Sam profiles Dan Gilbert — founder of Quicken Loans, owner of the Cleveland Cavaliers, and one of the wealthiest people in the United States. Sam covers Gilbert’s origin story, the sale and repurchase of his mortgage business, his mission to revitalize Detroit, and his eclectic portfolio of businesses from StockX to Dictionary.com. The episode includes Sam’s personal account of cold-emailing Gilbert and flying to Detroit for a two-day tour.
Speakers: Sam Parr (host), Shaan Puri (host)
Dan Gilbert Overview [00:00:00]
Sam: So yeah, my guy is Dan Gilbert. The reason I thought he was super interesting — I’ve talked about him a little bit in the past — is that this guy has had a freaking massive year. Two years ago or something he was worth like six, seven, eight billion dollars. Baby billionaire. Now he’s worth 57 billion.
Shaan: Wait — five… seven? Fifty-seven?
Sam: Fifty-seven. He’s number twenty-one, one of the wealthiest people in the United States. And he’s had a crazy couple of years. About two years ago he had a massive stroke. He was on the golf course with a friend, and the friend happened to be a doctor. He said, “Oh, that’s weird, I’m having these symptoms.” His doctor friend got him to the hospital, and they were able to do this special procedure — if he hadn’t been in the hospital he might have died or it might have been way worse. So he got super lucky. As lucky as one can be having a stroke. Horrible thing. And he’s been basically rehabilitating himself and getting back on his feet for the last two years.
Sam: So he’s had this horrible personal tragedy, but at the same time he’s become worth 6x as much. I bet he would give it all away to not have had the stroke. It’s super fascinating.
Sam: This guy described it really well when they IPO’d his mortgage business. He said, “This is a 30-year overnight success.” This guy has 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 kind of stumbled into hustling, was a good salesperson, and he started a business — a company called Rock Financial, which became Quicken Loans, which I’ll talk about in a second.
Why Dan Gilbert is Interesting [00:02:30]
Sam: One of the reasons I think he’s really interesting is that he’s invested in revitalizing his home city. 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. I’ll talk about some of the cool stuff he’s done.
Sam: One of the things I like about him is that he does a lot of stuff that might not work. He takes big swings, takes big risks that he thinks can make the world better. He invests in all sorts of crazy ideas. He also has five kids, which I think is pretty freaking cool. I love to see that with these billionaires — they’re not just miserable by themselves. He seems pretty family-focused.
Sam: He’s also been through these personal challenges: the stroke, and also his eldest son was born with a disease called neurofibromatosis, which is super rare. He’s poured a bunch of his own money into funding research around that disease. So it’s been fascinating.
Sam: He said — there’s a quote — “When we grew up, all I wanted to do was two things: own a sports team and a casino.” And now he owns both. So this is kind of like a childhood dream come true.
The Business Portfolio [00:04:30]
Sam: 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 basketball team and a few other sports franchises. Until recently he owned a casino — I think it was called Jack — which owned a whole bunch of casinos, but I think he sold it. And then he also owns Rock Ventures, where all the big swings happen and all the philanthropic stuff happens.
Sam: They own a ton of real estate, almost all in Detroit. They do venture capital and have invested in everything from restaurants to real estate businesses, hotels, crazy tech companies, and all sorts of other stuff.
Sam: He owns Rob Report, which is like a magazine for rich people. One more thing — can I tell you a few more things that he owns that are interesting?
Shaan: Yeah, yeah.
Sam: I believe he owns Fat Head. Do you know Fat Head?
Shaan: Yeah, it’s like those big hands and stuff.
Sam: Yeah, yeah. If you’re a kid and you want to put the face of Michael Jordan on your wall — it’s like a big decal. I think he owns the whole thing. He also just bought Dictionary.com and Thesaurus.com, which is totally random.
Sam: Actually, we helped him with that acquisition a little bit. I know him — I’ll talk about that in a second.
Shaan: Oh, no way. You know about it?
Sam: It’s like a $20 million revenue thing, or more maybe. It’s been doing that for like 10 years. I don’t have any insider information, these are guesses.
Shaan: Am I right?
Sam: Yeah, he owns Dictionary.com. And when you talk to him about why he bought it, he’s just like, “You know, I think this is cool.” He’s not like, “Oh, I bought it for x times EBITDA and I’m going to make a 20% return.” What I find so cool about this guy is he’ll just say yes.
Sam: So he owns Rob Report, Dictionary.com — he owns or has a very large stake in Shinola. Shinola has this insane hotel and they make watches. He owns StockX, which is basically like a stock market for sneakers and watches, which is awesome. He co-founded it.
Shaan: How old is he? Is he in his 70s yet?
Sam: He’s like 56.
Shaan: He’s that young? Wow.
Sam: And he’s totally a co-founder of StockX. I didn’t know that.
Sam: He’s got investments in esports, just all sorts of stuff. And he’s a large LP in a lot of venture funds, kind of quietly. Like 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 dull, boring mortgage business on one side, which is actually really innovative in and of itself for what he’s done. And then all these wild swings on the other.
The History: Rock Financial to Quicken Loans [00:08:00]
Sam: Let me just give the history of what happened. Basically in 1985, him and his little brother start Rock Financial, which is basically an independent mortgage lender. When someone needs a house or whatever, they go to them, they figure out the terms, 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 sell it off to a bank over time.
Sam: 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, made it RockFinancial.com or DigitalMortgage.com or something like that. And in — what was it, 1997 or so — Intuit acquired their business, because they were like, “Oh my god, this is this huge disruptive digital finance thing.”
Sam: What ended up happening is the dot-com boom blew up. And in 2002 he came back and bought his business back. The first sale was $90 million.
Shaan: Okay, is that right?
Sam: I don’t have the exact number but something like that. So the guy made a lot of money, especially for the ’90s, but he wasn’t like a crazy billionaire yet. Then he raised money from investors — himself and some friends went back to Intuit and bought it back.
Sam: What’s interesting is they kept the Quicken Loans name. Intuit owns Quicken — the personal finance software — and they branded it Quicken. So now there’s this weird other business they own called Quicken Loans, even though that’s an Intuit brand. Kind of a funny thing. And he just took it back, got rid of all the crap Intuit had added, and started growing it again.
Moving Back to Detroit [00:10:30]
Sam: This whole time he’s living in Detroit and watching his own city totally fall apart. In the financial crisis, Detroit went bankrupt. And meanwhile he’s super rich, living out in the suburbs. And he says, “We’re moving back into Detroit.” He moves his entire team into Detroit.
Sam: He had four thousand or so employees. If you actually go to Detroit, there’s this place called Campus Martius or something, right in the center of downtown — this huge building. He moved everyone there. And he basically said, “For my own employees and for the city, we’re just going to fix it.”
Sam: So he built casinos, built like a private security firm — if you walk around there’s normal police and then there’s “Dan’s police.” He bought billions of dollars of derelict buildings. You go there and there’s skyscrapers, and he’s just like, “Oh yeah, I own the Sears Tower and this and this.” Basically all of downtown Detroit — he owns like 20–30% of it.
Sam: He also just announced that he’s going to pay off $300 million of property taxes for Detroit residents. This guy really, really cares about Detroit.
Sam: Since he started all this, it’s now become the largest independent mortgage business in the United States. They’ve gone public, they had this huge IPO. It’s been a crazy story.
The IPO and Current Valuation [00:13:00]
Sam: What I love about this guy is just this crazy collection of businesses. If I remember correctly, I think he sold for $90 million, bought it back for like $20 million, and then took it public — quite recently, like six months ago. And he owned most of it when it went public — like 85 or 90% of it. And it went totally crazy.
Shaan: What’s the market cap now?
Sam: The market cap is… 46 billion dollars.
Shaan: Wow.
Sam: So yeah. Where’s the other 10 billion come from?
Shaan: Just other stuff?
Sam: A lot of real estate. The Cavaliers are probably worth, you know, half a billion. We’ve forgotten about that whole part. StockX is worth, I think, a couple billion dollars now. So he’s just got this crazy collection of stuff.
Cold-Emailing Dan Gilbert [00:15:00]
Sam: Chris and I got to meet him. The other cool thing about this guy is he’s just a wild card. I read about him in the New York Times — they did this profile of him — and 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 one in the morning and said, “Hey, I’d love to meet you.” I get an email back like five 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.
Sam: Sometimes when you go and meet these billionaires they’re like, whatever — you walk in, you get 20 minutes with them and that’s it. But he was incredible. They planned this whole tour of Detroit. It was like a two-day thing. They set us up in their hotel. Dan spent like two hours with us. He’s just this super nice guy. Deeply interested in what we’re doing, 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.
Sam: I always find that really inspiring. Because 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.
Shaan: That’s really interesting. That’s what you act like, and I usually say no to everything.
Sam: My joke is that my success is probably going to be quite predictable and it will be really good. Your success — you’re going to go completely broke and die young, or you’re going to become a billionaire super fast. It’s like a high-risk, high-reward thing. That’s not the reality, but that’s my joke.