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 company with $13 billion in revenue.
“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.”
