How Cleveland Cavalier's Owner, Dan Gilbert, Got So Rich

Andrew Wilkinson

So yeah my guy is dan gilbert and the reason I thought he was super interesting I've talked about him a little bit in the past but this guy has had a freaking massive year so you know 2 years ago or something he was worth like 6 7 $8,000,000,000 baby billionaire now he's worth 57,000,000,000 wait 5 7 57 57 he's number 21 one of the wealthiest people in the united states and this is he's had a crazy couple years so I think it was about 2 years ago he had a massive stroke so he was on the golf course with a friend and the the friend just happened to be a doctor and he said oh that's weird I'm having these symptoms so his doctor got him to the hospital and they he had a stroke in the hospital and in the hospital they were able to do this special procedure that if he hadn't been in the hospital he might have died or it might have been way worse right so he got super lucky and you know as lucky as one can be having a stroke horrible thing and now he's been basically rehabilitating himself and getting back on his feet for the last 2 years and so he's had this horrible personal tragedy but at the same time he's become worth you know 6 x you know as much and I bet he would give it all away to not have had the stroke or whatever so it's super fascinating this guy he described it really well when they ipo ed they just ipo ed his mortgage business he said this is a 30 year or sorry an overnight success 30 years in the making so this guy's been at it for a really long time I think he's super interesting because he started with nothing his dad owned a struggling detroit bar he worked in pizza delivery he just kinda stumbled into hustling and was a good salesperson and he started a business and that business was a company called roc financial which became quicken loans which I'll talk about in a second one of the reasons I think he's really interested interesting is that he's invested into revitalizing his home city so his mission is to revitalize detroit and get it back on its feet because it's struggled a lot he's like a capitalist batman in detroit and I'll talk about some of the cool stuff he's done and one of the things I like about him as well is that he he does a lot of stuff that might not work he takes big swings takes big risks that he think can make the world better and he invests in all sorts of crazy ideas he also has 5 kids which I think is pretty freaking cool I love to see that with these you know billionaires they're not just like miserable by themselves and they care about kids and stuff and seems pretty family focused and then you know he's been through these personal challenges the stroke and then also his eldest son was born with this disease called neurofibromatosis which is like super rare and he's poured a bunch of money his own money into funding research around that disease so it's been fascinating so he said there's a quote he said when I when we grew up all I wanted to do was do 2 things own a sports team and a casino and now he owns both so this is kind of like a childhood dream and his companies are quicken loans which is the largest home mortgage lender in the united states they're bigger than wells fargo which is freaking crazy he owns the cleveland cavaliers the basketball team and a few other sports franchises until recently he owned a casino I think it was called jac which owned a whole bunch of casinos but I think he sold it and then he also owns roc ventures and roc ventures is where all the big swings happen and all the philanthropic stuff happens so they own a ton of real estate almost all in detroit and then they do venture capital and they've invested in everything from restaurants to you know real estate businesses hotels crazy tech companies and all sorts of other stuff he owns rob report which is can I tell you one more thing that he

Sam Parr

Can I tell you a few more things that he owns? That's interesting. So, he owns... I think he owns Fathead. Do you know Fathead? Yeah, yeah, I believe.

Andrew Wilkinson

he sports it's like those like big hands and stuff and like you

Sam Parr

Got weird gloves to your face, kid, and you want to put like the face of Michael Jordan on your wall. It's like a decal that you put on your wall. I think he owns the whole thing. He just bought Dictionary.com and Thesaurus.com.

Andrew Wilkinson

Totally random. We were actually... we helped him. I know him; I'll talk about that a little bit. But we helped him with that acquisition a little bit.

Sam Parr

Oh, no way! So you know about it? It was like a $20,000,000 revenue thing or more. Maybe it's been doing that for like 10 years. I mean, I don't have any insider information; these are guesses. Am I right?

Andrew Wilkinson

Yeah, he owns Dictionary.com and TheStoreUs.com. When you talk to him about why he bought it, he's just like, "You know, I think this is cool." He had all these ideas of things he could do with it. He's not like, "Oh, I bought it for X times EBITDA and I'm gonna make a 20% return." What I find so cool about this guy is he'll just say yes. He owns Robb Report, which is like a magazine for rich people, and Dictionary.com. He also has a very large stake in Shinola. Shinola has this insane hotel in Detroit, and they make watches. Additionally, he owns StockX, which is basically like a stock market for sneakers and watches.

Sam Parr

Which is awesome! I'm a large investor because, like, he's the co-founder. How old is he? In his seventies yet?

Andrew Wilkinson

he's like 50 50 something 56 I think

Sam Parr

He's that young? Wow, okay. Yeah, a little bit older than like a sneakerhead and he...

Andrew Wilkinson

totally

Sam Parr

he's a co founder I know that so he was a he he was part

Andrew Wilkinson

Of it, he's got investments in esports, like just all sorts of stuff. Then he's also a large LP in a lot of venture funds. Kinda quietly, he's the largest LP in Ludlow Ventures. He's got his own venture fund. So, you look at it and he's got this barbell. He's got a really kind of dull, boring mortgage business, which is really innovative in and of itself. Just what he's done is kinda like Brad. What he's done is basically taken this fragmented, crappy industry run by banks and small lenders and built out this massive structure. He's been very innovative around culture and other stuff. So, let me just give the history of what happened, though. Basically, in 1985, he and his little brother started Rock Financial, which is basically an independent mortgage lender. So when someone needs a house or whatever it is, they go to them. They figure out, they basically make them an offer to lend them the money, and then I think they go sell the risk. They would lend them the money and then they would sell it off to a bank. Over time, basically in the late 1990s, the company grew into a huge business, one of the largest independent lenders in the United States. With the dot-com boom, they launched an internet strategy where they just made Rock Financial, I think it was rockfinancial.com or digitalmortgage.com or something like that. In 2000, what was it? No, 1997 or something, Intuit acquired their business because they were like, "Oh my god, this is like, you know, this huge disruptive digital finance thing." So what ended up happening is the dot-com boom blew up, and in 2002, he came back and bought his business back. He sold it for a ton of money to Intuit.

Sam Parr

first sale was 90,000,000

Andrew Wilkinson

okay

Sam Parr

is that right

Andrew Wilkinson

he he basically I I don't know I don't have the exact number here but something like that so you know the guy made a lot of money especially for the nineties but he wasn't like a crazy billionaire yet then he raised money from investors so himself and some friends went back to intuit bought it back I don't know what the number was and what's interesting is they kept the quicken loans name so intuit owns quicken the financial personal finance software and they branded it quicken and so now there's this weird other business they own called quicken loans even though that's an intuit brand so it's kind of a funny thing and it just kept he basically took it took it back got rid of all the crap that intuit had added and started growing it again and this whole time he's living in detroit and watching his own city totally fall apart so in the financial crisis you know detroit I think went bankrupt and he meanwhile is like super rich and living out in the suburbs and he says fuck it we're moving back into detroit and he moves his entire team into detroit so he had 4,000 or so employees they literally bought if you actually go to detroit there's this it's called campus martius or something and it's right in the center of downtown this huge building and he moved everyone there and he basically said for my own employees and for the city we're just gonna fix it and so he built casinos he built like a private security firm so if you walk around there's like there's like normal police and then there's like dan's police he bought 1,000,000,000 of dollars of derelict buildings you know literally like you go there and there's like skyscrapers and he's just it's like going to chicago and he's like oh yeah I own the sears tower and this and this and like basically all of downtown detroit he owns like 20 30% of and he also just announced that he's gonna pay off $300,000,000 of property taxes for detroit residences so this guy really really cares about detroit and since since he started it it's now become the largest independent mortgage business in in the united states you know they've gone public they had this huge ipo and it's been it's been a crazy story he but what I what

Sam Parr

I I what I

Andrew Wilkinson

love about this guy is just he's got such a crazy collection of businesses

Sam Parr

I think, if I remember correctly, I'm probably right. I believe he sold it for $90, bought it back for like $20, and I think he took it public. Did he take it public either recently or right away?

Andrew Wilkinson

quite recently like it was like like 6 months ago

Sam Parr

and he owned most of it when it went public

Andrew Wilkinson

he owned like 85 or 90% of it

Sam Parr

and it

Andrew Wilkinson

went public crazy

Sam Parr

what's the market cap now

Andrew Wilkinson

the market cap is let's see here market cap's $46,000,000,000

Sam Parr

Wow, so yeah, where's the other $10,000,000,000 come from? Just as other... just as other stuff.

Andrew Wilkinson

a lot yeah a lot of real estate you think the cavaliers are probably worth you know 500,000,000 to a 1,000,000,000

Sam Parr

we forgot about that whole part here

Andrew Wilkinson

Real estate, casinos... you know, all these. StockX is worth, I think, a couple of billion dollars now. So, he's just got this crazy collection of stuff. Chris and I got to meet him. The other cool thing about this guy is that he's just a wild card. I read about him in the *New York Times*; they did this profile on him. I have this habit of just cold emailing people I think are interesting. Like, 95% of the time, I just don't hear back. But I wrote him an email at like 1 in the morning and said, "Hey, I'd love to meet you." I got an email back like 5 minutes later, and he's just like, "Yeah, sure." Then I got a follow-up from his assistant, and we ended up flying to Detroit. You know, sometimes when you go and meet these billionaires, they're like whatever. You walk in, you get 20 minutes with them, and that's that. But he was incredible. They planned this whole tour of Detroit. It was like this 2-day thing. They set us up in their hotel, and then Dan spent like 2 hours with us. He's just this super nice guy. He's deeply interested in what we're doing and super engaged. Every business I mentioned to him, he'd be like, "How does that work? How can we get involved? What can we do? How can we do it?" He wants to say yes to ideas, which I always find really inspiring. I think some of these people have gotten really rich by being hyper-disciplined and just saying no to everything, but he says yes before no.

Sam Parr

That's really interesting. That's what Sean acts like. I usually say no to everything, while Sean says yes to everything. My joke is that my success is probably going to be quite predictable, and it will be really good. Sean's success, on the other hand, is that he's either going to go completely broke and die young, or he's going to become a billionaire. You know, it's a high-risk, high-reward type of thing. That's not the reality, but that's my joke.