they wanted to work with him again.
Brad has developed his own version of this phenomenon. Since I made the podcast episode about his book, I've been on the receiving end of numerous "Brad stories" from people who have interacted with him over the decades. The remarkable thing is that considering his four-decade track record and hundreds of business relationships, every single story I've heard has been positive. Many are hilarious, all are memorable, and they collectively create a reputation that opens doors and creates opportunities.
This reputation compounds over time. Because of his track record and relationships, Brad can now pursue opportunities that would have been impossible or inaccessible when he was starting out as a 23-year-old entrepreneur. Investors know him, industry leaders take his calls, and potential partners seek him out because of the trust he's built over decades.
The principle also applies to how Brad approaches mentorship and helping younger entrepreneurs. Just as Ludwig Jesselson took an interest in young Brad Jacobs and shared business wisdom that Brad still uses today, Brad now looks for opportunities to help the next generation. He specifically looks for people he describes as "young Brad Jacobs"—entrepreneurs with similar drive and potential.
This creates a virtuous cycle. Andrew Preston, founder of United Fruit, recognized this when he met Sam Zemurray in 1903. As the biographer wrote: "The titan who began the trade shaking hands with the nobody who would perfect it." Preston saw in Zemurray a younger version of himself and invested accordingly. Similarly, Brad seeks out younger entrepreneurs and provides guidance, creating relationships that benefit both parties over time.
The long-term view is crucial here. Brad understands that every interaction contributes to his reputation and relationship network. He never knows which conversation might lead to a valuable partnership, investment opportunity, or strategic insight years later. This understanding shapes how he treats everyone from fellow CEOs to frontline employees.
Warren Buffett captured this beautifully: "It takes 20 years to build a reputation and 5 minutes to ruin it. If you think about that, you will do things differently." This isn't just about avoiding mistakes; it's about recognizing that relationships and reputation are among your most valuable assets.
The practical application is straightforward: treat every interaction as an investment in your long-term reputation. Be helpful when you can, honest when you must, and remember that people have long memories for both positive and negative experiences. As one of my favorite maxims states: "Opportunity handled well leads to more opportunity."
In Brad's case, this philosophy has created a network of relationships that spans multiple industries and geographies. When he identifies a new business opportunity, he can quickly assemble teams, secure funding, and establish partnerships because people know him and trust his judgment. This relationship capital, built over decades, has become one of his most valuable competitive advantages.
Selected Quotes and Insights
"Problems are an asset, not something to avoid but something to run towards. Big ambitions often beget even bigger problems. If your initial reaction to a major setback is overwhelming frustration, that's counterproductive. Instead do this: Great! This is an opportunity for me to create a lot of value if I can figure out how to solve this problem."
This radical reframing of problems as opportunities separates exceptional entrepreneurs from everyone else. While most people avoid challenges, successful entrepreneurs actively seek them out because they understand that big problems create opportunities for big solutions and massive value creation.
"An empty seat is less damaging than a poor fit. Make your hiring choices as perfect as they can be because there are few mistakes costlier than hiring the wrong person."
This insight captures the power law nature of human performance. Given that top performers can be 50-100 times more effective than average ones, taking time to find exceptional people is always worth the wait. The cost of a wrong hire far exceeds the temporary cost of an unfilled position.
"You can mess up a lot of things in business and still do well as long as you get the big trend right."
This wisdom from Brad's mentor Ludwig Jesselson emphasizes the importance of macro thinking over perfect execution. Markets matter more than individual capabilities—being in the right place at the right time with reasonable execution beats perfect execution in a declining market.
Conclusion
My breakfast with Brad Jacobs revealed that building multiple billion-dollar companies isn't about possessing superhuman abilities—it's about developing specific mental models and behavioral patterns that compound over time. Brad's approach centers on relentless learning from everyone, treating problems as valuable assets, understanding the power law nature of human performance, identifying and riding major trends, accepting reality without emotional distortion, embracing authenticity over perfection, and building relationships that compound over decades. These principles, applied consistently over a 40-year career, have enabled him to create tens of billions of dollars in value while maintaining genuine enthusiasm for the entrepreneurial process. The most striking aspect of our conversation was Brad's energy and optimism at 68—he has no plans to retire or slow down because he genuinely loves the process of building companies and solving problems.
Practical Implications
- Treat every interaction as a learning opportunity and maintain a "sponge-like" approach to absorbing knowledge from everyone you encounter
- Reframe problems as valuable assets and train yourself to get excited about challenges rather than avoiding them
- Invest heavily in finding and retaining exceptional talent, recognizing that top performers justify almost any compensation level
- Focus on identifying major technological and societal trends rather than perfecting execution in declining markets
- Practice radical acceptance when facing setbacks—see reality as it is, not as you wish it to be, and make decisions accordingly
- Embrace your authentic personality and eccentricities rather than trying to project artificial perfection
- Build long-term relationships and protect your reputation as compound assets that create future opportunities
- Systematically research industries before entering them by talking to experts, reading extensively, and gathering multiple perspectives
- Maintain slightly understaffed teams of exceptional people rather than larger teams of average performers
- Ask yourself two key questions regularly: "What's your single best idea to improve our company?" and "What's the stupidest thing we're doing as a company?"
