Disclosure
Jacobs: A 2x to 3x return over ten years is a very bad outcome
“For me, if I'm going to spend five or 10 years putting all my life into something seven days a week and really in it, I want to win it. That would be a very bad, bad outcome if we only made two or three X after that period of time.”
Insight
Jacobs: Aligning with macro trends matters more than operational execution
“You can mess up a lot of stuff, and if you have the main trend right, you can make money. And conversely, You can do a thousand things right, and if the big trend is smacking you in the face, it's not going to work.”
Disclosure
Seventeen sovereign funds rejected Jacobs's oil roll-up over ESG mandates
“I was thinking about returning to my roots of energy. Spent a lot of time in Houston, a little time in New Orleans, et cetera. And talked to a lot of oil folks, love the business, and couldn't raise money for it. I talked to the 17 or so sovereign wealth funds…”
Insight
Jacobs executes large acquisitions in pairs to avoid multiple organizational restructurings
“I typically do large deals in pairs. Not always. I'd like to do two large deals near each other and then stop and digest and integrate. The reason I do that is I don't want to have to do two organizational charts.”
Assertion Not checkable as stated
Jacobs banned his Chief Customer Officer from operating reviews for a year
“I actually banned our chief customer officer from operating reviews for a year because he couldn't abide by the rules. He violated the rule of talking while someone else was talking.”
Opinion
Multi-million dollar M&A consultant reports just provide management plausible deniability
“Sometimes you see people hire a consultant. They pay them literally four or five million dollars. They put this big, big report. What is the purpose of that report? The report is for the manager team who's buying it to cover their butt. That's how in case the …”
Insight
Jacobs: Interviewing top target executives provides 90% of acquisition diligence
“I want to spend an hour, hour and a half with each one of the management team members And I just want to have an honest conversation with them. Just a very basic, candid discussion of, so if this was your money, would you do this deal? Am I doing something int…”
Insight
Jacobs: Moving slowly on tech integration is riskier than ruffling feathers immediately
“I actually find that with technology integration, going slowly is more risk than ruffling some feathers and doing it right away.”
Disclosure
Jacobs: Companies ban PowerPoints in favor of interactive discussions
“We don't do PowerPoints at meetings as a general rule. We do discussions at meetings, interactive, lively discussions.”
Assertion Supported
One executive earned over $100 million under Jacobs's compensation structure
“I've had people make tens of millions of dollars. See the senior executives. I've had one person make over a hundred million dollars.”
Disclosure
Jacobs is personally investing $900 million into his new distribution roll-up
“Our initial investment is a billion dollars, not a few billion dollars like the book, but a billion dollars, and nine hundred million dollars of that is coming from me, and a hundred million dollars of that is coming from Sequoia Heritage, and from friends and…”
Assertion Partly supported
Jacobs built five multi-billion dollar companies and raised $30 billion
“I've started five companies from scratch. I turned all of them into billion or multi-billion dollar enterprises. We did about 500 acquisitions along the way. We raised about thirty billion dollars or so of outside capital”
Insight
Jacobs: Building a multi-billion platform requires a hundred-billion-dollar industry
“If I'm going to create a company that's tens of billions of dollars in revenue, I need an industry that at a minimum is hundreds of billions of dollars in revenue.”
Assertion Not checkable as stated
Jacobs: High-Performing Frontline Staff Made Up to 2x Competitors' Pay
“We have people who are truck drivers. We have people who are warehouse workers. We have people who are mid-level managers who make one and a half, two times they would have made it to competition, but it's because they were performing. Their safety records, wh…”
Assertion Partly supported
United Rentals went from inception to NYSE IPO in three months
“United Rentals, we started on Labor Day weekend, like my kitchen table down the street in 1997, and by the second week in December, we were publicly traded on the New York Stock Exchange, and Dan Tully, who was the chairman and CEO of Merrill Lynch at the time…”
Assertion Supported
Jacobs: XPO was seventh best performing Fortune 500 stock last decade
“So you look at XPO for my initial investors was a 32 bagger. It was the seventh best performing stock of the Fortune 500 of the last decade.”
Assertion Supported
Jacobs: United Rentals was sixth best performing Fortune 500 stock last decade
“United Rentals was pre-IPO when I started it was three dollars and 50 cents a share. And last I checked, it was 575 dollars a share. So it's been much more than a hundred bagger. And it was the sixth best performing stock of the Fortune 500 of the last decade.”
Assertion Supported
Jacobs: United Waste outperformed S&P 500 by 5.6x with 55% CAGR
“United Waste Systems outperformed the S&P 500 by 5.6 X. You would have made 5.6 times more money buying United Waste than you would have bought buying the S&P. We had a 55% CAGR on the profit and not coincidentally a approximately 55% CAGR on the stock price.”
Disclosure
Jacobs: Quarterly 3-question employee surveys consistently achieve 80% engagement
“We send out a succinct questionnaire to every employee in the company every three months that says just a few questions. Number one, rate your level of job satisfaction on a scale of one to 10. Question number two, what would it take to make it a 10? Question …”
Insight
Jacobs: Return on Time Directly Drives Return on Capital
“When you're a leader, when you're a CEO, or if you're an institutional investor and you're running a team, whether you're running a few dozen people, a few hundred people, or in my case, a 150,000 people, how you channel their time is as important as return on…”
Assertion Supported
Jacobs: Building products distribution is an $800B market in North America and Western Europe
“It's eight hundred billion dollars in size between the geographies I'm going to focus in on, which are North America and Western Europe. I'm talking about building products distribution.”
Brad Jacobs