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Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.

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Speaker 2: Hello and welcome to another episode of the Authoughts podcast.

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Speaker 2: I'm Tracy Allaway.

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Speaker 3: And I'm Joe wysnt Thal.

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Speaker 2: Today we are bringing you a live episode recording that

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Speaker 2: took place at Bloomberg's recent invest conference, where we sat

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Speaker 2: down with Brad Jacobs, the billionaire and serial entrepreneur now

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Speaker 2: chairman and CEO at QXO.

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Speaker 3: We talked to Brad late last year about his new company,

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Speaker 3: QXO and the basic plan of buying up companies within

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Speaker 3: the building supply distribution industry. And since we talked to him,

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Speaker 3: he's raised four and a half billion dollars and so

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Speaker 3: we wanted to learn a little bit more about how

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Speaker 3: he's actually going to deploy his money.

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Speaker 2: Four and a half billion dollars is a lot to spend,

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Speaker 2: I think I read somewhere it was the biggest ever

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Speaker 2: capital raising in the building materials industry. So definitely worth

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Speaker 2: talking to him again.

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Speaker 3: Yep, we still don't know he hasn't bought any companies yet,

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Speaker 3: but we got a better sense of where he's at

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Speaker 3: and his sort of approach to figuring out how he's

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Speaker 3: going to deploy his cash.

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Speaker 2: Take a listen.

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Speaker 3: So, as Tracy mentioned before, we are here interviewing Brad Jacobs,

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Speaker 3: Chrman and CEO of the Newish firm QXO, which is

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Speaker 3: going to make a major splash in the building material space. Brad,

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Speaker 3: thank you so much for joining us.

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Speaker 4: Slight correction, we've already made it.

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Speaker 3: Oh, yes, you've already made this.

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Speaker 4: What have you done?

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Speaker 3: I've seen you've raised a ton of money? Is that counts?

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Speaker 4: So since I first, well, thank you for okay, thank you,

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Speaker 4: But since we did that podcast.

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Speaker 3: We talked to Brad, I think in December.

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Speaker 4: That seems like a long time ago. Yeah, we've done.

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Speaker 4: We built out the management team. Okay, so I have

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Speaker 4: fifteen amazing people now, one of whom was the head

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Speaker 4: of M and A at Barkley's's on Garden Leave, and

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Speaker 4: all the rest I know really well because they either

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Speaker 4: worked at XPO or GXO.

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Speaker 3: Some company with EXO in it.

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Speaker 4: Yeah it didn't have XOO in it. On the next

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Speaker 4: we didn't hire them. And then also we raised money.

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Speaker 4: We raised we put our billion dollars into the pipe

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Speaker 4: that we did into that public company, and then we

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Speaker 4: raised another three and a half billion dollars from institutional investors,

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Speaker 4: mostly long only funds, who know us, and now we're

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Speaker 4: out there. But the next stage is let's go buy

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Speaker 4: some companies.

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Speaker 2: Wait, so four and a half billion dollars raised must

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Speaker 2: be the biggest single raise in the building industry's history.

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Speaker 4: Yeah.

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Speaker 2: Right, So what's the pitch when you're going out to

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Speaker 2: people and saying, give us your money for this as

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Speaker 2: yet unproven business model. I know you have a number

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Speaker 2: of companies all three three letter acronyms, but like, why

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Speaker 2: do they want to give you four and a half

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Speaker 2: billion dollars or three and a half Okay, here's a secret.

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Speaker 4: I know most of the people who invest in us,

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Speaker 4: mostly people have invested in one of the xos or

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Speaker 4: gundamentals in other ways, the historical investors who did well,

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Speaker 4: and they're betting that we're going to do well again.

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Speaker 2: So when you're talking to investors who already know you,

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Speaker 2: what do they think is the Brad Jacob's playbook for

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Speaker 2: creating companies?

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Speaker 4: Well, as you know, I actually have a book. We

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Speaker 4: have the playbook in there.

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Speaker 2: Oh yeah, Brad's book has also a very modest title,

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Speaker 2: which is how to make a few billion dollars.

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Speaker 4: I think that's a good title. Catchy title gets people

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Speaker 4: to remember. So the playbook is pretty straightforward. It's first

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Speaker 4: of all, talent, making sure the people in the company

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Speaker 4: are amazing or honest or hardworking or collaborative or really

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Speaker 4: special people that they can get along with each other.

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Speaker 4: And we figure out ways where we can debate issues

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Speaker 4: honestly and disagree with each other without being a jerk,

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Speaker 4: being still nice and respectful, but you know, honestly debates.

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Speaker 4: We gets the right decisions, is moving fast, being decisive.

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Speaker 4: And it's an M and A play which means we

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Speaker 4: look at many, many acquisitions at the same time, so

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Speaker 4: we don't fall in love with one of them and overpay.

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Speaker 4: That's the cardinal sin in M and as. Overpaying that's

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Speaker 4: the ic and roic. And then integrating those businesses very

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Speaker 4: thoroughly so we have one company, one brand that has

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Speaker 4: a power in the marketplace.

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Speaker 3: Okay, So one of the things we learned the last

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Speaker 3: time we talked to you, I think you said, across

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Speaker 3: the US and Europe, building products eight hundred billion dollar industry.

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Speaker 3: At least it was back then, maybe it's higher now.

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Speaker 3: We know there's a lot of building going on. There's

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Speaker 3: housing there's infrastructures, there's all the green stuff, there's data centers,

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Speaker 3: et cetera. We learned it's extremely fragmented this market. There's

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Speaker 3: no one big giant in the space with three and

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Speaker 3: a half billion dollars or four and a half billion dollars.

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Speaker 3: Are you going to start with some big deal that's

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Speaker 3: a big chunk of that or do you see that

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Speaker 3: going to a range of companies that go then consolidate.

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Speaker 4: Stay tuned. I'll give you the scoop. Get give us

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Speaker 4: a little week.

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Speaker 3: Come on.

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Speaker 4: So we're not looking at tiny little companies. We're going

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Speaker 4: to build a fifty billion dollar company, fifty plus billion

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Speaker 4: dollar company over the next decade. So you know we're

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Speaker 4: going to have to chop some big wood here. So

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Speaker 4: we're looking at more larger acquisition.

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Speaker 3: But more than one that do you see more than one?

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Speaker 4: We're going to do more than one acquisition or over

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Speaker 4: in the coming years. We're going to be acquisitive. So

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Speaker 4: it'll go start and integrate, Yeah, M and A and

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Speaker 4: then integrate M and A, integrate and when we after

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Speaker 4: we integrate, we pay attention to a bunch of metrics

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Speaker 4: like customer satisfaction, employee engagement, on time, performance and so forth.

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Speaker 4: And if it's humming, we're closing the books on time,

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Speaker 4: get clean numbers, everyone is in good shape. Then we

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Speaker 4: go back and rinse, wash, repeat and go buy something else.

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Speaker 2: I remember every Sunday when I was growing up, my

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Speaker 2: parents used to give me ten dollars for my allowance.

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Speaker 2: It was actually one thousand yen, but back then I

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Speaker 2: grow up in Japan. Back then it was about ten dollars,

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Speaker 2: and that will always be the exchange rate in my mind.

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Speaker 2: But I would get my allowance on Sunday and I

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Speaker 2: would go out and I would buy like the first

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Speaker 2: thing that I saw. You've got four and a half

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Speaker 2: billion dollars, do you feel a sense of urgency to

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Speaker 2: spend it?

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Speaker 4: So we feel a sense of urgency in life in general.

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Speaker 4: We feel that time goes by fast, and if you

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Speaker 4: want to make your mark, do something big. Let's do

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Speaker 4: some stuff. So we're prone to action. The fact that

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Speaker 4: we've got four and a half billion dollars and we've

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Speaker 4: got leverage we could add on to that. That's completely irrelevant.

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Speaker 4: That doesn't put more pressure on us to do a deal.

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Speaker 4: What we have pressure on us is to do good deals.

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Speaker 4: A creative deals, strategically compelling deals, deals that make sense

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Speaker 4: to do, deals that we can grow them over five

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Speaker 4: or ten years and they'll be much bigger businesses at

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Speaker 4: that time.

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Speaker 2: Let me ask the question in a slightly different way.

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Speaker 2: Before you announced QXO, did you have a potential list

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Speaker 2: of targets in your mind? Is that how it so.

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Speaker 4: Fast? Rewind so a year and a half ago or so,

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Speaker 4: I stepped down as being CEO. I'm still chairman executive

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Speaker 4: chairman of XPO, but I stepped down as the day

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Speaker 4: to day running Mario Parkers doing that do a fantastic job.

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Speaker 4: And I looked at fifty five different industries to see

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Speaker 4: which one does my playbook fit that we can create

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Speaker 4: some shareholder value with. And I hired two consultants who

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Speaker 4: have expertise in this, consulting firms, and part of the

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Speaker 4: mission was to educate us about the business fast. Part

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Speaker 4: of the mission was give us a list of like

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Speaker 4: who would we buy it? Give us like a one

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Speaker 4: or two pager on. So we put together about a

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Speaker 4: thousand names to look at, and Matt Fassler and Austin

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Speaker 4: Landa worked me very closely on that project. And then

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Speaker 4: we paired it down, paired it down, we filtered it

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Speaker 4: to about forty names that have about three hundred billion

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Speaker 4: dollars in aggurate revenue, and then we paired it down

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Speaker 4: even more to the to the top dozen and those

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Speaker 4: are the ones that we're really focusing on.

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Speaker 3: Let's talk about building products. So and there's a lot there,

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Speaker 3: and this is a wide ranging space. One of the

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Speaker 3: things that we talked about on the last time we

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Speaker 3: talked to you, and one of the things that Tracy

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Speaker 3: and I have learned over the last several years we've

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Speaker 3: done a lot of logistics and supply chain related episodes,

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Speaker 3: which is that much of this space the physical world,

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Speaker 3: ordering a bunch of lumber, ordering HVAC equipment, whatever, it

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Speaker 3: does not feel like twenty twenty four. And there's a

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Speaker 3: lot of old tech. Yeah, still like that, and so

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Speaker 3: it still seems like there's an opportunity. You talked about

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Speaker 3: this already, that there's an opportunity to upgrade the tech.

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Speaker 3: So here's what I want to ask. If I go

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Speaker 3: or let's say I'm a contractor and I need to, like,

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Speaker 3: you know, buy some equipment, some bricks or something like that,

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Speaker 3: what is the experience like today and what is the

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Speaker 3: experience going to be like after you've applied your secret sauce.

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Speaker 4: Okay, it's a ton of stuff in there. So first

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Speaker 4: of all the long term growth and demand. Yeah, so

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Speaker 4: the residential let's start with there. Okay, residential construction is unconstructed.

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Speaker 4: There's millions of units were short on. And I live

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Speaker 4: in Greenwich and Connecticut, and I have friends who want

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Speaker 4: to move from Manhattan and they're on a real tough

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Speaker 4: time finding a property to buy. It's very, very tight.

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Speaker 4: That's not a Greenwich phenomenon. It's a country wide phenomen

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Speaker 4: it's a phenomenon in Europe too. We've underbuilt and now

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Speaker 4: so it's going to be growth. There's growth, there's gonna

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Speaker 4: be and is it old? So most houses in America

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Speaker 4: are like the average house is like forty something years old,

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Speaker 4: which is old. I was a kid ten years old,

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Speaker 4: was like an old house. As someone who was living

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Speaker 4: in a fifteen twenty years I says, your father having

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Speaker 4: a bad time, Like what's going on? So this is old.

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Speaker 4: So this is gonna be repairing and remodeling and there

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Speaker 4: will be new construction. Commercial is the same thing, which

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Speaker 4: is actually older. Commercial is like fifty years old is

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Speaker 4: a typical commercial building. And then you got the infrastructure

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Speaker 4: building all the roads, the bridges and the tunnels. No

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Speaker 4: trillions gonna have to be sent on that. So I

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Speaker 4: think if you fast forward ten years from now, high

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Speaker 4: high likelihood, there's going to be more demand for building

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Speaker 4: products than there is today. I think it's so one

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Speaker 4: of the things I filtered for when I looked at

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Speaker 4: those fifty five industries was is this an industry that's

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Speaker 4: going to get disrupted by AI or another form of

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Speaker 4: tech or automation? And I think it's a safe bet

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Speaker 4: that ten years from now will still have some form

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Speaker 4: of physical body, and we'll sleep in a physical house

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Speaker 4: with a physical roof from physical windows and physical doors,

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Speaker 4: And so I think there'll be more demand as a

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Speaker 4: result of all that.

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Speaker 3: Just to follow what's the buying experience? Right now?

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Speaker 4: Buying experience is not the right What happened?

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Speaker 3: Someone goes to a warehouse? How does that work? I

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Speaker 3: imagine there's pen paper facts as emails, Yeah, you got it?

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Speaker 4: What perfectly right?

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Speaker 3: And then what's gonna what's it gonna look like? When

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Speaker 3: that's the same person goes to the same distribution center

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Speaker 3: aka warehouse and is after it's QXO five.

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Speaker 4: Yeah. So right now, when you talk to customers and

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Speaker 4: you say what do you think, they generally think the

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Speaker 4: industry gets about six out of ten, you say, we

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Speaker 4: have great the industry one out of ten in terms

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Speaker 4: of your customer experience. How delighted are you? Ten meaning delighted,

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Speaker 4: one being it's a stinker. It's about a six. That's

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Speaker 4: what I generally hear from people, and the two main

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Speaker 4: reasons why people only give it a So send the

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Speaker 4: follow up question what would make it a ten? Yeah.

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Speaker 4: The two main things that you hear are, you know,

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Speaker 4: I ordered ten things, I needed the ten things and

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Speaker 4: I got six and I got back ordered on the

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Speaker 4: other four. And the other complaint they have is, you know,

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Speaker 4: I'm in a project and I ordered it, I needed

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Speaker 4: it buy a week from Tuesday, and you know I

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Speaker 4: got it like a week late, and that costs me money.

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Speaker 4: So it's very frustrating you to customers to not know

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Speaker 4: why is this happening. It goes to the other question technology,

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Speaker 4: sense of technology. So one of the companies that we

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Speaker 4: spun off that I still chair it is called GXO.

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Speaker 4: It's the largest pure play warehouse company in the world.

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Speaker 4: It's got over two hundred million square feet of warehouses,

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Speaker 4: get one thousand warehouses in a couple dozen countries. If

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Speaker 4: you go to a tip to a GXO warehouse, you're

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Speaker 4: likely to see collaborative robots, likely to see robotic arms,

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Speaker 4: autonomous equipment. You'll see a very sophisticated WMS, a warehouse

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Speaker 4: management software system that keeps track of every single SKU

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Speaker 4: in the warehouse and does inventory on a daily basis,

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Speaker 4: so you know everything's in the warehouse. And one of

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Speaker 4: the benefits of that is that you can do demand

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Speaker 4: forecasting and then you can do inventory management so you

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Speaker 4: get just the right amount of SKU, not too much,

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Speaker 4: and then you're killing working capital, not too little. You're

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Speaker 4: annoying customers not stocked upright. So I think if we

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Speaker 4: use tech to do proper twenty twenty four inventory management,

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Speaker 4: I think we can delight customers and I think that'll

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Speaker 4: differentiate us in the eyes of customers.

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Speaker 2: I'm going to ask the obvious question then, But you

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Speaker 2: know we're talking about inventory management making the company more efficient.

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Speaker 2: Why don't existing building distribution companies already do this?

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Speaker 4: This is about a half a dozen actually are, so

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Speaker 4: Ferguson gets the joke and they're doing that. Wats Go

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Speaker 4: understands this is doing that. Build This first source seems

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Speaker 4: to be doing a good job doing that too, and

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Speaker 4: a few other companies are too, but by and large

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Speaker 4: the industry, I have a theory to answer your question.

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Speaker 4: It's not proven. This my hypothesis. My hypothesis is, this

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Speaker 4: is an industry where you get about roughly seventy five

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Speaker 4: percent ish conversion from EBIDAH to free cash flow. So

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Speaker 4: there's not a lot of capex, there's working capital, there's

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Speaker 4: not a lot of capecks, so it spits off a

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Speaker 4: lot of cash. So in a downturn, there's not a

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Speaker 4: lot of bankruptcies. So if you're in the trucking business

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Speaker 4: or if you're in the garbage business, you're in a

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Speaker 4: construct you have high fixed costs, you have him into

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Speaker 4: When you have a downturn, you see people who like

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Speaker 4: messed up and they took on too much leverage. They

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Speaker 4: can't pay their debt, they can't service it. Boom, they're out.

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Speaker 4: You see people have inventory and they can't get rid

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Speaker 4: of it fast enough, so they have to sell it

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Speaker 4: to stressed prices. It kills them. You don't see that here.

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Speaker 4: So in this industry you don't have the lean six

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Speaker 4: sigma continuous improvement kais in mindset of every day I

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Speaker 4: gotta find some sofas to turn over and shake and

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Speaker 4: find some nickels and some fennies and some dimes. That's

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Speaker 4: not the mentality. So I think we'll bring that operational

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Speaker 4: rigor that focus on operational excellence, and I think we'll

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Speaker 4: bring that to the industry. There are some companies doing

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Speaker 4: a good job. Don't misunderstand me. I'm not casting the

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Speaker 4: whole industry and doing a lousy job. I think in general,

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Speaker 4: particularly the smaller ones, they could improve.

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Speaker 3: Is that a matter of balance sheet capacity? You're bringing

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Speaker 3: a lot of balance sheet capacity as such, you don't

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Speaker 3: you have the maybe luxury to invest across The stacle

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Speaker 3: is that basically a.

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Speaker 4: Couple of things. One is having the size to be

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Speaker 4: able to afford that. And we're going to invest hundreds

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Speaker 4: and hundreds of millions of dollars into technology. If you're

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Speaker 4: only doing one hundreds of millions of dollars in revenue,

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Speaker 4: you're not going to put hundreds of millions dollars in

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Speaker 4: a tech. But we need to do that. That's what's

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Speaker 4: going to differentiate us from the have nots. That's the

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Speaker 4: main thing there. The second thing is it's a mindset

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Speaker 4: of what I was talking about before. The industry as

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Speaker 4: a whole has not had this passionate, intense commitment to

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Speaker 4: continuously improve the business and to delight customers more and

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Speaker 4: more and more and more. It's not that passion is

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Speaker 4: not there in general. Some companies have it, but in general,

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Speaker 4: the industry doesn't have it.

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Speaker 2: So Joe and Brad and maybe some odd blocks. Listeners

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Speaker 2: know that my husband and I are currently building a

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Speaker 2: shed in Connecticut. And when I say shed, it's actually

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Speaker 2: in New York. It would probably be the size of

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Speaker 2: a small house. But because we're doing this and we're

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Speaker 2: doing it by hand, I now feel empowered as a

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Speaker 2: construction expert, so I can ask Brad all these questions.

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Speaker 2: But you mentioned the frustration of getting supplies and having

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Speaker 2: to wait ages for you know, did you have to wait?

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Speaker 4: Yes, did you get did you get your ordered delivered

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Speaker 4: in full or just in part?

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Speaker 5: In part?

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Speaker 3: There you go, ok Okay, okay, there you go.

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Speaker 2: But I take I take the point about efficiency and

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Speaker 2: reducing lead times and things like that, How does technology

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Speaker 2: aid with quality control? Because I'm sure this is the

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Speaker 2: other big thing for anyone who's ever done construction work.

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Speaker 2: You order a piece of ply wood, you think that waterproof.

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Speaker 2: I'm getting very specific here. I think that waterproof coating

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Speaker 2: is going to be on the wood, and then maybe

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Speaker 2: it's not as good as you thought it was.

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Speaker 4: That's that's two things. It's tech. The system should be

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Speaker 4: able to track that, and it should be controls on that.

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Speaker 4: And secondly, it's a cultural thing of caring. So I

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Speaker 4: mentioned before that we do M and A and then

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Speaker 4: we stop and we measure a bunch of things. And

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Speaker 4: one of the things we mentioned we measure that I

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Speaker 4: mentioned was employee engagement. You want very high levels of

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Speaker 4: employee morale. You want employees to care, to really really

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Speaker 4: care about the customer, and you want to hire people

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Speaker 4: who have that customer pleasing mentality. And as I was

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Speaker 4: saying before, I think the industry could use a little

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Speaker 4: more in that.

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Speaker 3: You do one of these exo companies like every ten years,

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Speaker 3: and you've done several. I'm guessing this is the first

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Speaker 3: one that's I don't know if it's the first one actually,

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Speaker 3: but for the first time in a long time. There's

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Speaker 3: a high cost of capital interest rates, so where they are,

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Speaker 3: they may not come down anytime soon. What is the

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Speaker 3: difference today in looking at or evaluating deals in twenty

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Speaker 3: twenty four versus whatever you are buying in twenty fourteen.

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Speaker 4: So let's talk about this. Does that an important point?

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Speaker 4: Let's talk about cost to capital? Okay, debt is higher

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Speaker 4: than it was the last ten years because it was

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Speaker 4: almost free. Yeah, so definitely is a cost to debt.

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Speaker 4: But we're not going to be highly levered. We're going

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Speaker 4: to lever this business something around one to two times

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Speaker 4: as our standing target. Sometimes you might go over for

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Speaker 4: short period of time in connection with an acquisition, but

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Speaker 4: our target is to keep it at one to two times.

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Speaker 4: Equity is not more expensive. I mean markets are all

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Speaker 4: time high and yeah that's right. Equity is okay. Equities,

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Speaker 4: But just on the.

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Speaker 3: What about when it comes to the buying the company part?

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Speaker 3: Does the math change at all in this environment? Does

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Speaker 3: it affect sellers? Do they say, oh, I want to

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Speaker 3: wait for rates to come down in multiples to go

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Speaker 3: up or Etcider Like, how does this current environment affect

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Speaker 3: that process?

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Speaker 4: It's a dynamic market and you have a whole range

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Speaker 4: of people. You have some people saying, you know, I

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Speaker 4: think I think it's going to get better over the

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Speaker 4: next couple of years, and the industry is going to

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Speaker 4: come down, and I'm not selling now, let's pay some

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Speaker 4: really crazy high price. Yeah. Other people say, you know what,

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Speaker 4: kind of feel soft out there. Some of the public

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Speaker 4: companies has been missing their numbers recently, and some of

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Speaker 4: the indicators coming out looks like construction might be softening,

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Speaker 4: the industry might be slowing in general, the economy might

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Speaker 4: be slowing possibly over the rest of the year. So

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Speaker 4: they want to sell now. So it's a range, It's

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Speaker 4: a whole range.

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Speaker 2: Wait, tell us more about this, because of course everyone

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Speaker 2: looks at construction as a leading indicator for the economy.

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Speaker 4: It's not the most leading. Transportation is more leading.

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Speaker 2: Oh wait, okay, talk about that too.

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Speaker 3: You definitely have of you on the farm with all

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Speaker 3: the bords.

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Speaker 2: You're talking to a bunch of different.

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Speaker 3: Tell us what's happening right now?

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Speaker 4: Okay, there are there are two categories of professionals who

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Speaker 4: traditionally have fairly consistently been wrong about predicting the economy.

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Speaker 4: Actually three, it's one of them. Podcasters, economists, the FED,

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Speaker 4: and CEOs. So I was at a.

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Speaker 3: You spirit journalists, so thank you.

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Speaker 4: Journalists haven't been better at because journalists are providing both sides.

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Speaker 4: They don't really take a few on the one hand

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Speaker 4: because on the other hand, you could do like that.

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Speaker 4: So I always at a CEO Trade Association thing a

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Speaker 4: couple years ago, and you know, you have these little

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Speaker 4: slideo apps where you can vote in the audience. People

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Speaker 4: get their phones out and they vote. You should never

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Speaker 4: do that because they never come back to what you're

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Speaker 4: doing and once they're on their phones, but you take

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Speaker 4: a vote, and the vote was what's the likelihood of

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Speaker 4: a severe recession, a moderate recession, no recession growth? Over

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Speaker 4: ninety percent of these you know smart quote unquote CEOs

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Speaker 4: said there was either going to be a severe recession

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Speaker 4: or motor session. Well there's no recession. So it's hard

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Speaker 4: to predict this stuff. And right now it's much harder

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Speaker 4: than it has been in the past. And I say

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Speaker 4: that because you have these two opposite things going on.

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Speaker 4: You still have a bunch of stimulus, which is inflationary

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Speaker 4: by definition, and you have interest rates having gone up,

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Speaker 4: which is like the breaks and slowing things down, So

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Speaker 4: the economy is like really weird. You have, it grows,

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Speaker 4: but then it contracts. There's a tension there. So I

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Speaker 4: don't know who's going to win the arm wrestle here.

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Speaker 4: So I don't know the answer is the understands. So

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Speaker 4: I don't have a firm view with strong conviction, like

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Speaker 4: the rest.

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Speaker 5: Of the year is going to be stronger weak.

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Speaker 2: Well, since I mentioned conversations with other companies, here's something

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Speaker 2: I always wanted to ask a a serial roll up er,

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Speaker 2: if you will, or a M and a person. Warren

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Speaker 2: Buffett is still on my list to ask this question,

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Speaker 2: but maybe one day, but.

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Speaker 3: Maybe I will.

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Speaker 2: It takes when you approach a company, how do you

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Speaker 2: actually do it? What's that initial contact line?

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Speaker 4: Very straightforward, so you send it a d M on

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Speaker 4: X slash call somebody. I just call him up and say, hey,

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Speaker 4: you know, I'm Brad Jacobs. I haven't heard of me.

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Speaker 4: I'm trying to do some acquisitions. Learn there you go

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Speaker 4: three dollars every time you buy, and and you know,

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Speaker 4: I could have an interest in buying your company. I

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Speaker 4: don't know yet. I got to learn more, but I

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Speaker 4: could have an interest in you know, the reaction usually

436
00:21:42,240 --> 00:21:44,040
Speaker 4: is one of two things, like, look, I'm happy to

437
00:21:44,040 --> 00:21:46,480
Speaker 4: meet you could be an interesting guy, but we're not

438
00:21:46,520 --> 00:21:50,200
Speaker 4: selling the company. That's like part sometimes true and sometimes

439
00:21:50,240 --> 00:21:52,399
Speaker 4: blown me and and other times people say, hey, you know,

440
00:21:52,400 --> 00:21:55,000
Speaker 4: at the right price, why not come on over. I

441
00:21:55,040 --> 00:21:58,320
Speaker 4: find a different reaction depending on who the seller is.

442
00:21:58,960 --> 00:22:01,159
Speaker 4: So there's this bec term of types of folks. The

443
00:22:01,240 --> 00:22:04,359
Speaker 4: private family companies are great because I call them up

444
00:22:04,359 --> 00:22:05,840
Speaker 4: and they say, yeah, come on over, and it usually

445
00:22:05,840 --> 00:22:07,679
Speaker 4: turns into like a three day event. We were just

446
00:22:07,720 --> 00:22:11,080
Speaker 4: hanging out meeting the people, touring the facilities, and I

447
00:22:11,119 --> 00:22:14,200
Speaker 4: really understand the business, and I appreciate that and reciprocate

448
00:22:14,240 --> 00:22:16,240
Speaker 4: for that, because that's really great. On the other end

449
00:22:16,280 --> 00:22:18,840
Speaker 4: of the spectrum would be private equity owned ones where

450
00:22:18,840 --> 00:22:22,200
Speaker 4: it's very controlled and very choreographed and you have to

451
00:22:22,240 --> 00:22:24,920
Speaker 4: really keep your intendant up to figure out what's true,

452
00:22:25,000 --> 00:22:27,359
Speaker 4: what's not true, and what are the real numbers and

453
00:22:27,359 --> 00:22:31,200
Speaker 4: so forth. And in between that I would put corporate companies.

454
00:22:31,680 --> 00:22:34,680
Speaker 4: We've done very well with the carve outs corporate carbouts,

455
00:22:34,680 --> 00:22:36,879
Speaker 4: and that works well. We're looking at some in this

456
00:22:36,960 --> 00:22:39,919
Speaker 4: industry as well, but even buying whole public companies has

457
00:22:39,920 --> 00:22:41,920
Speaker 4: worked out. Well for us too. We just just announced

458
00:22:41,920 --> 00:22:43,480
Speaker 4: one with RXO a couple of days. Well, actually it

459
00:22:43,480 --> 00:22:45,439
Speaker 4: wasn't a public Corani's division of public coanies carve out.

460
00:22:45,560 --> 00:22:47,920
Speaker 3: It was Coyote from you Coyote, yeah right, and the

461
00:22:48,000 --> 00:22:50,040
Speaker 3: stock the investors really liked that deal.

462
00:22:50,160 --> 00:22:50,280
Speaker 4: Up.

463
00:22:51,760 --> 00:22:55,320
Speaker 2: Why buy an existing company as your sort of vehicle

464
00:22:55,640 --> 00:22:58,439
Speaker 2: at all? Like, why not start from scratch and do

465
00:22:58,480 --> 00:22:58,919
Speaker 2: an IPO?

466
00:22:59,080 --> 00:23:02,840
Speaker 4: Is it just I did the same exact thing with XPO.

467
00:23:03,000 --> 00:23:06,040
Speaker 4: If you remember back in twenty eleven, there was a

468
00:23:06,080 --> 00:23:10,600
Speaker 4: trucking company called this brokerage company called Express One, which

469
00:23:10,600 --> 00:23:13,719
Speaker 4: is where XPO comes from. Express One. It was trading

470
00:23:13,760 --> 00:23:16,320
Speaker 4: on what was then called the MX American Stock Exchange

471
00:23:16,359 --> 00:23:20,520
Speaker 4: that NYS bought and we did a pipe. We did

472
00:23:20,520 --> 00:23:22,720
Speaker 4: a pipe into the company, took control of the board,

473
00:23:23,240 --> 00:23:26,240
Speaker 4: moved the headquarters to Grantwich, and off to the races.

474
00:23:26,240 --> 00:23:28,160
Speaker 4: We kept buying, buying more companies. I did the same

475
00:23:28,160 --> 00:23:30,280
Speaker 4: thing here. I found a public company, we did a

476
00:23:30,280 --> 00:23:33,720
Speaker 4: pipe into the company, and we're continuing to grow the company.

477
00:23:33,960 --> 00:23:37,960
Speaker 4: After that, A million territories for me to repeat.

478
00:23:39,000 --> 00:23:41,440
Speaker 3: Going back to building products, So there's a lot, as

479
00:23:41,480 --> 00:23:45,320
Speaker 3: you mentioned, that's getting built because there's housing, there's infrastructure,

480
00:23:45,400 --> 00:23:48,800
Speaker 3: there's all the energy stuff, there's all the data centers that.

481
00:23:48,720 --> 00:23:51,840
Speaker 4: Are energy is not the strongest of them, okay.

482
00:23:51,600 --> 00:23:53,480
Speaker 3: But there's all the data that all the data centers

483
00:23:53,480 --> 00:23:54,160
Speaker 3: are huge.

484
00:23:54,440 --> 00:23:55,639
Speaker 4: Electricity is huge.

485
00:23:56,040 --> 00:23:59,239
Speaker 3: Are they competing with each other like for some of

486
00:23:59,280 --> 00:24:03,760
Speaker 3: the same supple so agree? Is the supply chain intention.

487
00:24:03,600 --> 00:24:06,800
Speaker 4: No, they're fairly segregated. So electrical is a whole different

488
00:24:06,800 --> 00:24:11,760
Speaker 4: than plumbing and HVAC and lumber and your case, they're

489
00:24:11,800 --> 00:24:12,480
Speaker 4: fairly different.

490
00:24:12,920 --> 00:24:14,600
Speaker 3: Are you going to be in the data center? Is

491
00:24:14,600 --> 00:24:17,640
Speaker 3: there anything that will come through your warehouses or distribution

492
00:24:17,760 --> 00:24:19,200
Speaker 3: centers that may go to data centers.

493
00:24:19,320 --> 00:24:21,239
Speaker 4: I would love to have exposure to data centers. I'm

494
00:24:21,320 --> 00:24:24,040
Speaker 4: very bullish long term about the demand for data centers.

495
00:24:24,359 --> 00:24:27,760
Speaker 4: The AI growth needs data centers, a lot of them,

496
00:24:27,880 --> 00:24:29,879
Speaker 4: a lot of power. So yeah, I think that's a

497
00:24:29,920 --> 00:24:30,440
Speaker 4: growth area.

498
00:24:31,200 --> 00:24:35,960
Speaker 2: You mentioned distribution for commercial real estate earlier, and I'm

499
00:24:36,000 --> 00:24:40,560
Speaker 2: curious are there additional considerations for commercial versus something like

500
00:24:40,640 --> 00:24:43,560
Speaker 2: residential or infrastructure. And one of the reasons I ask

501
00:24:43,720 --> 00:24:46,800
Speaker 2: is because we were speaking with I think it was

502
00:24:46,840 --> 00:24:49,520
Speaker 2: the CEO of Chactor Supply how lowten, and he was

503
00:24:49,560 --> 00:24:52,440
Speaker 2: talking about how expensive it is to build out these

504
00:24:52,480 --> 00:24:55,800
Speaker 2: big stores nowadays, and he was talking about ways to

505
00:24:55,880 --> 00:24:59,200
Speaker 2: save money in that space, and I think I jokingly

506
00:24:59,280 --> 00:25:02,520
Speaker 2: said to him, like, well, you know, you run a

507
00:25:02,560 --> 00:25:05,879
Speaker 2: distribution company. Essentially you bring goods into the store and

508
00:25:05,880 --> 00:25:08,760
Speaker 2: then you sell them. Couldn't you become your own supplier

509
00:25:08,840 --> 00:25:11,880
Speaker 2: and distributor for construction materials? And he was like, yeah,

510
00:25:11,880 --> 00:25:14,520
Speaker 2: that's something we're looking at. Would you expect to see

511
00:25:14,720 --> 00:25:19,280
Speaker 2: more big commercial companies like a Walmart for instance, or

512
00:25:19,320 --> 00:25:22,560
Speaker 2: a tractor Supply start to be their own suppliers and

513
00:25:22,600 --> 00:25:25,640
Speaker 2: distributors for construction materials they have the scale already.

514
00:25:26,119 --> 00:25:29,400
Speaker 4: Yeah. Both those are good customers of the XPO families. Yeah,

515
00:25:29,440 --> 00:25:29,880
Speaker 4: I like both.

516
00:25:29,960 --> 00:25:32,600
Speaker 2: I think the Waltons are invested in the new company

517
00:25:32,640 --> 00:25:32,920
Speaker 2: as well.

518
00:25:33,000 --> 00:25:36,720
Speaker 4: Right, no comment, okay Bloomberg speculation. I didn't. That wasn't

519
00:25:36,720 --> 00:25:40,600
Speaker 4: from us, So I think you already. I mean sometimes

520
00:25:40,640 --> 00:25:44,000
Speaker 4: it's not through distributors. Sometimes, if you have these big purchasers,

521
00:25:44,240 --> 00:25:45,199
Speaker 4: is they go direct?

522
00:25:45,320 --> 00:25:45,560
Speaker 2: Yeah?

523
00:25:45,680 --> 00:25:47,920
Speaker 4: Right, direct? And that's fine. It's like in most industries,

524
00:25:48,080 --> 00:25:51,160
Speaker 4: the ones that have the massive size, massive procurement, they

525
00:25:51,160 --> 00:25:53,320
Speaker 4: tend to go direct. But that's an exception, not the rule.

526
00:25:53,400 --> 00:25:55,120
Speaker 4: That's few at the top.

527
00:25:55,880 --> 00:25:59,080
Speaker 3: Question from the audience. That's good, by the way, I

528
00:25:59,119 --> 00:26:01,920
Speaker 3: think there's a way ye Tracy mentioned, there's a way to.

529
00:26:02,080 --> 00:26:03,720
Speaker 3: There's the QR code if you want to enter in

530
00:26:03,760 --> 00:26:07,160
Speaker 3: a question. There is others, as you mentioned, there's others

531
00:26:07,240 --> 00:26:11,120
Speaker 3: in the space in the building's products industry. Others are

532
00:26:11,119 --> 00:26:14,320
Speaker 3: trying and presumably seeing the same thing of consolidating this

533
00:26:14,600 --> 00:26:18,280
Speaker 3: hyper fragmented space. How do you think about competition for

534
00:26:18,359 --> 00:26:21,240
Speaker 3: deals and how do you balance that competition while not

535
00:26:21,320 --> 00:26:24,440
Speaker 3: avoiding the winner's curse or overpaying for company.

536
00:26:24,480 --> 00:26:26,960
Speaker 4: We don't overpay, we don't underpay. We don't try to

537
00:26:26,960 --> 00:26:28,800
Speaker 4: steal a company or take advantage of anything like that.

538
00:26:28,960 --> 00:26:32,119
Speaker 4: We pay a fair price, a fair price. We don't

539
00:26:32,560 --> 00:26:36,080
Speaker 4: pay these trophy prices. So sometimes you see in many

540
00:26:36,080 --> 00:26:41,840
Speaker 4: industries companies they're not really professional m and A machines

541
00:26:41,880 --> 00:26:43,960
Speaker 4: there there once in a while do a big deal

542
00:26:44,440 --> 00:26:47,720
Speaker 4: and and and they overpay. And when you overpay, it

543
00:26:47,760 --> 00:26:49,919
Speaker 4: takes years and years and years to get your costing.

544
00:26:50,160 --> 00:26:52,560
Speaker 4: It doesn't work in terms of creating shareholder value. If

545
00:26:52,560 --> 00:26:57,159
Speaker 4: your focus is on shareholder value creation, then you need

546
00:26:57,200 --> 00:26:59,360
Speaker 4: to pay a reasonable price in order to get good

547
00:26:59,400 --> 00:27:02,479
Speaker 4: returns on that competition for M and A is normal.

548
00:27:02,560 --> 00:27:04,720
Speaker 4: I mean, in every industry I've been in, I haven't

549
00:27:04,760 --> 00:27:07,800
Speaker 4: had a monopoly on being a consolidator. Yeah.

550
00:27:07,880 --> 00:27:10,240
Speaker 2: I'm going to ask a very cliched question, but I

551
00:27:10,280 --> 00:27:14,120
Speaker 2: think it might it might be illuminating in the sense

552
00:27:14,119 --> 00:27:16,439
Speaker 2: of what you look for in an acquisition. But is

553
00:27:16,480 --> 00:27:19,040
Speaker 2: there a particular deal that you're most proud of?

554
00:27:21,040 --> 00:27:24,240
Speaker 4: Well, you know, it's like asking who's your favorite kid,

555
00:27:24,240 --> 00:27:26,560
Speaker 4: Like you can't answer that there's I should get Christmas

556
00:27:26,600 --> 00:27:29,320
Speaker 4: cards from, like most of the people life, it's I

557
00:27:29,359 --> 00:27:31,840
Speaker 4: there's a there's a Yeah, there are. I would say

558
00:27:31,840 --> 00:27:33,679
Speaker 4: two deals, they'd hard to pick which ones was so

559
00:27:33,720 --> 00:27:37,960
Speaker 4: in to too fifteen at XPO, we did two deals.

560
00:27:37,960 --> 00:27:41,240
Speaker 4: We did Conway, which got us into LTL and now

561
00:27:41,280 --> 00:27:45,239
Speaker 4: it's we're, you know, an LTL behemoth. And the other

562
00:27:45,280 --> 00:27:48,240
Speaker 4: one was Norba don Song, which was a French company

563
00:27:48,240 --> 00:27:52,040
Speaker 4: that did contract logistics and trucking and brokerage and LTL

564
00:27:52,640 --> 00:27:54,720
Speaker 4: and different parts of that company we put with the

565
00:27:54,760 --> 00:27:57,640
Speaker 4: different different spins and both of those were really good.

566
00:27:57,760 --> 00:27:59,919
Speaker 4: And both those are really good because they gave us

567
00:28:00,040 --> 00:28:03,320
Speaker 4: al and they gave us an opportunity to apply our

568
00:28:03,359 --> 00:28:07,800
Speaker 4: playbook to those businesses and dramatically improve the profitability in

569
00:28:07,800 --> 00:28:10,320
Speaker 4: the return on capital on both of them. So from

570
00:28:10,320 --> 00:28:13,640
Speaker 4: a point of view of shareholder value creation, those were

571
00:28:13,760 --> 00:28:15,880
Speaker 4: very remarkable deals. So I would pick those two.

572
00:28:16,000 --> 00:28:17,880
Speaker 3: Why don't you tell us more about that Conway deal?

573
00:28:17,960 --> 00:28:21,719
Speaker 3: So less than truckload carrier when you see we applied

574
00:28:21,720 --> 00:28:24,639
Speaker 3: our playbook, because that's what we're trying to understand further,

575
00:28:24,880 --> 00:28:29,200
Speaker 3: what did you do Conway? Conway? Conway came into the house,

576
00:28:29,240 --> 00:28:30,080
Speaker 3: and what did you do with it?

577
00:28:30,680 --> 00:28:32,520
Speaker 4: First thing we did is we looked at the organization

578
00:28:32,640 --> 00:28:35,800
Speaker 4: chart and figured out and when you have an organization chart,

579
00:28:36,040 --> 00:28:38,640
Speaker 4: I've looked a lot of organization charts, it should be

580
00:28:38,680 --> 00:28:42,120
Speaker 4: real elegant. It should be simple and geometric and just

581
00:28:42,160 --> 00:28:46,200
Speaker 4: really really simple, simple and straightforward. Their organization chart was

582
00:28:46,440 --> 00:28:49,240
Speaker 4: spaghetti throw out a painting. You know, there's some artists.

583
00:28:49,360 --> 00:28:51,880
Speaker 4: You look at the painting, you say, kind of looks

584
00:28:51,920 --> 00:28:53,560
Speaker 4: like you just like took a bunch of mud, put

585
00:28:53,560 --> 00:28:56,480
Speaker 4: it in paint on the canvas. That's what their org

586
00:28:56,600 --> 00:28:59,520
Speaker 4: chart looked like. It's very unsatisfying to look at it,

587
00:29:00,040 --> 00:29:02,440
Speaker 4: and there is a there is a correlation between the

588
00:29:03,120 --> 00:29:05,600
Speaker 4: beauty of it elegance of it and the effectiveness of it.

589
00:29:05,600 --> 00:29:08,520
Speaker 4: It's a very very interesting concept. Theirs wasn't, and they

590
00:29:08,520 --> 00:29:11,040
Speaker 4: had multiple It was a business that had grown up

591
00:29:11,160 --> 00:29:15,120
Speaker 4: Cluegate style kl Uge meeting just they bought some stuff

592
00:29:15,160 --> 00:29:18,040
Speaker 4: and they never really integrated it thoroughly. You know, to

593
00:29:18,080 --> 00:29:21,480
Speaker 4: do integration, you need courage, you need confidence, you need

594
00:29:21,520 --> 00:29:23,000
Speaker 4: to know that what you're doing is the right thing

595
00:29:23,120 --> 00:29:25,719
Speaker 4: and execute on it. They were more a sheepist about that.

596
00:29:25,760 --> 00:29:28,920
Speaker 4: So they had three I organizations, the three HR organizations,

597
00:29:29,000 --> 00:29:31,800
Speaker 4: the three finance accounting organ the three of everything. And

598
00:29:31,960 --> 00:29:34,440
Speaker 4: you don't need three of everything. That's two x extra

599
00:29:34,680 --> 00:29:36,640
Speaker 4: that you really need. So we went in there and

600
00:29:36,680 --> 00:29:39,480
Speaker 4: we did an exercise that we do all the time

601
00:29:39,480 --> 00:29:42,560
Speaker 4: as part of continuous improvement, which is look at everything

602
00:29:42,800 --> 00:29:45,240
Speaker 4: that we're spending and look at everyone who's on the

603
00:29:45,240 --> 00:29:50,400
Speaker 4: payroll and think, how are they contributing to achieving our goals?

604
00:29:51,000 --> 00:29:55,200
Speaker 4: And are they must have costs, must have people, or

605
00:29:55,280 --> 00:29:58,120
Speaker 4: they kind of nice to have but it's not really critical,

606
00:29:58,560 --> 00:30:01,360
Speaker 4: or are they like the hell did this get an organization?

607
00:30:01,720 --> 00:30:03,600
Speaker 4: You find a lot of that kind of stuff, particularly

608
00:30:03,600 --> 00:30:06,880
Speaker 4: in bigger companies where things just kind of grew and

609
00:30:06,920 --> 00:30:08,920
Speaker 4: no one got rid of it, but it's served its

610
00:30:08,960 --> 00:30:11,320
Speaker 4: purpose and it's not doing much more. So we went

611
00:30:11,320 --> 00:30:15,080
Speaker 4: through the whole organization and made it streamlined and more effective,

612
00:30:15,440 --> 00:30:18,640
Speaker 4: and then in the last few years we got our

613
00:30:18,680 --> 00:30:21,280
Speaker 4: service levels up really, really high, and as a result

614
00:30:21,360 --> 00:30:24,000
Speaker 4: of that, we're able to get yield growth and we're

615
00:30:24,000 --> 00:30:27,000
Speaker 4: able to get take market share as a result of that.

616
00:30:28,040 --> 00:30:31,480
Speaker 2: A good question from the audience, they ask, what's the

617
00:30:31,520 --> 00:30:35,840
Speaker 2: biggest challenge of breaking into the building products supply chain.

618
00:30:35,880 --> 00:30:39,120
Speaker 2: I guess another way of asking that is, what's stopping

619
00:30:39,160 --> 00:30:41,720
Speaker 2: you from making one billion dollars of revenue right now

620
00:30:41,800 --> 00:30:43,480
Speaker 2: as opposed to the end of the year.

621
00:30:43,760 --> 00:30:45,240
Speaker 4: Give me a little time and we've been in the

622
00:30:45,240 --> 00:30:47,360
Speaker 4: business like ten seconds, but we'll get there. I will

623
00:30:47,400 --> 00:30:51,840
Speaker 4: satisfy you on that goal. So the biggest the biggest

624
00:30:52,160 --> 00:30:56,080
Speaker 4: obstacle to achieving big goals personally too, by the way,

625
00:30:56,080 --> 00:31:00,160
Speaker 4: personally and professionally or people, the people that you associate with,

626
00:31:00,240 --> 00:31:02,720
Speaker 4: people you surround yourself with, people who deal with all

627
00:31:02,800 --> 00:31:06,480
Speaker 4: day long, the people whose exhales you inhale and vice versa.

628
00:31:06,560 --> 00:31:11,400
Speaker 4: That's the key thing. If you can get fantastic people, smart, honest,

629
00:31:11,400 --> 00:31:13,760
Speaker 4: hardworking people who get along with each other, and get

630
00:31:13,760 --> 00:31:15,720
Speaker 4: the right culture of how you interact with each other.

631
00:31:15,920 --> 00:31:19,200
Speaker 4: You can accomplish enormous things. You can dream big and

632
00:31:19,280 --> 00:31:22,520
Speaker 4: actually achieve it. If you don't have that, if even

633
00:31:22,920 --> 00:31:25,160
Speaker 4: you have to have it universally. You can't just have

634
00:31:25,720 --> 00:31:27,640
Speaker 4: like your top twenty five people. You can't have like

635
00:31:28,160 --> 00:31:31,200
Speaker 4: fifteen are hardworking, but ten, you know, maybe the work

636
00:31:31,320 --> 00:31:33,920
Speaker 4: they don't worry. You can have like fifteen honest ones

637
00:31:33,960 --> 00:31:36,080
Speaker 4: and ten are just honestly. It has to be all

638
00:31:36,320 --> 00:31:38,440
Speaker 4: in this example, twenty five out of twenty one hundred percent.

639
00:31:38,600 --> 00:31:41,959
Speaker 4: If you can concentrate on the quality of the people

640
00:31:42,640 --> 00:31:45,760
Speaker 4: and the rules of engagement between that constellation of people,

641
00:31:46,400 --> 00:31:48,000
Speaker 4: you can move mountains.

642
00:31:48,400 --> 00:31:50,360
Speaker 3: I think there might be someone in the audience who

643
00:31:50,400 --> 00:31:52,600
Speaker 3: also is planning a roll up because they want to

644
00:31:52,640 --> 00:31:55,480
Speaker 3: know what is the what was your number two? What

645
00:31:55,600 --> 00:31:58,160
Speaker 3: almost made the cut? You know, the fifty industries you

646
00:31:58,200 --> 00:32:01,280
Speaker 3: looked at, what didn't happen, So therefore there's an opportunity

647
00:32:01,360 --> 00:32:01,880
Speaker 3: for someone else.

648
00:32:02,000 --> 00:32:06,280
Speaker 4: So my absolute favorite one apart from this, was oil

649
00:32:06,320 --> 00:32:08,239
Speaker 4: and gas so or emp oiling gas. So I used

650
00:32:08,280 --> 00:32:09,880
Speaker 4: to be in the oil business a long time ago,

651
00:32:10,520 --> 00:32:14,040
Speaker 4: and right now, right now, you can go out and

652
00:32:14,040 --> 00:32:17,160
Speaker 4: you can buy bruising properties for three times cash flow,

653
00:32:17,440 --> 00:32:20,240
Speaker 4: and then you have an annuity for like fifteen years

654
00:32:20,320 --> 00:32:21,600
Speaker 4: or just getting.

655
00:32:21,200 --> 00:32:24,360
Speaker 3: And that's right today, these bright right right this minute.

656
00:32:24,400 --> 00:32:27,720
Speaker 4: However, you can't finance it. You just can't finance it.

657
00:32:27,880 --> 00:32:32,080
Speaker 4: I went to seventeen sovereign wealth funds and long only

658
00:32:32,120 --> 00:32:36,680
Speaker 4: funds that have historically financed XPO in the past and said,

659
00:32:36,800 --> 00:32:38,480
Speaker 4: went over, like the things I was looking at, so

660
00:32:38,600 --> 00:32:41,240
Speaker 4: what do you think of energy? Every single one said no, no, no,

661
00:32:41,520 --> 00:32:43,440
Speaker 4: don't do energy. We can't do that. It's a ESG

662
00:32:43,720 --> 00:32:46,360
Speaker 4: or they got burnt during the boom or for whatever reason.

663
00:32:46,400 --> 00:32:49,520
Speaker 4: It was just like they're sellers not buyers. Well that

664
00:32:49,640 --> 00:32:52,080
Speaker 4: makes low prices when there's not a lot of buyers.

665
00:32:52,080 --> 00:32:55,200
Speaker 4: And now similar phenomenal you see in Europe sort of,

666
00:32:55,200 --> 00:32:56,840
Speaker 4: I mean the analogy backs down at a certain point.

667
00:32:56,840 --> 00:33:00,680
Speaker 4: But in Europe right now in building products distribution, very

668
00:33:00,680 --> 00:33:04,200
Speaker 4: few buyers, very few buyers. Yeah, I can't think of

669
00:33:04,280 --> 00:33:08,000
Speaker 4: one big strategic that's doing a roll up in Europe,

670
00:33:08,360 --> 00:33:10,520
Speaker 4: and the private equity firms is just a handful of them,

671
00:33:10,520 --> 00:33:12,240
Speaker 4: whereas here in the United States, you know a couple

672
00:33:12,280 --> 00:33:13,200
Speaker 4: dozen of them, we're active.

673
00:33:14,120 --> 00:33:16,360
Speaker 2: Would you have for two renewables. I mean, since you

674
00:33:16,400 --> 00:33:20,040
Speaker 2: brought up renewables, since you brought up the financing point,

675
00:33:20,120 --> 00:33:22,920
Speaker 2: I mean I don't think people Yeah, I don't think

676
00:33:22,920 --> 00:33:25,760
Speaker 2: people are falling over themselves to finance renewables necessarily, but

677
00:33:25,800 --> 00:33:28,680
Speaker 2: you don't necessarily have the mandate constructions. Is that something

678
00:33:28,680 --> 00:33:29,720
Speaker 2: you see any value in?

679
00:33:30,080 --> 00:33:35,320
Speaker 4: I think green renewable, this is all sustainability. These are

680
00:33:35,360 --> 00:33:38,040
Speaker 4: long term real trends. This is this is this is

681
00:33:38,120 --> 00:33:40,160
Speaker 4: this is the future. It's it's not just a story.

682
00:33:40,680 --> 00:33:42,800
Speaker 4: And I think any company that wants to succeed and

683
00:33:42,840 --> 00:33:45,600
Speaker 4: prosper needs to be thinking about am I leaving the

684
00:33:45,600 --> 00:33:47,840
Speaker 4: world in a better place? So I think every company,

685
00:33:47,880 --> 00:33:49,800
Speaker 4: not just our company, not just our industry, needs to

686
00:33:49,800 --> 00:33:50,920
Speaker 4: be thinking about all those things.

687
00:33:52,760 --> 00:33:56,880
Speaker 3: Another question about global supply chains, and obviously we hear

688
00:33:57,000 --> 00:34:01,000
Speaker 3: a lot about friends shoring or companies feeling that they

689
00:34:01,080 --> 00:34:06,080
Speaker 3: have to reduce their exposure to China because reasons or whatever.

690
00:34:06,200 --> 00:34:09,040
Speaker 3: How is that going? How are those trends going to

691
00:34:09,080 --> 00:34:11,719
Speaker 3: play out within the context of building supplies? So what

692
00:34:11,760 --> 00:34:16,360
Speaker 3: are you seeing in terms of geopolitical risk hedging? Maybe

693
00:34:16,440 --> 00:34:18,319
Speaker 3: is the way to put it, and the just and

694
00:34:18,400 --> 00:34:21,720
Speaker 3: the sort of changing geography of supply chains within building supplies.

695
00:34:21,719 --> 00:34:24,040
Speaker 4: Well, China is certainly a risk because the relationship between

696
00:34:24,080 --> 00:34:25,799
Speaker 4: China and the West is probably an all time low,

697
00:34:25,960 --> 00:34:31,440
Speaker 4: so it's a it's very difficult time. So diversifying your

698
00:34:31,440 --> 00:34:35,160
Speaker 4: supply chain away from China is probably not a bad idea. Now,

699
00:34:35,440 --> 00:34:38,520
Speaker 4: in our case, we're we have a very clear perimeter

700
00:34:38,600 --> 00:34:41,320
Speaker 4: that we're going after. We're going after North America. Primarily,

701
00:34:42,040 --> 00:34:44,400
Speaker 4: We're not say North America, I mean USA and a

702
00:34:44,440 --> 00:34:46,560
Speaker 4: little bit of Canada, most of the USA, not not

703
00:34:46,600 --> 00:34:50,480
Speaker 4: so much Mexico and Western Europe, so France, Germany, Spain,

704
00:34:50,640 --> 00:34:53,200
Speaker 4: so forth. That's really our perimeter. And that's about eight

705
00:34:53,239 --> 00:34:55,000
Speaker 4: hundred billion dollars between those two.

706
00:34:55,200 --> 00:34:57,680
Speaker 3: But there must be products that you expect to come

707
00:34:57,760 --> 00:35:00,759
Speaker 3: through your distribution centers, oh yea, from all over the world.

708
00:35:00,760 --> 00:35:03,279
Speaker 4: There'll be some source from China, but you don't want

709
00:35:03,320 --> 00:35:06,919
Speaker 4: to have a preponderance of your supply chain coming from China.

710
00:35:06,920 --> 00:35:07,760
Speaker 4: That's highly risky.

711
00:35:08,400 --> 00:35:10,759
Speaker 2: Is that different to how you would have maybe done

712
00:35:10,840 --> 00:35:14,000
Speaker 2: this kind of business previously, Like that newfound supply chain

713
00:35:14,040 --> 00:35:15,360
Speaker 2: resiliency is at the background.

714
00:35:15,400 --> 00:35:17,640
Speaker 4: Absolutely. I mean I gave the keynote at a big

715
00:35:17,680 --> 00:35:20,480
Speaker 4: trade event out in California about I know, eight or

716
00:35:20,560 --> 00:35:22,759
Speaker 4: nine years ago, and the topic was globalism. Now it's

717
00:35:22,760 --> 00:35:25,520
Speaker 4: a big champion for thinking globally, but the world's changed

718
00:35:25,520 --> 00:35:26,440
Speaker 4: a lot in last decade.

719
00:35:26,520 --> 00:35:28,360
Speaker 2: Yeah, you don't hear that much anymore.

720
00:35:28,000 --> 00:35:29,279
Speaker 4: No, they don't.

721
00:35:29,560 --> 00:35:32,880
Speaker 3: I have a question that I thought of earlier, and

722
00:35:32,960 --> 00:35:34,680
Speaker 3: I don't want to forget to ask it. It's about

723
00:35:34,760 --> 00:35:37,839
Speaker 3: warehouse tech, and we did this episode. It was actually

724
00:35:37,880 --> 00:35:40,319
Speaker 3: about the snack food industry and why there are so

725
00:35:40,400 --> 00:35:44,600
Speaker 3: many proliferations of snacks like you know, Korean prawn flavored

726
00:35:44,640 --> 00:35:46,279
Speaker 3: Doritos and stuff like that. And the guy was saying

727
00:35:46,320 --> 00:35:48,800
Speaker 3: that one of the technological breakthroughs is that with the

728
00:35:48,920 --> 00:35:51,440
Speaker 3: robots and the warehouses, they can get a lot more

729
00:35:51,480 --> 00:35:54,560
Speaker 3: skews within a given amount of square footage because they

730
00:35:54,560 --> 00:35:56,480
Speaker 3: could pack the warehouses in different ways. And if the

731
00:35:56,520 --> 00:35:58,560
Speaker 3: robots go around and stuff like that. What do you

732
00:35:58,600 --> 00:36:00,920
Speaker 3: see on that? Like in your for your years of

733
00:36:00,960 --> 00:36:04,960
Speaker 3: dealing with warehouses, do you are you able to get?

734
00:36:05,040 --> 00:36:07,120
Speaker 3: Is that the same in the various industries you work with,

735
00:36:07,120 --> 00:36:09,600
Speaker 3: that a given amount of square footage can have a

736
00:36:09,640 --> 00:36:12,480
Speaker 3: greater diversity of goods. These days, due to automation.

737
00:36:13,120 --> 00:36:17,120
Speaker 4: A warehouse man as well can be far more productive

738
00:36:17,200 --> 00:36:21,920
Speaker 4: and efficient than one that's like a hardware store. So slotting,

739
00:36:21,960 --> 00:36:24,400
Speaker 4: for example s L T T I G means you

740
00:36:24,520 --> 00:36:28,160
Speaker 4: use the data to analyze which SKUs tend to go

741
00:36:28,239 --> 00:36:32,040
Speaker 4: out together, and you position those in the warehouse. You

742
00:36:32,080 --> 00:36:34,279
Speaker 4: locate them next to each other, so you save a

743
00:36:34,320 --> 00:36:38,520
Speaker 4: lot of time for example, and everything. So warehouse should

744
00:36:38,560 --> 00:36:41,160
Speaker 4: be less in the warehouse of the future is less

745
00:36:41,160 --> 00:36:45,880
Speaker 4: and less people and more and more collaborative robots and automation.

746
00:36:46,160 --> 00:36:48,080
Speaker 4: If you go to some of the more advanced jicks

747
00:36:48,120 --> 00:36:50,640
Speaker 4: of warehouses and you look around, you, hey, where's the people?

748
00:36:50,960 --> 00:36:54,600
Speaker 4: Very quiet here, very efficient and very very effective. What

749
00:36:54,640 --> 00:36:56,040
Speaker 4: it does? That's the future for sure.

750
00:36:57,040 --> 00:36:59,480
Speaker 2: This is a question from the audience, but they're asking

751
00:36:59,600 --> 00:37:02,680
Speaker 2: because the industry is so fragmented and often, you know,

752
00:37:03,480 --> 00:37:06,279
Speaker 2: very regional. Is there part of the country that you're

753
00:37:06,280 --> 00:37:08,680
Speaker 2: more focused on, at least initially.

754
00:37:08,600 --> 00:37:12,360
Speaker 4: No, Nationally, we want to be nationally, want to be global.

755
00:37:12,480 --> 00:37:14,800
Speaker 4: Global in the sense of Western Europe and North America.

756
00:37:14,800 --> 00:37:17,120
Speaker 4: We're not really pursuing the other parts of the world.

757
00:37:17,760 --> 00:37:20,000
Speaker 3: But like people talk, for example about you know, there's

758
00:37:20,040 --> 00:37:23,239
Speaker 3: great business migration to the southeast Southwest, et cetera.

759
00:37:23,320 --> 00:37:25,840
Speaker 4: But that's not at there's there's a lot of the

760
00:37:25,880 --> 00:37:29,240
Speaker 4: growth rate for constructions, certainly bigger down down south.

761
00:37:29,600 --> 00:37:31,759
Speaker 2: Wait, here's something else. I always wanted to ask a

762
00:37:32,440 --> 00:37:37,239
Speaker 2: roll up er to use rollbrevious and M and a

763
00:37:37,320 --> 00:37:40,719
Speaker 2: profession serial entrepreneur, billionaire I suppose would work.

764
00:37:40,760 --> 00:37:43,000
Speaker 4: Don't call me a billionaire, but M and a professional.

765
00:37:43,040 --> 00:37:43,440
Speaker 4: I like that.

766
00:37:43,520 --> 00:37:46,040
Speaker 2: OKAYM and a profession here. But okay, we know that

767
00:37:46,080 --> 00:37:48,239
Speaker 2: you want to buy a bunch of companies. Does the

768
00:37:48,280 --> 00:37:50,880
Speaker 2: sequence that you buy them in matter?

769
00:37:51,400 --> 00:37:51,520
Speaker 4: Like?

770
00:37:51,680 --> 00:37:53,480
Speaker 2: Is the idea Okay, I buy this one, I buy

771
00:37:53,480 --> 00:37:55,040
Speaker 2: that one, and then I put them together and I

772
00:37:55,080 --> 00:37:56,640
Speaker 2: get to that level and then I do this and

773
00:37:56,719 --> 00:37:59,280
Speaker 2: that or is it just like we have all these targets,

774
00:37:59,440 --> 00:38:02,000
Speaker 2: let's just try to complete as many deals as in the.

775
00:38:01,960 --> 00:38:05,480
Speaker 4: Perfect world, which doesn't exist. Yes, the sequence would be

776
00:38:05,560 --> 00:38:08,440
Speaker 4: deliberate and you'd have lots of synergy between number one

777
00:38:08,480 --> 00:38:10,720
Speaker 4: and number two and number three. In the real world,

778
00:38:10,880 --> 00:38:15,000
Speaker 4: there should be some level of opportunism and seeing what's

779
00:38:15,080 --> 00:38:17,400
Speaker 4: what's out there and what's actionable, what's a good value.

780
00:38:18,239 --> 00:38:21,280
Speaker 3: Since we're at a conference and it's the year twenty

781
00:38:21,280 --> 00:38:24,359
Speaker 3: to twenty four, I have to ask an AI question. Great,

782
00:38:24,400 --> 00:38:27,360
Speaker 3: and I'm sure you know everyone's doing something with AI

783
00:38:27,640 --> 00:38:30,480
Speaker 3: et cetera, and I'm sure it's all great efficient, but

784
00:38:30,560 --> 00:38:35,000
Speaker 3: what specifically, what does it mean and when we you know, what,

785
00:38:35,400 --> 00:38:37,600
Speaker 3: when you when it's at this company or some of

786
00:38:37,640 --> 00:38:40,480
Speaker 3: the other exos, what does it mean to you to

787
00:38:40,560 --> 00:38:43,800
Speaker 3: put like AI into practice? And are there any specific

788
00:38:43,840 --> 00:38:46,040
Speaker 3: areas where you can say, look, this is a tech

789
00:38:46,080 --> 00:38:48,920
Speaker 3: that I want to call artificial intelligence, and it's either

790
00:38:49,120 --> 00:38:52,200
Speaker 3: improved the product or significantly saved on costs.

791
00:38:52,480 --> 00:38:56,000
Speaker 4: So XPO was all about machine learning and AI. When

792
00:38:56,040 --> 00:38:59,280
Speaker 4: I first hired Mario Harrik from my CIO now CEO

793
00:38:59,360 --> 00:39:03,040
Speaker 4: when you CIO, so the vision was, here's all these

794
00:39:03,040 --> 00:39:05,840
Speaker 4: brokers and they have like these halls with like hundreds

795
00:39:05,880 --> 00:39:08,680
Speaker 4: of kids, and they're on two phones at a time

796
00:39:08,800 --> 00:39:11,120
Speaker 4: and they're playing. And we said, why do you need

797
00:39:11,160 --> 00:39:12,680
Speaker 4: these people? This is stuff that should be done on

798
00:39:12,719 --> 00:39:15,200
Speaker 4: an app. The shipper would prefer it would be better

799
00:39:15,280 --> 00:39:17,160
Speaker 4: for the shipper to be doing on an app, be

800
00:39:17,160 --> 00:39:19,080
Speaker 4: better for the dispatcher on the trucker to be doing

801
00:39:19,080 --> 00:39:21,560
Speaker 4: an app. And why you're paying a third of your

802
00:39:21,600 --> 00:39:24,440
Speaker 4: gross margin to sales repsen you know that this is

803
00:39:24,680 --> 00:39:28,080
Speaker 4: not adding in some cases enough value to justify that.

804
00:39:28,800 --> 00:39:33,640
Speaker 4: And at that time zero percent of the business was automated. Today,

805
00:39:34,360 --> 00:39:37,280
Speaker 4: our XO, the one that just bought Coyote from the EPs.

806
00:39:37,800 --> 00:39:41,920
Speaker 4: OURXO is where we put the brokerage spin. Ninety seven

807
00:39:41,960 --> 00:39:45,040
Speaker 4: percent of the orders are either sourced or covered digitally,

808
00:39:45,719 --> 00:39:48,440
Speaker 4: and I believe that is the main reason, not the

809
00:39:48,440 --> 00:39:51,640
Speaker 4: only reason. It's the main reason why OURXO has been

810
00:39:51,640 --> 00:39:54,680
Speaker 4: growing at three times industry growth rate, because the model

811
00:39:54,719 --> 00:39:55,280
Speaker 4: works better.

812
00:39:56,000 --> 00:39:59,640
Speaker 2: Are there specific pieces of technology or technology platforms that

813
00:39:59,680 --> 00:40:02,879
Speaker 2: you can whole out of XPO or GXO and use

814
00:40:02,960 --> 00:40:06,319
Speaker 2: for QXO. Like do you use, for instance, like those

815
00:40:06,400 --> 00:40:09,239
Speaker 2: trackable palettes? Those are very cool I find could you

816
00:40:09,320 --> 00:40:10,640
Speaker 2: use something like that for distribution?

817
00:40:10,840 --> 00:40:13,000
Speaker 4: So there's tons of stuff we could do with the exos.

818
00:40:13,000 --> 00:40:14,560
Speaker 4: We gotta a little careful about that. That has to

819
00:40:14,600 --> 00:40:17,640
Speaker 4: all be arm's length and market and so forth. But yeah,

820
00:40:17,680 --> 00:40:20,000
Speaker 4: there's tons of things that we could use from the exos.

821
00:40:20,760 --> 00:40:23,560
Speaker 4: You got to remember this business has a big component

822
00:40:23,600 --> 00:40:27,760
Speaker 4: of transportational logistics. This is a business where you're transporting

823
00:40:28,120 --> 00:40:32,440
Speaker 4: building materials from the OEM from the manufacturer by truck,

824
00:40:32,640 --> 00:40:36,080
Speaker 4: mostly a little intomotive, but mostly truck to the warehouse

825
00:40:36,440 --> 00:40:39,440
Speaker 4: that you're managing we were talking about before, and then

826
00:40:40,080 --> 00:40:42,920
Speaker 4: you're delivering it in the last mile generally to the

827
00:40:43,000 --> 00:40:46,440
Speaker 4: job site, almost always by truck. So there's a big

828
00:40:46,520 --> 00:40:50,279
Speaker 4: cost and a big efficiency and productivity and ability to

829
00:40:50,320 --> 00:40:54,680
Speaker 4: delight or annoy the customer by getting transportation logistics just right.

830
00:40:55,120 --> 00:40:59,080
Speaker 3: Someone asks, in perfect dovetails with your answer there, how

831
00:40:59,120 --> 00:41:01,080
Speaker 3: far up and down this supplied chain do you go

832
00:41:01,160 --> 00:41:03,760
Speaker 3: to ease bottlenecks? When you think of I mean supply

833
00:41:03,920 --> 00:41:06,480
Speaker 3: chain risk. I know supply chain professionals, this is what

834
00:41:06,520 --> 00:41:09,280
Speaker 3: they've always done. But for the rest of us, supply

835
00:41:09,400 --> 00:41:11,319
Speaker 3: chain risk is this new thing that most of us

836
00:41:11,320 --> 00:41:14,319
Speaker 3: started talking about in the last three or four years,

837
00:41:14,320 --> 00:41:16,640
Speaker 3: and I have to imagine it's going to stay on

838
00:41:16,760 --> 00:41:20,000
Speaker 3: the minds of many business managers, particularly with the China

839
00:41:20,080 --> 00:41:22,719
Speaker 3: risk and so forth. Talk to us about some of

840
00:41:22,840 --> 00:41:27,600
Speaker 3: what you will do with QXO to hedge against that

841
00:41:27,680 --> 00:41:30,040
Speaker 3: or protect against supply chain risk. And how close do

842
00:41:30,080 --> 00:41:31,920
Speaker 3: you want to get to the producer, how close do

843
00:41:31,920 --> 00:41:34,560
Speaker 3: you want to get to the end customer to ease

844
00:41:34,600 --> 00:41:35,200
Speaker 3: those concerns.

845
00:41:35,280 --> 00:41:37,000
Speaker 4: I want to get very close. We want to buy

846
00:41:37,040 --> 00:41:40,799
Speaker 4: directly from the manufacturer and want to sell directly to

847
00:41:40,960 --> 00:41:44,880
Speaker 4: either the final end user or the contractor that's servicing it.

848
00:41:45,040 --> 00:41:47,360
Speaker 4: More often not so much. They see more the b

849
00:41:47,680 --> 00:41:50,680
Speaker 4: that's serving the sea, the business that's serving the consumer.

850
00:41:51,360 --> 00:41:53,200
Speaker 4: So yeah, you want to be close. That's the whole business.

851
00:41:53,239 --> 00:41:53,759
Speaker 3: How do you do it?

852
00:41:53,800 --> 00:41:58,040
Speaker 4: The business plan is to buy in large quantities at

853
00:41:58,120 --> 00:42:01,120
Speaker 4: a price that reflects at a lower price that reflects

854
00:42:01,120 --> 00:42:04,120
Speaker 4: those larger quantities and the risks you're taking by storing

855
00:42:04,120 --> 00:42:07,000
Speaker 4: them and putting in inventory and selling them retail, and

856
00:42:07,080 --> 00:42:10,680
Speaker 4: smaller amounts at a price that is appropriate for retail,

857
00:42:10,680 --> 00:42:12,360
Speaker 4: and that's your margin. That's how you make your business.

858
00:42:12,719 --> 00:42:17,800
Speaker 4: The supply chains, yeah, but you can't blame the manufacturer.

859
00:42:18,000 --> 00:42:21,000
Speaker 4: You can blame anybody on the supply chain, but ourselves,

860
00:42:21,040 --> 00:42:25,279
Speaker 4: if we're a distributor, that's our responsibility. Our responsibility is

861
00:42:25,320 --> 00:42:28,440
Speaker 4: to get the supply chain right, to use technology and

862
00:42:28,480 --> 00:42:31,799
Speaker 4: to use and to use culture, to use compensation and

863
00:42:31,880 --> 00:42:35,160
Speaker 4: recognition to get people to take that seriously so that

864
00:42:35,200 --> 00:42:38,320
Speaker 4: we always have the right amount of products in stock

865
00:42:38,719 --> 00:42:42,040
Speaker 4: so when customers want a product, we got it, and

866
00:42:42,040 --> 00:42:44,520
Speaker 4: that when a customer needs it by a certain date, yes,

867
00:42:44,600 --> 00:42:46,279
Speaker 4: we can do that. And if we do that, if

868
00:42:46,280 --> 00:42:50,520
Speaker 4: a distributor does that professionally, I believe you'll get a

869
00:42:50,520 --> 00:42:52,640
Speaker 4: little more price, not a huge amount more price, but

870
00:42:52,640 --> 00:42:54,600
Speaker 4: you get a little bit more price, and you'll get

871
00:42:54,600 --> 00:42:56,440
Speaker 4: greater share of wallet. That's my thesis.

872
00:42:56,600 --> 00:42:58,640
Speaker 2: I need treated plywood by this weekend.

873
00:42:58,680 --> 00:43:02,359
Speaker 4: Brad, I know again, so this is bad.

874
00:43:03,400 --> 00:43:06,320
Speaker 2: Okay, there's one more question from the audience. And before

875
00:43:06,360 --> 00:43:08,080
Speaker 2: I ask this one, I'm just going to give a

876
00:43:08,120 --> 00:43:11,360
Speaker 2: plug to Brad's book because it's all about his experience

877
00:43:11,520 --> 00:43:13,920
Speaker 2: as an m and a professional. But it is one

878
00:43:13,960 --> 00:43:17,919
Speaker 2: of the more unusual sort of entrepreneurial books that I've read,

879
00:43:17,960 --> 00:43:22,239
Speaker 2: because you do have some unusual strategies in the way

880
00:43:22,239 --> 00:43:24,520
Speaker 2: you think about business. So I remember there's a chapter

881
00:43:24,560 --> 00:43:27,560
Speaker 2: where you talk about thought experiments to make you think

882
00:43:27,600 --> 00:43:29,600
Speaker 2: in new ways, and one of the thought experiments was

883
00:43:29,680 --> 00:43:33,719
Speaker 2: imagine yourself as a banana. That one sticks in my head.

884
00:43:33,840 --> 00:43:34,520
Speaker 4: I like that one.

885
00:43:34,640 --> 00:43:37,960
Speaker 2: But you also worked and this actually led to another

886
00:43:37,960 --> 00:43:40,800
Speaker 2: all thoughts episode. But you've also worked with an ex

887
00:43:41,120 --> 00:43:44,719
Speaker 2: CIA official who was very instrumental in the use of

888
00:43:44,840 --> 00:43:48,360
Speaker 2: lie detectors as someone to help you do due diligence

889
00:43:48,520 --> 00:43:51,399
Speaker 2: on different companies we did and he was amazing. It's

890
00:43:51,560 --> 00:43:55,240
Speaker 2: a good episode. But this brings me to the audience question.

891
00:43:55,640 --> 00:43:58,960
Speaker 2: They ask, as you've applied various new and improved management

892
00:43:59,000 --> 00:44:02,279
Speaker 2: techniques to your aqui positions, what are some old techniques

893
00:44:02,320 --> 00:44:05,759
Speaker 2: that you found have to go or just aren't very

894
00:44:05,840 --> 00:44:06,640
Speaker 2: useful anymore?

895
00:44:07,520 --> 00:44:10,439
Speaker 4: So my approach is, as you can tell from reading

896
00:44:10,480 --> 00:44:12,920
Speaker 4: the book, is really simple. It's very straightforward. You get

897
00:44:12,960 --> 00:44:18,280
Speaker 4: great people, You figure out big goals with great specificity

898
00:44:18,280 --> 00:44:21,279
Speaker 4: and clarity. What are you trying to achieve? But bold

899
00:44:21,840 --> 00:44:24,040
Speaker 4: We're going to create a fifty billion dollar company. I've

900
00:44:24,040 --> 00:44:26,640
Speaker 4: got everyone in the organization completely signed up for that.

901
00:44:27,360 --> 00:44:29,319
Speaker 4: And then you figure out what do I have to

902
00:44:29,360 --> 00:44:32,480
Speaker 4: do to get from here to get to there? What

903
00:44:32,520 --> 00:44:35,160
Speaker 4: are the steps I have to do? And then who's

904
00:44:35,200 --> 00:44:37,719
Speaker 4: going to be in charge of that? And then how

905
00:44:37,719 --> 00:44:40,440
Speaker 4: do we tie compensation to that? So that and how

906
00:44:40,480 --> 00:44:44,719
Speaker 4: do we measure it, keep people accountable accurately and appropriately

907
00:44:44,800 --> 00:44:48,520
Speaker 4: and fairly, reward people for achievement on that, and keep

908
00:44:48,520 --> 00:44:51,640
Speaker 4: people on track. That's my basic playbook. There's a lot

909
00:44:51,640 --> 00:44:54,200
Speaker 4: of other details to it. That's my basic playbook. Great people,

910
00:44:54,680 --> 00:44:58,080
Speaker 4: big vision, hold people accountable, and go make it happen,

911
00:44:58,160 --> 00:45:00,640
Speaker 4: and as a result of that, you create, in all

912
00:45:00,760 --> 00:45:02,680
Speaker 4: likelihood great shareholder value.

913
00:45:03,760 --> 00:45:07,360
Speaker 3: The book's been out for several months, has anyone, And

914
00:45:07,360 --> 00:45:08,759
Speaker 3: it's called how to Make a billion dollars?

915
00:45:08,840 --> 00:45:09,560
Speaker 4: Right? Few billion dollars?

916
00:45:09,600 --> 00:45:12,720
Speaker 3: How to make a few billion dollars? Sure, sometimes Tracy

917
00:45:12,719 --> 00:45:15,239
Speaker 3: and I, because we've been doing the podcast for several years,

918
00:45:15,280 --> 00:45:17,040
Speaker 3: like we'll get a email. It's like, by the way,

919
00:45:17,080 --> 00:45:18,919
Speaker 3: I just want to say I listened to this episode

920
00:45:19,400 --> 00:45:21,719
Speaker 3: and then I went to business school, and now I

921
00:45:21,760 --> 00:45:23,319
Speaker 3: got my first job on Wall Street. You've been doing

922
00:45:23,320 --> 00:45:25,600
Speaker 3: it for a while. Has anyone called you up and say, Brad,

923
00:45:25,600 --> 00:45:27,120
Speaker 3: I just want to thank you. I've made a billion

924
00:45:27,160 --> 00:45:29,400
Speaker 3: dollars since buying your book, or a few billion billion?

925
00:45:29,800 --> 00:45:32,239
Speaker 4: Not yet, but I'll underline the word yet. But I

926
00:45:32,280 --> 00:45:33,920
Speaker 4: tell you what I have had a lot of people

927
00:45:34,000 --> 00:45:35,719
Speaker 4: like what Tracy thought experiments.

928
00:45:36,440 --> 00:45:38,080
Speaker 2: I have imagined myself as a banana.

929
00:45:38,120 --> 00:45:41,760
Speaker 4: It's true because the commonality of DNA between a banana

930
00:45:41,760 --> 00:45:44,240
Speaker 4: and the humane is it's quite Significant's like ninety something percent.

931
00:45:44,400 --> 00:45:47,360
Speaker 2: It is more than you would expect. I'll say that, Brad.

932
00:45:47,440 --> 00:45:49,279
Speaker 2: There's one There's another question I want to ask you,

933
00:45:49,320 --> 00:45:52,040
Speaker 2: which is you know you're an m and a professional

934
00:45:52,200 --> 00:45:55,839
Speaker 2: serial entrepreneur. You start one company that's very successful, then

935
00:45:55,880 --> 00:46:00,560
Speaker 2: another that's very successful, and now another. How much runway

936
00:46:00,600 --> 00:46:03,000
Speaker 2: do you give yourself for each company? And when do

937
00:46:03,040 --> 00:46:06,359
Speaker 2: you declare like, Okay, I've done it here and now

938
00:46:06,400 --> 00:46:08,040
Speaker 2: I'm going to move on to the new thing, or

939
00:46:08,080 --> 00:46:10,279
Speaker 2: now I feel prepared to take an additional thing on.

940
00:46:10,880 --> 00:46:13,720
Speaker 4: If you look at my bio 'es, basically every decade

941
00:46:14,440 --> 00:46:17,279
Speaker 4: I really get into something I started from scratch, this

942
00:46:17,400 --> 00:46:19,800
Speaker 4: big idea. Get everyone, we do it, do it, do it,

943
00:46:19,840 --> 00:46:23,239
Speaker 4: do it. Ten years later we did it, and I

944
00:46:23,360 --> 00:46:26,200
Speaker 4: do it again. That's my psychic Everyone's got their bio rhythm,

945
00:46:26,239 --> 00:46:27,600
Speaker 4: that's mine. Once a decade.

946
00:46:27,719 --> 00:46:31,400
Speaker 3: Well, we'll have you back here in a decade and

947
00:46:31,440 --> 00:46:33,480
Speaker 3: you can tell us about your next venture.

948
00:46:33,680 --> 00:46:37,280
Speaker 4: Great, it'll have x O in it.

949
00:46:37,320 --> 00:46:40,200
Speaker 3: Sounds good, Brad Jacobs QX So thank you so much

950
00:46:40,239 --> 00:46:44,280
Speaker 3: for coming on. Odd lots, thank you, good question.

951
00:46:57,400 --> 00:47:00,880
Speaker 2: That was our conversation with Brad Jacobs at Bloom invest

952
00:47:01,160 --> 00:47:04,479
Speaker 2: I'm Tracy Alloway. You can follow me at Tracy Alloway and.

953
00:47:04,400 --> 00:47:07,200
Speaker 3: I'm Joe Wisenthal. You can follow me at The Stalwart.

954
00:47:07,400 --> 00:47:10,920
Speaker 3: Follow our producers Carmen Rodriguez at Carmen armand dash Ol

955
00:47:10,920 --> 00:47:14,480
Speaker 3: Bennett at Dashbot and Kelbrooks at Kelbrooks. Thank you to

956
00:47:14,520 --> 00:47:17,520
Speaker 3: our producer, Moses ondem and for our odd Lots content,

957
00:47:17,600 --> 00:47:20,000
Speaker 3: go to Bloomberg dot com slash odd lots where we

958
00:47:20,040 --> 00:47:24,000
Speaker 3: have transcripts, a blog and a newsletter. And if you

959
00:47:24,040 --> 00:47:26,440
Speaker 3: want to chat with fellow listeners, go check out our

960
00:47:26,480 --> 00:47:30,000
Speaker 3: discord Discord dot gg slash odd lots. And by the way,

961
00:47:30,520 --> 00:47:34,279
Speaker 3: sometimes we drop special invites to events such as this

962
00:47:34,360 --> 00:47:37,600
Speaker 3: one only for discord listeners. You might want to hang

963
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Speaker 3: out in there and catch the next.

964
00:47:39,360 --> 00:47:42,440
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967
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972
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