Billy
Brad Jacobs: the man who started 5 billion-dollar companies
Sam profiles Brad Jacobs, who started his first company at 23 and built five companies that went public or topped a billion dollars, running the same acquisition playbook across oil, waste, equipment rental and logistics while buying 600-700 companies.
“And this person is super interesting because they have started, uh, 5 companies that have either gone public or are worth over a billion dollars. He started age 23, he's 64 now. Uh, Google him, Brad Jacobs. He's worth somewhere in the range of $3, $4, $5 billion, and he's bought or in both. He doesn't like invest passively like a venture check. They buy companies and he's bought something like 600, 700 companies and he's done it across a variety of industries and he's done the same strategy over and over and over again in different industries.”
Number
Jacobs' oil brokerage hit $4.7B in bookings by the time he was 27
Brad Jacobs started oil brokerage Amerex Oil Associates at 23; within four years it was doing $4.7 billion in gross oil bookings, and he later sold it for around a billion dollars.
$4700M
Gross oil bookings · USD
“by the age of 27, AmarEx, his oil business, was doing $4.7 billion in gross, uh, gross oil bookings, meaning he would— that's how much oil they're buying and, uh, and selling. Now I imagine his company kept a tiny percent of that, like 1 or 2 or 3%, but incredibly impressive for a young guy.”
Framework
The four types of entrepreneur: innovator, remixer, scaler, optimizer
Andrew Wilkinson breaks founders into four archetypes using Chipotle: the innovator who rolls the first burrito, the remixer who builds the brand, the scaler who rolls it out to 100 locations, and the optimizer who maximizes an existing machine. Jacobs is the classic scaler.
“I always think there's like, um, 4 different types of entrepreneurs, right? There's the innovators. So let's just take, let's take, um, Chipotle as an example, right? So there's the innovator, there's the guy who rolled the first burrito and was like, oh shit, this tastes really good. Um, then there's the remixer. There's the person who creates Chipotle. They take the burrito, they package it up, they create a brand around it. Then there's the scalers, the person who scales Chipotle to 100 locations. And then there's the optimizer, the person who just sits on top, makes sure it doesn't blow up and gets as much as possible, gets as much juice out of the lemon as they can.”
Steal thisFigure out which of the four founder types you are, then build or buy in the lane that fits you.
Framework
The four types of entrepreneur: innovator, remixer, scaler, optimizer
Andrew Wilkinson breaks founders into four archetypes using Chipotle: the innovator who rolls the first burrito, the remixer who builds the brand, the scaler who rolls it out to 100 locations, and the optimizer who maximizes an existing machine. Jacobs is the classic scaler.
“I always think there's like, um, 4 different types of entrepreneurs, right? There's the innovators. So let's just take, let's take, um, Chipotle as an example, right? So there's the innovator, there's the guy who rolled the first burrito and was like, oh shit, this tastes really good. Um, then there's the remixer. There's the person who creates Chipotle. They take the burrito, they package it up, they create a brand around it. Then there's the scalers, the person who scales Chipotle to 100 locations. And then there's the optimizer, the person who just sits on top, makes sure it doesn't blow up and gets as much as possible, gets as much juice out of the lemon as they can.”
Steal thisFigure out which of the four founder types you are, then build or buy in the lane that fits you.
Story
United Rentals went from formed-on-Labor-Day to NYSE in months, then a $25B company
Jacobs founded United Rentals and within 13 months leapfrogged Hertz to become the world's largest equipment rental company; Merrill Lynch called it the fastest IPO they had ever seen, and the company is now worth roughly $25 billion.
“Within 13 months, we became number one, leapfrogging, leapfrogging Hertz, which had become the equipment rental, which was the number one equipment rental business in 1965. Another thing we did was we went fast, uh, we went public fast. We formed the company on Labor Day weekend and we were trading on the New York Stock Exchange by December.”
Story
United Rentals went from formed-on-Labor-Day to NYSE in months, then a $25B company
Jacobs founded United Rentals and within 13 months leapfrogged Hertz to become the world's largest equipment rental company; Merrill Lynch called it the fastest IPO they had ever seen, and the company is now worth roughly $25 billion.
“Within 13 months, we became number one, leapfrogging, leapfrogging Hertz, which had become the equipment rental, which was the number one equipment rental business in 1965. Another thing we did was we went fast, uh, we went public fast. We formed the company on Labor Day weekend and we were trading on the New York Stock Exchange by December.”
Framework
Jacobs' rollup recipe: buy a $30M business, add 30-40 bodies, double revenue
Jacobs' template: find a huge fragmented industry of small, profitable businesses starved of capital, buy a brokerage doing ~$30M revenue, add 30-40 salespeople, and double revenue over time, supplying the capital the founders never had.
“in a nutshell, this is how you ramp up a business. You buy a brokerage or some type of small business with $30 million in revenue and you add 30 to 40 bodies to it and you double revenue in time. I've looked into companies that have executed this plan, but most of them don't have the capital to sustain it. I try to find those businesses and I bring all the capital to do it.”
Steal thisBuy a ~$30M profitable business in a fragmented industry, inject capital and 30-40 salespeople, and double revenue.
Framework
Jacobs' rollup recipe: buy a $30M business, add 30-40 bodies, double revenue
Jacobs' template: find a huge fragmented industry of small, profitable businesses starved of capital, buy a brokerage doing ~$30M revenue, add 30-40 salespeople, and double revenue over time, supplying the capital the founders never had.
“in a nutshell, this is how you ramp up a business. You buy a brokerage or some type of small business with $30 million in revenue and you add 30 to 40 bodies to it and you double revenue in time. I've looked into companies that have executed this plan, but most of them don't have the capital to sustain it. I try to find those businesses and I bring all the capital to do it.”
Steal thisBuy a ~$30M profitable business in a fragmented industry, inject capital and 30-40 salespeople, and double revenue.
Tactic
The acquirer's moat: treat the sellers so well they don't leave
Jacobs says the common denominator in every company he buys is sellers with high integrity, and that a key moat is taking great care of the people in the acquired businesses, because the biggest risk to the plan is those people leaving.
“the common denominator of everything we buy is the people who we buy from have to have high integrity. And also one of our moats is we take care of the people of the businesses who work for the businesses that we're inheriting. In fact, the biggest risk of our plan is that the people who we buy companies from, they leave. And so we treat them all really, really well.”
Steal thisWhen you acquire a company, retain and over-take-care-of the sellers and key people; their departure is the real risk.