Ladies and gentlemen, we're about to start one of the most special panels this conference has ever had. We're going to play a quick video before we start the panel.
Garbage trucks, forklifts, warehouses, and artificial intelligence—all of these were turned into five billion-dollar companies by American entrepreneur Brad Jacobs. At 27, Brad founded Hamilton Resources, an oil brokerage that traded barrels around the world. In just 4 years, the company was generating over $1 billion in annual revenue. In the '90s, Brad built United Waste Systems, a company that collected and managed garbage across the United States, which he later sold for $2.5 billion. He used that money to start United Rentals, a company that rents out heavy equipment like forklifts and cranes to construction firms. It became the largest equipment rental company in the world. Then came XPO Logistics. Brad took a small freight company and turned it into a $17 billion logistics powerhouse, helping businesses move goods across borders, cities, and supply chains. In 2021, he launched GXO Logistics, which runs high-tech warehouses for global brands like Nike, Apple, and Nestle, organizing, packing, and shipping millions of online orders using robots and automation. Now he's building QXO, a company aiming to modernize industrial supply with software, artificial intelligence, and automation. Think Amazon, but for factories and distributors. In 2024, Brad encapsulated his decades of entrepreneurial wisdom in his book, How to Make a Few Billion Dollars. This work offers a deep dive into the strategies and philosophies that propelled him to build it all. Brad didn't just build one great company. He built five in fragmented, unglamorous industries and turned them into revenue-generating machines. Today he shares the stage with Jorge Paulo Lemann, another master of scale and efficiency, for a conversation about what it takes to operate and grow at the highest level.
Please welcome to the stage a man that needs no introduction, Jorge Paulo Lemann.
Please welcome to the stage Brad Jacobs.
Feel the pressure. I feel the pressure.
For Brad, I'm only going to speak Portuguese a bit, and the rest will be in English now. I'm a great fan of Brad. I really admire what he has put together, the way he has worked. He has built some very big companies, and he's done it in a way which I like. He's very involved in the management of these companies. He invests a lot of his own money in the projects he's built up, and he has developed a system of doing it over and over again and repeating his success. So as a businessman and somebody who is interested in building companies, I have a lot to learn from Brad. I'm a little bit worried here because I'm supposed to interview him, but he has said that he's going to be asking me questions also. So, we're ready. But before we get going, how many of you want to be philanthropists in the future and would like to help others and create big projects? Okay. How many of you want to be a billionaire? Okay. So, I recommend very much that you read his book, How to Make a Few Billion Dollars. It's a good book to tell you how to become a billionaire. But Brad, tell us a little bit about your youth and how that affected what you became later and how it affected your business principles and like that.
Well, first of all, thank you for inviting me here, and I appreciate it. And thank you all for taking time to listen to us. My youth—I still think I'm in my youth. I still feel very young. I don't feel mature at all. I don't feel like an adult. I feel like an adolescent, and I feel I have the same mental energy and, to some extent, the same physical energy, and even more of the spiritual energy of someone young. So I don't know if I buy into this concept of you're young and then you're old. I think you're kind of what you want to be. I was kind of older in some ways when I was younger.
What did you want to be when you were very young?
Different times I wanted to be different things. My mother wanted me to be president of the United States. I wasn't so interested. At some point I wanted to be a rabbi, but I lost interest in that. At one point I wanted to be a musician. I wanted to be a musician very strongly, and I still identify as a musician even though I don't play music and practice music like I should, but I identify as a musician. I think of all the different things I did earlier in my life, the music is what influenced my business career the most because it was involved in improvisation and teamwork harmony.
Good. So what was your big dream then, and what is your big dream now?
My big dream when I was a kid is I wanted to make $100,000 because we had stagflation with Jimmy Carter and interest rates were in the high teens. So you could take $100,000 and put it in a Bank of America certificate of deposit and you'd make 18% on that. So you could make 1,500 bucks a month. And I figured I could retire after I made the $100,000, and I'd make 1,500 bucks a month, and I could meditate, and I could do my music, and I could just really have a deep life. But I started a company, and we started making $100,000 a week, $100,000 a day. It just kind of kept going. And I just always intended to stop at some point, but I just never stopped. I just kept going.
And what do you think is your edge? What is your edge? Why have you done better than most, and why have you been so successful?
Well, I think without trying to be falsely modest, I do think luck matters. I think where you're born helps or hurts. What education you get helps or hurts. What social environment you grow up in helps or hurts. So I lucked out on some of those things. But once I was the beneficiary of that, I think it was drive. I think it was motivation. I think it was determination. My edge was intensity of focus, concentration at the obliteration of everything else—just concentrate on one specific thing at a time and go really deep into that, and be passionate about it, and work seven days a week from when you wake up to when you go to sleep, and just don't do anything else. I think that that was my edge. What was your edge? Because you've done much better than I have. I should be interviewing you. This is a role reversal here.
Oh, no. My edge, I think, is I work very hard. I chase things very hard. I'm focused. I don't try to do too many things at the same time, and I like everything I do a lot. So if you do things that you like, and if you work very hard and focus, you get there.
And that got you where you are now. And the second question you had, the follow-up, was: and what's your dream now?
Oh, the dream now is to make the companies I'm involved with continue to be very successful. Some of them are doing okay, some could do better. I'm trying to improve how they do. And my dream is that my family continues watching over some of these companies and continuing the philanthropic work I do. I do a lot of stuff in education and training people, and giving especially Brazilians a better chance in life. And the idea is that the companies I'm involved with will fund the foundation that helps these philanthropic projects.
I'm curious in this room here, how many people either indirectly or directly have benefited in some way from Jorge Paulo Lemann's and his wife's philanthropy? Wow. Okay. So you've touched a lot of lives as well. Good for you.
So Brad, what mistakes did you make?
The right question would be what mistakes did I not make? Because I really have made every mistake you can possibly think of. The biggest category of mistakes is the same as what's the biggest category of what's made me or one successful, which is people choices. If you pick wonderful people—and wonderful needs to be defined—but if you pick very wonderful people, you will succeed. The chances of your success go way, way up. If you pick the wrong people—dishonest people or incompetent people, or people who don't work together in the team well, or people who just aren't as great as you thought they were—it can really slow you down quite a bit. So I would say the biggest mistakes I've made have been once in a while I've made a whopper of a decision on a person and had big consequences. But I'm okay with that because mistakes are something I've learned to not just accept, but to actually enjoy and to realize that that's a part of the game. And I'm making mistakes now. I expect myself to make mistakes. I expect myself to make a lot of mistakes because I'm making a lot of decisions. So like you, when you're running big business, you're making decisions all day long, and sometimes you don't have time to really think them through really long and carefully and thoughtfully. You have to make a snap decision because they're waiting for you to decide. You hear a little bit, hear a little bit, you make a decision, and fortunately most of them are right. Once in a while some are going to be wrong. That's just the way it's going to be.
How do you find and pick the people that work with you?
How I pick the people is very, very carefully. So for someone to work at one of my companies on a senior level, you get about eight or nine interviews, each of about hour to hour and a half. You get a questionnaire which is in the back of my book. It's 45 questions of unusual questions for an interview. HR people actually don't like asking some of those questions, but I need to ask those questions because I need to know who the person is. I need to know what motivates the person. I need to know what they are really all about. What defines them? What's their goal? What are they trying to achieve? And can I do a deal? Is this somebody who I can provide what they're looking for? Most of the time the majority of that is money, but it's not the only thing. People want development. They want leadership. They want to really make a difference. They want to apply things they've learned. So you really need to understand their mind and where they are. So the process of hiring someone is a long one. I try to do most things fast, but that I do pretty slowly.
If you're using the same questionnaire, don't they know what you're going to ask, and they all learn how to answer it? How do you get away from that?
There is some of that. For the last 15 years, I've been a student of a guy called Dick Houston, who's written a couple books, and he used to be the head of polygraphy at the CIA. Then he developed a model of detecting deception, so he's the world's expert in detecting deception, knowing when you're lying. And so I've studied that. So even if a person is not telling the truth, according to the model of detecting deception, you can detect that pretty easily. It's very objective. That tells you something, too. So the fact that they're insincere is valuable information to know. So yeah, there's some pollution in the data because they know the questions ahead of time, but on balance, we still get to where we need to go.
So after being so successful, what keeps you going?
I haven't gone to therapy in about 15 years, so I don't know the answer to that. I knew what motivated me when I did two years of therapy, but it's been so long. I don't know that you really know what motivates you. Everyone thinks they know. People think they know what motivates them, but maybe it's something else that's motivating. For me, I just love what I'm doing. I'm having fun. I like starting businesses. That's the funnest part. I usually go in 10-year cycles, and then I get bored and sell a company or start a new company, whatever. But the first few years for me are the most enjoyable ones because it's pure art. It's pure creativity. You're starting off with a completely blank slate, and you can paint whatever you want. You have complete freedom, and you get to select the people you're going to spend all this time with, which is a wonderful thing to have—the freedom and luxury to spend time with people you love and respect and admire. That's probably one of the top five things I value in life. So you get to pick the people. You get to design the organization from the start. What's decentralized? What's centralized? What's shared? You've got to figure out all the delegations of authority. What are the main things we're doing? What are we trying to achieve in order to make a lot of money? What are the top 10 or so things that we've got to do, and then who's going to be in charge of that? And how do you compensate people so that if they succeed at that, they make a lot of money? So that part, when you're initially setting up the culture of the organization, for me is the funnest part. So the next two, three years should be fun. It should go downhill after that.
What have you found out about remunerating people?
Pay them more than you should. I think I'm a big advocate of overpaying. I think overpaying is underpaying, because if you want to succeed in a big way, you need good people. You just can't do it yourself. It's just too much to do. You know that. And if you want really good people, they have choices. There's a lot of competition for great talent. So one of the things you have to provide is money. They have to have a real opportunity to make a lot of money. Now, I like to structure the deal so they don't make that much money if we just do okay, or even if we do better than okay, but they can make a ton of money if we do fabulously successful. So I like to structure compensation packages that are long-ended, so a lot of equity that vests at the end so no one thinks about going anywhere, and ones that are heavily equitized for the top people. So everyone's thinking about: how do we get share price to go up long-term? How do we create share price long-term? Everyone's in that mindset all day long. Below the top part of the organization, I don't like using equity at all. I find it hasn't worked when I've done it because it doesn't correlate. If you're a truck driver, you're a warehouse worker, you're not really following stock so much, but you are following a bonus. So there I like to compensate people on what they're in charge of, what their job is. Do you find our philosophies of compensation similar or different?
Yeah, we've always overpaid and tried to incentivize people, maybe excessively like that. So we haven't really figured out what is ideal, but we try to make sure that the compensation of our executives, since we're in public companies, are equivalent to what the public investors are making. We try to link it so that you don't have the executive making a lot of money and the investors not making any money. So that's our basic orientation.
But people who have been associated with you have become billionaires and multi-billionaires. I've made investors billionaires. I've never made an employee or partner of mine a billionaire. I've given people the opportunity to make themselves hundreds of millions of dollars, tens of millions of dollars, many, many people millions of dollars, but I haven't caught up to you yet on the billionaire stuff. I have to learn that. I haven't figured that one out.
Well, we figured we want to attract the best possible people, and we started off as stockbrokers and things like that in Brazil. And then we didn't have money; we didn't have a name. So the way we could attract the best possible people was by giving them partnership. And that worked quite well, and we did well. So we always remained with our model of attracting very, very good people and top people, and making them partners in our business. And so they did very well, and sometimes did better even than the public investors, as you say. But it's been our way.
All those companies—you've been in many different industries like I have. Which one made the most amount of money for shareholders? All your different ventures.
Our best deal of all was obviously the brewery, where we bought a very small, by world standards, brewery and we invested $60 million in 1989.
The $60 million we invested was about 20% of the company we bought, which is what we still have of the company that it is now.
And you haven't diluted? What? You have not diluted?
No. We haven't been diluted. We still have the same number of shares, which is 22% or something like that. And the company's now worth 120 billion. So 20% is nice.
Worked out nice. I'll drink to that.
Yeah, this AB InBev. This AB InBev.
Are you worried about marijuana taking market share?
Our first 30 years were better than our last seven years. So even though it was very, very successful, it slowed down. This is life, and we're fixing it, and it's being fixed. There are things we didn't do right, and we're trying to do right now.
Do you worry—not a joke—do you worry about kids, the younger generation, smoking weed instead of drinking beer and you may lose your customers?
