#408 How to Make a Few MORE Billion Dollars: Brad Jacobs

In 2024 Brad Jacobs wrote the book How to Make a Few Billion Dollars. In the book Brad explains how he built 8 separate billion dollar companies and other lessons from his 40+ year career as an elite entrepreneur. In the two years since Brad has made a few MORE billion dollars and so the sequel to his first book is: How to Make a Few MORE Billion Dollars. In this episode I share some of Brad's ideas on raising tons of money (Brad has raised over $50 billion), mastering his integration playbook, ideas for organizational integration, org chart design, and how Brad keeps his mind centered and in a positive place to handle the inevitable ups and downs of building great companies. Episode sponsors: ⁠ Ramp⁠⁠⁠⁠⁠⁠⁠ gives you everything you need to control spend, watch your costs, and optimize your financial operations —all on a single platform. Make history's greatest entrepreneurs proud ⁠⁠⁠by going to Ramp and learning how they can help your business control your costs and save time and money.⁠⁠⁠ ⁠⁠⁠⁠https://ramp.com Automate compliance, security, and trust with Vanta.⁠ ⁠⁠⁠Vanta helps you win trust, close deals, and stay secure—faster and with less effort⁠⁠⁠⁠. ⁠⁠⁠Find out how increased security leads to more customers by going to Vanta⁠⁠⁠. Tell them David from Founders sent you and you'll get $1000 off. https://vanta.com/founders⁠⁠⁠ Collateral⁠⁠ transforms your complex ideas into compelling narratives. Collateral crafts institutional grade marketing collateral for private equity, private credit, real estate, venture capital, family offices, hedge funds, oil & gas companies, and all kinds of corporations. Storytelling is one of the highest forms of leverage and you should invest heavily in it. You can do that by going to ⁠⁠https://collateral.com

• 0:00Speaker 00

  Two years ago, Brad Jacobs wrote a book called How to Make a Few Billion Dollars. I covered it all the way back on episode 335. In the two years since the book has come out, Brad has made a few more billion dollars. So his new book is, has the appropriate title of How to Make a Few More Billion Dollars. Brad was kind enough to send me an early copy of the book so I could read it and do an episode on it. So I want to jump right in the introduction. In the introduction, he talks about why he wrote this book. He said, "After the first book, I started getting inquiries from people on topics that I didn't cover enough or at all. This sequel provides answers to those questions." And he states why he would be qualified to write such a book. He says, "I start companies from scratch, assemble teams capable of extraordinary success,

• 0:44Speaker 00

  and turn abstract ideas into billions of dollars of tangible value." But this is my favorite thing about Brad is how much he talks about managing his mind and how, over his nearly five-decade career, he has learned the tools to turn an imperfect mind into a mind capable of building billions of dollars of value. And so he says, "But I'm far from perfect. Psychologist Albert Ellis nailed it when he said, 'We're all valuable, fucked-up human beings. Well, count me among them.'" And so in the introduction, there's a series of what I would call like standalone ideas from Brad. I just made a list and I just want to share some of those with you. First, there's this great description of just the magic of company building. So he says, "For me, creating shareholder value isn't just financial.

• 1:27Speaker 00

  It's about bringing something extraordinary into existence from absolutely nothing. Imagine this: one moment, you've got an idea, and before you know it, you're looking at 150,000 employees, billions in profit, and a soaring stock price on the New York Stock Exchange. It is the ultimate feat of business alchemy." Another standalone idea from the introduction, he says, "This is a very crucial thing. You've got to think extraordinarily big from day one." Nobody achieves massive success by thinking small and hoping to become big. And then the next idea is the one that I've personally benefited the most. I've spent a bunch of time with Brad. Not only did I read his first book, I got invited to have breakfast at his house.

• 2:08Speaker 00

  I've recorded a new conversation for my new show with Brad Jacobs that was actually shot and filmed at his house. If you haven't seen that, just search my name, David Senra, in whatever podcast player you're listening to. And you can watch our two hour conversation. And I've also spent time with Brad since then at a few events. And the biggest change for me was rearranging my, I say, inner monologue into a much more positive mindset. One of my favorite lines in his first book is so much of success in business comes from keeping your head in a good place. So in this book, this is what he says, and I'll explain how he helped me change the way I think, literally, the way I think, literally. A proper mindset is essential.

• 2:48Speaker 00

  The ability to rearrange your brain and create that mindset is entirely within your grasp. And so Brad has slowly had an influence on me. One time we were at a friend's mutual birthday party in Miami. I was talking to Apollo Ono. Apollo Ono is the most decorated winter Olympian of all time. And Apollo listens to a bunch of episodes of Founders and he asked me that question. He's like, you know, most of the people that you cover on the podcast, they are extremely driven. But usually that source is because they had a really bad childhood. They had issues with their parents. They didn't want to be poor anymore. There was some kind of negative fuel source that they then channeled into this extreme drive and persistence and focus.

• 3:29Speaker 00

  And Apollo asks, he's like, have you ever come across anybody where the fuel source is actually positive? And standing, I don't know, like 20 feet away, I go, hey, you see that guy? I go, do you know who that guy is? And I pointed Brad and Apollo didn't know who he was. I go, that's Brad Jacobs. He started eight separate billion dollar companies. And he has some of the most positive, maybe the most positive infectious energy of any human I've ever been around. And Brad started out with that. He talks about that in a little bit in this book, but a lot in his first book as well, that he used to just beat himself up. He used to have this, he used to expect perfection and we didn't reach perfection. His inner monologue was so negative. And one of the things I learned from talking to Brad and observing Brad is like, over time, it's fine if you start out with a negative fuel source.

• 4:12Speaker 00

  Most people do, but it is possible to move to a positive or a more generative one. And so, over the past few months, it's like, hey, my fuel source isn't, what I want it to be now is the fact that I love my work. I love reading biographies. I like making podcasts. I'm obsessed with making podcasts. Now I like talking to some of the greatest living entrepreneurs. So much so that after some of these conversations I have, I can't even sleep. I don't do any drugs, but I have to imagine this is what it feels like when you take ecstasy. I am completely wired. And so what Brad has really influenced me, and it made me a lot, I would say, just nicer to myself. My inner monologue is a lot nicer now. It's like I moved to a generative source of motivation, where my drive creates more energy, creates more ideas.

• 4:56Speaker 00

  It creates more momentum the more it is used. Where if you have a negative, or even if you have like a goal base, like say, okay, I didn't want to be poor anymore, and now I made X amount of money. It's possible to deplete that fuel source. And the remarkable thing about observing Brad and what I'm working towards too is like, the work itself fuels the drive. And so now with a more positive mindset, you're actually motivated. Your motivation is increased by building, by solving problems, by learning new things, by making something better. Could be your individual product that you're making better, or your entire company you're making better. And this generative drive builds on itself, where the motivation and the drive compounds over time. And so, instead of needing like a constant validation of some kind of external, like money, praise, status, something like that, the act of creation itself generates its own feedback loop.

• 5:41Speaker 00

  I learned that from Brad. And again, I'm not perfect. I still, if I make a mistake, or if I listen to past podcasts and I didn't like what I did, I can still critique myself and be kind of mean, but it is way more generative. And I'm actually shocked at how fast that changed. So, in this book, he's going to talk a lot about his, actually like the way he builds his company, the way he raises money, the way he integrates his acquisitions, how he designs his organizations. But just like the first book, I think some of the most valuable chapters are actually on how he has improved his mind over time. So, back to the introduction, he says, "There's always something urgent happening. When you're trying to build a giant company, there's always problems popping up." He says, "I channel that pressure into a relentless..." Drive, one of my favorite stories I've ever heard and that came to mind when I read

• 6:24Speaker 00

  this, it comes from Herb Kelleher, who's the founder of Southwest Airlines, was the most successful airline ever created. I think they were profitable for 40 straight years. And he was asked one time, how do you handle stress? He says, I don't handle the stress, I like it. And so Brad says something very similar here. I'm comfortable with a little bit of anxiety, even fear, when facing a decision that has huge consequences, because I believe that's a healthy trait in a leader. And then another piece of advice, you've got to love what you do. I love being a CEO. I get up early and work seven days a week. If there were eight days in a week, I'd happily work another day. It is a blast. And then the last thing from the introduction before, I want to go to chapter four, I'm going to jump around. I really view Brad's books as reference manuals, as you can keep the book

• 7:08Speaker 00

  on your desk. You don't have to read in chronological order if you don't want to. Go to the table of contents, see whatever subject matter pops out at you, and what's most important, where you are in your career at that point, and read that chapter. And so the first chapter I want to get into is chapter four, which is raising tons of money. But before we get there, it says, a lot of this comes down to striving for clarity and reducing my own bias. And so before we get into chapter four, raising tons of money, I want to tell you about the presenting sponsor of this podcast, and that is Ramp. I've seen Brad Jacobs up close. He is personally involved in every step of the process as he builds these companies. Brad loves details. That is something that Brad has in common with a lot of history's greatest founders. They know their business from A to Z and

• 7:52Speaker 00

  their costs down to the penny. And Ramp makes doing this effortless. Ramp gives you easy to use corporate cards for your entire team, automated expense reporting, bill payments, accounting, and cost control. And they do this all on a single platform. Ramp's corporate cards are fully programmable. You can set limits so the spending in your team never gets out of hand. Most companies only find out about excessive spending after the fact. With Ramp, you can stop it before it happens. The chief accounting officer of Notion just said this about Ramp. Ramp is the only vendor that can service all of our employees across the globe in one unified system. They handle multiple currencies seamlessly, integrate with all of our accounting systems, and thanks to their customizable card and policy controls, we're complete. Client worldwide. Matt Paulson, who is the founder of Mercabeat, recently switched to Ramp. And this is what he said about it. Ramp is the best.

• 8:37Speaker 00

  The amount of money you will save from unwanted renewals and employees who think company credit card equals buy whatever you want will far exceed the best credit card rewards program. Matt told me that Ramp has helped him save $420,000 a month. Take the time and set up a demo of the product and you will see why many of the world's top founders are running their company on Ramp. Go to ramp.com to learn how they can help your business today. That is ramp.com. Okay, so let's jump into the chapter where Brad outlines all the different ways that he's raised money. He says, "I'm a big fan of capital markets. My teams and I have utilized them to fuel our growth strategies for decades. We've raised about $50 billion in total capital to fund M&A and organic growth.

• 9:19Speaker 00

  We've worked with every investor category, ultra high net worth, family offices, private equity funds, sovereign wealth funds, pension plans, university endowments, long only mutual funds, retail investors, passive ETFs and hedge funds, as well as my own friends and family. There are pros and cons to raising money from each of these investor types. I will lay out how I think about sourcing capital and how to stay aligned with your major investors once they're on board." So I just want to pull out a couple of the different types of investors that he's raised money from and how he thinks about them. Before we get there, he talks about being a massive fan of running public companies. "I like running publicly traded companies. Being public makes it easier to build something big and lasting. It gives me deep access to capital markets on non-onerous terms.

• 10:03Speaker 00

  No coupons, no covenants, and usually no board seats. In a matter of days or even hours, my team and I can raise hundreds of millions or even billions of dollars." There are more advantages to being a public company than just funding. For one thing, it keeps your management team sharp. Every 90 days, the quarterly earnings release is a public report card for all to see. We share our perspectives on the quarter and analysts model our decisions in real time, poking holes in those results. That's fair. Results that repeatedly hit or exceed the mark can earn a higher valuation multiple. So investors naturally want to know what's driving those numbers. Being public is also a free form of marketing. I've had acquisitions come to the table because someone saw our earnings report or read a note from a sell-side analyst. Now, this is wild. Brad sent me...

• 10:48Speaker 00

  An early copy of his book. He didn't tell me that he wrote about Founders Podcasts in that book. And so this is what he said, which is a true story, by the way. "While most of the investors in QXO are repeat investors from my previous companies, two of our current top 20 shareholders had never heard of me until I was profiled by David Senra on his Founders Podcast, Brad inadvertently." There's two people in the audience that didn't know who Brad was when I covered his book the first time, heard the episode, decided to look into this Brad Jacobs character, and have since invested $750 million into Brad's company. My friend John Coogan says that is the greatest podcast endorsement of all time. Brad put me in the book. I thought it was really cool.

• 11:31Speaker 00

  "The elevated profile that comes with being a public company is not all sunshine and roses, though. It also requires thick skin, which Brad definitely has. No matter how well a company performs against outlook, there will be loud doubters in the wings telling the world why they think the stock is overvalued. I'm comfortable with that trade-off." So then he gives you advice. "Your dilution should be strategic. Trading equity for capital sounds like pure upside until you realize you're selling off chunks of your company. New shares issues dilute the ownership percentage held by existing shareholders. You're essentially trading ownership for fuel, and if you don't think through the math carefully enough, you can end up giving away too much for too little." So the first source of equity that I want to talk about, he talks about family offices. "Over the last 20 years, a new class of investors emerged.

• 12:14Speaker 00

  The offices that manage the money of the world's wealthiest families. Family offices are often the first outside capital source that I will approach. The good ones are thoughtful, patient, and entrepreneurial. Unlike other institutional investors, family offices are usually not burdened by rigid investment mandates when making decisions. If they believe in a venture, they can move fast. Another advantage of family offices is that they're sometimes run by former operators or investors with real-world know-how about building businesses. They understand the grind." I have talked to a bunch of founders about this. Almost without exception, they said they would rather raise money from a fellow entrepreneur's family office than a professional VC fund.

• 12:57Speaker 00

  "Family offices can offer strategic guidance and access to their network. In some cases, the warm intro into a strategic customer or ideal executive candidate can be more valuable than the capital itself." Then Brad talks about private equity. Each of these, he breaks down, you can read them each in a few paragraphs. Obviously, I highly recommend buying the book. And don't worry if you didn't read the first book, because what's cool about this book, there's like a 30 or 40-page summary of Brad's first book at the end of this book, too. So Brad does not sound like he is a fan of taking money from private equity. He says, "I generally avoid taking money from them. However, I've made four exceptions, and all four have turned out very well. In general, though, I would advise against using private equity funds if you have the luxury to do so.

• 13:40Speaker 00

  As a group, they're entrepreneurial, but can be fair-weather friends, and their focus on self-interest can favor aggressive decision-making. That said, if you have an early-stage company and need to raise a lot of money, private equity firms can be ready, check writers." The next category he talks about is sovereign wealth funds. These funds are some of the best investors on the planet, but they're not easy to land. They're serious and professional investors, and they think in decades, not quarters. They also come with global networks and huge influence. The downside is that they take a long time. You have to start cementing the relationship brick by brick long before you need the capital. Before they invest, they'll perform 360-degree due diligence, not just on your numbers, but on how you think, how you lead, and whether you're the kind of person they want to partner with.

• 14:22Speaker 00

  Their backing can unlock opportunities you could never realize on your own. The next category is pension plans. Pension plans are excellent sources of capital when you're looking for big checks and low drama. They're not after board seats or special terms. What they want are predictable returns over long horizons, which makes them a strong match for business models like mine that deliver value by compounding returns over time. Pension plans are not speedy investors. Decisions typically have to be passed through consultants and layered approval chains of investment committees, board members, and trustees. It's a very methodical risk evaluation process, and the money doesn't move until every box is checked. But when they commit, their capital is sticky. They don't freak out during short-term market fluctuations.

• 15:04Speaker 00

  That kind of consistency is worth the slower ramp-up. And then Brad talks about long-only funds. When your publicly traded company reaches a certain scale, significant daily trading volume, real revenue and earnings, and a substantial organization, you'll start to get attention from long-only institutional investors. There are two catches. First, most long-only funds only invest in large, well-established companies. And second, their investment attention span has come to resemble that of a hedge fund. 30 years ago, long-only funds would buy my company's stock and hold it for a decade. Today, some might hold it, but they're just as likely to sell it in a few months. That's a long maybe, in my estimation. Nevertheless, you're going to need good relationships with the major long-only players, because they're probably going to be your second-largest source

• 15:48Speaker 00

  of capital eventually, after index funds. And then he talks about retail investors. Retail investors are often overlooked, but they can be a powerful part of your shareholder base once your company is public. Retail investors have their own advantageous trait. They talk, they post on Reddit, they share on X, and they swap ideas in group chats and forums. If they're excited about a stock, they'll become online crusaders for your company. All that positive exposure can create value, because it shapes perceptions about your company and reaches existing and prospective investors, customers, and talent. And then he gives a cautionary tale on hedge funds. He says, "This one, I learned the hard way." Hedge funds will tell you they're long-term investors and go on about alignment and conviction. But in my experience, most of them flip the stock as soon as the share price goes up.

• 16:33Speaker 00

  "My team and I put together some pipes to raise money for QXO, deals I thought were well-structured. As soon as they were permitted to, the hedge funds we let in immediately sold out. In fact, one of them sold the stock the day before it was permitted. Hedge funds aren't built for what my companies do." That's not a criticism. They have a business model, and it's not about loyalty or patience. And then he ends the chapter talking about debt. Issuing debt is a powerful tool for a public company. Unlike equity, it does not dilute existing shareholders, because no new shares are created. The interest paid on debt is often tax-deductible, making it a very efficient way to raise capital. Also, because debt must be repaid, it forces a company to be disciplined with its finances.

• 17:17Speaker 00

  With that said, he says he usually targets a debt-leverage ratio of about 1X to 3X EBITDA. "I'd rather be slightly under-optimized on leverage and sleep at night than live quarter-to-quarter hoping nothing implodes." And then he's got two great standalone sentences here. The first one, "The best investors don't just write checks, they open doors and sharpen your strategy." The second one, which is my favorite sentence in the entire book, "The most consequential decision you'll make in business and in life is who you surround yourself with." The very last sentence in this chapter is a great summary of Brad's peron of view on this. Above all, remember that when someone wires money into your company account, they're trusting you to turn it into substantially more. You own that expectation.

• 17:58Speaker 00

  Okay, so let's move on to chapter five, which is mastering the integration playbook. He says, "Most acquisitions do not create shareholder value." "There are probably only a few dozen CEOs who are truly knowledgeable about all the ingredients to make an acquisition successful." "This is important because if you're not substantially improving the companies you buy, you're just moving capital around." "As an industry consolidator, I stake my reputation on my ability to transform separate entities into a cohesive profit machine through integration. If I focus solely on buying businesses and neglected to integrate them well, my companies would be a shamble of local branches with old branding, tech silos, and teams that don't talk to each other. Operations that are left to linger for months or years under legacy structures limit their profit opportunities,

• 18:43Speaker 00

  yet this happens all the time. When we complete an acquisition, the very first step is simple but crucial: ask questions and listen closely. In every acquisition, we ask what's working well and what could work better. The answers often come from the front lines, where employees who have never been asked for their input reveal precisely what's working and what's broken. That is where we start, with respect for the wisdom already within the organization. For most acquirers, integration begins the day a deal officially closes. But for my companies, that's too late. I do something unusual. I negotiate explicitly for unrestricted access to the company from the moment we sign an agreement. Immediate access to employees is an essential condition for us.

• 19:28Speaker 00

  This is not commonplace in M&A." And so then he talks about how he does this. He says, "We hold town halls and team meetings and visit field operations. I conduct face-to-face interviews with the top executives of the entity we're acquiring." So he wants to integrate right away. He says, "Regarding the timing of this process, I generally take the Band-Aid approach and rip it off because I've found the pros vastly outweigh the cons. Sure, there could be some kerfuffles when we do an integration quickly, but the sooner we get the operation running on our systems, the better. The same goes for business intelligence and dashboards. Our dashboards display performance data in a graphical way to erase the barriers between levels of financial and operational sophistication. Everyone gets the same point without big swings in interpretation." And he gives an example from his recent past. "When QXO closed on the Beacon Buildings Products deal,

• 20:13Speaker 00

  we sent out a Zoom Town Hall invite to everyone with a Beacon email address within minutes of the press release going live." I was happy that 3,600 people, the overwhelming majority of those invited, showed up on three hours' notice. Instead of lecturing about ourselves from on high, I gave a brief introduction and moved right into Q and A. It's essential to give new employees an open mic to share what's on their minds. And when we respond just as openly, this starts to create an environment of trust. And so something he'll repeat over and over again is that an acquisition comes with talented employees, full of untapped ideas. You should ask them what they do to make the business better. It's not rocket science. He says, "The town halls we run are far from polished presentations.

• 20:56Speaker 00

  In fact, being too slick can be a mistake." I make a point of being accessible, answering questions candidly without pre-screening them. And so there's a bunch of lists of sample questions that he uses in the book. Here's a few of them. What are we doing that should be stopped immediately? Where are we over-investing in this business? Where are we under-investing in this business? What are we doing that annoys our customers? What are we doing that delights our customers? Are we prioritizing the products and services that our customers value most? What are the biggest causes of waste or inefficiency in our operations? Does your compensation structure incentivize you to keep doing better? Are we making decisions fast enough or are we too bureaucratic?

• 21:38Speaker 00

  And then these answers to these questions, Brad says, "This is when inherited issues usually come to light. We come away with a list of targeted actions that matter to our employees. These get turned into work streams with named owners who are accountable for the deliverables." I am eager to meet anyone who interacts with a customer, either in sales or support. I ask questions, scribble down notes, and always end by extending an invitation to email me directly. This is well worth my time." Brad is also huge on employee surveys. He says, "Quarterly, all employee surveys are one of my absolute favorite tools for running a business. We also send a version of this survey immediately after we buy a business. It sets a respectful tone and communicates an important message that we want to hear

• 22:22Speaker 00

  the truth so we can act on it." And then the important thing about the way you do these employee surveys, all you have to do is just ask three questions. We keep it simple with three questions derived from a longer list. Number one, what's working really well? Number two, what needs fixing? And number three, what's your single best idea to improve the company? As a result, we end up with a set of clearly defined prioritizations, milestone targets, and end goals. It keeps everyone focused on the thing that moves the needle. And then he also talks about how he does these integrations. One of the most important things is he always has a person that is responsible for every single line item. And he calls this a throat to choke. A single integration can have thousands of specific line items.

• 23:07Speaker 00

  Each one is assigned a single throat to choke, an owner who is personally accountable for the outcome on a firm completion date. I want to jump to the next chapter, which is called organizational integration. And so Brad says, the first question to answer in organizational design is how is this business we're acquiring going to create value? I will start with the organizational chart. The blueprint for well-run companies. Over the years, I've reviewed thousands of organizational charts, some elegant and efficient, others chaotic. I've found that the org chart is often a good indicator of a company's focus. Get the people part right, and it can become your greatest competitive advantage. Get it wrong, and you'll spend years untangling dysfunction

• 23:51Speaker 00

  and losing money. And so he goes into designing the optimal organizational chart. When it's done properly, someone from outside the company can look at the chart and immediately understand how the company is structured. Some people do crossword puzzles. I do org charts. And he talks about some of them are so confusing. He says, "These are incoherent and bloated because no one's ever stopped to ask, what is the optimal organizational architecture to accomplish our goals?" For good org chart design, at the heart of that design is this question. Where should decision-making and P and L authority sit? The answer always guides to a role, not a person. Always keep it simple. If it looks like a bowl of spaghetti, it probably runs like one.

• 24:35Speaker 00

  A great org chart should fit on a single page, a clean geometric structure with minimal dotted lines and no asterisks. Brad has a great line from his first book where he says, "An empty seat is less damaging than a poor fit." And so he talks a little bit about that here. "It takes commitment to let an org chart seat stay open until the ideal person is found. An empty slot is far less risky than filling it with the wrong person. My company's org charts reflect what we want the organization to be, not what we've been handed to work with. We never compromise the structure to check a box and will hire from outside the company if we need to.

• 25:16Speaker 00

  If I look at a business and see a Frankenstein org chart, an amalgamation of charts from prior M&A, it tells me that each leader has been allowed to keep their fiefdom intact to the detriment of the whole. We take a fresh look at every position and categorize it as a must-have, a nice-to-have, or what the hell. And we're diligent about taking a broom to that third category. The nice-to-have category is a larger cost reduction opportunity than either of the other two. So by keeping the most promising nice-to-haves and saying goodbye to the rest, we can optimize the headcount." And so he has some funny examples of these org charts, these thousands of org charts that he's seen.

• 26:00Speaker 00

  He says, "I've seen companies where someone manages," and he put that in quotation marks, "someone manages one person. That's not management, that's companionship. And it pains me to think shareholders are paying for it. You want to eliminate as many layers as possible," he says, "layers are the number of rungs between the person on the front line and the CEO. Every layer slows down communication and decision-making. The goal is to flatten the org structure, not to the point where no one knows who's in charge, but flat enough so ideas move fast. I've seen org charts where there are nine layers between the customer and the CEO. That's bureaucracy." The shorter and more direct the line from problem to decision, the better.

• 26:43Speaker 00

  And he says in most of the acquisitions that he does, the cuts don't come from the front lines of people actually serving the customer. It comes from bloated management. So he talks about, he had a very wise chief operating officer, this guy named Waylon Hicks. And he says Waylon Hicks was fond of saying that a fish rots from the head. Meaning if your leaders aren't top tier, their bad characteristics cascade downward, dragging performance with them. Typically, when we acquire a business, most of the people we exit do not come from the front lines. They're in the mid to upper echelons of the legacy operation. That is where we usually find most of the bloat. A fish rots from the head. Okay, so now I want to go back to the very beginning of the book.

• 27:27Speaker 00

  I want to touch on the two chapters that are about getting your mind right. Or how Brad gets his mind right would be more accurate. Before I jump into that, I need to tell you about two tools that you should be using for your business. The first one is Vanta. Vanta helps your company prove you're secure so more customers will use your product or service. Customer trust can make or break your business, and the more your business grows, the more complex your security and compliance tools get. That can turn into chaos, and Vanta helps you tame that chaos. You can think of Vanta as your always-on AI-powered security expert who scales with you. Vanta automates compliance, continuously monitors your controls, and gives you a single source of truth for compliance and risk. So whether you're a fast-growing startup like Curseur or an enterprise company like

• 28:09Speaker 00

  Snowflake, Vanta fits easily into your existing workflows so you can keep growing a company that your customers can trust. Many companies will not sign contracts unless you're certified, and that causes you to lose out on sales. That is why the average Vanta customer reports a 526% return on investment after becoming a Vanta customer. Vanta will help you win trust, close deals, and stay secure faster and with less effort. You go to vanta.com/footslashfounders and you can get $1,000 off. That is vanta.com/footslashfounders. Another valuable service I want to tell you about is collateral. Most companies have a hard time telling their own story. There's a great quote- From Don Valentine, who's the founder of Sequoia, that illustrates why this is so important. He says, "The art of storytelling is critically important.

• 28:54Speaker 00

  Most of the entrepreneurs who come talk to us cannot tell a story. Learning to tell a story is incredibly important because that's how the money works. The money flows as a function of the stories. And that is exactly what Collateral does. Collateral transforms your complex ideas into compelling narratives. Collateral crafts institutional-grade marketing collateral. And they do this for private equity, private credit, real estate, venture capital, family offices, hedge funds, oil and gas companies, all kinds of corporations. I have friends that have used Collateral for their marketing collateral and have raised billions of dollars of capital and have made hundreds of millions of dollars. I will leave a link down below, but make sure you go to collateral.com and improve the way your company tells its own story." So, the first two chapters of this book are the tools that Brad uses to keep his head in a good place.

• 29:38Speaker 00

  He says, "Mental clarity is even more vital to your success. Throughout my 46 years as a CEO and entrepreneur, I've discovered that maintaining a clear, balanced mindset is essential to strong leadership, not just for good decision-making or resilience in the face of challenges, but also because clarity can give you a huge edge. How you manage your inner state can be the determining factor. It is imperative to center your mind. Keeping your head in a good place is crucial for business success. So, before creating anything of value, I first need to get myself centered." And so, he starts with two quotes from Lao Tzu, the famous Chinese philosopher. And he says, "Two of his most powerful tenets are knowing others is intelligence, knowing yourself is true wisdom. And the second one is mastering others' strength, mastering yourself is true power.

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  From the 6th century B.C. to today, the philosophy behind those words hold true. Our success flows from inner control." I am an advocate for what I call rearranging the brain, consciously reshaping thought patterns, perceptions, and emotions to access more expansive ways of being. Mind transformation techniques take continuous practice and a genuine heart and soul commitment. I've dedicated this first chapter to detailing my personal meditation practices. To be clear, I'm not a meditation teacher or a guru. I'm a fellow explorer who meditates twice a day every day to chill out and stay centered." And so, he says, "I began transcendental meditation, TM, when I was 16 years old. I started practicing meditation twice a day.

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  I've been doing that for decades without missing a single day." Meditation is a tool for sharper decisions and bolder visions, not just relaxation. Meditation for me is not about replicating a particular experience. It's about profoundly letting go. And then he describes one of the techniques he uses. Two times that I've been with Brad, he's done this. He's actually done this in front of me and led the other people we're with into this practice. He goes into a lot more detail in the book, but here's the high level. He says, I do a technique based on Qing Gong practice, where I open my hands outward, close my eyes and think, I am in the universe. I let myself become a mind without a body floating in a vast, mostly empty space. It is a very liberating feeling.

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  Then I'll bring my arms inward and think, and the universe is in me. I will think, I love the universe and the universe loves me. It puts me into a completely different state of awareness, one that helps me enter a blissful frame of mind. It also stimulates creativity. And it reminds me of the gigantic context that informs all of our lives, which helps keep things in perspective in business. I think that's the most important sentence. When the inevitable problems of the day hit, they seem small by comparison. And so he uses a combination of about five techniques. He says, your best ideas will not come from thinking harder, but from thinking in different ways. More often than not, I'm practicing mindful meditation, which is like watching a movie. I'm not the director, the producer, or even an actor.

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  I am simply the audience. Anything can happen in that movie and I do not resist it. Meditation in all its forms is more than just a concept. It helps keep you in the zone with your head in a good place and gives you the skills to think differently while maintaining an inner peace. Consider the techniques I describe in terms of the benefits they deliver. Humility, positivity, the headspace to think expansively.

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  Relaxation and rejuvenation amid chaos and the ability to keep problems in context. This produces boundless creativity and the capacity to be inspired. In high stakes business situations, emotional balance is a powerful advantage. And that moves into the second chapter, which is making your way back to center. What happens when you're knocked off balance? In any endeavor, it is important to keep the ups and downs into perspective, especially the downs. Spoken like an entrepreneur with over four decades of experience. Losing your center is not a failure and perfection is impossible. I know that our brilliantly flawed universe will inevitably generate some outcomes I do not like. Not only am I okay with that, I also recognize that good things can come from those outcomes.

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  Or at the very least, I can learn from them. When I stopped expecting flawlessness from myself and others, this is something he also talks about in the first book. That really resonate with me. When I stopped expecting flawlessness from myself and others, I could let go of frustration and put that energy to good use. I believe in this imperfection mindset so strongly that I've woven it into the culture of each new company I start. Mistakes are not failures, they're the very substance of our growth. And one thing that Brad does is really good at zooming out and trying to put everything into its proper context. So he's like, well, how did these human traits that we deal with now? How do they evolve? And do they make any sense in our modern environment? So he talks about this right now with the fight or flight response. He really likes to zoom out.

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  Take the fight or flight response. For our more skittish ancestors, catastrophizing harmless rustles in the bushes gave them a survival edge over those who ignored potential threats. Their vigilance was passed down. Today, that same wiring can leave us anxious in safe environments. We pump adrenaline, our hearts race, we sweat. Prolonged, it can zap our energy, heighten tension, and leave us caught in cycles of worry. Anxiety and pessimism, once vital to avoiding danger, now often manifest as excessive risk avoidance. As a serial CEO, I couldn't have built global public companies without embracing calculated risk.

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  Evolution reminds me that these feelings are echoes of the past, not accurate guides for contemporary decisions. When we recognize these inherited tendencies for what they are, outdated survival strategies, we give ourselves the power to step out of their grip. Evolution explains why anxiety and self-criticism show up so strongly, but it doesn't dictate how we respond to external events today. So then he gets into some of these tools that he's found very helpful. The first one is Rational Emotive Behavioral Therapy, REBT. Brad likes the work of Albert Ellis. Talks about some of the ways that Ellis would help people get back to center. So he talks about this group environment. They're talking about, you know, people would share something that was making them angry,

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  anxious, or depressed, something that was knocking them off-center. And so Ellis would then ask the person to close their eyes and get in tune with that negative emotion. When he felt they were ready, he'd say, "Okay, now make yourself half as upset as you just were." They would sit in silence for a minute or two while they do this. And essentially, he says, "Ellis was demonstrating that external events in and of themselves do not make you upset. What makes you upset is what you tell yourself. In my experience, most people carry on an intermittent internal monologue of self-criticism. It's a quiet, often unspoken commentary, invasive, persistent, and deeply personal. Nearly everyone I know underestimates their own worth." This is what Ellis referred to as "stinking thinking."

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  Ellis's work profoundly reshaped my understanding of perfectionism. "I used to hold myself to punishingly high standards, demanding constant excellence and leaving no margin for error. Unsurprisingly, this only led to disappointment. Ellis taught me to reframe rigid demands as flexible preferences, to aim high but not crumble if I fell short. By embracing the inevitability of human error, I discovered a more resilient mindset and a far healthier foundation for both my business endeavors and my personal relationships." Through his REBT, Ellis helped millions of people confront and reshape their irrational, self-defeating beliefs. The core of his therapy is to identify those beliefs and reframe them into more rational

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  ones. And so he's a bunch of lists of examples of this. So like, you know, your rational belief would be, "I must be liked by everyone to feel good about myself." Well, you need to reframe that into a rational belief that would sound something like, "I prefer to be liked, but I can still value myself even if some people don't like me." And he lists like 17 of them. I'll just give you some other examples. Irrational belief. "Others must treat me fairly or they're awful people." Reframe that into a rational belief. It's preferable when others treat me fairly, but I can't control their behaviors, only my response. Irrational belief: I should never feel anxious, sad, or angry. Rational belief: Emotions are natural and they serve a purpose. Irrational belief: I must take responsibility for other people's problems. Rational belief: I can be supportive, but I'm not responsible for fixing everything for everybody.

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  Irrational belief: If I feel it, it must be true. Rational belief: While my emotions are important, they don't always reflect the full truth. I can challenge my feelings with evidence. And so then Brad, at the end of the section, says, "When I find myself out of the zone, when I find myself off-center, I try to pay attention to what I've been telling myself that made me upset, and I reframe it in a more constructive, rational way." Literally saying it to himself in a better way. I find this extremely effective. The second tool that he talks about a lot is cognitive behavioral therapy, CBT. It is widely considered to be the gold standard for helping people free themselves of problematic thought patterns, learned behaviors, and core beliefs. And so Brad writes, "What I learned from CBT is that we're all born with schemas.

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  Schemas are cognitive frameworks to shape how we interpret the world. Core beliefs are part of schemas. So are behaviors and emotions, which are often developed during childhood. These schemas act as prisms through which a person interacts with life. Over time, this can lead to cognitive distortions in how a person thinks, especially when the schemas are rigid and over-filtering or negative to begin with. When I'm out of the zone, it's usually because I'm upset, anxious, sad, or angry about something. There are a couple of ways I can approach this. I might use Albert Ellis's method and ask, 'What am I telling myself right now? What is my irrational belief that I need to reframe? Irrational and distorted thoughts must be reframed in a constructive way

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  to engage with life more validly and happily." The way you think affects the way you feel. CBT taught me how my interpretation of a situation through automatic thoughts can skew my emotions and behaviors. It also gave me an incentive to consciously question my negative thoughts. And so previously, he had examples of irrational belief, rational belief. This time, he has distorted thought, reframed thought. And a lot of this has to do with negative internal monologues. So distorted thought, I mess this up, I always screw things up. Reframed thought, this one didn't go as planned, but I've done well before and I can learn from this. Distorted thought, I feel like a failure, so I must be one. Reframed thought, feelings aren't facts, just because I feel this way doesn't mean it's true.

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  Distorted thought, they said I did a great job, but they were just being nice. Reframed thought, they didn't have to say anything at all. Maybe I really did do a good job. And so he gives a bunch of other examples in the book. The next tactic that he uses is dialectical behavior therapy. And this section is really short. A dialectical approach means viewing something from multiple perspectives and interpreting it in different ways that were all valid. The fourth tool that he uses is positive psychology. This is also very short. The fourth technique in my re-centering toolbox is positive psychology. Instead of asking what's wrong, it asks what's right and how can we build on it? And the fifth and final one is mindfulness. Mindfulness is a powerful and uplifting approach to life.

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  It involves radically accepting yourself, others, and the world, non-judgmentally and unconditionally, without trying to change a thing. And it requires intentionally paying attention to what's happening in the moment. And he talks about one of his teachers translated mindfulness from the Buddhist monasteries to a secular form. And he says his method was elegantly straightforward. Pay attention to the present moment without judgment and without trying to change it. That is all. By systematically directing the mind to each part of the body and practicing mindful breathing as well as a slow, intentional movement, this trains the mind to anchor itself in the here and now for mental clarity.

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  Mindfulness is a tool I use for emotional regulation. When something is going haywire in an MNA transaction, or I'm dealing with any of the myriad challenges that inevitably land on a CEO's desk, I practice mindfulness to get back into the zone. One of the most powerful things I can do as a business leader is to be fully mindful of the person I'm with in that moment. It could be a customer, a shareholder, a teammate, a vendor, anyone. When I give a person my complete attention, I'm treating that encounter as something meaningful and that person as someone important. Sometimes I think to myself how fortunate I am to be right here, right now, with this person or group. So those are the five frameworks in my re-centering toolbox.

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  If I get thrown off-center, I reach for one or more of them. REBT, CBT, DBT, positive psychology, or mindfulness. The techniques overlap and sometimes I mix and match them, but the goal is always the same: to get back to center. It is not about eliminating problems, since they're part of the gig, but about responding to them intentionally from a grounded place. I don't pretend to have it all figured out. I slip up sometimes, like when I catastrophize or catch myself demanding perfection for myself or others, but I pick up on it faster now and I reframe it faster. I return to the zone more smoothly. No one stays perfectly centered all the time, but knowing how to get back to center will

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  help you navigate the ups and downs of life and business.