Billy
Dan Gilbert: the 'capitalist Batman' rebuilding Detroit
Andrew profiles Dan Gilbert, who went from a struggling Detroit bar family and pizza delivery to founding Quicken Loans, and whose net worth jumped from ~$7B to $57B even as he survived a major stroke; he pours money into revitalizing Detroit.
“He's like a capitalist Batman in Detroit, and I'll talk about some of the cool stuff he's done. And one of the things I like about him as well is that he. He does a lot of stuff that might not work. He takes big swings, takes big risks that he thinks can make the world better. And he invests in all sorts of crazy ideas.”
Billy
Dan Gilbert: the mortgage king who co-founded StockX off his kids' sneakers
Shaan marvels at Dan Gilbert, owner of the Cleveland Cavaliers and Quicken Loans, who noticed his kids were obsessed with sneakers and helped turn a sneaker store into StockX, a stock exchange for shoes that became a billion-dollar company.
“the other company that Dan Gilbert started or helped start was StockX, which is a billion dollar, uh, what do you, uh, eBay for sneakers basically.”
Framework
The pre-mortem: why will this have failed 6 months from now?
Shaan's decision-making habit: imagine fast-forwarding 6-12 months to a future where the project has failed, ask what the most likely reason would be, write it down now, and start working on it immediately, then revisit to see what he was right or wrong about.
“What's the, 6 months from now, if we fast forward to there and it's failed, what's the most likely reason I'd be giving you over a beer when we're like, dude, what happened? That was great. And then I write that down now and I start to work on it now.”
Steal thisRun a pre-mortem on every project: name the most likely failure reason 6 months out, write it down, and start mitigating it today.
Fact
Incentive-caused bias: share buybacks line the CEO's own jeans
Wilkinson explains incentive-caused bias using buybacks: CEOs paid in stock options benefit when share price rises, and buybacks shrink the share count to lift price — so a 'return capital to shareholders' move can really be self-enrichment.
“a lot of CEOs are compensated based on share price because they get stock options. So their stock options become more valuable when the share price goes up. And what makes the share price go up but share buybacks? So when you buy back shares, there's fewer shares and each individual share is worth more. So it's actually a way for the CEO to put money in his or her own jeans.”