Carvana CEO Ernie Garcia met the company’s COO, Ben Huston, when they were college students at Stanford. 

Neither imagined that they’d later work side by side leading a $13 billion company. 

“We were very lucky that we basically met each other in college, and we became close friends with no knowledge that we would ever work together,” Garcia said at the Fortune COO Summit on Tuesday. 

Because of their college friendship the two “bonded in a way that was completely independent of trying to accomplish things together, but as a result, we have deep respect for each other,” Garcia added. 

The schoolmates turned colleagues had very different approaches to business, according to Garcia. Huston, as is often the case for COOs, is methodical and pragmatic, focused on implementing solutions to daily problems. While Garcia was known for bold visions, referring to himself as a “breathless entrepreneur.” Those sorts of people tend to gravitate toward others who share that same enthusiastic, gung ho approach.

But they do so at their own peril, he suggests. 

“They enjoy being around that same energy,” Garcia said. “And as a result companies go in a certain direction, they make certain kinds of mistakes. You have a very high ceiling when you have that kind of excitement, but I think you also have a very, very low floor and very high probability of hitting that floor.”

The two cofounders discovered they needed those complementary skill sets. 

“I think it’s easy for the operators to call the entrepreneurs ‘breathless,’ and it’s easy for the breathless to call the operators ‘unimaginative,’” Garcia said. “The truth is you need both to get anything done, and I think that’s tremendously important and a huge part of our story.”

Garcia and Huston founded Carvana in 2012 alongside Ryan Keeton, who now serves as the company’s chief brand officer. Carvana specializes in selling used cars online, an incredibly complex business that requires logistics to get cars from sellers to buyers and financing operations to ensure buyers can ultimately afford to pay for them. In April 2017 Carvana went public. 

“We went public as a four-year-old company, which is also something I would not wish on anyone,” Garcia said. 

The company’s time on the public markets has been nothing short of tumultuous. In August 2021 its stock traded at an appealing $360 a share. A little over a year later in December 2022 its share price was just $3.55. It had dropped approximately 99%. 

“I think the combination of basically a complicated business going public very early … and then being a very aggressive company that’s tried to grow really quickly, meant that there was gonna be some volatility along the way,” Garcia said. 

Since then Carvana has been on a remarkable turnaround, pushing its stock back up to $338 a share. “We’re back,” Garcia said. “We’re in a good spot.”

This story was originally featured on Fortune.com

© Kristy Walker—Fortune

• New data from the Labor Department shows 1.96 million people were on unemployment benefits the week ending May 31. That is the highest number since mid-November 2021, when they topped 1.97 million. While other data shows a steady labor market, these new figures indicate more people are unemployed at the same time.

Recurring claims for unemployment benefits hit their highest level in more than three years, according to data from the Labor Department released on Thursday. 

The latest report, which gathered data through last month, showed 1.96 million people were on unemployment benefits during the week ending May 31. The last time recurring claims exceeded that level was the week ending Nov. 13, 2021, when 1.97 million people were on unemployment benefits, according to historical data from the Federal Reserve Bank of St. Louis. 

Recurring jobless claims measures the number of people who remain on unemployment benefits, rather than just those who have newly enrolled during a certain time period. It is often used as a proxy for the total number of people on unemployment. 

The rising number of people on unemployment benefits indicates it is taking them longer to find a new job. While new claims remained relatively steady, hovering around 248,000 for the week ending June 7, the fact unemployed people are struggling to land new jobs hints at a broader slackening in the labor market. 

The latest unemployment numbers complicate last week’s monthly jobs report, which saw the U.S. add 139,000 jobs in May. That level was actually slightly higher than most estimates, which expected around 125,000 new jobs. At the same time, the unemployment rate held steady at 4.2%. However, the same report saw downward revisions of a combined 95,000 jobs in March and April. 

Even though the job market hasn’t yet been characterized by acute shocks like major layoffs, it appears hiring has slowed, or at least that more people are unemployed at the same time than have been during the past three years. Exactly how the labor market will shape up over the next 12 months will depend on President Donald Trump’s trade and economic policies, which have changed considerably during the five months he has been in office. 

The Federal Reserve has held off on making any changes to monetary policy until it can better assess the impacts those policies will have on the economy. Over the last several months, Fed chair Jerome Powell has reiterated the U.S. economy is in good condition, which affords the central bank time to continue to assess its next move based on how, or if, the picture changes.

This story was originally featured on Fortune.com

© Frederic J. BROWN / AFP

When Blackstone researches a company before a deal, it brings in not only financial experts but also HR mavens.  

Every company Blackstone considers investing in gets evaluated for its financial performance, growth potential and leadership—the personnel that should, in theory, be shepherding that company toward a brighter future and a higher multiple. 

“We think about succession planning day one,” Blackstone senior managing director Courtney della Cava said at Fortune’s COO Summit on Monday. 

Della Cava is an influential figure inside Blackstone, which is the world’s largest alternative asset manager with $1 trillion in assets under management. After 10 years at the consulting giant Bain & Company and a career in HR at the highest levels of corporate America, della Cava joined Blackstone in 2021 to lead hiring across its more than 250 portfolio companies. 

During her tenure she turned talent evaluation from an art that relied on gut feelings and intuition to a precise science. It was the exact sort of transformation that appeals to investors like Blackstone who are eager to quantify every aspect of businesses they evaluate. Human resources became just as critical, and carefully appraised, in an investment thesis as projected cash flows or market opportunity. 

When evaluating a deal, della Cava starts with imagining what kind of return on investment she’s like to see: “If this is the point of departure, when we sell it in 12 months or 18 months, what do we hope [the value] will be at the end?” she said. “And then we work backwards to the people.”

Della Cava focuses on two roles in particular: CEOs and board chairs. “Those are the two anchors for a deal,” she said.

One of the CEOs that della Cava and Blackstone recently selected to lead a portfolio company was Howard Hochhauser, CEO of Ancestry.com. Hochhauser stepped into the top job in February, after having served in a dual role as CFO and COO and a brief stint as interim CEO from October 2017 to May 2018. 

Even someone like Hochhauser, who was a veteran executive, said he was surprised by how all-encompassing the corner office could be. 

A CEO at a Blackstone portfolio company is tasked with running the business but also with planning for a future exit—whether that be an IPO or another sale—which adds another layer of consideration to their work. 

“Everybody wants a successful exit,” Hochhauser said. “To do that, you have to grow the company. And so now it’s spending 110% of my time on growth.”

The exit plan is never far off from Blackstone’s plans 

“We have opportunities to seize and also, ultimately, when we go to exit, they want a good, strong leadership team that’s going to sustain,” della Cava said. “So I wish it were just identifying a CEO—one and done. But what makes it fun is the end to end ecosystem.”

This story was originally featured on Fortune.com

© Kristy Walker/Fortune

In Silicon Valley’s white-hot race for AI talent, companies are looking for two types of people: the experts and the learners. 

The first group is made up of the world-renowned technical talent that can design chips, program large language models, and engineer sophisticated AI apps. The second group comprises the business leaders who prove to be the most adept at using the new technology. 

This new class of executives will need to be “bilingual” in AI and their area of expertise, Google Cloud chief operating officer Francis deSouza said at the Fortune COO Summit on Monday. 

“The marketing person should not only know marketing, but should now get very comfortable with AI tools and where they could go,” deSouza said. “And that’s not just in marketing, but finance, logistics, you know, sales. At some point, everybody in the org will want to be bilingual.” 

Employers should undertake dedicated companywide efforts to teach employees these new AI skills, according to Microsoft Americas chief operating officer Tracy Galloway. 

“Find the work elements you want to apply something against, put the [AI] agents in, and work with your customer support, your HR, so that they’re learning and training along the way,” Galloway said. 

The benefits to those who pick up these skills would be significant: “The people who leverage this technology will be orders of magnitude more productive, more effective, and [will] do things that others can’t,” deSouza said. 

Finding ‘very specialized’ AI experts

DeSouza is under no illusions about how difficult it is to find AI experts—the computer scientists who will build the technology. “That is a very specialized talent; that is very rare,” he said. 

Google turns to academic institutions to recruit this talent, which is in short supply, deSouza added. He pointed to many of Google’s AI efforts, which include developing its Gemini model and designing proprietary chips, as key reasons people wanted to join the company: “Fortunately, we’re doing exciting work,” he said. 

Since OpenAI’s ChatGPT-3.5 model catapulted AI into the public consciousness in November 2022, Silicon Valley’s top firms have been engaged in an all-out war for the world’s best AI researchers. More than two years on from that seminal moment, the push to recruit the best and brightest in the field hasn’t slowed. 

Many tech giants have come up with unique solutions for how to assemble the superteams of the best AI executives and developers they covet. For example, in March 2024 Microsoft signed an unusual $650 million licensing deal with the startup Inflection AI, that would also allow it to hire its key personnel, including its founder Mustafa Suleyman. In August of last year Google put together its own unorthodox deal with the startup Character AI, which was founded by one of its former employees. The $2.7 billion agreement gives Google a nonexclusive license to Character AI’s tech and also allows it to hire some of the startup’s employees.

This story was originally featured on Fortune.com

© Kristy Walker/Fortune