Carvana CEO & Co-Founder, Ernest Garcia: Building a $50B Company, Losing 99% and Coming Back

The pressure of scale pushes everyone up the pyramid. I think that if you want to make the biggest difference, it's like, get in the game. You don't want to be a reaction to other people's reduced view of what you are.

When you're public, it's cold. It's ruthless. It's just results. No one's ever going to clap for you. What's more important to you? Is it important to succeed, or is it important to have the best personal life that you can have?

1. Are all great founders just “stubborn egomaniacs”?

Ready to go? Ernie, I am so excited for this, dude. I am a massive fan of the Carvana business. I've known Dan for a while. Neil has sung your praises for years, so thank you so much for joining me today.

Excited to be here. Thanks.

Now, when I was stalking the shit out of you, you once said that entrepreneurs are stubborn ego maniacs. Can I ask you, when you reflect on that, do you think you're a stubborn ego maniac?

Can we jump to the next question, please?

Here's what I'm going to say: I think truth is often times like—you can find a positive word or a negative word to describe almost anything. I think it comes down to what you're trying to get across. Sometimes it's more impactful to communicate with the surprising choice.

I think there's a lot of good that comes out of being stubborn. I think there's a lot of good that comes out of self-belief, which could also be restated as being an ego maniac. But I do think that's what entrepreneurs are.

I think it's really hard to sit in a room with a bunch of people who tell you you can't and to believe that you can if you're not stubborn and if you don't have maybe a touch too much self-belief. So I think that is a characteristic of entrepreneurs, in my opinion.

When did being stubborn in the Carvana journey help the business strategically in a very significant way?

I think many, many times. Even if I go back to 6 months into the business, we were out trying to raise money. We were out in Silicon Valley, and we talked to every fund that you could possibly imagine.

Basically, it was just like, we were capital-intensive, operationally intensive, and we had industrial components to our business. Everyone wanted us to be software. Everyone would just ask the question, "Can't you just be a software layer on top of dealerships?"

I do think there's a very good chance we actually would have been successful raising money had we made that choice. But I think we believed that vertical integration was very important—honestly, every bit as much for control over the entirety of the customer experience as for the economic and strategic benefits that come from being totally stacked and having access to all the economics.

That was just a core belief that we had. We were like, "We don't believe you can give customers the experience that we want to give them unless you do it all." I think you face a really tough choice there. You're like, "Okay, you have really smart people that are proven, that have backed lots of companies that have done well before, that are basically indirectly telling you they don't really think the way you're going to do it is going to work."

You can bend to that and choose to shift in that direction and build a software layer, or you can be stubborn and persist. I think we chose the latter. Making that choice led to at least 1 extra near-death experience.

2. How Carvana Almost Died on Several Occasions

But the truth is, I think most companies that take a big swing generally have multiple near-death experiences. So I think avoiding 1 extra one to sacrifice the things you deeply believe is not worth it. We went ahead and just kept doing what we were doing.

What was the most palpable near-death experience that you remember, and what did you learn from it?

In 2022, our stock went down 99%. Our bonds were trading at around 40 cents on the dollar. I think to the world, that looked like a near-death experience. Honestly, from my perspective, I didn't ever think it was that, but I think it very clearly looked like that.

It was very public, and that kind of thing is rarely public. So I think that's probably the one that would be in most people's minds. But in my mind, there were real near-death experiences early on where you're struggling to get things built, you don't have the whole machine, and you're struggling to get capital.

At the end of the day, as a company taking a big swing, you're not going to make money for a while. You need capital. That's the lifeblood of the business and of having the option to even keep building.

I think we really struggled to get that capital. So early on, we had several times where we got very, very tight on capital. There were several—maybe 2 or 3—but they were tough. Those, to me, were the real near-death experiences that were hard to manage through.

What did you learn?

I think you learn—how many stories have we all heard about somebody who had some injury where, if the injury had been 1 millimeter over, they would have died? We've all heard 100 versions of those stories.

I think there are 2 things you can take away from that. One is maybe all these people are really lucky. The other thing you can take away from it is that a lot of times, when we reassess things in retrospect, we think they were closer than they were.

I think the reason for that is because you have more moves than you think. When you find yourself with your back against the wall, you can find action that you might not have found otherwise.

I think it makes risk a little less risky than people think. When you find yourself in that spot, if you have problem-solvers around, you can usually do more than people imagine—whether that's fundraising, finding a way to make dollars go further, or finding a way to be a little bit more efficient in the business.

3. Is Carvana’s Inability to get VC Funding a Sign the VC Model is Broken?

When you have to, you will, to some degree. And I think that, to me, was the lesson that I feel like I learned. I think you need to take risk to do something meaningful, and I think risk is less risky than most people believe.

I do just want to stay on the fundraising element. It would suggest a broken nature to funding and funding environments that Carvana cannot get funding in the way that you couldn't in the early days. Do you think that venture funding is broken in its mindset toward some of the businesses that we fund?

When you're looking at what other people are doing and you see patterns that are emerging that are successful over and over again, it takes real conviction in some dimension to choose to run against that.

At the time that we were trying to do our early fundraises, I think capital intensity and operational intensity were not popular. Marketplaces were very popular. That was the pattern people saw. Phoenix was not viewed as a market where you could build a company.

So I think we didn't fit the patterns, and we didn't have the relationships that gave investors the opportunity to have deep enough conviction in some other way that would allow them to overpower the fact that we weren't fitting those patterns.

To me, that would be my politically correct answer today. At the time, when you're pissed off and you can't get money, you're like, "Isn't the way this is supposed to work that venture capital is supposed to be risk-takers? They're supposed to be the ones that fund risk in the economy?"

It's also a challenging business because you have to be so mentally plastic to see the transformation and margin evolution over time and buy into that. What it is today in the very early days versus what it will be—the 2 are very different things. You have to believe a lot is true for that margin transformation to be real, and so you have to be very mentally plastic as an investor.

The reality is, people are taking layered risk. When you have to solve 10 problems in a row, there are just not that many people that want to take that risk. I think there are people who will take 2 or 3 risks in a row, but when you've got 10 in a row, it's very hard to find that match of someone who wants to take that risk.

Given what I feel like I've seen, observed, and learned throughout this journey, to me the most important input to that question—to assess what the real risk is—is trying to understand the people.

I think people are going to face problems, and they're going to face the strain that comes from facing those problems. They're going to react in some way, and they're going to try to solve them.

If you have many things in a row that have to be solved, I just think it's impossible to foresee what all those things are. So you have to decide you believe in the people to ultimately solve all the problems as they come.

In a world of AI, many, many businesses that we thought were impenetrable are suddenly very vulnerable overnight, and most defensibility is lost. Do assets like Carvana become more valuable because of the complex coordination and logistical challenges—nightmare, respectfully—that the business has, making it actually far more valuable because there is such inherent defensibility?

The simplest answer, I believe and I hope, is yes. I think it's easy to see software layers being easier to build over time. But I think a software layer sits on top of physical processes, then fits on top of business processes, and then software enables that.

I think that, as it sits today, you want to have meaningful physical processes where things are moving and, ideally, different business processes where the dots are connected in different ways. And then the software layer makes all that happen. Because if the software is easy to replicate, the next 2 layers are still hard. So I think you want to have as many layers as you can.

You mentioned the different layers of value there, or layers of defensibility. What layer do you not have today that you would most like to have?

In that highly conceptual framework, I think we designed the business from scratch to basically try to deliver a customer experience that we thought was enabled by different physical infrastructure that supported a simpler, more direct customer experience where they're in complete control. And I think that required that we build logistics and reconditioning centers and business processes where finance connects directly into trade-ins. All the decision-making is continuous, so it all fits together, and then software layers sit on top that enable customers to interact with those choices on their own. Our entire customer experience design required all 3 layers.

So I think we have all 3, but I also think that if you zoom into any of those layers, in any part of our business—and we have many parts of our business—it's very obvious. Any smart person sitting in a room for half an hour would come up with 5 things they want to improve. And then I think what's fun about it is, if you have smart people in a room who are motivated, you fix those 5 things. By the time you're done fixing those 5 things, you're going to think of 7 more things.

I just think that it's a continual process, always. I think there's a million things that we wish we had that we don't have, but I think we've got a lot of problem solvers, and I think we enjoy tackling those problems. So I think we're trying to make our machine better all the time.

If I could ask you, though, and press you for one that you would most like, is that one?

Honestly, I think right now, even at the start of this conversation, it's very early in the adoption of AI broadly. To me, that is a layer. I think thinking about that as a layer is a reasonable thing because it can permeate everything that I'm able to think of right now in real time.

I think all businesses today are using AI at a small fraction of what's possible, given the quality of the technology today. And I think the technology is improving so fast, it's unbelievable. To me, trying to catch up to that horizon is a battle. It's way in front of us.

I think there's a ton to do there. I'm excited by it, but to me, relatively speaking, I think we're weakest there because it's just a new set of capabilities that we have not invested in for a long period of time. So I think we have a lot of work to do.

4. Operators vs. Strategists: What Hires Can Make or Break a Company?

You've mentioned problem solvers. You've mentioned the importance and centrality of team. When we spoke before, you said to me about operators and strategists, and I thought it was really interesting. How do you differentiate between operators and strategists and their importance within a business?

One of the things that I've come to believe is that pairing those 2 things is exceptionally important. If you can pick 1, I think you want operators. Operators get things done, and operators focus on the practical. They make sure that the wheels turn, and they make sure that whatever problems people are facing every single day get resolved. I think you must have that to succeed.

Oftentimes, operator mentalities view more conceptual thinkers and more strategic thinkers as head-in-the-cloud idealists, and it's hard for them to work well together. I think a lot of times these conceptual thinkers view operators as solving problems that are less important. It's not as interesting. I can't sit around a campfire and talk about this for 3 hours and impress my friends. A lot of times, the 2 don't fit together as well as you would like.

In reality, the more important of the 2 for any success—getting from 0 to 1—is the operator. But the ceiling of your possible success is a function of the conceptual thinker. To me, marrying those things together is really important and really hard, and I think the most productive people in the world are kind of both.

I think through this journey I've been lucky enough to meet Jeff Wilke at one point, and we went through one of our inspection centers together. The number one takeaway I had from that is that he's one of these people who is both things. He's a very conceptual thinker. He's very analytical, and he uses frameworks to evaluate everything, but then he also wanted to tell me that he thinks the shapes in which we're parking cars are stupid because we're not able to move the cars around as quickly.

That extreme detailed focus, and then his storytelling of the ways that they faced those problems at Amazon and just hearing how iterative it was, was interesting because you very rarely talk to someone who is as fluent in frameworks and concepts and also as obsessed with details. Pairing those things is really important, and usually they repel each other because they're not the same type of person. It's hard to pair those things, but if you can, I think it's very valuable.

You said about strategists sitting around a campfire and discussing it for 3 hours. You also mentioned to me before about living in the abstract and the potential for people to do that. How do you think about and reflect upon people living in the abstract, whether that's good or bad, and how managers should approach it?

I think abstraction is very bad. At least for a person who starts conceptual, I think abstraction is very bad because you have this constant desire to abstract.

How do you define abstraction?

The closer you are to the ground, the better you are. I think the pressure of scale pushes everyone up the pyramid. People do really well in their career, and they want to go manage more people, have one-on-ones, and influence a lot.

But if you want to make the biggest difference, it's like, get in the game. Get on the ground where things are happening. Sit there with the actual people who are doing the work. Your one-on-ones are great—you should have real conversations with people—but if you're just there influencing what's happening right now, you're leading. People are learning from that. That's the way it actually happens.

So I think fighting abstraction, especially for a conceptual person, is very important.

Strategically and specifically, what do you do to abstract yourself, or to not abstract yourself, to be as close to the iron as possible despite the immense scale that you have today?

First of all, I don't think I do this perfectly, but I'll tell you what I try to do. What I generally try to do is pick several projects. You sit in a room where you're getting readouts on what's going on with the project, and you ask questions and figure out who's answering all the questions.

There tend to be a subset of people who everyone in that room turns to when a question comes up that isn't on the slide. That person is the person who has developed frameworks for how it all works and is probably doing a lot of the work, so they know all the detailed answers.

Once you find who that person is, go check in with that person every day. If you actually sit behind that person, pull up behind them in a chair, look at a screen together, and try to solve the problem, you want the flattest organization you can have in general. But you can only do so much, so you've got to limit yourself in terms of how many projects you're working on.

You said that you should have the flattest organization. How many direct reports do you have? Are you Jensen Huang with 55?

No, I'm not. I know, because I'm not very good at that. I've got 7. Then I try to have all of them have as many as they can.

I'm not a great manager. I consider myself much better at trying to solve problems and get involved than I am at being a natural manager.

The one thing I find quite hard, especially for me, is that respect is earned over time. Bluntly, I don't respect many people coming in on day 1, but by month 1, month 2, month 3, it grows and grows and grows, and it can be great. But you have to put up with little for a while. How do you think about where your respect starts and how your relationship with it changes with people?

I would way rather take a person in any role who is respected by someone that I respect than someone who's done it before. My personal view is, I don't care that much if you've done it before. I really don't, and I don't care that much if you did it at a company that everyone thinks is a great company or if you have a degree that everyone thinks is a great degree.

If you're deeply respected by someone that I deeply respect, I just think you can figure it out. For me, that's way more important than anything else.

When you reflect on people—we're going to get to what you got right—are there any elements of what you most got wrong and what you learned from them?

As it relates to people?

Yeah, hiring, culture, something like that.

I think that there's an archetype of a person that is extremely common, and I think that they're even more common in Silicon Valley. I think they have good raw material, but they can be very destructive. You either need to avoid them or identify them and work to resolve what is inside them that can be problematic.

These people are storytellers. They're usually very smart, very conceptual, very good at fitting frameworks together, and very articulate and persuasive. They're usually very high-energy and charismatic, but they lack the ability to get practical, find the occasions where they're wrong, own that, and adjust.

They tend, instead, when they find that discomfort of being wrong, to shift the explanation or shift to the next problem and just keep bouncing to the next one. But because they're charismatic, high-energy, and smart, they always have people following them. I think those people can be tough.

When you see those people, you've got to make sure that you address it quickly, because I think that's a very common archetype that leads, in my opinion, to a ton of wasted effort.

One thing that I hate is bounces, as I call it, where people jump from company to company throughout their career. One thing that's astonishing with the Carvana executive team is, bluntly, the longevity of it and the stickiness of it. How have you kept such a nucleus together for such a long time when, respectfully, very few companies do?

I think that it's a group of people that are not motivated by status as much as most are, and I think that matters. A lot of times, what creates those moments of change—where people bounce from company to company—is when the company faces difficulty and the people disintegrate as a result. Blame starts to show up, and it starts to feel like, “This is no longer great for my résumé. This isn't what I signed up for. This isn't the path that I was on my whole life.”

I do want to discuss the resiliency of the business. You said to me before about being robust to volatility versus overreacting to market conditions.

There are no stories of companies that make it with no volatility. There are no stories of companies where people just cheer the whole time and it's a standing slow clap that never ends. That's just not how it goes, right? The reality is that every single company has stories where they were questioned over and over again. You just need to recognize that that's the truth. That's just what it is.

If it's true, don't worry about it. Of course, you want to try to learn from the world around you, so you've got to listen a little bit. But my personal view is that people listen too much to the world around them—people who are further away from the problem—and they should listen less. They should build what they believe in and what they feel like they deeply know, and not worry about it.

I think we try to get that going inside Carvana across all levels, and it's not easy, right? You wake up and read a new article about how you're going bankrupt, what you're working on doesn't matter, consumers don't want it, and it doesn't fit the new whatever. You're going to go through those times, and those times are tough, but you need to know that there's no avoiding that.

If you know that, then when it happens, just use it. Tape that up on your locker and use it, because it's energy.

Not shying away from the directness, Ernie, you got a lot more criticism than a lot of CEOs, to be blunt.

I'm sure I earned that.

I get given these research packs, and I highlight the things that are interesting. I'm like, “Poor dude. That's a lot.” My question is, do you just get a bit numb to it over time? I get very upset with comments and bad critique, and I haven't got numb to it. Can you advise me? How do you manage that and not personally feel a blow every time?

Man, that's a hard question. To be totally honest with you, I really do think that, relative to the vast majority of people, many people inside Carvana are way less impacted by those things than most. I do think that I am not very impacted by those things.

Why is that?

It might come back to the beginning of this conversation, being stubborn and egomaniacal. Maybe that's what it is. But if I were to frame it more positively, I would just say I've made peace with the fact that people are going to question you if you're ever doing anything that matters.

I don't think there's a path from the beginning to the end where they don't question you. What matters to me in my life is that I've got a family with 3 kids, I've got Carvana, and I've got pickleball. I don't care that much about the rest. The rest, I'm okay with. I've got my friends. I'm fine.

I focus on those things, and it is what it is. You can't stop it. You've just got to keep going.

5. Billionaire’s Biggest Lessons on Parenting

I'm not shying away here, but I think about this a lot with great entrepreneurs: how family money at the start and financial protection affect upside thinking and downside protection. Given the financial protection that you had, how did that change your operating mindset, do you think?

Let me start with this: I think any questions that you ever ask any person about themselves are subject to the story they tell themselves. It's hard for anyone to even know the truth about themselves. We're complicated creatures with very high-quality story-making, or storytelling, capabilities that exist in our brains. You're hearing people's stories, so I'm trying my best to separate from that.

Here's what I would say: I think that I have been unimaginably lucky in my life in so many ways. Where does the willingness to take risk come from? I think one of the places is that, as a parent, I've got 3 kids. I think the number one thing you have to do as a parent, in my opinion, is make sure that your kids know they're unconditionally loved, no matter what happens.

If they know that one thing, they always have a foundation to come back to. Every tough thing they go through—which they will go through, because they will go through tough things—they always have somewhere to go back to. When they have that, and that's not going anywhere no matter what, they have the capacity to be confident.

I think I had that growing up, so that was very lucky. My dad was an entrepreneur. He went through personal bankruptcy and his own trials and tribulations, and I think that up until I was 10 or 12 years old, I don't think I even knew that was happening. I give my parents a tremendous amount of credit for that, because I think you shouldn't know that when you're a kid.

When you're a kid, you should be eating dirt. You shouldn't worry about your family's financial situation. It's funny that my family lost all of our money when I was 11 or 12, and it gave me this ferociousness that I would never let us be in such a precarious position again.

I'm quite young. I look quite old because I will never, ever let that happen again. That's because I saw it. I don't know if it was good for me or bad for me.

By the way, that sounds like a very deep question, and I don't—

That's what happens after therapy, Ernie.

Yeah, yeah. I think you'd have to define what's good and bad to even answer that, because I think there's probably a different answer depending on different definitions of good and bad.

To me, once I became aware of what my dad did, I would say the biggest benefit of that was that I saw he was successful and I saw that he was human. I believe that if he was successful, I could be successful. I think that made it less scary.

For a lot of people, they think that other people who are successful are made out of different stuff than they're made out of. If you have an example that's very close to your life, where you know that person as a person and you see them being successful, it gives you the belief that you can do it yourself. I think that was tremendously helpful.

The next thing that I'll say, which I think is my version of the motivation that you just described in yourself, was seeing difficulty. I don't know where it comes from, and I don't know if it's good or bad in the same way you don't know if your situation is good or bad, but I've always been a deeply competitive person.

In high school football, every time we lost, I would go sit in the back of the bus by myself. I wouldn't talk to anyone, and I would sit there and cry—a tough cry, a cry that would make you proud. But I would say I couldn't take it. My stomach just hurt, and I would sit by myself. As I said, I wouldn't talk to anyone. Everyone knew to leave me alone. I couldn't handle it.

I hated losing. You would think if you hate losing so much, you would just stop putting yourself in a position where that's even a possibility. But I think truly competitive people can't stop putting themselves in that position. They have to compete. And I had to compete, but I also just hated losing.

I think that transferred a little bit into, okay, if my dad can do it, I can do it and I can do it better. So I think from a very young age, I felt like—people always have these founding stories that are about their specific problem. For me, it was way more—and, like I said, I hate to say this because I don't think it's an obviously noble thing—but it was, if he can do it, I can do it and I can do it better. So I'm going to do something. I don't know what it is, but I'm going to do something.

In the majority of really successful men, there is this deep-rooted desire to please or impress their father. Did you feel that?

Again, the reason I'm pausing is I'm trying to decide: is it please, impress, or beat? I'm positive that it was beat. But I think there's no doubt that please and impress are in there. But sure, I think that's all in there, right? I think we're all humans. It's not all conceptual. Some of it's emotional and just inside, and I think that's true.

6. Is Life About Happiness or Achieving

You said something there about the humanity of people and people who've achieved, and them being just like everyone else. It reminded me of the Steve Jobs quote, which is very famous: The world around you and all the amazing things is built by someone just like you.

I don't really buy that, Ernie. When I meet the greatest entrepreneurs in the world, they are fucking awesome, and they are not like everyone else. That's by definition why they've built these category-defining businesses. I almost think it's a lie to tell your random person on the street, “Oh, don't worry, you can do anything. Look at Steve Jobs.” It's different. Am I overly cynical?

If I got to live 1,000 lifetimes, I don't think that I would be likely to be part of something as big as Carvana in very many of those lifetimes. I think there is luck in the world. I just think that there is.

There are prerequisite skills that a group of people has to have to have a chance at success, but I think that opportunity does have to meet with some luck to ultimately manifest in success. So I think what I would say is, for every Steve Jobs out there who has done an amazing thing, there's probably 100 people of similar quality who haven't had anywhere near the same level of success.

There aren't people nodding their heads every time they talk because they don't have that superficial success, but what they do is exceptional. I do think there are a lot more exceptional people in the world than there are exceptional outcomes, because I do think that luck plays a part in all this.

You mentioned the love that your parents showed you and the confidence that it gave you. This is totally away from schedule, but I'm enjoying this way too much. If that's what you've carried with you to your children, what have you deliberately decided to do differently from the way that you were brought up with your children?

Not much, honestly. I think—God, I want to say, mine, for example, is financial shielding. I don't think it was actually that good. To know every night that you could lose your home is scary as a child. I would have a very clear Chinese wall between finances and what my children know, period.

Let's dive into that one for a second, and that's going to go back to what's good. My guess, without confidence, would be knowing that you could lose it all every night is not good for your happiness and your mental daily well-being. It's probably very good for your ambition. It probably hardens you and creates character that you couldn't otherwise get.

So to me, is that one good or bad?

I think it depends on what you're aiming for. So that's where, to me, what I think I believe in deeply is basically 2 things. We talked about one of them: make sure your kids know that they're unconditionally loved.

Then I think give them a chance to go explore the world. Give them a chance to fall down and figure things out, because I just think that's how we learn as people. You can't tell people all the rules. You just can't. People have to go learn things themselves. They have to go figure stuff out.

To me, those are the 2 things that I feel strongly about in parenting. The rest, I feel like I don't know, because it's just too complicated. But those 2 things I believe in for sure.

Norway is the only country which encourages children to climb trees. It is also the country which has the lowest cases of depression in under-18s.

Yeah. Yeah, it is. So, great example, right? It's very easy to see the problem with climbing trees. It's not easy to see the 15th-order impact of climbing lots of trees.

Do you want your kids to climb trees or not? I don't know. You want to love them for sure, and you want them to know they're loved for sure.

You said, “Is it good for you?” But it does give you drive, and it does give you ambition. I know this is incredibly meta, but I actually think about it a lot. Is it actually about happiness for you, or is it about achievement, success, and accomplishment? How do you think about that?

I think happiness is probably the unit that we should all be chasing. But I think that there's superficial happiness and there's deep happiness. There's cheap dopamine and there's expensive dopamine.

Stock goes up: cheap dopamine. Jump on Twitter, read that you're smart: cheap dopamine. Then there's building something, doing something, overcoming something difficult. Put yourself in a fight and lose, and put yourself back in a fight and win. I think that drives satisfaction, right? Contentment. It's a deeper happiness.

So I think maybe that's a story, but I think that's, to me, the pursuit. I think it's a beautiful thing about our complex system and economy that it is probably the case that, to find outside success, the results of your actions have to be positive for other people. So you're driving their happiness.

But I think to find that outside success, you have to put yourself in battles and seek the expensive dopamine. You have to go try to build something and find that fulfillment and satisfaction. I think that's, to me, what it's about. But I think for different people, it's about different things.

I think one thing that's very challenging, respectfully, for people in your position is that, through what I do, I speak to many incredibly successful billionaires, entrepreneurs—you name it. The unifying thing that we talk about, sometimes off mic and sometimes on mic, is bringing up children in an affluent environment, having that same level of ambition and hunger that they had, and then infusing that in their kids.

How do you think about that, given the financial background that your kids are brought up in?

I think it's brutally hard. I think your palpable story is lying in bed wondering if, every night, you're going to lose everything. Humans are impacted by those moments. So I think that when those moments aren't happening, it's going to be a little different.

As a parent, I heard a quote the other day that I thought was a good one. It was something like, “For as long as time has been going, children have not listened to their parents, but they've never failed to observe what they do.”

I think that's pretty true. I think the actions you take every day matter. Your kids are watching, and what you value, they will value. Having stuff and being around stuff is one thing, but modeling for them that that's important, I think, is a much more dangerous thing than being around it. Both are probably not perfect for kids coming up in the world.

That's hard.

I think the best answer, in my opinion, is sport. Not everyone loves sports, but the thing about sports is someone wins and someone loses every single time, and it doesn't matter where you started. It doesn't matter where you woke up this morning or where you go to bed tonight. They want to win and you want to win, and only one of you is going to.

I think sport is one of the few places where we can go collect extremely real experiences very quickly. So I'm a huge fan of sport and competition for kids. I think it's very useful to help them figure out how to navigate the world.

Do you push or encourage your children to do sports and to be actively competitive to get that same drive?

Yes. I would say try not to push them too hard, right? Try to model the behavior and have them want to. Go in the backyard and throw a football with them, and let them know when they drop it.

If they react to it the right way and they think that's fun, they don't want to drop it anymore, and they want to go out and play more. So I think sport is great, and I think you should try to make it fun and try to make them want to do it.

For people to be impacted by things in positive ways, they have to want to. So I think you have to make it fun.

7. The Reality of Being a Public Company CEO

You’re a public company CEO. You have so much expectation. You have so many people working for you. So many mortgages rely on you, respectfully. Sometimes you can’t always be there for your kids in the way that you’d like to be. Is there a time when that has been most prominent for you, and how did you think about and reflect on that?

I think being present is the most important thing. I think the quality of the time is more important than the time. When you have a million things on your mind, it’s really easy to go lie on the couch and be deep in your head with glazed-over eyes. I think with your kids, it’s most important that when you’re there, you’re there.

I think it can be moments that are seemingly unimportant. It’s picking them up from practice and driving them home, or whatever it is. But I just think when you’re there, engage with them. Don’t accept the, “How is school?” “Good.” “How is soccer?” “Good.” “How did you play?” “Good.” And then I’m like, “Okay, cool. I’ll go into my mind, you go into yours, and I’ll see you later.” Don’t accept that.

I think you should try to engage, and as long as you do that, that’s where you show that you care. That’s where you show that the love is deep and unconditional. Quality is more important than quantity, in my opinion.

On money, I think people have a lot of misconceptions—wrong thoughts, bluntly—around wealth. What do most people think about money or wealth that, actually, in reality, isn’t true? I know you’re thinking, “Jesus Christ, what have my comms team done, putting me in front of people like this?”

That was my second thought. My first thought was, “What’s the answer to that question?” My second thought was actually exactly that.

You are who you are. It’s hard to change who you are deeply, in meaningful ways, and I think it takes real effort. One of the things that’s weird whenever outside story labels get placed on you is that you see that you change in other people’s eyes in a way that you haven’t changed in your own.

An example of that would be Carvana when it was 20 people, 50 people, 100 people. I never felt like I was the CEO. I felt like I was Ernie. I felt like you walk in a room, sit behind the person, and figure out the problem. Then, all of a sudden, when you’re 1,000 people, 10,000 people, you see the way people are looking at you and you see that you’re the CEO now. You’ve become this label. You’ve become this reduced concept.

It’s a bummer, to be totally honest, because inside, you know, you’re still that 15-year-old kid looking out your eyeballs at the world, who’s a little competitive and wants to figure things out. You see people seeing you differently, and you just wish that they didn’t. I think that trying to fight that as best you can is important, because you don’t want to be a reaction to other people’s reduced view of what you are.

The reality is, as things change, as your title changes or your financial situation changes, I think that the way you feel inside changes a lot less than people think. I think that’s important. I think that’s probably the healthiest way to approach it.

You said about being a reaction to who people think you are, maybe who people want you to be. Do you like being a public company CEO? How do you reflect on what the world thinks about Ernie and what you actually are?

The superficial answer to that is no. I think it’s a cost of the goal, basically. My advice to any person out there considering going public would be: What’s more important to you? First of all, it depends on who you are, because some people love it. I don’t love it.

If success is more important to you, I think you want to be public. I think that the things that people say about being public are true. There are bad things. People are shortsighted and they focus on things that don’t matter that much. But on average, I think it’s very, very helpful because it creates pressure that I don’t think you can create otherwise.

I mean, this is, respectfully, Ernie. I’ve listened and spoken to you now for over an hour, and my takeaway is that you’re incredibly disciplined. You’re incredibly competitive. You don’t need some analyst at a bank to tell you that you should have a margin improvement of 1%.

I think that’s right, but I don’t think you need that to push you in general. But I do think it helps to push you specifically.

Earnings prep is viewed by many as a waste of time. Every quarter, you have to go sit in front of analysts and investors. You have to answer these questions. You have a day afterward where you talk to all your big investors for half an hour, and you have to answer their questions.

But to me, it’s my natural way to approach the world. I like to go sit behind someone, understand a problem, and think about the fundamentals. What are the moving pieces? What are the people? What are the processes? Think about things functionally. I don’t think about things from an accounting perspective.

But then, when you have to reorient your mind into that accounting perspective, it forces this different view where, a lot of times, it pushes you down other nooks and crannies that you might not have otherwise wondered about as quickly. I think you realize, “Okay, there’s an area where we’re going to get a bunch of questions.” The reason we’re going to get a bunch of questions from a bunch of smart people is because they’re good questions.

It’s not fun because you want to go attack the problem over here that you’re focused on, and now you have to get pushed over in this direction. But I just think that pressure is good. Humans—all of us, myself very much included—gravitate to things that we like. A lot of times, productivity is found by confronting the things that you don’t want to confront. I do think it’s helpful.

Playing the contrarian side, there are various one-off instances that we both know. You have Neil [surname unclear] at Greenoaks, as we said, Vincent and Josh at Thrive, who would provide that similar pressure dynamic in a board environment more naturally in a later-stage private-company environment, as, say, they do in a Stripe of the world, without the challenges of being public.

8. Why Companies Should Go Public

I disagree, but I respectfully disagree. Let me say why. I have a ton of respect for them. I think that when you’re public, effectively, there’s almost zero relationship influence in the way people are reacting. The stock does not care about who you are. It doesn’t care about your relationships. It just doesn’t care.

When you know someone for a year, 2 years, or 5 years, they do care who you are. You can evaluate someone on intentions, you can evaluate someone on their actions, or you can evaluate someone on their results. Being public, it’s just results.

When you have a relationship, there is some portion of the way you’re evaluated that is based on intentions and actions. When you’re public, it’s just cold. It’s ruthless. It’s just results. It’s very hard to replicate that.

There’s the heuristic that everything before the “but” is nonsense. Being public, like I said, isn’t perfect, but I think the feedback that you get is cold and ruthless, and I think that’s valuable.

Why do you feel public markets around Carvana are shortsighted, where it would be most helpful for you if they were long-sighted?

So, I think everywhere. I think that’s a useful thing for us to dive into because it kind of contradicts my previous answer.

In good times, in 2021, what percentage of investors said that they weren’t long-term-focused investors? It was zero, or approximately zero. The reason was because it was in their short-term interest to be a long-term investor in that moment. But then you find out who the real long-term investors are when it’s not in their short-term interest to be a long-term investor. That’s when you know if it’s real or not.

I think we went through a moment where that became exceptionally clear. God bless, people got to make their choices. People change their opinion and they face their own stresses. I don’t mean to judge the choices that were made. You see who people are and what they care about in moments of strain. It becomes very clear.

I think the market, in my opinion, is constantly panicking about everything. It’s constantly over-evaluating all these micro data points. You don’t want to overreact to all of that. You need to have your convictions and beliefs.

But it is useful to sit there and say, “Okay, but what is the one thing we’re going to get 15 questions about?” And then, is that something where the market is just wrong and we don’t care? Many times, that is the case, and it’s like, just don’t worry about it; move on. But absolutely, on occasion, you’re like, “That’s not perfect.”

What's going on there? Let's dig into that. It does matter to the long-term trajectory of Carvana, and it does mean that this is an area where we can put more focus. So, to me, I think you have to sift through the pressure because the pressure comes in all kinds of crazy directions.

You said nothing else matters but results. There's a famous saying—I can't remember who said it, so I'm not going to try—but they said that the market in the short term is a voting machine and in the long term is a weighing machine. Would you agree with that analogy?

100%. I think that's Benjamin Graham. I think that whole analogy through that book is Mr. Market, which is this crazy thing that you get to trade with every day. I think there's a recognition that the sum of investors is a volatile thing. And I think that when you're evaluating something that is necessarily high potential, I think it is high volatility.

Because high potential means high upside, but it also means the probability of downside is greater than in many other cases. If you have something that is high potential, you're probably going to have high volatility. I think that's just part of what it's going to be, and you just have to deal with it. But in the long run, it works.

You know what I mean? We went public at $15, and the vast majority of the time the stock has looked pretty good compared to that. If you're just connecting dots that are very far away, yeah, it's looked pretty good. We've had moments where it didn't look great, right? Which is actually hard to do from some of the places that we were, just mathematically, but we did—we found a way to do it.

But I think on average, the market will weigh you. Build the things that you think matter, use the pressure the market provides to find the things that they may be right about that you're hiding from because it's not comfortable, because it's not what you're naturally good at or what you're naturally interested in, and then just try to do your best over and over again. Make peace with the fact that the market's going to move around and you can't control it.

You said about Mr. Market that I often think about Adam Smith and the Adam Smith invisible-hand theory, and how markets self-regulate and correct in a very natural and authentic way. Do you agree with Adam Smith's invisible-hand belief, or do you think sometimes interventions in many other ways are much more necessary?

I do believe in his belief. I think the market and capitalism—and I don't mean to fall into the expected trope of all the things that I would have to believe—but I do think they're true. I just think that they're beautiful organizing functions for people. And I think as long as you believe people are smart, markets will make all kinds of mistakes, but I think that they progress on average. I think on average they weigh.

So, yeah, I'm a huge believer in that. And I think it's a wonderful—I don't know if it's a coincidence; I would need to think through it more carefully—but I think it's a wonderful coincidence that people pursuing their own goals in a free market necessarily serve the interest of others. I think that that's wonderful. It's a beautiful truth.

9. Why You Should Price Your IPO to Perfection with No Pop

When you look back now, you went public, I think, 5 years into the journey.

4 years, yeah. 4.

Okay. Unbelievably short amount of time. Do you regret going public so early? Do you wish you'd gone public earlier? How do you reflect on that?

I don't. But again, subject to retrospective rationalization and my own storytelling, I think it created pressure, and I think it made us more resilient. I remember, we went public at $15 and we were down to $8 within a couple of days. I remember walking into the office—you go on this road show, and you have 45-minute meetings where smart people just ask you everything about the business.

Then you jump in an elevator, run downstairs, get in a car, drive for 5, and go to the next meeting. You're trying to find 2 seconds in between to go to the bathroom. You have 10 of them a day, and you do it for a week straight. I lost 10 pounds. So that's the pre-IPO process.

Do you think they got it in that road show? Reflect on that.

Some did. But I think it's hard, right? We're an unknown entity out of Phoenix, Arizona, with none of the hallmarks of success. We don't have any of the big funds where they can go, "Yep, that's smart," and I can call this investor that I deal with 50 times and they can tell me about the company.

So we're coming in and they're like, "Who are you? What's going on? How do I check on you? I don't have any idea." That was a lot to ask of investors. And I think that's part of why we immediately dropped afterward.

But you go through that period, you go out, and you imagine ringing the bell and the stock goes up and everyone hugs and it's a party. Instead, they can't even open the stock because no one wants to buy it, so it's just plummeting post-IPO, which the bankers are losing their minds over because that's not the way it's supposed to work.

Then you already set up 4 TV interviews. I had never done one before, and you jump in front of the camera and they're like, "Why do investors not believe in you?" And you're just like, "Come on." So, it's a whole—you’re just like, "I have no idea how to manage this."

Then you get back to the office, and I remember walking in: What do you say to that? I mean, I don't know. I was a deer in the headlights, trying to make stuff up and talk fast, as is my habit. I tried to do the best I could.

But you get back to the office where it actually matters, because it's the people who are going to build the thing for a long time. It's the people who believe in what they were building, and it's the people who bought into the fact that it matters. It's the people who aren't close to investors, and they think that the fact that investors are rejecting us means that we're not good. So now they have a moment of questioning it.

And you walk in and you feel the energy, right? You feel that the energy is like, this was supposed to be a party and it's not. And that's tough. So I got a text message from someone who was like, "Hey, listen. I think we have to address this. We have to pull everyone into a room."

I remember I saw the text message and I was just like—I knew it was right, and I was like, I just lost 10 pounds on the road for the last week. I just had the worst day ever, trying to leave with the stock doing the opposite thing of what you're hoping. And I got to try to jump in a room, have energy, and have this conversation.

But then you jump in there, and you do it, and it was the right thing to do, and it went well. You're building resilience. You're building personal resilience, but you're also building company resilience because you just had a moment where everyone questioned you, and you all came together and had an honest conversation about it.

People decide whether or not they believe your answers, and then, if they do, you're all now a little tighter because you just fought something together. So, to me, that helped to build a kind of resilience. As a private company, what do you do when you go through a tough time? For the most part, what do you do?

You don't talk about it because there's no forcing mechanism to make you talk about it. You just keep going. And so, I think you get to avoid building resilience. I think going through it wasn't fun. Superficially, it was massively dopamine-reducing. But I think deeply, it allowed you to find the expensive dopamine. I think it was better for us.

How do you think about IPO pricing? Do you like to price it to perfection, where then you're going to draw, or do you want to price it—

Yes, and you're not supposed to say that, but I don't understand why any rational person would take any other view. If we all can take the view that, actually, I want to leave a little bit of room so people feel like they got a bump, it creates this synthetic excitement, and that could lead to subsequent excitement and upward mobility.

I don't buy into that. I think you price it as high as you can price it. I don't think that it's very likely. I mean, let's take our example. You're not supposed to say this, so sorry to everyone. I just don't think that the standard view is right, in my opinion.

But we went out at $15. We opened at $12. It's a complete disaster. We're down to $8 a week later. Do you remember?

Do I remember?

Who cares? Do our investors today care? No one cares. But if we would have priced it at $10 or $8 or whatever to try to get some magical bump, we would have gotten a lot less money, we would have been more likely not to make it across the line, and we would have taken more dilution for all of our pre-existing shareholders, who we also owe something to.

Then everyone's going to forget anyway because Mr. Market's wild, right? To me, the results are going to matter. Get the money where you can get the money and go build the thing. That's my take. Mr. Market's wild.

Mr. Market's wild. When you have [__] and, sorry for being blunt, [__] like Hindenburg, do you worry that Mr. Market's also irrational?

I think one of the things that I have grown to believe is that the market can be more volatile than I ever thought. So, I think you want to build in resilience in whatever ways you can. I think the most important resilience is people. It's people that have had hard days. It's ideally teams who have had hard days together and made it through.

I think when those things happen and the market tells you that you're wrong, those people have reps that they can go back to, that they know they've made it through before, and they can probably make it through again. So, I think that's important. I think resilience also, ideally—especially in build phases before you are generating cash—means a little bit stronger balance sheet than you think you need. If you find yourself in a moment where results are a little worse than you thought, the market's a little worse than you thought, and you face another bump that you didn't foresee, that can be a problem.

So, you want to minimize the odds of those existential moments, which I think, honestly, is a lesson that I'll never fully internalize. I think it was one that I had to learn the hard way, for sure. It's not a natural one for me. I want to take as little dilution as possible the entire time. Yeah, then those things are going to happen. Like I said, never expect—no one's ever going to clap for you.

10. “What I Wish I Had Known About Debt in Building Carvana”

Think about all the most amazing companies in the world today. Are people standing up clapping? Maybe in the tiny world of investors and people that study businesses, there's some applause that occurs. But for the most part, read the news and look at public sentiment every day. No one ever stops and says, "Great job." You just have to keep marching and build a thing that's valuable, productive, and useful. If you allow yourself to need outside validation, I just think that you're putting yourself in a weak spot.

You said you want to take as little dilution as possible. I think Andy Dunn at Bonobos and Alex Chesterman at Cazoo will very openly say that about the cancerous nature of debt and what debt did to the business. How do you reflect on your relationship to debt as a business—the cancerous nature of it, maybe the benefits of it? How do you reflect on debt as an instrument?

I think debt is dangerous in general, and I think it's more dangerous for a company in a phase that we were in where you're not positively cash-flowing. I think those things are definitely true. I also think in this case it worked out. Had we raised equity in the same dollars at the same time that we took out debt, we would have taken a lot more dilution than, let's say, if we just raised equity today and paid it off, just to allow you to do that math.

We would have taken quite a bit more dilution had we done it the other way. So, I think it worked out, which doesn't necessarily speak to whether or not it's good in general. You observe one case of the world, but the world is complex. The other thing that I think was interesting about the debt was that it was almost like being super public because it created a way bigger pressure.

It was like we were not a positive cash-flowing business, and then all of a sudden the market said, "We're not giving you money." Not only did you have to get to break-even, you had to get to a place where you could cover the interest. That pressure, I would like to believe that we could have created it for ourselves, but I don't think we could have.

I think we're a group of people that put a tremendous amount of pressure on ourselves. I really do believe that we're relatively unique in that way. But there's no substitute for huge cash flows that have to be covered and a market that's telling you you're stupid every day. That generates a type of pressure that is extremely valuable.

So, to me, that was not the plan, right? We weren't like, "Hey, let's take out this debt because it's going to create this near-death experience. It's going to be great for us in the long run." That wasn't our story, so we don't get to take credit for that. But I think that it at least ended up being that way. So, I think there were positives that came from it.

11. Quick-Fire Round: Favourite CEO, Marriage Advice, Carvana in 10 Years

I've enjoyed this conversation so much. The breadth is amazing. I'd love to do a quick-fire round now, if it's okay with you—a short statement. So, let's start with: What do you believe that most around you disbelieve?

I believe people matter a lot. The underlying capabilities of the person matter a lot more than the experience. I'm not sure how many people around me don't believe that, but certainly a subset do.

I believe that if you have kids, you are willingly accepting a trade-off in execution professionally. Is that fair?

Wow, that's a good question. My brother's just had a baby, and I just see the intense amount of work that takes.

I am ruthlessly selfish, Ernie. I work 16-hour days.

Yeah, that comes across. It's very, very clear. I'm just [__] with you.

No, well, by the way, I think it's a very good question.

I think that there's, in support of that perspective, I've even seen papers about professors: the number of times that their papers are cited, I think, goes down when they get married, and I think it goes down again when they have kids. So, I think there's data that supports that.

Kids are, at least, an offset: they remind you of what matters and what humans really are. It's very easy as you get older to drift into highly intellectualized views of the world. When you see your 5-year-old kid explaining to you why something just happened in a way that is so obviously wrong, it's unbelievable, you remember that, okay, this is obvious to me because I have a lot more experience and I'm a lot smarter than my 5-year-old kid right now.

So, I know this story is nonsense. But a much higher intelligence than me would probably look at all the things that I say all the time and would view a lot of it as completely dumb as well, because we are naturally storytellers. When you get these little examples that you care so much about, that are running around constantly displaying to you what the human animal is, it's a very helpful reminder that I think helps you manage better. I think it helps you understand customers better. So, I think there's at least an offset there.

Where do you have little resilience where you would like to have more?

I eat a lot of salty food at night. I don't know why that is. I'm not a sweet guy. I eat a lot of salty food at night. I have some things I can bring up. In any good relationship, you've got your recurring battles. My wife and I have our recurring battles, where I'm probably less resilient.

I'm going to stay away from that one. But there have to be some lines somewhere. There are lines. I'm going to stay away from that one, but I think there's some areas where I'm probably less resilient than I should be. I don't know. I'm not sure I answered that question very well.

I do love that, dude. It's like Hindenburg Harry would be like, "[__] it." And then there's, "I'm not going there." Harry is like, "I totally get it. Well played. Don't go there."

Exactly. It's not worth it. That one is not worth it.

What is the secret, though, to a happy marriage in your eyes? You're the CEO of a public company that's very demanding, and you're also a happily married man. What's the secret?

I think that comes down to people, too. I'll try to make this quick, but my wife is someone who is probably the most present person that I know. She's probably the person who is most likely to be 100% engaged with the people around her that I have in my life, at least.

I think she had the benefit, growing up, of having a family that clearly unconditionally loves her. So, I think she's a confident and happy person, and I think she defaults to positivity, which I think different people default to in different ways there. I think that makes it all pretty easy, in my mind.

I think the foundations of people are unconditional love, the confidence that emerges from that, and the ability to be happy that emerges from that confidence. I think it's kind of the building blocks, and I think if you have that, you're in a good spot.

Which public company CEO do you most respect and admire, and why them?

I mean, God. I hate to say such expected things, but I will say that I think we've studied Amazon forever as just kind of an incredibly analogous business to our business. There are a lot of moving things. There are a lot of very similar problems that you face. So, I think we've always paid a ton of attention to that business.

Someone who I was lucky enough to meet—I was lucky enough to meet Brian Niccol a couple times in my life. He's now the CEO of Starbucks and was previously the CEO of Chipotle. To me, Chipotle is one of the most amazing operational machines I've ever seen.

Like you walk in there and you have an unbelievable burrito bowl in 30 seconds. There’s no wasted movement in that entire place. It’s unbelievable.

I think that’s incredible, and you try to learn from it because I think that’s the practical area where I think that’s my relative weakness. Every time you find a clip on Twitter or whatever with little nuggets of wisdom from Steve Jobs, I just think the depth there is unbelievable. It stems from a deeply human place and a very deeply driven place that I think is remarkable.

I think Elon Musk is—I mean, people can have their views of him, and that’s fine—but has there ever been a greater builder? Has there ever been someone who’s faced more 0%-likelihood-of-success problems in a row and continually succeeded? I think that’s unimaginably impressive, and I think you have to try to learn from that.

I’m actually very excited. We’ve got Brian Niccol coming on the show. He’s great. I was saying he’s the most underpaid CEO in the public markets. When you look at his pay packet, you should tell him that just to put him in a bad spot where he has to dance.

What have you changed your mind on in the last 12 months?

2 things I’ll say there. I think what I’ve come to believe over the last 3 years is that focus is very important and that, for an ambitious company, it basically requires constant tending. Every 3 months, you have to uncomfortably take things off your board that you’re working on because I think it’s very hard to stay focused. Companies naturally drift away from focus, so trying to continually manage that takes a lot of effort.

We, as a company—not to dive too deeply into the specifics of us—but I think we faced a 2-year period where we focused on nothing but profitability, and I think more recently we’ve been trying to find the right balance between profitability, growth, and continuing to build a machine that is even more differentiated than the machine that we had before.

I think we’re at a place where it makes sense for us to be shifting some of our finite focus toward growth and toward foundation-laying. But I think that’s hard.

Are you worried about a knee-jerk reaction?

I’m worried about allowing a shift in the thing that you’re focusing on to lead to diffuse focus everywhere. What I think can happen is when you say, “We’re going from just focusing on this one thing to, hey, we’re going to work on this, but we also have this other goal and this other goal,” it gets really easy for everyone to say, “Right, okay, so we’re going to do this and this and this and this and this and this and this.” They just keep adding more things.

I think when you shift the thing that you’re focusing on, you have to make sure that you’re taking things off the board that were pointed at that focus and replacing them with things that are pointed at the new focus. That’s just to make sure that you don’t find yourself in a million projects and get nothing done.

I think that’s the hardest thing about managing a change in the area that you’re focused on.

Where did you naturally drift to that you wish you hadn’t?

My natural drift is capabilities first, scale second, and blocking and tackling third. For 2 years, we focused on blocking and tackling, and we had tremendous success as a result of that.

I’m always worried in myself about drifting too far in the other direction. I think we find ourselves now at a place as a business where we should drift in the direction that’s more natural to me. I don’t know why there are fireworks going off.

That’s really hilarious. I love it. It’s like hand gestures. Was it—okay, that was—I was wondering, did you just do something?

What did I do?

Yeah, I’ve got to figure out what those hand gestures were.

But I think it’s hard to manage in that direction that you believe is right when you also know that it’s your instinct. It’s your default. It’s the area that you’re most likely to make mistakes in. You have to make sure that you’re being really careful in those moments, I think.

Everyone on Twitter wanted to know why you’re buying car dealerships.

I think we’re going to stick with our public statement on that one. Let’s circle back on that in the future.

Is that a spicy one? We can edit it out. I had no idea.

No, there’s nothing spicy. I think it’s early. I just think we’re always running experiments, trying to learn, and I think it’s extremely early. We should save our words for when we’ve got very concrete things to say.

You have, I think, 400,000 cars of a 40 million-used-car market in the US. That was Dan who mentioned that.

It’s give or take.

Yeah, 40 million used cars.

40 million used cars.

Yeah. God, Dan missed that one. Come on, come on, Dan. Take your double. We should double the stock price on that one.

Where are you in 10 years’ time? If I take today—meh, good, and great case—where are you?

I think we hope it’s many millions. We’re built today—we have infrastructure that, without diving too much into the details of what this means, clearly supports 3 million.

The reality of how these things work is, if we go backward in time to think about how we project the future, at 100 cars it was easy to see 250. At 250 cars, it was easy to see 500. At 500, it was easy to see 1,000. At 1,000, it was easy to see 10,000. At 10,000, you could imagine 100,000.

I think everyone always wants to look from the moment you are to what the finish is going to be, but you have to remember that where you are is going to keep changing. If the trajectory is positive, then your position in space is going to keep changing. What looks possible is always a multiple, depending on how big your eyes are. It’s a multiple of where you are today.

I think our goal is to keep making progress, and if we keep doing that, regardless of what the multiple is that people have in their mind, they’ll start applying that multiple to bigger and bigger numbers. I think our numbers are really big, but we don’t want to share them. We’re ambitious.

Ernie, as I said, I like doing what I do, but this show is a very rare one where, honestly, you’re able to have such a natural discussion and bluntly build the relationship in a way that’s just super natural. Thank you for reminding me why I love what I do so much. Thank you for joining me. This has just been fantastic.

Well, that was a very nice thing to say. Thank you back. I really appreciate it, and I really had fun as well. We did not talk about any of the things that I thought we would talk about, so that’s more fun, I guess.