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This is my book summary of How to Make a Few Billion Dollars by Brad Jacobs by Jeff Ryan. It includes my favorite quotes, excerpts, stories, notes, and ideas from the book.

During his more than four decades as a CEO and serial entrepreneur, Brad Jacobs has created seven flagship companies across different industries, delivering tens of billions of dollars of value to shareholders. In How to Make a Few Billion Dollars, Jacobs defines the mindset that drives his remarkable success in corporate America―and distills a lifetime of business brilliance into a tactical road map.

From provocative recommendations for “rearranging your brain”―an essential prerequisite to accomplishing enormous goals―to practical advice for dealing with colleagues, Jacobs will have you rethinking what it means to win big. He explains why it’s critical to spot key trends and capitalize on them, including the biggest trend of all―the rapid evolution of technology relative to human development. And, he shares his techniques for:

• turning a healthy fear of failure to your advantage,
• achieving lots of high-quality M&A without imploding,
• building an outrageously talented team,
• catalyzing electric meetings, and
• transforming a company into a super-organism that kills the competition

How to Make a Few Billion Dollars is an inside look at how this entrepreneurial titan leads with humility, compassion, and accountability, while running hard toward the American Dream. If your personal dream is to create wealth through free markets or to triumph in sports, the arts, politics, philanthropy, or any other part of your life, this book will help you make that a reality.

Sections of this book summary:

• Introduction
• My Favorite Quotes from the Book
• Quotes from Brad Jacobs
• History of Technology Timeline
• Who is Brad Jacobs?
• More Books Like This‍
• Buy the Book

Introduction

During my 44 years as a career CEO and serial entrepreneur, I think I've made every possible mistake in business. I've overpaid for acquisitions and botched integrations. I've run operations for cash when I should have invested for growth. I've delegated tasks I should have done myself. Sometimes I've hired the wrong people, or made strategic bets that didn't pay off.

And yet, my teams and I have managed to create tens of billions of dollars of value for our shareholders. This book is about what I've learned from my blunders, and how you can replicate our successes.

In corporate America, I'm what's called a moneymaker. I've started five companies from scratch—seven if you include two spin-offs—and turned them all into billion-dollar or multibillion-dollar enterprises. My teams and I have completed approximately 500 acquisitions and opened more than 250 greenfield locations. In total, these ventures have created hundreds of thousands of jobs and raised about $30 billion in outside capital.

These experiences have allowed me to share thought experiments that can help you learn to think differently—an essential prerequisite to accomplishing big things. I also share how I spot big trends and capitalize on them through M&A, and I give you my thoughts on what I consider to be the biggest trend of all: the rapid evolution of technology and what it could mean for humankind. I lay out my approach for finding superhuman talent, "overpaying" them, and creating a love-vibe culture that nourishes them. And I confess my deep-seated aversion to boring meetings and share the techniques I use to make them electric.

This book is a guide for anyone who wants to achieve wealth creation through free markets or pursue their personal version of the American Dream. If you have a burning passion to make enormous amounts of money in business, or want to turbocharge your chances of success in sports, the arts, politics, philanthropy, or any other part of your life, read on.

My Favorite Quotes from the Book

“Problems are an asset—not something to avoid but something to run toward.”

“When I notice I’m feeling anxious about something, I ask myself a basic CBT question: “What’s the worst that can happen, and how would I cope with that?” Or, “If a friend had a similar worry, how would I advise them to handle it?” By putting distance between myself personally and the source of the anxiety, I can think more objectively about positive outcomes.”

“Look, Brad, 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.”

“Problems are an asset—not something to avoid but something to run toward. Big ambitions often beget even bigger problems. If your initial reaction to a major setback is overwhelming frustration, that’s understandable, but it’s also counterproductive. Once you’re over that moment, pivot toward success: “Great! This is an opportunity for me to create a lot of value. If I can just figure out how to solve this problem, I’ll be much closer to my goal.”

“A fellow CEO laid this out for me graphically once when we were talking about M&A deals. “Think of M&A as having four quadrants defined by size and risk,” he said. “Big, low-risk deals are the ones everyone wants, but they don’t exist. Small, low-risk deals do exist, but you can’t make much money from them because of their size. Small, hairy deals are the worst quadrant, because the reward is limited and the odds are stacked against you, so why bother? The bingo quadrant is the big, hairy deals. If you can find a big, hairy deal with solvable problems, that’s where the real money is.”

“Be a futurist and figure out the bullish and bearish trends driving your industry. If you get the major trends right, you can make mistakes and still succeed.”

“One of the first things I look for in an industry is scalability. I want to be able to envision how I’ll take a business from a few million dollars to tens of billions of dollars. What will be the path to do that, and how fast can we move along that path? Is the industry growing much faster than GDP so that we’ll probably generate top-line growth each year just by showing up and can build from there? What’s the base price/volume combination we need to be profitable, and how realistic is it to significantly increase our profit margin over time? What could prevent us from doing that?”

“Structurally, is it an industry where companies have advantages of size and economies of scale? Are there ways to grow the business organically or through M&A? What multiples will I likely have to pay for companies I acquire, and is that number a large enough discount from the multiple I’d expect my company to trade at? This is important because the arbitrage between our cost of capital and what multiple we’re able to buy companies at is the biggest value-creation lever in a roll-up. Improving the actual profitability of the business is the second-biggest lever.”

Quotes from Brad Jacobs

So much of success in business comes from keeping your head in a good place.

I don't take it for granted that l'm going to be successful. Unexpected stuff can happen at any time. A healthy fear of failure has kept me sharp.

Life can be uncomfortable, but you can accomplish a lot if you can figure out how to reframe the uncomfortable things in ways that allow you to utilize them.

Embrace everything that comes your way, the good and especially the bad. And don't just accept adversity—figure out how to capitalize on it.

Being dialectical means looking at something from different perspectives and interpreting it in multiple ways that are all valid.

If I had tried to do everything I wanted to, I never would have accomplished anything big. Narrow your focus to your most important dreams and tune out everything else.

Be a futurist and figure out the bullish and bearish trends driving your industry. If you get the major trends right, you can make mistakes and still succeed.

Our species is moving along a new evolutionary path toward using technology to augment our senses and outsource our memory and cognitive functions.

I like big industries because even a small chunk of a huge, growing industry is still big.

Scalability is one of the first things I study in a business plan.

The easiest way I know to create tremendous shareholder value is to buy businesses at profit multiples lower than the multiple our stock trades at, and then significantly improve those businesses.

Bigger is better in business most of the time, but not always. Understand the pros and cons of size. Some service industries are better off local.

I wasted a lot of time early in my M&A career because I thought I could pay less by playing hard to get. I learned it's better to let sellers know how excited I am to do a deal and the price and terms that work for me.

It's better to be slightly understaffed, but not badly understaffed. A team that's appropriately lean has a more concentrated focus and gets more done.

An organization is like a party. You only want to invite people who bring the vibe up.

If you hire a B player, they'll probably hire C players. Then you'll have C players led by B players. Yikes.

Give the person you're with your entire attention while listening to them non-judgmentally. This is the greatest gift you can give anybody.

A customer relationship is like any other relationship—for it to succeed, you have to be clear about how much you value it, and continually work on improving it.

In some businesses, there's a perceived conflict between quality and speed. A world-class organization figures out how to achieve both.

History of Technology Timeline

To understand the most important trends in business, start by looking at the most important trend of all: the evolution of technology over the last two million years. Two things stand out. First, the frequency of technological development is accelerating. Second, humans are in the process of merging with the technologies we create.

More than 2 million years ago

Early humans in Africa make the first stone tools from split pebbles

‍

1 million years ago

Humans begin to use fire as a tool

500,000 years ago

Humans build the first shelters

350,000 years ago

Humans begin to hunt with spears

100,000 years ago

Humans begin to trade using beads made of shells

60,000 years ago

Humans begin to use spears for hunting, protection, aggression

1000 BC

Early accountants in Asia create the abacus

635 ВС

The Chinese produce the first coins

600 BC

The Romans build the first public sewer system

200 BC

The Chinese invent the compass

AD

725

Buddhist monk Yi Xing creates the first mechanical clock

900

The Chinese first use gunpowder in war

1182

The Chinese invent the magnetic compass

1284

The Italians invent eyeglasses

1328

The Europeans invent the sawmill

1440

Johannes Gutenberg invents the printing press

1530

Europeans invent the spinning wheel

1609

Galileo Galilei invents the telescope

1662

Blaise Pascal invents the public bus

1698

Thomas Savery invents the basic steam engine

1769

A French military tractor becomes the first self-propelled road vehicle

1793

Eli Whitney invents the cotton gin

1795

Nicholas-Jacques Conté invents the modern pencil

1838

A British steamship makes the first transatlantic crossing

1839

Charles Goodyear develops a way to make rubber strong, durable, and elastic

1850

Isaac Singer introduces the sewing machine

1857

William Kelly invents the blast furnace

1865

Giovanni Caselli introduces the first commercial facsimile system

1869

John Wesley Hyatt invents synthetic plastic

1874

Remington Company introduces the mechanical typewriter

1876

Alexander Graham Bell invents the telephone

1877

Thomas Edison invents the phonograph

1880

Thomas Edison invents the incandescent light bulb

1882

America opens the first hydroelectric power plant

1883

England constructs the first electric railway

1885

Gottlieb Daimler builds the first four-wheeled automobile using an internal combustion gas engine

1886

Josephine Cochran invents the first practical dishwasher

1892

Rudolf Diesel invents the diesel engine

1894

Nikola Tesla invents radio signal coils

1896

Gottlieb Daimler builds the first truck

1901

Henry Booth invents the vacuum cleaner

Thomas Edison invents the alkaline storage battery

1902

Marie and Pierre Curie discover the existence of the elements radium and polonium

1903

Willis Carrier introduces the first electric air conditioner

1908

Henry Ford uses the assembly line to introduce the Model T

Thomas Edison develops a moving picture with sound

1910

A plane transports commercial freight for the first time

1913

England manufactures the first stainless steel

1914

Electric traffic lights are invented in the United States

1920

James Smathers invents the electric typewriter

1921

Karel Capek invents the robot

Western Union introduces the telegram

1923

Clarence Birdseye invents frozen food

1927

Erik Rotheim invents the aerosol can

Philo Farnsworth invents the all-electric television

1933

Eric Fawcett and Reginald Gibson invent polyethylene

1935

Robert Watson-Watt pioneers the development of radar

Who is Brad Jacobs?

‍Brad Jacobs is a career CEO and serial entrepreneur with a unique track record as a Wall Street moneymaker. To date, he has founded and led seven billion-dollar or multibillion-dollar companies, creating tens of billions of dollars of value for shareholders.

Over the course of his career, Jacobs has raised $30 billion of debt and equity capital, including three IPOs, and led approximately 500 M&A transactions across multiple industries.

In the supply chain industry, he grew XPO into a top ten global logistics provider, and then executed a strategic plan for a $7 billion spin-off of GXO Logistics and a $5 billion spinoff of RXO, creating two new public companies in about 15 months. XPO was the seventh best-performing stock of the last decade in the Fortune 500 and became a "32-bagger"—initial investors in XPO made more than 32 times their money.

Prior to XPO, Jacobs founded United Rentals and United Waste Systems. He built United Rentals into the largest construction equipment rental company in the world in 13 months. United Rentals was the sixth best-performing Fortune 500 stock of the last decade and became more than a "100-bagger"—the share price at inception was $3.50, and its stock now trades at more than 100 times that price. United Waste's stock outperformed the S&P 500 by 5.6 times from the time Jacobs took the company public to its sale for $2.5 billion.

Jacobs is managing partner of Jacobs Private Equity, and serves as chairman of the board of XPO (NYSE: XPO), GXO Logistics (NYSE: GXO), and RXO (NYSE: RXO).

For more, I highly encourage you to order How to Make a Few Billion Dollars by Brad Jacobs and read the entire book yourself.

Recommended Reading

If you enjoyed How to Make a Few Billion Dollars by Brad Jacobs, you might also like:

• Who is Henry Singleton? Wisdom From The Legendary CEO Who Built The Conglomerate Teledyne
• Who is Charlie Munger? Wit and Wisdom From The World’s Most Irreverent Billionaire‍
• Who is Warren Buffet? Wisdom From The Oracle of Omaha and One of History's Greatest Investors‍
• Who is Bernard Arnault? Insights and Wisdom from the King of Luxury and Founder of LVMH‍
• Who is Sol Price? The Retail Revolutionary Who Built FedMart and Shaped Walmart and Costco‍
• Interview with Warren Buffett’s Biographer Alice Schroeder‍
• Singleton Prize: Charlie Munger in Conversation with Todd Combs‍
• "Turning $2 Million Into $2 Trillion" from Charlie Munger's Biography‍
• ‍Charlie Munger on "The Berkshire System" - 50th Anniversary Essay on Berkshire Hathaway‍
• “The Multidisciplinary Approach to Thinking“ Talk by Peter Kaufman‍
• Warren Buffet's Memo to Berkshire's Managers on The Importance of Reputation
• Some Thoughts On Selling Your Business from Warren Buffett‍‍

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