Dan Gilbert is one of those rare individuals who has had a huge impact on a large community. I began to understand his philosophy listening to a fascinating interview he gave at the Summit conference in Detroit I attended earlier this month.
Detroit had really seen better days when it filed for bankruptcy in 2013. Dan Gilbert, a well-known entrepreneur and billionaire founder of Quicken Loans – now known as Rocket Mortgage — jumped in to help bring the city back. To rebuild Detroit and Cleveland, his development company Bedrock has bought more than 140 buildings, modernized and restored them, and brought in high end retail, offices, hotels, affordable apartments, and luxury condos. Today, Detroit is a model of urban revival.
Dan Gilbert has also done more philanthropically to help Detroit than almost anyone else has done to rebuild a single city. In addition to the billions he spent buying and renovating buildings, he has donated $500 million to revitalize the neighborhoods, cleared property tax debt for 20,000 home owners, created startup incubators Detroit Venture partners and Venture 313, helped rebuild the streetcar, brought in two medical research institutions for $439 million, and contributed to the public-private partnership Grand Bargain to save the Detroit Institute of Arts.
These are his guiding principles, that both made him rich, and shapes how he spends his money and lives his life.
There’s for profit and non-profit, but we’re for more-than-profit. We want profit, but more than that.
Dan Gilbert said he isn’t only interested in making money. Rocket is a public, for-profit company, but everyone knows their goal is to produce great products and enrich lives. He stressed that Rocket aims to create broad based social impact, not just profit, through a variety of mortgage and financial products and services. One of their many products, Rocket Money, was designed to improve household financial stability.
Why make a short term profit when we can aim for a long term profit and both we and the community can grow together.
Dan Gilbert believes that some of his buildings may make money in the near term, while others won’t be profitable for years, if ever. Many of the buildings were in significant disrepair and required millions and millions of dollars to renovate. He doesn’t mind, because restoring these 140-plus buildings to current standards has significantly improved downtown Detroit, contributed massively to bringing the city back to life, and created opportunities for other businesses to join in the city’s revitalization and to invest. For some of the buildings, the return on investment may take decades for a financial return, but have already begun contributing massively to the economic transformation of the city and to a renewed sense of civic pride — a non-monetary ROI.
There’s no such thing as a good deal with a bad guy — or vice versa.
Dan Gilbert shared this as one of his philosophies that has proven true time and again. He made the point that you want to work with people you trust. He said an investment opportunity may look attractive, but if it’s offered by an untrustworthy person, the long-term risk outweighs the potential short-term gains. Similarly, a great entrepreneur may have a weak idea, but over time, they will refine it and modify it and develop it, so it has the potential to be profitable.
Invest in the jockey, not the horse. You can always find another horse.
This is a similar point. He believes a great founder will pivot if their idea doesn’t work, but a bad founder will not be able to recover. He says he always invests in the founder, not the idea. As a hugely successful investor, he has found over many years that the person behind the idea is more important than the idea itself. He invests in the entrepreneur, not the startup, because a mediocre idea with a great founder is more likely to be successful than a great idea with a mediocre founder. The great founder — who has grit and integrity — will adapt, and pivot, and evolve until the idea becomes great.
A healthy man has 1,000 problems, a sick man has one.
This was really profound coming from Dan Gilbert, as he has personally suffered a stroke and lost his beloved son, Nick, in his twenties to neurofibromatosis (NF). He has spent millions trying to find a cure for NF, funding – along with Henry Ford Health and Michigan State University – a new research institute in Detroit, as well as giving millions to existing institutions working to cure the disease. But this sentence makes you appreciate the significance of being healthy compared to everything else that you may think is important.
Risk taking — If you’re healthy, what’s the worst that can happen?
Dan Gilbert said you won’t get outsized returns if you’re not willing to take outsized risk. If the risk is thoughtful, and aligned to the goals and the culture of the organization, it’s worth taking. Extraordinary outcomes only come from being willing to take big risks. He has done this with Detroit — investing billions in abandoned buildings to rebuild a city he loves. He has done this with Rocket Mortgage — going digital years before others. He has done this with venture capital — investing in startups others were afraid to fund. And he’s doing this with the millions he’s spending to find a cure for NF.
Enjoy seeing what your money can do. Don’t wait until you die to give it away.
Dan Gilbert said it makes no sense to hold onto your money until you die. It’s so much better to see the fruits of your efforts. It’s also better for your children to know how you want your money to be spent. This is similar to Bill Perkins’ book, Die With Zero: Don’t save it. Give it away and have an impact.
Money follows, it doesn’t lead, the idea. A great idea will make money; if you’re focused on the money, you won’t be great.
Dan Gilbert told us, if you chase greatness, the money will come. But if you chase money, you’ll never find greatness. This is one of his famous “isms.” He wrote a book about the truisms he follows, Isms in Action. He believes that success always comes from following the mission, not the money, and that how much money you make should never be the goal. He explained that if you’re focused on solving a problem and creating something meaningful, and you refuse to compromise on the really important things — your mission, your principles, your long-term purpose — the money will come.
Empower your employees to make decisions.
I love that Dan Gilbert made this point, because it’s similar to an article I wrote for Forbes, Why You Should Empower Your Employees If You Want To Succeed. He believes — as I think most of the best entrepreneurs do — that when you empower your employees to make decisions, based on the company’s core values, the business will be more successful. He stressed that company culture drives behavior, and is the foundation of every decision. He also believes that employees who are valued and are treated well, will have greater job satisfaction and perform at a higher level. He has found that when employees are empowered to solve problems and make decisions, they will respond more quickly to changing environments, they will be more productive, they will have more job satisfaction, and they will stay longer at the company.
Dan Gilbert is inspirational, and what he has done to transform Detroit is extraordinary. But his guiding principles should be followed by everyone, to succeed in business and, even more important, to achieve a meaningful life.
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