Problems as Opportunities

A convergent stance

At lunch, Ludwig Jesselson told a young Brad Jacobs: "When you have problems, when you have challenges, when you have obstacles, by addressing those, that's how you make money." Jacobs took the lesson to its extreme: "You want to hug problems. Problems are the way you succeed. You want to run to the fire. You don't want to run away from the fire."¹ The stance recurs, independently, across operators from different industries and eras: problems are the mechanism by which value is created, and the correct response to one is curiosity and energy rather than dread. Jacobs adds a reflexive corollary: "There's always a play. No matter what gets thrown in your face, there's a way to embrace that and turn that into success."

The underlying logic is consistent across the accounts. Problems signal unmet needs or inefficiencies; removing a problem creates value; therefore the presence of problems is a signal of opportunity, not evidence of failure. The practical consequence is that the team with the highest problem-absorption capacity tends to win, other things equal.

Problems as the substance of a company

Daniel Ek offers a structural version, attributing to his co-founder Martin Lorentzon the line that "the value of a company is the sum of all problems solved," which frames problems as the substance of the system rather than noise in it.² His personal version actively seeks hard problems, the kind with only a five to ten percent chance of succeeding but that would be "huge for humanity" if they did: "When we face very difficult problems, it is great, because if we solve these problems, we will create a lot of value." He connects the chain explicitly, problems producing impact and impact producing sustained satisfaction, so that running toward problems is the path rather than an incidental cost.

The acquisition thesis and the counterfactual test

Tilman Fertitta operationalizes the stance into a repeatable acquisition filter, betting that corporate-level problems hide unit-level opportunity. "That's every deal I've done, it's usually poor management at the corporate level, but it has nothing to do with how successful you are at the store level."³ The corporate dysfunction that depresses a stock price is, in his reading, the mechanism that delivers strong unit economics at a discount, though he pairs it with a worst-case financial discipline that filters out the cases where the problem is genuinely unfixable. The Rainforest Cafe deal is his clearest case: outbid on the first attempt, he waited for the stock to fall further and then bought the company roughly 450 million dollars cheaper, closing with only 15 to 20 million dollars of cash on the balance sheet.³

Peter Thiel adds the most demanding qualifier, a counterfactual test for whether a problem deserves the work. "The meaningful version is always counterfactual. It's great to be working on problems where if you weren't working on them, nobody else would do them."⁴ The fourth pet-food company or the thousandth restaurant fails the test, because the problem would be solved anyway. This is the strictest reading of the pattern, since it holds that not all problems qualify, and it connects to zero-to-one monopoly thinking and the contrarian question.

The exogenous-disaster variant: Todd Graves

Todd Graves demonstrates a distinct case, converting an externally imposed catastrophe into market share through operational response.⁵ With 21 of his 28 restaurants down after Hurricane Katrina and the company over-levered, he secured passes into a sealed New Orleans, worked out protocols with the state, and reopened roughly 30 days after the storm while competitors took 90 to 120 days, feeding first responders and returning residents who had nowhere else to eat. He repeated the improvisation during COVID with parking-lot drive-throughs. What distinguishes his version is that the problem was exogenous and existential, and the flip was operational improvisation under acute time pressure. The material also records the caveat that the Katrina fragility was self-inflicted through leverage; the disaster revealed the vulnerability and the fanatical response redeemed it.

Cross-links and limits

The pattern connects to get the major trend right, since problems only fuel value creation when pointed in the right direction, to default alive (cockroach mode), the startup-finance version of treating adversity as normal, and to money as scoreboard, where the reward is downstream of the problem solved. Its stated limit is that the framing risks romanticizing every problem equally; some problems signal fundamental model failure, where the correct response is exit, not embrace, so the stance needs a metacognitive check on whether the problem is solvable or structural.