MW This billionaire's blueprint for a 200-bagger: Why you're thinking too small in a world of 'infinite capital'
By Michael Sincere
Brad Jacobs, who built eight multibillion-dollar companies, reveals his repeatable process for massive returns
Brad Jacobs is a serial entrepreneur with a notable track record as a Wall Street investor and business builder. He has founded and led eight companies, all of which grew into billion-dollar or multibillion-dollar giants. He has completed around 500 M&A transactions and raised more than $50 billion in debt and equity capital, including three IPOs.
His companies include United Waste Systems, United Rentals $(URI)$ and XPO $(XPO)$, its two spin offs, GXO Logistics (GXO) and RXO $(RXO)$, and, more recently, QXO $(QXO)$, where Jacobs serves as chairman and CEO.
Jacobs is the author of "How to make a few billion dollars" and "How to make a few more billion dollars."
In this recent interview, edited for length and clarity, Jacobs shared his tips on finding businesses to invest in and creating effective management teams to run them. He confessed to the mistake that cost him $500 million, and gave the secrets of building billion-dollar businesses that last.
MarketWatch: You've built eight multibillion-dollar companies across different industries - waste management, equipment rental, logistics and building-products distribution. How do you decide which industry to go into and what are you looking for?
Jacobs: For my skill set, building-products distribution - supplying construction materials to contractors and builders - is the best opportunity right now. It's a large, highly fragmented industry with 20,000 distributors between here and Western Europe, which gives you room to consolidate and scale.
There's also an opportunity to apply cutting-edge technology. Fragmentation lets you lower costs, improve logistics and generate more cash flow. When you reinvest that cash into technology and M&A, it's a virtuous flywheel.
We target industries that are tech-backward. I like it when incumbents are operating on outdated systems because that creates a substantial opportunity to leapfrog competitors with modern integrated technology.
'The world is not constrained by money. It's constrained by ideas and talent.'
The building-products-distribution industry has strong secular tailwinds - chronic housing shortage, aging homes, old commercial buildings. Over the next decade, there will be more construction, more repair and remodeling. On top of that, there's $2 trillion needed to fix infrastructure.
This is the same playbook we've used successfully over and over again. We built United Rentals into the world's largest construction-equipment rental company in just 13 months, and it became the sixth best-performing Fortune 500 stock the last decade.
MarketWatch: With a career spanning 500 M&A deals and decades in business, you've obviously learned from experience. What mistakes cost you the most money, and what did you learn from them?
Jacobs: The mistake that cost me the most money happened when I was at United Rentals. We bought a bunch of road rental companies - all those orange barricades and cones and striping you see on the roads. I did that to capitalize on expected federal government legislation, which was passed, and it was supposed to spend hundreds and hundreds of billions of dollars to repair the nation's infrastructure.
The government spending never fully materialized. That part of the business was a bad performer, and we decided to sell it at a big loss - a $500 million loss. That was very painful.
I counted 100% on the government doing what it said it was going to do. That was naive. In the world of business, you have to say exactly what you believe, then do exactly what you say. The world of politics is more malleable and short-term. Sometimes politicians say they're going to do stuff and it doesn't get done.
MarketWatch: QXO recently made its second big acquisition, buying Kodiak Building Partners for $2.25 billion. What did you like about that deal?
Jacobs: Kodiak is a national distributor of essential building products, including lumber, trusses, windows and doors, construction supplies, waterproofing and roofing, with 110 locations across 26 states and about 5,500 employees serving more than 10,000 customers. This deal triples QXO's existing market opportunity and expands our total addressable market to over $200 billion. It puts us in nearly every major building-products category.
Plus, Kodiak holds No. 1 or No. 2 positions in many of its local markets, including higher-growth areas like the Sunbelt and Mountain states. It operates in highly fragmented segments that give us a substantial runway for consolidation, which aligns perfectly with our long-term goal of becoming a $50 billion revenue company.
We got it at a great price, paying 10.7 times 2025 Ebitda of $211 million. When you include synergies, the Ebitda multiple is about 7.3 times. The timing is good, too. We believe we're buying at the bottom of the housing cycle, so there's clear operating upside.
MarketWatch: Many investors are looking for opportunities, whether as entrepreneurs or shareholders. What would you tell them?
Jacobs: That depends. Our strength is M&A and integration - buying companies well and improving their profits. So for us, consolidation in large, highly fragmented, tech-backward industries is the right strategy.
But that may not be for everybody. Some people want to grow organically - find something scalable that you can rinse, wash, repeat and grow by opening more locations, like McDonald's or Walmart did.
When people ask me what industry they should go into, I ask them back: What are your superpowers? Find an industry that matches those superpowers, and make sure you're on the right side of the long-term trend.
I learned from a successful mentor that you can get a lot of things right, but if you don't get the major trend right, it's for naught. On the other hand, if you get the big trend right, you can mess a lot of things up and still do really well.
MarketWatch: One thing people always wonder is how much capital they need to get started. How much startup capital do you think would be needed nowadays to grow a business into an industry giant?
Jacobs: I started my first business when I was 23 years old in 1979 with $5,000 left over from my bar mitzvah money, and that business grew to a billion dollars. You don't need lots of money.
The right frame of mind is more important than capital. In my second book, I list 269 sources of equity capital that manage $32 trillion. There is so much capital in the world, it's ridiculous. There is, however, a shortage of powerful ideas and fantastic management teams.
If you're thinking, "I won't be able to get the money for my great business idea," that is a psychological fallacy. That is a mental roadblock you're inflicting on yourself. The world is not constrained by money. It's constrained by ideas and talent.
'If you think huge, you will expand your vision and motivate yourself to go beyond perceived limitations. It's not the money, it's the mindset.'
MarketWatch: Let's get practical. For the average reader who wants to build serious wealth, how can they actually make it?
Jacobs: Again, understand what your superpowers are. Find an industry that matches your skill set. Devise a strategy to capitalize on the big trend you see. What big problem are you solving for customers?
Then assemble a group of very bright, hardworking, collegial, honest people and lead that team. Have a culture where you can respectfully disagree with each other. Use technology to eliminate waste and become more productive.
Set very ambitious goals that initially seem unattainable. If you think huge, you will expand your vision and motivate yourself to go beyond perceived limitations. It's not the money, it's the mindset.
MarketWatch: You mentioned assembling talented teams. If you had to identify the single most important factor in your success, how important is hiring the right people?
Jacobs: Do they have fire in the belly? Are they smart? Are they collaborative? I always hire people who have a higher IQ than I do. I want to be surrounded by people who are more intelligent than I am.
I say it almost every day: "Teamwork makes the dream work." You can't accomplish great things without a team. I've never accomplished anything by myself. If I had to identify the single most important reason why my companies have been so successful, it would be the quality of the people on my teams.
I give senior people lots of equity, but I like it to vest over many years. The senior executive team at QXO owns about 30% of the company, but the vast majority is locked up for six years. People are thinking about long-term decisions, not short-term ones.
MarketWatch: Running multiple billion-dollar companies means making thousands of high-stakes decisions. How do you approach risk and decision-making?
Jacobs: I make mistakes every day because I'm making thousands of decisions. If your goal is only making decisions when you have 100% certainty, you're not going to make a whole lot of decisions. You need to take some risks. You need to evaluate risk objectively. Understand the probability that the decision is right. If it turns out to be wrong, can you live with that? Is the downside correctable and not fatal?
When I'm analyzing a problem early on, I want to be testing every scenario, poking around for where I could be wrong. I'm a big believer in dialectical thinking - looking at situations from multiple perspectives. But once we've made the decision, I do want to be confident. I want to execute with speed. If you're going to be an effective leader, you have to have confidence in your decisions.
MarketWatch: Looking at everything you've accomplished - 500 acquisitions, $50 billion raised, multiple 50-bagger and 200-bagger stocks - what's your best advice for someone who'd like to be in your position one day?
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May 06, 2026 07:42 ET (11:42 GMT)
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