November 22, 2024 • 1hr 25min

Brad Jacobs - Think Big and Move Fast - [Invest Like the Best, REPLAY]

Invest Like the Best with Patrick O'Shaughnessy

Brad Jacobs is a serial entrepreneur who has founded seven companies, all of which became billion or multi-billion dollar businesses. He has completed 500 M&A transactions and raised $30 billion in capital. Currently, he serves as Executive Chairman of XPO, a logistics company he started in 2011. His approach combines ambitious vision with rapid, disciplined execution.

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Key Takeaways

Think Big and Move Fast - This has been Brad Jacobs' core philosophy in building multiple billion-dollar businesses across different industries
Scalability is Critical - Look for industries large enough to build tens of billions in revenue through M&A and organic growth
Integration Speed Matters - Fast, thorough integration post-acquisition with standardized systems and processes is essential
People and Culture - Success depends on having honest, hardworking, collaborative leaders who can execute the vision
Technology as an Enabler - While not a tech company builder, Jacobs leverages technology aggressively to improve operations
Capital Allocation - Disciplined approach to acquisitions, focusing on ROIC and buying at lower multiples than the company trades at

Introduction

Brad Jacobs is a serial entrepreneur who has founded seven companies, all of which became billion or multi-billion dollar businesses. He has completed 500 M&A transactions and raised $30 billion in capital. Currently, he serves as Executive Chairman of XPO, a logistics company he started in 2011. His approach combines ambitious vision with rapid, disciplined execution.

Topics Discussed

M&A Strategy and Philosophy (07:11)

Jacobs outlines his approach to identifying and executing acquisitions:

Industry Selection Criteria:
- Large enough total addressable market
- Fragmented industry structure
- Opportunities for operational improvement
- Ability to buy at lower multiples than company trades at
Integration Philosophy:
- Move quickly to standardize systems and processes
- Focus on "one" of everything - one CRM, one ERP, etc.
- Maintain tight control and visibility

Seller Psychology and Deal Execution (13:43)

Jacobs shares insights on working with sellers:

"When people sell a business, particularly if they've spent decades building it up...they get really nervous and they get very anxious and they're very stressed out"
Keys to Success:
- Build strong personal relationships with sellers
- Show genuine empathy and understanding
- Move quickly but maintain discipline
- Focus on seller integrity as key indicator

Capital Markets Strategy (27:49)

Discussion of working effectively with Wall Street:

Key Principles:
- Be consistently truthful about both positives and negatives
- Deliver on promises and forecasts
- Create alpha for investors
"They've never bought my stock because I'm handsome...they bought my stock and supported me because we created Alpha"

Leadership and Team Building (35:17)

Jacobs describes his approach to building high-performing teams:

Essential Leadership Qualities:
- Absolute honesty and integrity
- Strong work ethic
- Collaborative mindset
- Balance of confidence and humility
Team Dynamics:
- Create environment for open, respectful disagreement
- Focus on shared purpose
- Maintain high energy and engagement

Running "Electric" Meetings (1:02:22)

Detailed breakdown of Jacobs' unique meeting methodology:

Key Components:
- Pre-distribute materials
- Collect participant input on agenda items
- Rate topics by importance
- No devices or distractions allowed
- Full attention and engagement required
"The leader doesn't set the agenda for the meeting, the people set the agenda for the meeting"

Technology Implementation (53:59)

Approach to leveraging technology in traditional businesses:

Process:
- Gather input from employees on pain points
- Evaluate ROI potential
- Stack rank opportunities
- Track implementation closely
Philosophy: Technology should be an enabler, not the core business

Life Philosophy and Personal Practices (1:23:45)

Jacobs shares personal insights and practices:

Daily Meditation: Practiced twice daily for 51 years
Thought Experiments: Regular use of Einstein-inspired visualization
Time Management: Intense focus on making every day count
"Life goes by real fast. And you can just dilly dally through it and just die. Or you can do real fun stuff and real exciting things and you can change the world."

Conclusion

Brad Jacobs exemplifies a unique combination of ambitious vision and disciplined execution. His success across multiple industries demonstrates the power of his "think big and move fast" philosophy, coupled with careful attention to people, processes, and capital allocation. His approach to business building, while not easily replicated, offers valuable lessons for entrepreneurs and leaders looking to create significant value through acquisition-driven growth strategies.