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  • Bill Ackman on Investment Strategy, What the Market Is Missing, and How AI Breaks Businesses

    Bill Ackman, founder and CEO of Pershing Square, joined the All-In Podcast for a conversation about how his investment approach has shifted toward permanent, long-term ownership, why he believes the highest-quality companies are being left behind by a market chasing the new new thing, and how AI is raising the risk of disruption for almost every business. He also lays out his plan to turn Howard Hughes into a Berkshire Hathaway-style compounding machine built on insurance. You can watch the full conversation here. Below is a structured breakdown of the ideas, the stories, and the frameworks he uses to underwrite a business.

    TLDW

    Ackman explains how his philosophy evolved from a smaller, more liquid activist toward concentrated, permanent ownership of durable, non-disruptible businesses, with much of his activism now playing out on X rather than in the boardroom. He tells the origin story of his first big trade, Wendy’s and the Tim Hortons spin-off, and explains why a large long-term shareholder on a board is an antidote to short-term markets. On AI, he argues that this is the greatest era in history to build a company, which means the risk of being disrupted has gone up enormously, and that the market is mispricing high-quality compounders like Microsoft, Meta, and Amazon while crowding into chips, semiconductors, and energy. He works through the SaaS question and why niche software is more at risk than platforms, how he underwrites SpaceX, xAI, OpenAI, Anthropic, and Palantir like late-stage venture bets using a people, opportunity, context, deal framework, and why founder-led companies have an edge in making radical calls. The back half covers his Howard Hughes plan to copy Buffett’s insurance-float model, the role of cost of capital and reflexivity in markets, the meme-stock era, going direct on social media, and the three different ways an investor can put money to work with Pershing Square.

    Thoughts

    The most useful idea in the interview is the way Ackman reframes disruption as the central investing problem of the AI era. His point is that the same forces making this the best time in history to start a company, meaning near-unlimited compute, capital, and talent, also raise the odds that any given incumbent gets disrupted. That reframes the word quality. It is no longer mostly about margins and moats. It becomes about non-disruptibility, which is a much higher bar than most quality investors were using a decade ago, and it is why he says most of his research time now goes into assessing that single risk.

    The what-the-market-is-missing thesis is classic contrarian Ackman. Arguing that Microsoft, Meta, and Amazon are the new old-fashioned, undervalued names while capital piles into semiconductors and energy is a direct echo of 2000, when Berkshire Hathaway bottomed precisely because money was chasing internet stocks. It is worth keeping in mind that he owns all three, so the call is also his book. The durable signal here is the framework, not the specific tickers: capital reliably chases the new new thing, and genuinely high-quality businesses get left behind during those rotations.

    The Howard Hughes plan is the most concrete bet in the conversation. Copying Buffett’s insurance-float playbook, short-term treasuries for policyholder money and equities for the surplus, onto a discounted real-estate holding company is elegant. The hard part is exactly what Ackman flags about insurance as an industry: the best investors go to hedge funds, not insurers, so most insurance companies only ever manage the liability side well. Pershing Square’s edge is that Ackman can both write the business and invest the float, which is the same reason it worked for Buffett. The framing of going from a four billion dollar company to a trillion over fifty years is a statement of intent, not a forecast, and should be read that way.

    Underneath all of it sits cost of capital and reflexivity. His observation that a higher stock price literally makes a company more valuable, because it lowers the cost of capital and creates acquisition currency, is the mechanism behind both Elon Musk’s empire and the meme-stock era he is wary of. Going direct on X is the same lever pointed at himself: communicate the vision, lower your own cost of capital, and make the bet easier for other people to place. It is a coherent worldview in which narrative and balance sheet continuously feed each other, and it explains a lot of his behavior over the last few years.

    Key Takeaways

    • The biggest change in Ackman’s approach over time is an appreciation for business quality, meaning long-term, durable, protected, non-disruptible growth as the most important factor.
    • He says he is as activist as ever, but more of it now happens on X than in the traditional corporate context.
    • His first big investment was Wendy’s, which owned Tim Hortons. The simple thesis was to buy Wendy’s, spin off Tim Hortons, and double the money.
    • Early on no one returned his calls, so he had Steve Schwarzman’s Blackstone write a fairness opinion, filed it publicly, and the company spun off Tim Hortons six weeks later. The CEO later thanked him after being fired with a large exit package.
    • Reputation compounds. Where Pershing Square once had to bang down the door, companies now sometimes tweet a welcome when it buys a stake.
    • A large long-term shareholder on a board is a counterweight to short-term markets, letting management test ideas privately and pursue initiatives that hurt the next few quarters of earnings.
    • Pershing Square owns Microsoft, Meta, and Amazon. Ackman argues you are either invested in AI directly or indirectly, or it is a threat, so you have to understand it.
    • The hardest and most important job for a concentrated investor is judging the risk of disruption, and that risk has risen dramatically.
    • This is the greatest era in history to build a business because of near-unlimited access to compute, capital, and talent, which is exactly why the probability of being disrupted has gone up enormously.
    • Markets bring their eye to the new new thing, currently chips, semiconductors, and energy, while high-quality companies get left behind.
    • He draws an analogy to 2000, when Berkshire Hathaway traded at one of its lowest valuations because everyone chased internet stocks. He sees a similar dynamic around Amazon, Meta, and Microsoft today.
    • On the SaaS question, he worries more about a Salesforce than a platform like Microsoft, because niche software charging high per-seat or per-year prices is most exposed, while low-priced platforms are safer.
    • Any software company today has to be as AI-enabled as possible, or risk losing the monopolistic pricing it once enjoyed.
    • His famous March 2020 CNBC appearance was an attempt to reach President Trump and argue for a short shutdown, paired with the view that stocks were incredibly cheap and worth buying.
    • He describes valuation as a tether on the market: when prices stretch too high they snap back, and when they get too cheap the same rubber band pulls valuations up. Calling that out publicly can trigger a psychological reset.
    • His recent bullish call came because stocks of really high-quality companies had gotten crazy cheap on fundamentals, meaning the present value of the cash they generate.
    • He underwrites high-multiple names like SpaceX as venture investments using a framework from business school: people, opportunity, context, deal.
    • On SpaceX, people and opportunity are one of one, the context is incredible, and Starlink plus near-monopoly low-cost launch make it strategically valuable. The complicated part is the deal, meaning the valuation. He invested via an SPV after Ron Baron’s nudge, and also invested in xAI.
    • He treats OpenAI, Anthropic, and Palantir as late-stage venture bets that have proven they can generate real revenue, and says OpenAI should do a better job communicating how it thinks about its enormous capital commitments.
    • Every CEO in America is asking how to use AI, how it applies to their business, and how it is a threat. It is top of mind and boards open every meeting with it.
    • He has not seen much enterprise AI success yet, citing a McKinsey study that 95 percent of enterprise initiatives fail and the rise of the forward deployed engineer as the hot role bridging promise and ROI. Pershing Square itself uses AI mainly for legal, compliance, and back-office work.
    • Founder-led companies have an advantage because founders have the authority and the economic stake to make radical calls, while the average S&P 500 CEO has a roughly three to four year tenure and is incentivized not to make mistakes.
    • He cites Mark Zuckerberg buying Instagram and WhatsApp as the kind of shocking-at-the-time calls that a founder with a track record can make.
    • Ben Graham’s enduring lesson is that a stock is an interest in a business, not a piece of paper, but Graham mostly invested in liquidations and cash-rich shells, and made most of his money on Geico.
    • Most of Buffett’s value at Berkshire came from owning insurance operations and focusing on the asset side of the balance sheet, not just the liability side.
    • Insurance is hard to copy because top investors do not go to work for insurers. Buffett owned half his company and was a great investor, which is why it worked.
    • Howard Hughes came out of the General Growth bankruptcy and owns master-planned cities like Summerlin, with 26,000 acres in the Las Vegas area, comparable to the Irvine Company that built roughly a hundred billion dollars of wealth for Donald Bren.
    • The plan is to reinvest the cash Howard Hughes generates into insurance, put policyholder float in short-term treasuries and the surplus in common stocks, and build a compounding machine over fifty years, buying it at roughly sixty cents on the dollar.
    • A company must earn a return above its cost of capital for the stock to rise. Elon Musk has kept his companies’ cost of capital extremely low, and a SpaceX IPO near a 1.75 trillion dollar valuation could be one of the lowest cost of equity capital transactions ever.
    • Markets have changed less because of Ackman and more because of figures like Ryan Cohen and GameStop, where a stock can trade well above its value on personality and an army of followers.
    • Higher valuations are reflexive: a rising stock price lowers cost of capital and creates currency to issue stock and acquire businesses, which is part of how Elon built Tesla.
    • There are three ways to invest with Pershing Square: the management company itself (a royalty on compounding assets with no capex), PSUS (a portfolio of best ideas trading at an 18 percent discount), and Howard Hughes (a bet on building the next Berkshire). A dollar invested 22 years ago became roughly 27 to 28 times net of fees.
    • Going direct on X, with 2.2 million followers, lets him communicate his vision and lower the friction for others to back his bets, even as his very long tweets have become a running meme.

    Detailed Summary

    From activist trades to permanent capital

    Ackman frames the evolution of his career as a steady move toward business quality. As a smaller, more liquid investor early on, he did not have to think as long-term. As Pershing Square became a bigger, more concentrated investor, durable growth became the dominant factor in every decision. He insists he is still as activist as ever, but a lot of that energy has shifted to X, where he can argue a position publicly rather than only inside a boardroom. The best investments, he notes, are the ones where you do not need to join the board and do anything at all.

    The Wendy’s and Tim Hortons origin story

    One of Pershing Square’s first investments was Wendy’s, which owned the Canadian coffee and donut chain Tim Hortons. The value of Tim Hortons alone was greater than the entire value of Wendy’s, so the idea was simple: buy Wendy’s, spin off Tim Hortons, and double the money. Ackman bought ten percent of the company and could not get the CEO to return a single call, so he had a contact at Blackstone, with Steve Schwarzman’s sign-off, write a fairness opinion on what Wendy’s would be worth after a spin-off, filed it publicly, and watched the spin-off happen six weeks later. The CEO eventually called back to thank him, having been fired but rewarded with a large exit package. Over the years that scrappy approach gave way to a reputation that now opens doors on its own.

    Why a long-term shareholder on the board matters

    The core problem of being a public company, in Ackman’s telling, is the short-term nature of markets and analysts, when a good business should be run in the context of years and even decades. A large, supportive shareholder on the board gives management a place to test ideas before exposing them to the public and a credible voice willing to back initiatives that hurt earnings for a few quarters. That is the value-add he believes a constructive activist can bring to a mature public company, as opposed to a startup where the best outcome is simply to own a great business and stay out of the way.

    AI and the rising risk of disruption

    For a concentrated, long-term investor, the most challenging task is judging the risk that two people from Stanford in a garage build something that destroys your thesis. Ackman argues that risk has climbed dramatically because this is the greatest era in history to build a company, with near-unlimited access to compute, capital, and talent. The paradox is that the conditions that make building easier also make incumbents more fragile, so the bulk of his research now centers on assessing how disruptible a business really is.

    What the market is missing

    Investors bring their attention to the new new thing, currently chips, semiconductors, and energy, which leaves high-quality companies behind. Ackman compares the moment to 2000, when Berkshire Hathaway traded at one of its lowest valuations ever because capital was chasing internet stocks. He sees an echo today in how Amazon, Meta, and Microsoft are treated as old-fashioned, and he considers them undervalued on fundamentals, where value is the present value of the cash a business generates over its life. His recent bullish call, like his March 2020 appearance, came because stocks of really high-quality companies had simply gotten too cheap.

    The SaaS question and AI-enabled software

    On the so-called SaaS apocalypse, Ackman says it is a company-by-company analysis. He worries more about something like Salesforce than about a low-priced platform. The companies most at risk are those that extracted near-monopolistic profits by charging a high annual price for a niche product, because AI lowers the barrier to replicating that functionality. A platform where the average customer pays a small amount per seat, like Microsoft, is far less exposed. The takeaway for any software company is to become as AI-enabled as it possibly can.

    Underwriting SpaceX, xAI, and the AI labs like venture

    For the highest-multiple private companies, Ackman uses a venture lens and a framework a business school professor taught him: people, opportunity, context, deal. SpaceX scores as one of one on people and opportunity, with an incredible context and a near-monopoly in low-cost launch through Starlink, which makes even Amazon a likely customer. The complicated variable is the deal, meaning the valuation, and he admits he has not done all the math, having invested through an SPV after Ron Baron encouraged him, along with a position in xAI. He treats OpenAI, Anthropic, and Palantir as late-stage venture bets that have proven real revenue, and argues OpenAI in particular should communicate more clearly how it justifies capital commitments that vastly exceed current revenue.

    Founder-led companies and the authority to act

    Ackman agrees that founder-led companies have a structural advantage in a fast-changing environment. The average S&P 500 CEO has a tenure of roughly three to four years, a small economic stake, and an incentive not to make a career-ending mistake. A founder is betting an entire life and reputation, has the authority of a major voting and economic position, and has usually made several hard, contrarian calls that turned out right. He points to Mark Zuckerberg’s acquisitions of Instagram and WhatsApp, which looked shocking at the time, as exactly the kind of decision a founder with a track record can make and a hired manager often cannot.

    Howard Hughes as Berkshire Hathaway 2.0

    Ackman points to a detailed financial history of Berkshire Hathaway showing that the vast majority of Buffett’s value creation came from owning insurance and focusing on the asset side of the balance sheet, not just the liability side. Insurance is hard to replicate because skilled investors join hedge funds rather than insurers, but Buffett owned half his company and was a great investor. Pershing Square is applying the same idea to Howard Hughes, a company created out of the General Growth bankruptcy that owns master-planned cities such as Summerlin, with 26,000 acres around Las Vegas, in the spirit of the Irvine Company that made Donald Bren roughly a hundred billion dollars. The plan is to reinvest the company’s cash into insurance, place policyholder float in short-term treasuries and the surplus in common stocks, avoid issuing stock the way Buffett did, and compound for fifty years, all bought at around sixty cents on the dollar.

    Cost of capital, reflexivity, and going direct

    A company only creates value when it earns above its cost of capital, which is why Howard Hughes, seen as a high-cost-of-capital real-estate business, has long traded at a discount, and why Ackman is repurposing its assets into a higher-returning model. He highlights how reflexive markets are: a higher stock price itself makes a company more valuable by lowering its cost of capital and creating currency to raise money and acquire businesses, a lever Elon Musk used to build Tesla. He attributes real market change less to himself and more to figures like Ryan Cohen and GameStop, where personality and a following can lift a stock far above its value. His own going-direct strategy on X, with 2.2 million followers and famously long posts, is the same mechanism applied to communicating a vision and lowering friction for investors. He closes by laying out three ways to invest with Pershing Square: the management company as a royalty on compounding assets, the PSUS portfolio trading at an 18 percent discount, and Howard Hughes as a bet on building the next Berkshire.

    Notable Quotes

    “The best investments are one where you don’t need to join the board and do anything.”

    Bill Ackman, on the kind of business he most wants to own

    “The probability of your being disrupted has gone up enormously.”

    Bill Ackman, on why assessing disruption risk now dominates his research

    “Valuation is like a tether on the market, right? When it gets too high, it’s like this rubber band that’s stretching and inevitably it bounces back.”

    Bill Ackman, on how prices revert at both extremes

    “People, opportunity, context, deal.”

    Bill Ackman, on the business school framework he uses to underwrite companies like SpaceX

    “Every CEO in America today is like, how do I use AI?”

    Bill Ackman, on AI as the top opportunity and threat in every boardroom

    “A closed mouth gathers no foot.”

    Bill Ackman, quoting the line a friend put next to his name in his high school yearbook

    “The increase in value of the company increases the value of the company, right? Because it lowers the cost of capital, it gives you more flexibility, gives you the ability to issue stock, raise capital, acquire other businesses.”

    Bill Ackman, on the reflexivity between stock price and corporate value

    “The company’s got like a $4 billion market cap and the goal is to build it into a trillion dollar thing over time compounding.”

    Bill Ackman, on his fifty-year plan for Howard Hughes

    Taken together, the conversation is a tour of how Ackman now thinks about quality, disruption, and compounding, and a preview of the Berkshire-style machine he wants to build out of Howard Hughes. Watch the full conversation here.

    Related Reading

  • Uber CEO Dara Khosrowshahi on AI, Autonomous Vehicles, Robotaxis, Drones, and the Future of Transportation

    Uber CEO Dara Khosrowshahi sat down with Patrick O’Shaughnessy on the Invest Like the Best podcast for a long, candid conversation about the forces remaking transportation. There is artificial intelligence inside the company, and there is physical AI out in the real world, meaning autonomous vehicles, robotaxis, and delivery drones. He calls the autonomous opportunity another trillion dollar marketplace and argues it will change how society operates. You can watch the full interview here. What follows is a structured breakdown of the most useful ideas, the strategy behind Uber’s AV bet, and the operating philosophy that runs underneath all of it.

    TLDW

    Dara Khosrowshahi explains how he brought order to the chaos he inherited at Uber in 2017 by treating hard problems like vector mathematics, and how an immigrant childhood shaped his all-in, low-stress operating style. He describes AI hitting Uber on two fronts at once: much larger digital models that predict rider intent, and physical AI that changes how rides and food get fulfilled in the real world. The conversation covers Uber blowing through a full year of AI budget in a single quarter, metering headcount as engineers become superhuman, the more than 30 AV partnerships with Waymo, Nuro, Lucid, Nvidia, Wayve, and Pony AI, and why supply, not demand, is the whole game. It runs through the coexistence model borrowed from travel and Uber Eats, the Uber One membership flywheel at 50 million members, the push from on-demand to planned travel through hotels and Uber Reserve, the economics of cheaper autonomous cars and delivery drones, the regional race from the Middle East to Europe, and the lessons from Barry Diller and Herbert Allen about getting to ground truth and betting on people. It closes on his capital allocation philosophy of prioritizing organic growth and AV commitments over buybacks.

    Thoughts

    The most underappreciated line in the whole interview is the budget one. Blowing a full year of AI spend in a single quarter is the clearest signal yet that frontier intelligence is being consumed far faster than even an AI-native company planned for. Dara’s response has quietly become the default enterprise playbook: explore on the expensive frontier models, then scale the proven interactions onto cheaper or open-source models. The deeper tension is that he is simultaneously telling teams to drive adoption and metering headcount, which is the real story of AI in large companies. The productivity gains are showing up as fewer hires, not only as faster shipping.

    The supply-first framing is the strategic core, and it inverts the demand-first logic he learned at Expedia. In autonomous vehicles this means Uber does not need to win the self-driving race itself. It needs to own the demand layer and aggregate every AV maker’s supply, the same way online travel agents coexist with hotels and Uber Eats coexists with McDonald’s. The 30 percent higher utilization figure for AVs on Uber’s network is the wedge in that argument. It is the reason a Waymo stays on the platform even while building its own brand, because filling more of an expensive asset’s day changes the entire return on the car.

    His premortem answer is unusually honest. Asked what kills the opportunity, he does not name an Uber-specific execution failure. He names AI’s unpopularity with the general public. That is a CEO admitting the gating factor is social license, not technology. The early data he leans on, drivers in Austin and Atlanta earning more and signing up in greater numbers as AVs add incremental demand, is the counter-narrative he is betting the public conversation on. Whether that story holds as AV volume scales from thousands of vehicles to hundreds of thousands is the open risk the entire industry shares.

    Underneath the strategy is one repeated instinct: get to ground truth. It shows up in the Barry Diller story about reading the model from the analyst who built it, in his hunt for the troublemakers who keep a company mutating, and in the fact that he bought an ebike to deliver food in San Francisco. It is the same move applied at every altitude, and it is why he frames AI as a chance to rebuild processes from first principles rather than shave 20 percent off the ones that exist. The leaders who treat AI as an efficiency tool will likely lose to the ones who rebuild from the ground up.

    Key Takeaways

    • Dara took the Uber job in 2017 after Daniel Ek recommended him at the Allen and Company Sun Valley conference and told him, when he hesitated, that life is about impact rather than happiness.
    • He inherited what he calls complete chaos: a board fighting for control, lost trust with regulators and the public, and a committee running the company after Travis Kalanick stepped back.
    • His method for chaos is to treat it like vector mathematics, breaking a seemingly unassailable problem into component dimensions and solving each one.
    • Early moves included bringing in chairman Ron Sugar to unite the board, running a listening tour with stakeholders, and rebuilding the executive team with leaders like Andrew McDonald and Tony West.
    • He credits an engineering mindset and an immigrant childhood for his calm under pressure. His family lost everything leaving Iran when he was nine and rebuilt from nothing.
    • On parenting, he argues that overcoming challenges is what forms people, and that doing everything for your kids is a long-term disservice disguised as a short-term favor.
    • Uber has always operated in a probabilistic real world of traffic, cancellations, and late food, so it has used machine learning longer than most consumer companies.
    • The current inflection is AI on two fronts: larger digital models that predict intent, and physical AI that changes how Uber fulfills in the real world.
    • Uber’s feed and search models are now roughly 10,000 times bigger than the older ones, enabling universal search across rides, eats, and grocery in a single query.
    • Uber can already guess a rider’s destination about three quarters of the time, turning booking into a one-tap interaction.
    • AI adoption is bottoms-up across engineering, legal, and marketing. Developers in India are driving roughly ten times the code commits using autonomous agents.
    • Dara pushes teams to rebuild processes from first principles with AI rather than settling for 20 to 30 percent optimization of an existing process.
    • He wants the rebels and troublemakers to win, and treats unpredictable internal adoption patterns as something to find and promote.
    • Uber blew through its full-year AI budget in a single quarter, which is now forcing it to meter headcount as engineer throughput climbs.
    • The token strategy is to explore on expensive frontier models, then scale proven interactions onto cheaper or open-source models.
    • Uber generates over 10 billion dollars in free cash flow on more than 10 billion trips a year, but it is not a high-margin business, so efficiency funds lower prices and higher earnings.
    • In autonomous vehicles, the thesis is supply: own the demand layer and aggregate every AV maker’s vehicles, the way Uber aggregates drivers and restaurants.
    • Uber has more than 30 AV partnerships, including Waymo, Nuro, Lucid, Nvidia, Wayve, and Pony AI.
    • Uber is building the surrounding ecosystem: depots, charging, fleet partners, a one billion dollar Santander financing line for EV and AV fleets, and autonomous insurance.
    • AVs operating on Uber’s network are about 30 percent busier in trips and revenue per vehicle per day than vehicles not on the network, which transforms the return on an expensive car.
    • The build, partner, or buy answer is coexistence, mirroring how travel agents coexist with hotels and airlines and how Uber Eats coexists with McDonald’s, Starbucks, and Chipotle.
    • His public premortem is that AI’s unpopularity, not Uber-specific execution, is the biggest risk, so the company must move at the pace society will accept to avoid backlash.
    • Early data in Austin and Atlanta shows drivers earning more and more drivers joining, suggesting AVs are adding incremental demand rather than only displacing humans.
    • AV hardware costs typically fall 30 to 40 percent per generation. A Lucid midsize built with Nuro could land around 60,000 to 70,000 dollars and bring transportation costs down.
    • Lower cost expands demand. Uber already dwarfs the taxi market it was once sized against, and Dara expects the same dynamic with AVs.
    • Traditional OEMs are now investing in L4-ready systems and should arrive over the next two to four years. Each AV drives roughly three to four times what a human driver does.
    • Chinese manufacturing capability and bill of materials are described as unrivaled. A low-cost Western, Foxconn-style player for AVs is being worked on but does not exist yet.
    • Drones are gated by battery density. Food and grocery drones should reach real scale in two to five years and become normal in five to ten, with Joby and Zipline cited as examples.
    • The Middle East, including Abu Dhabi, Dubai, and Saudi Arabia, is moving fastest thanks to entrepreneurial regulators. Europe is catching up, with London robotaxi pilots expected before year end.
    • Uber Eats wins the number one position more often internationally. The playbook is selection plus reliability, amplified by cross-platform upsell, with about 13 percent of Eats bookings coming from the mobility app.
    • Uber One has 50 million members growing 50 percent year on year. Dara frames it like Netflix, more content for the same price, and accepts a first-year loss for multi-year profit.
    • Uber is pushing from on-demand to planned through hotels, via a deal with Expedia, and through Uber Reserve, now at over a 5 billion dollar run rate with 99 percent-plus reliability.
    • His leadership lessons: from Barry Diller, get to ground truth from source material and tell the truth as a leader. From Herbert Allen, bet on people, not companies.
    • On capital allocation, he prioritizes organic growth and financialized AV commitments over buybacks, while keeping costs growing slower than revenue.

    Detailed Summary

    From chaos to structure: the 2017 turnaround

    Dara came to Uber from 13 years running Expedia under Barry Diller, recruited through a head hunter after Daniel Ek floated his name at the Sun Valley conference. He arrived into what he describes as complete chaos, with the board fighting over control rather than the fate of the company and trust badly damaged with regulators, the public, and employees. His approach was to decompose the situation the way an engineer decomposes a multidimensional problem, solving each dimension and reassembling the whole. Practically that meant a new chairman in Ron Sugar to unite the board, a listening tour to understand stakeholder concerns, and a rebuild of the leadership team that kept strong insiders like Andrew McDonald while adding people like Tony West.

    An engineering mind and an immigrant chip on the shoulder

    His wife Sid calls him a robot, by which she means he does not get rattled. He traces that to an engineering education and to a childhood upheaval. His family left Iran when he was nine and lost the business his father had built, and he watched that loss diminish his father over the years. The experience produced a durable drive to rebuild and a refusal to let external chaos define him internally. He applies a similar philosophy to his kids, arguing that challenges and the act of overcoming them are what form a person, and that helicopter parenting removes the very friction that builds capability.

    AI inside Uber: prediction, agents, and superhuman engineers

    Uber has always lived in a probabilistic world where the digital booking is deterministic but the real-world fulfillment is not, so it adopted machine learning earlier than most consumer companies. The newest models are roughly 10,000 times larger than the prior generation and power universal search and destination prediction that is right about three quarters of the time. Internally, adoption is bottoms-up and uneven in a good way, with engineers in India shipping around ten times the code commits using autonomous agents. Rather than mandate from the top, Dara pushes teams to rebuild whole processes from first principles with AI instead of trimming a fifth off the existing ones.

    The cost of intelligence

    The flip side of fast adoption is cost. Uber blew through its annual AI budget in a single quarter, and that is forcing a real adjustment. Because engineer throughput is climbing, the company is metering headcount increases rather than simply hiring. The operating rule is to keep driving adoption while pursuing efficiency, using frontier models from providers like OpenAI and Anthropic to experiment with new interactions, then moving the scaled experiences onto more efficient or open-source models to bring the per-token cost down. With more than 10 billion dollars of free cash flow on over 10 billion trips, Uber is not a high-margin business, so efficiency directly funds lower prices for riders and higher earnings for drivers.

    Why supply decides the AV race

    At Expedia, Dara learned a demand-first model where you attract consumers and then build inventory to match. Uber is the opposite, a supply company, where securing every car, restaurant, courier, and retailer causes the demand to follow. Applied to autonomous vehicles, the strategy is to be the go-to-market and demand layer for anyone building a digital driver. Uber wants to aggregate the largest pool of AV supply, just as it aggregates human drivers, so that the companies building the actual self-driving software can focus on the driver while Uber handles distribution and utilization.

    Building the ecosystem around the digital driver

    Uber now has more than 30 AV partnerships spanning Waymo, Nuro, Lucid, Nvidia, Wayve, and Pony AI, and it expects many winners rather than one, the same shape as the foundation model market. Around those partners it is assembling the connective infrastructure: depots and charging in cities where the regulatory path is opening, fleet partners, a one billion dollar financing line with Santander for EV and AV fleets, and work on autonomous insurance. It is also collecting street data today that can feed the models, so that when a partner’s cars hit the market there is instant demand waiting. The early proof point is that AVs on Uber’s network run about 30 percent busier than comparable vehicles off it, which materially improves the return on a costly car.

    The premortem and the public’s patience

    Asked what derails the opportunity, Dara points outward rather than inward. The risk is that AI is powerful but unpopular, and the average person experiences it as a threat to electricity costs or a cousin’s job rather than as magic. The same dynamic could hit AVs even though the technology should end up safer than human drivers, which is why questions about emergency services, equitable access, and driver earnings have to be worked through with regulators and communities. The encouraging early signal is in Austin and Atlanta, where drivers are making more money and more are joining because AVs appear to be adding incremental demand. The controllable risk, he says, is access to supply, which is exactly why Uber has partnered with nearly every AV provider across mobility, delivery, and freight.

    A trillion dollar marketplace: cheaper cars and delivery drones

    Dara sizes the autonomous opportunity as another trillion dollar marketplace. As AV software and hardware costs fall, typically 30 to 40 percent per generation, a Lucid midsize built with Nuro could come in around 60,000 to 70,000 dollars, which starts to lower the real cost of transportation. History says lower cost expands demand, and Uber already became multiples larger than the taxi market it was once compared to. Manufacturing scales from hundreds to thousands to hundreds of thousands of vehicles, each driving three to four times what a human does, with traditional OEMs investing in L4-ready systems over the next two to four years and Chinese manufacturers setting the bar on cost and quality. Delivery drones are further out, gated mainly by battery density, but should reach real scale in two to five years and feel normal in five to ten.

    Membership, hotels, and the shift from on-demand to planned

    Uber Eats often reaches the number one position internationally by nailing selection and reliability and then layering on cross-platform advantages, with roughly 13 percent of Eats bookings flowing from the mobility app. Uber One, at 50 million members growing 50 percent year on year, is the loyalty engine, and Dara likens it to Netflix in that members get more for the same price. He explains the membership economics through Amazon Prime, accepting a money-losing first year to earn multi-year profit as members spend more across services. The newest expansion is travel: hotels through a deal with Expedia, and a broader move from Uber’s on-demand brand toward planned bookings, proven out by Uber Reserve at a 5 billion dollar-plus run rate and 99 percent-plus reliability. The end state he wants is a trip where Uber pre-books your ride to the airport, knows your hotel, and brings in-market magic to the whole journey.

    Operating philosophy: ground truth, troublemakers, and capital allocation

    The mentors thread through everything. From Barry Diller, with whom he worked for more than 20 years, he took the discipline of getting unfiltered truth from the source, illustrated by Diller insisting on hearing the Paramount LBO model from the young analyst who built it. From Herbert Allen he took the lesson to bet on people rather than companies, because great people stay great across cycles. In his own practice that becomes radical transparency, a deliberate hunt for the troublemakers who act as the mutations that keep an organism from dying, and a willingness to be wrong, since learning, often through pain, is what he finds interesting. On capital, he treats allocation as an art, prioritizing organic growth, which took Uber Eats from under a billion to over a hundred billion in gross bookings, then AV commitments that can be financialized, with buybacks coming after growth rather than instead of it.

    Notable Quotes

    “I know who I am, and I’m always going to be that same person. I’m not going to let the chaos of the world affect me mentally.”

    Dara Khosrowshahi, on why crisis does not rattle him

    “We blew through our AI budget in a quarter, you know, for the whole year essentially. And it is forcing us to adjust.”

    Dara Khosrowshahi, on the real cost of AI adoption at Uber

    “What’s magical now is going to seem normal to all of us 10 years from now.”

    Dara Khosrowshahi, on how fast riders stop noticing autonomous vehicles

    “We think it’s another trillion dollar marketplace.”

    Dara Khosrowshahi, on the scale of the autonomous vehicle opportunity

    “If we do that, the demand will take care of itself.”

    Dara Khosrowshahi, on why Uber obsesses over securing supply first

    “I’m looking for those mutations. I’m looking for those troublemakers constantly.”

    Dara Khosrowshahi, on keeping a large company adaptive

    “It’s the filtering that gets the edge out of the story or out of the situation. And it’s often the edge that gives you an edge.”

    Dara Khosrowshahi, on a lesson from Barry Diller about going to the source

    “If I’m not wrong, if I’m not making mistakes, it’s just not very interesting.”

    Dara Khosrowshahi, on why learning, often through pain, drives him

    “Meeting her and seeing her operate, I think, finally allowed me to be the person I want to be versus the person I thought I was supposed to be.”

    Dara Khosrowshahi, on his wife Sid, when asked the kindest thing someone has done for him

    The throughline is that Uber intends to be the demand layer for autonomous transportation the way it became the demand layer for human drivers, while rebuilding its own operations around AI from first principles. Whether the public grants the industry enough patience is the open question Dara keeps returning to. Watch the full conversation here.

    Related Reading

    • Uber primary source for the company, products, and AV partnerships discussed in the interview.
    • Dara Khosrowshahi (Wikipedia) background on the CEO’s path from Iran to Expedia to Uber.
    • Invest Like the Best the podcast with Patrick O’Shaughnessy where this conversation took place.
    • Waymo the autonomous driving company behind the Austin and Atlanta partnerships referenced.
    • Barry Diller (Wikipedia) the mentor whose lessons on ground truth shaped Dara’s leadership style.

  • The King of Hollywood: 7 Lessons on Power and Persuasion from Michael Ovitz and David Senra

    When the co-founder of Creative Artists Agency (CAA) sits down with David Senra, the host of the Founders podcast, you don’t just get industry gossip—you get a masterclass in agency, psychology, and relentless ambition. Michael Ovitz, often cited as the most powerful man in Hollywood during the 1980s and 90s, shared the playbook he used to revolutionize the entertainment industry.

    From his early days in the mailroom to orchestrating the sale of Columbia Pictures to Sony, Ovitz’s career is a testament to the power of information and relationships. Below is a breakdown of his conversation with David Senra, including key takeaways and a detailed summary of their discussion.

    TL;DW

    Michael Ovitz argues that success is driven by “frame of reference”—the accumulation of experiences that allows you to instinctively spot quality and talent. He emphasizes that fear is the enemy of business, that you must relentlessly study history to leverage it in the present, and that true salesmanship often involves “punching without punching”—selling without ever explicitly asking for the sale.

    Key Takeaways

    • Build a “Frame of Reference”: You cannot spot excellence if you haven’t seen it before. Ovitz believes in consuming vast amounts of information—art, culture, business history—to build a mental database that allows for instant pattern recognition.
    • Information is Leverage: As a mailroom trainee, Ovitz showed up at 6:30 AM (hours before anyone else) to read the agency’s private files. This gave him an encyclopedic knowledge of the business that his peers lacked.
    • The “No Guardrails” Mindset: Creativity in business means refusing to accept arbitrary boundaries. As Ovitz famously states, “I’ve never seen a guardrail I don’t try to jump”.
    • Punching Without Punching: The highest form of sales is demonstrated by David Rockefeller, who raised millions for MoMA without ever asking Ovitz for a dime. He simply built a relationship and shared a vision until Ovitz wanted to contribute.
    • Radical Transparency creates Loyalty: At CAA, Ovitz instituted a rule of “no lying.” If an agent didn’t know an answer, they had to say “I don’t know” and follow up later. This created trust in an industry famous for dishonesty.

    Detailed Summary

    1. The Mailroom Strategy: Outworking the Competition

    Ovitz’s career began in the mailroom at William Morris. Realizing he had no nepotistic connections in a relationship-driven town, he decided to differentiate himself through pure knowledge. While the other trainees arrived at 9:00 AM, Ovitz arrived at 6:30 AM.

    He read the correspondence of the top agents, learning the history of the industry. This allowed him to speak the language of the older generation of filmmakers. When he later met legendary directors, he could discuss their obscure influences (like Frank Capra or Howard Hawks) because he had done the reading. He noted that he wasn’t necessarily smarter than the Ivy League trainees, but he eradicated them by outworking them.

    2. The “Frame of Reference”

    A recurring theme in the interview is the “frame of reference.” Ovitz explains that his ability to spot talent—whether it was a young Wolfgang Puck in a parking lot restaurant or the chef Nobu Matsuhisa—came from constantly scanning the world for excellence.

    He creates a “personal AI” in his brain by consuming hundreds of images of art, reading widely, and meeting people. This creates a benchmark. When he met Nobu, he knew the chef was special not just because the food was good, but because Nobu “filled the room” with a sensei-like presence.

    3. The Coca-Cola Deal and The $3 Million Check

    One of the most tactical examples of Ovitz’s negotiation style involved Coca-Cola. CAA took over Coke’s advertising, employing film directors to make commercials—a move the industry mocked. When Coke sent CAA a check for $3 million to cover the cost of a specific commercial, Ovitz sent it back voided.

    He told them the commercial only cost $30,000 (having been made on an Apple IIe computer). He refused to let the client overpay for the production, which established immense trust. He then told them, “You’re not going to overpay for commercials, but you got to pay us.” This move allowed him to negotiate a much higher fee for the agency’s intellectual property and strategy rather than just production margins.

    4. Lessons from Mentors: Rockefeller and Morita

    Ovitz collected mentors as aggressively as he collected art. Two stand out:

    • David Rockefeller: Ovitz learned the art of the “soft sell.” Rockefeller invited Ovitz to join the MoMA board and spent hours discussing art and architecture, never bringing up money. By the end, Ovitz wrote a larger check than he ever intended, purely out of respect for Rockefeller’s integrity and vision.
    • Akio Morita (Sony): Ovitz admired Morita’s courage to disrupt his own business. Morita taught him the value of “thinking big”—not just building a company, but changing the perception of a nation (Japan). Ovitz also recounted how Morita hired his harshest critic, Norio Ohga, because he valued an honest “mirror” over a “yes man”.

    5. The Friendship with Michael Crichton

    Ovitz speaks touchingly of his 30-year friendship with author Michael Crichton. He describes Crichton as possessing a unique work ethic: he wouldn’t write every day, but when a deadline approached, he would write 20 hours a day for months. Crichton wrote Jurassic Park in a five-month burst of intensity. The biggest lesson Ovitz took from Crichton was “curiosity about everything”.

    Some Thoughts

    What stands out most in this interview is the bridge Ovitz builds between the “old world” of Hollywood and the “new world” of Silicon Valley. He speaks about Marc Andreessen and Ben Horowitz with the same reverence he holds for Paul Newman or Martin Scorsese.

    Ovitz’s philosophy is ultimately one of input/output. He treats his brain like a machine learning model—if you feed it high-quality data (art, history, business biographies), it will output high-quality decisions (spotting Nobu, packaging Jurassic Park). In an age of algorithmic curation, Ovitz represents the value of manual curation—going to the library, reading the files, and seeing the world with your own eyes.

    As he told Senra regarding his relentless drive even after achieving wealth: “I’ve never seen a guardrail I don’t try to jump”. For entrepreneurs, that is the only way to operate.

  • Alex Becker’s Principles for Wealth and Success

    Alex Becker, claiming a net worth approaching multi-nine figures, argues that achieving significant wealth and success boils down to adopting specific principles and a particular mindset. He asserts that these principles, though sometimes counterintuitive or harsh, are highly effective. He emphasizes that conventional paths often lead to mediocrity and that true success requires a different approach focused on leverage, risk, focus, and a specific understanding of how to manage one’s own mind and efforts.

    🏛️ Core Principles for Success

    These are the foundational principles Becker identifies as crucial:

    1. Everything Is Your Fault:
      • Take absolute ownership of everything that happens in your life, both good and bad.
      • Avoid a victim mentality; blaming others removes your control over the situation.
      • Using the drunk driver analogy: while the drunk driver is legally at fault, focusing on your own decisions (driving late, not looking carefully) allows you to learn and potentially avoid similar situations in the future.
      • This mindset forces you to think ahead and strategize to avoid negative outcomes and trigger positive ones.
    2. Volume Overcomes Luck:
      • Success isn’t primarily about luck, especially in business.
      • Consistently putting in high volume of effort (e.g., 10-12 hours a day for years) inevitably leads to skill development and results.
      • If you take enough shots (e.g., try enough business ideas with full effort), one is statistically likely to succeed, overcoming the need for luck.
    3. Embrace Being Cringe:
      • Accept that the initial stages of learning or starting anything new will be awkward, embarrassing, and “cringe”.
      • Becker cites his own early videos, jiu-jitsu attempts, and guitar playing as examples.
      • Willingness to look bad, be judged, and make mistakes is essential for growth and achieving mastery.
      • Fear of looking like a beginner or being judged prevents most people from starting or persisting.
      • Consider this willingness a “superpower”; putting yourself out there forces rapid learning and improvement.
    4. Get Rich From Leverage (Not Just Hard Work):
      • Hard work alone doesn’t guarantee wealth; leverage multiplies the impact of your efforts.
      • Types of Leverage:
        • Assets: Owning assets (like a business) that generate value or appreciate.
        • Systems/Delegation: Building systems and hiring people so your decisions or processes are executed by others, multiplying your output. Example: Training a sales team vs. making calls yourself.
        • Capital: Using money (often borrowed against assets) to acquire more assets or invest.
      • Focus work efforts on activities that build leverage, not just repeatable low-leverage tasks.
      • This is the key to working fewer hours while making significant money (the “one hour a week” concept) – build leverage, then delegate its management.
    5. Understand and Take Calculated Risk:
      • Avoiding risk is the surest way to guarantee failure or mediocrity. Almost all success comes from taking risks.
      • Structure your life to enable risk-taking. This primarily means keeping personal expenses extremely low, so failures don’t ruin you.
      • View risk-taking as a skill that improves with practice. Each attempt, even failures, provides learning for the next.
      • The reward potential in business/wealth creation often vastly outweighs the downside if you can take multiple shots. Position yourself to be a “chronic risk taker”.
    6. Don’t Stay In Your Comfort Zone:
      • Comfort leads to stagnation at every level of success.
      • People plateau (e.g., at a comfortable job, or even at $2M/year income) because they become unwilling to take new risks or face discomfort.
      • Continuously ask yourself if you are comfortable; if yes, you need to push yourself into something challenging or scary to grow. Time is limited for taking big swings.
    7. Sacrifice Ruthlessly:
      • “If you fail to sacrifice for what you care about, what you care about will be the sacrifice”.
      • Audit your life: identify activities, possessions, habits, and even relationships that don’t align with your core goals.
      • Cut out the non-essentials ruthlessly (e.g., mediocre friendships, time-wasting hobbies, bad habits like excessive drinking or video games).
      • Prioritize work over social life, especially early on. Becker argues most early-life friendships fade anyway, and financial stability enables better long-term relationships.
      • Reject the justification of “living a little” for habits that hold you back; often these are just dopamine traps or addictions.
      • Live poorly initially to free up time and resources to invest in yourself and your goals.
    8. Focus: One Thing is Better Than Five:
      • To achieve exceptional results and beat competitors, intense focus on one primary objective is necessary.
      • Splitting focus leads to mediocrity in multiple areas (Tom Brady analogy).
      • Most highly successful people (billionaires) achieved their wealth through one primary business or endeavor. Identify your main thing and say no to almost everything else.
    9. Enjoy the Process (The Game Itself):
      • Peak happiness often arrives relatively early in the wealth journey (e.g., when bills are comfortably paid). More money doesn’t proportionally increase happiness.
      • Find fulfillment in the process of learning, growing, and playing the “game” of business or skill acquisition, much like leveling up in a video game.
      • Avoid “destination addiction” – thinking happiness will only come upon reaching a specific goal.
      • Recognize the ultimate pointlessness (in the grand scheme of mortality) allows you to define the point as enjoying the journey itself.

    💰 Specific Wealth Building Strategy: Equity over Income

    Becker advocates focusing on building equity (the value of your assets, primarily your business) rather than maximizing income.

    • Problem with Income: High income is heavily taxed, and much is often spent on lifestyle or agents/expenses, reducing actual wealth accumulation (Dak Prescott example). Pulling profits as income also starves the business of capital needed for growth.
    • Equity Focus:
      • Reinvest profits back into the business to fuel growth.
      • This growth increases the valuation (equity) of the business, often at a multiple (e.g., $1 reinvested might add $5 to the valuation).
      • Growth in business value (equity) is typically unrealized capital gains and not taxed until sale.
      • Live off a small salary or, more significantly, borrow against the business equity for living expenses or investments. Loans are generally not taxed as income.
      • This creates a cycle of reinvestment, equity growth, and tax-advantaged access to capital.
      • If the business is eventually sold, it’s often taxed at lower long-term capital gains rates.

    🧠 Mindset and Execution

    Beyond the core principles, Becker stresses several mindset shifts:

    • Be Unbalanced: Accept and embrace periods of extreme imbalance, prioritizing goals (especially financial stability) over a conventionally “balanced” life filled with mediocrity.
    • Value Specific Opinions: Only heed advice from people who have demonstrably achieved what you aspire to achieve. Ignore opinions from parents, friends, or the general public if they haven’t reached those goals.
    • Strategic Arrogance/Confidence: Reject forced humility. Cultivate strong self-belief and confidence (backed by work and sacrifice) as it fuels risk-taking and ambitious action. Frame life as a game where a confident “main character” mindset is more fun and effective, while acknowledging the ultimate lack of inherent superiority.
    • Embrace Dislike: Don’t fear being disliked or misunderstood, especially by those outside your target audience. Controversy can be effective marketing (Brian Johnson example).
    • Value Simplicity: Prioritize clear, simple thinking and communication over complex jargon that often masks a lack of results (contrasting Steve Jobs/Hormozi with “midwits”).
    • Ruthless Prioritization of Time/Focus: Be extremely protective of your time and mental energy. Say no often and don’t apologize for prioritizing your core objectives over others’ demands.

    ⚙️ The Engine: Optimizing Your Brain (The Sim Analogy)

    Becker argues the primary obstacle to achieving goals is the inability to consistently direct one’s own brain and actions. He suggests treating the brain like a Sim you need to program, optimizing three key areas through removal:

    1. Energy (Brain Health):
      • Remove: Bad food (sugar, inflammatory foods), poisons (alcohol, pot), poor sleep habits.
      • Add/Optimize: Clean diet (plants, meat, simple carbs), adequate sleep, exercise.
      • Result: Increased physical and mental energy, reduced brain fog.
    2. Focus:
      • Remove: All non-essential distractions. This includes financial stress (by drastically lowering living costs), unnecessary social obligations (friends, excessive family time), non-productive hobbies, politics, mental clutter (chores, complexity).
      • Result: Ability to direct mental resources intensely towards the primary goal.
    3. Motivation (Dopamine Management):
      • Understand: The brain seeks the easiest path to dopamine/reward and doesn’t prioritize long-term benefit. Modern life offers many “shortcuts” (video games, porn, social media, junk food, TV) that provide high dopamine with low effort.
      • Remove: These dopamine shortcuts. Smash the TV/game console, delete social media apps, block websites, eliminate junk food.
      • Result: By removing easy dopamine sources, the brain’s reward system recalibrates. Productive work and achieving goals become the most stimulating and rewarding activities available, making motivation natural rather than forced. Embrace the initial boredom until the baseline resets.

    By systematically optimizing energy, focus, and motivation through removal, Becker claims you can transform yourself into a highly effective individual capable of achieving ambitious goals.

    🚀 Practical Starting Advice

    • Just Start: Don’t get paralyzed by picking the “perfect” business. Start something. Skills learned are often transferable, and you’ll discover what works for you through action.
    • Find Breakage: Look for inefficiencies or problems in existing markets where businesses are losing money or customers are underserved. Solving these “breakage” points creates valuable opportunities.
    • Niche Down: In saturated markets, focus on a specific, underserved niche where you can become the best provider.

  • How to Win in E-commerce in 2025: Lessons from a $200M/Year Marketer

    TLDW (Too Long; Didn’t Watch): Sean Frank, a $200M/year e-commerce expert, shares his playbook on the My First Million podcast. Key takeaways: Start with services to build skills and cash flow, spot fast-emerging trends (e.g., no screen time, creatine), prioritize profitability from the first sale over lifetime value (LTV), and be ruthless with product expansion. His company, Ridge, grew from $5M to over $200M in six years by focusing on a simple product (wallets), leveraging Facebook ads, and expanding into categories like wedding bands—all without debt or outside funding.

    E-commerce in 2025 is a battlefield, but Sean Frank, the mastermind behind Ridge—a company pulling in over $200 million annually—has cracked the code. In a recent My First Million podcast episode hosted by Sam Parr and Shaan Puri, Frank unpacked his journey from a 22-year-old agency hustler to a dominant force in direct-to-consumer (DTC) commerce. His insights offer a blueprint for anyone looking to thrive in the ever-shifting e-commerce landscape. Here’s what he revealed—and how you can apply it.

    From Agency to Empire: The Ridge Story

    Frank’s journey began not with a groundbreaking product but with a services gig. In 2012, as Facebook ads emerged, he learned the ropes at a mediocre ad agency. At 22, he saw an opportunity: “I could do this better.” With his CMO, Conor, he launched his own agency, snagging 10 clients—including Ridge, a fledgling wallet brand started by a father-son duo and their friend. By 2016, Ridge was doing $5 million in sales, but Frank saw untapped potential.

    His agency took over everything—marketing, customer service, logistics—eventually merging with Ridge in 2018. From there, the brand skyrocketed: $5M to $10M, $15M, $18M, $30M, $50M, $100M, and now “multi-hundred million” in revenue. No debt. No venture capital. Just pure, profitable growth.

    What fueled this? A simple product (a sleek, minimalist wallet), a massive total addressable market (TAM—$10 billion for men’s wallets), and a relentless focus on paid ads—especially Facebook. “We could always put another dollar into Facebook and it worked,” Frank said. While others chased complex innovations, Ridge doubled down on what worked.

    The 2025 Playbook: How to Win

    Frank’s success isn’t luck—it’s strategy. Here’s his advice for winning in e-commerce in 2025:

    1. Start with Services, Then Pivot to Products
      Frank recommends cutting your teeth in services—think ad agencies, consulting, or freelance gigs. “You’ll make your first million delivering good value to people,” he says. It’s low-risk, permissionless, and builds skills and cash flow. Ridge grew out of his agency; so did brands like Brez (a weed-mushroom drink) and Holo Socks, both founded by ex-agency operators. Services let you test trends and markets before committing to inventory.
    2. Spot Fast-Emerging Trends
      Trends are your rocket fuel. Frank highlights two for 2025: no screen time (e.g., crocheting kits like The Woobles, which went from $10M to $150M in two years) and creatine (tied to fitness and wellness). Others include microplastic-free products and tactile toys. How do you find them? Look at your life for passion points, or—if you’re seasoned—follow TikTok’s “girlies” or LA’s trendsetting Erewhon crowd. “Reddit and Etsy are dead—AI slop,” Frank warns. Go where real humans signal what’s next.
    3. Profit First, Forget LTV
      Lifetime value (LTV) is a trap, Frank argues. “Most brands die waiting for LTV.” Ridge thrives by being profitable on the first purchase—crucial for one-off products like wallets. Contrast this with supplement brands banking on repeat buys; if the trend fades, they’re toast. In 2025, cash flow is king—don’t bet on future loyalty to save you.
    4. Expand Ruthlessly
      Don’t cling to brand purity. Ridge added wedding bands in 2022, hitting eight figures in year one. “Customers never think about you,” Frank says. Look at BIC—lighters, pens, razors—and now tattoo removal. Allbirds stagnated by staying rigid; Ridge grows by meeting customers where they are. Test new categories fast, cut what flops, and double down on winners.
    5. Respect Your Customer
      Frank’s team obsesses over “Ed,” the everyday dad who loves widgets, fishing, and the NFL. HexClad, a cookware brand Frank admires, spent years perfecting pans before scaling to $500M+. “Are we delivering value to Ed?” guides every move. In 2025, quality matters—arbitrage alone won’t cut it.

    Case Studies: Who’s Crushing It?

    • HexClad: Bootstrapped from county fairs to Super Bowl ads, now over $500M with Gordon Ramsay as an investor. Product-first excellence.
    • The Woobles: A crocheting kit brand that rode the no-screen-time wave from $10M to $150M in two years—no capital raised.
    • Brez: Ex-agency founders hit $4.6M monthly revenue in 21 months with a cannabis-mushroom drink, leveraging TikTok’s organic reach.

    The Hard Truth: E-commerce Isn’t Easy

    Frank admits e-commerce is “blue-collar work”—unsexy, physical, and trend-dependent. “It’s permissionless,” he says, unlike tech infrastructure gigs requiring credentials. But scaling means bigger POs, more management, and constant pivoting. Compare that to SaaS, where growth can feel effortless once the product clicks. Yet for Frank, the grind fits: “If I have to pack boxes, I’ll pack boxes.”

    What’s Next for Frank?

    Ridge could fetch $300M today, but Frank’s eyeing $500M–$600M by decade’s end, fueled by tech retail (Apple, Verizon) and new products like power banks. His long-term goal? Net $100M from a sale, then build a portfolio of trend-driven brands and services—a personal PE empire.

    Takeaway for 2025

    E-commerce rewards the adaptable. Start small with services, chase growing markets, prioritize profit, and expand fearlessly. As Frank puts it, “Strong beliefs, loosely held.” In a world of fading trends and brutal competition, that’s the mindset to win.

  • Michael Dell on Building a Tech Empire and Embracing Innovation: Insights from “In Good Company”

    In the December 11, 2024 episode of “In Good Company,” hosted by Nicolai Tangen of Norges Bank Investment Management, Michael Dell, the visionary founder and CEO of Dell Technologies, offers an intimate glimpse into his remarkable career and the strategic decisions that have shaped one of the world’s leading technology companies. This interview not only chronicles Dell’s entrepreneurial journey but also provides profound insights into leadership, innovation, and the future of technology.

    From Bedroom Enthusiast to Tech Titan

    Michael Dell’s fascination with computers began in his teenage years. At 16, instead of using his IBM PC conventionally, he chose to dismantle it to understand its inner workings. This hands-on curiosity led him to explore microprocessors, memory chips, and other hardware components. Dell discovered that IBM’s pricing was exorbitant—charging roughly six times the cost of the parts—sparking his determination to offer better value to customers through a more efficient business model.

    Balancing his academic pursuits at the University of Texas, where he was initially a biology major, Dell engaged in various entrepreneurial activities. From working in a Chinese restaurant to trading stocks and selling newspapers, these early ventures provided him with the capital and business acumen to invest in his burgeoning interest in technology. Despite familial pressures to follow a medical career, Dell’s passion for computers prevailed, leading him to fully commit to his business aspirations.

    The Birth and Explosive Growth of Dell Technologies

    In May 1984, Dell Computer Corporation was officially incorporated. The company experienced meteoric growth, with revenues skyrocketing from $6 million in its first year to $33 million in the second. This impressive 80% annual growth rate continued for eight years, followed by a sustained 60% growth for six more years. Dell’s success was largely driven by his innovative direct-to-consumer sales model, which eliminated intermediaries like retail stores. This approach not only reduced costs but also provided Dell with real-time insights into customer demand, allowing for precise inventory management and rapid scaling.

    Dell attributes this entrepreneurial mindset to curiosity and a relentless pursuit of better performance and value. He believes that America’s culture of embracing risk, supported by accessible capital and inspirational role models like Bill Gates and Steve Jobs, fosters a robust environment for entrepreneurs.

    Revolutionizing Supply Chains and Strategic Business Moves

    A cornerstone of Dell’s strategy was revolutionizing the supply chain through direct sales. This model allowed the company to respond swiftly to customer demands, minimizing inventory costs and enhancing capital efficiency. By maintaining close relationships with a diverse customer base—including individual consumers, large enterprises, and governments—Dell ensured high demand fidelity, enabling the company to scale efficiently.

    In 2013, facing declining stock prices and skepticism about the relevance of PCs amid the rise of smartphones and tablets, Dell made the bold decision to take the company private. This move involved a massive $67 billion buyback of shares, the largest technology acquisition at the time. Going private allowed Dell to focus on long-term transformation without the pressures of quarterly earnings reports.

    The acquisition of EMC, a major player in data storage and cloud computing, was a landmark deal that significantly expanded Dell’s capabilities. Despite initial uncertainties and challenges, the merger proved successful, resulting in substantial organic revenue growth and enhanced offerings for enterprise customers. Dell credits this acquisition for accelerating the company’s transformation and broadening its technological expertise.

    Leadership Philosophy: “Play Nice but Win”

    Dell’s leadership philosophy is encapsulated in his motto, “Play Nice but Win.” This principle emphasizes ethical behavior, fairness, and a strong results orientation. He fosters a culture of open debate and diverse perspectives, believing that surrounding oneself with intelligent individuals who can challenge ideas leads to better decision-making. Dell encourages his team to engage in rigorous discussions, ensuring that decisions are well-informed and adaptable to changing circumstances.

    He advises against being the smartest person in the room, advocating instead for inviting smarter people or finding environments that foster continuous learning and adaptation. This approach not only drives innovation but also ensures that Dell Technologies remains agile and forward-thinking.

    Embracing the Future: AI and Technological Innovation

    Discussing the future of technology, Dell highlights the transformative impact of artificial intelligence (AI) and large language models. He views current AI advancements as the initial phase of a significant technological revolution, predicting substantial improvements and widespread adoption over the next few years. Dell envisions AI enhancing productivity and enabling businesses to reimagine their processes, ultimately driving human progress.

    He also touches upon the evolving landscape of personal computing. While the physical appearance of PCs may not change drastically, their capabilities are significantly enhanced through AI integration. Innovations such as neural processing units (NPUs) are making PCs more intelligent and efficient, ensuring continued demand for new devices.

    Beyond Dell Technologies: MSD Capital and Investment Ventures

    Beyond his role at Dell Technologies, Michael Dell oversees MSD Capital, an investment firm that has grown into a prominent investment boutique on Wall Street. Initially established to manage investments for his family and foundation, MSD Capital has expanded through mergers and strategic partnerships, including a significant merger with BDT. Dell remains actively involved in guiding the firm’s strategic direction, leveraging his business acumen to provide aligned investment solutions for multiple families and clients.

    Balancing Success with Personal Well-being

    Despite his demanding roles, Dell emphasizes the importance of maintaining a balanced lifestyle. He adheres to a disciplined daily routine that includes early waking hours, regular exercise, and sufficient sleep. Dell advocates for a balanced approach to work and relaxation to sustain long-term productivity and well-being. He also underscores the role of humor in the workplace, believing that the ability to laugh and joke around fosters a positive and creative work environment.

    Advice to Aspiring Entrepreneurs

    Addressing the younger audience, Dell offers invaluable advice to aspiring entrepreneurs: experiment, take risks, and embrace failure as part of the learning process. He encourages tackling challenging problems, creating value, and being bold in endeavors. While acknowledging the value of parental guidance, Dell emphasizes the importance of forging one’s own path to achieve success, highlighting that innovation often requires stepping outside conventional expectations.

    Wrap Up

    Michael Dell’s conversation on “In Good Company” provides a deep dive into the strategic decisions, leadership philosophies, and forward-thinking approaches that have propelled Dell Technologies to its current stature. His insights into entrepreneurship, innovation, and the future of technology offer valuable lessons for business leaders and aspiring entrepreneurs alike. Dell’s unwavering commitment to understanding customer needs, fostering a culture of open debate, and leveraging technological advancements underscores his enduring influence in the technology sector.

  • From Day 1 to Dominance: Unpacking the Historical Significance of Jeff Bezos’s 1997 Letter

    From Day 1 to Dominance: Unpacking the Historical Significance of Jeff Bezos's 1997 Letter

    In the annals of business history, few documents have the kind of reputation and influence as Jeff Bezos’s 1997 letter to Amazon’s shareholders. The letter, a seminal piece of corporate philosophy, outlined the guiding principles for Amazon’s development and growth. These principles have not only underpinned Amazon’s journey from an online bookstore to a global behemoth but have also shaped modern startup culture and entrepreneurial thinking.

    At the heart of Bezos’s 1997 letter was a commitment to long-term thinking. Bezos declared, “We will make decisions and weigh trade-offs relating to customer benefits and long-term market leadership considerations rather than short-term profitability.” This was a revolutionary stance in a business world often driven by quarterly earnings and immediate returns. By prioritizing long-term goals over short-term gains, Bezos signaled Amazon’s readiness to take risks and embrace disruptive innovation, even if it meant short-term losses.

    This long-term orientation dovetailed with a relentless obsession with customers. Bezos positioned customers at the center of Amazon’s universe, stating that the company would “focus relentlessly on customer satisfaction.” This commitment has manifested in numerous ways, from Amazon’s vast product selection to its customer-friendly return policies, and from its pioneering of customer reviews to its continued efforts to reduce prices. Bezos’s philosophy of customer obsession has been a key driver of Amazon’s growth and its reputation for customer-centricity.

    The 1997 letter also revealed Bezos’s willingness to make bold decisions and take significant risks. He acknowledged that many of Amazon’s bets might fail, but he also understood that a few big successes could compensate for numerous failures. This boldness has led Amazon to venture into diverse areas, from cloud computing with Amazon Web Services to entertainment with Amazon Prime Video, and from hardware with Kindle and Echo to grocery retail with the acquisition of Whole Foods.

    Bezos also stressed the importance of maintaining a “Day 1” mentality, which he associated with the nimbleness, curiosity, and drive of a startup company. “Day 2,” in contrast, represented stasis, decline, and eventual death. This philosophy has helped Amazon maintain its innovative edge and avoid the complacency that often accompanies success.

    Finally, Bezos’s focus on cash flow rather than immediate profitability was a notable departure from conventional wisdom. He argued that improving cash flows over time was a more sustainable strategy than managing earnings to meet Wall Street’s expectations. This approach has allowed Amazon to reinvest continually in innovation, expansion, and customer benefits, fueling its impressive growth trajectory.

    In retrospect, the 1997 Bezos letter was not just a roadmap for Amazon’s success but a blueprint for the digital age. Its principles have become the norm for many tech companies and startups, influencing a generation of entrepreneurs. It’s a testament to the letter’s timeless relevance that it continues to be included in Amazon’s annual reports, reminding everyone of the values that have guided one of the most transformative companies in the 21st century.

    The historical significance of Bezos’s 1997 letter lies not just in its influence on Amazon’s trajectory but in its broader impact on the business landscape. It has helped redefine success metrics, champion customer centricity, and advocate for long-term, bold, and disruptive innovation. It is a testament to Bezos’s foresight and leadership, and to the culture and strategy that have powered Amazon’s extraordinary journey.