(FORTUNE Magazine) – Lightning has struck thrice for Wayne Huizenga. He's the only person in history to build three FORTUNE 1,000 companies virtually from scratch. Starting in 1962 with a single trash truck, he launched Waste Management, a garbage-hauling multinational with operations in such far-flung places as Argentina and New Zealand. Next he built Blockbuster into a behemoth before selling the company to Viacom in a 1994 stock-swap deal valued at $8.4 billion.

Act III was AutoNation, which brings dealerships for Ford, Chevy, and others under a single corporate umbrella. After building AutoNation into a company with nearly $20 billion in revenues, Huizenga stepped down as chairman in 2002 to pursue other opportunities. He has no shortage of them. Huizenga Holdings has investments in a crazy quilt of businesses.

Huizenga also owns the NFL's Miami Dolphins. Go back a few years, and he owned the region's baseball team, the Florida Marlins, as well as its hockey team, the Panthers. That makes him the only person ever to have owned three professional teams in a single market--another Huizenga hat trick. Here he reveals some of his secrets for transforming small enterprises into sprawling empires, and he addresses the challenge of finding an Act IV.

Let's walk through what might be termed the Huizenga method. First, you identify an industry that isn't meeting customer needs, right?

Right. With Blockbuster, for example, the video-rental business was relatively new. Still, there were something like 25,000 mom-and-pop stores out there. Most of the stores were tiny. They never had enough of the new releases. They weren't professionally run, either. You went inside to rent a video, and the owner was likely to be some guy wearing an old undershirt.

I saw an opportunity for large, well-lit stores. We put in 10,000 tapes, where the neighborhood store had maybe 1,000. We offered standardization: All the stores looked the same; all the employees wore uniforms. Nobody in the U.S. was doing that. We always try to move quickly to offer a service that no one else is providing.

Similar story with AutoNation: We've all gotten used to hearing lots of car-salesman jokes about how you always get ripped off. I said, "You know, there's got to be a better way."

We [Huizenga remains on the board] put in 25 or so service initiatives. For example, we said, "Okay, our goal is to be a one-price company." People love the one-price concept--no haggling. Women love it, because they're used to having their boyfriend or their sister's husband accompany them to the dealership to handle the price negotiations and make sure they don't get ripped off.

Do you rely on market research to identify new opportunities?

It depends. Sometimes you don't need it. I started out in the garbage-removal business, and in the early years I met a lot of people. There are trade shows in waste hauling, just like any industry, where you'd go and look at new garbage trucks. I got to be friends with guys in Baltimore, in San Diego. We all shared information, since none of us were operating in the same market.

Then Waste Management went public in 1971. By that time I'd met a lot of people in my industry. When we decided whom to acquire, we went after people we knew were doing good business, people who were in the right markets.

But I use market research too. With AutoNation we drew on some studies. One that really opened my eyes was a survey by the auto industry showing that 75% of people who buy a car will never go back to that dealer. That's why you see so much auto advertising. Because auto dealers tee off all their customers. They have to get a new customer because the old customer is not coming back.

Part of your formula is sticking to service industries. Why is that?

I guess it's because of my early beginnings in the waste business. That's definitely a service-intensive industry. If you're in manufacturing, you have to build a big fancy plant. Then you have to contend with constant changes in demand. One month your plant is working double shifts, the next month you're down to four days a week. Service has ebbs and flows of demand too, but not as much. If Waste Management signed up your restaurant as a customer, as long as we were there every day on time, there was no reason to change. If we're picking up the garbage at your home and you lose your job, we're still going to pick up your trash twice a week.

Another hallmark of the Huizenga approach is entering businesses that offer rental income. Why?

I like the idea of a rental business. But it's very capital-intensive. It's a business that separates the men from the boys real quick. In trash hauling, every dumpster costs $300 to $500; some of them cost $3,000 to $4,000. On one route you have a quarter-million invested, just like that. Of course, customers pay a collection fee every month and a fee for the container rental. Eventually that container gets paid off, and I'm still charging you rental.

When I started out with Blockbuster, it cost about $60 to buy a videotape. They're cheaper today, but there is still a huge up-front cost to stocking all those movies. The payoff can also be huge. At Blockbuster we were making, on average, 26% to 28% pretax profits in our stores.

You're not always a ground-up entrepreneur. You don't necessarily dream up new businesses. Instead you buy into businesses started by others, then take them to the next level. Is there an advantage to that?

I think there is. If you simply have an idea, it can take a long time to get that idea working. You're continually fighting to get people to buy into the concept. It's faster the way we do it.

When we [Huizenga and fellow investors] got involved with Blockbuster, there were already 19 stores. I obtained the financials for these stores, and the revenues were huge. I went around the country and visited about 50 of the mom-and-pop competitors. Everybody said, "You're going to go broke. Blockbuster stores are too big." But I had the numbers right in front of me. The competition was making all kinds of mistakes, like going for the cheapest rent. Their stores were behind shopping centers or on side streets. Blockbuster's were right out on the main roads where a gas station or a fast-food restaurant would be. They were big stores, lots of parking, brightly lit, because people don't like to come out of stores at night and walk to their car in shadows.

By the time I got involved, Blockbuster had already worked out some of the kinks. I'll bet we left more than half of the Blockbuster concept and the operational model unchanged.

Once you spot an opportunity, you're known for moving incredibly quickly. Talk about the need for speed.

With Blockbuster, we had a better mousetrap. We opened a lot of stores in a short period. Over seven years, while I was there, we opened one store every 17 hours on average. The whole deal was to move quickly before our competition saw what we were doing.

With garbage collection, the timing was right to put together a nationwide company. Again, we needed to get there before Browning-Ferris or one of our other competitors. So we started acquiring all these little companies that we were already familiar with. Each of them had a goal, because the owners were entrepreneurs, right? The manager of one might say, "Boy, if I had the money, I'd acquire that landfill down the street." Another might say, "If I had the money, I'd buy four more trucks; then I could land that city contract."

We'd come in and say, "Okay, here's the money. You go ahead and do the things you wanted to do." It allowed us to move fast. We didn't have to devote a lot of time to figuring out various local markets. We tapped into the expertise of all these small companies that didn't have the resources to expand like they wanted to. We were able to give them capital, enabling them to grow, which was good internal growth for us.

You acquired Blockbuster before you even owned a VCR. You bought the Florida Marlins without being much of a baseball fan. Everyone says a key to entrepreneurial success is to choose businesses based on personal passion. Is that notion overrated?

Believe me, I was passionate about Waste Management. I was really passionate about Blockbuster. At the same time, I didn't think of myself as being in the waste-collection business. I wasn't in the video business. I'm in the moneymaking business. I just had to pick up garbage or rent videos in order to make money. To me, if I'm successful at building a business, if every month the profits get bigger--I can be passionate about that. Even if the product was hair tonic--something I wouldn't even use--I could still get excited about growing that business.

How important is selecting the right talent?

You hear it said all the time. It goes in and out of your head so many times you don't pay attention to it anymore: People are the name of the game. It really is true. With AutoNation, for example, you could go out and purchase the second-best Ford dealer in a particular market. With the right management, it can be No. 1.

You and I can sit here today and come up with the greatest idea in the world. Unless we have some people out there to execute for us, it isn't going to get off the ground.

At Blockbuster stores our main competition for labor was fast-food restaurants. You can work at a Blockbuster for the same pay as Kentucky Fried Chicken, and you won't be covered in grease, you won't have to face lunch and dinner rushes--it's a much nicer environment. We had no trouble getting labor. It all gets back to people. Every person you hire counts.

You once said, "Part of this country's problem is that people from New York City--Wall Streeters--don't think about the little guy who can't afford things." Can you elaborate?

People think differently in New York. Everything costs a lot of money. If you go to an NBA game, it costs $2,000 to sit on the floor. When New Yorkers--I'm picking on New Yorkers--come down here, they say, "Wow, that's cheap!"

But people here don't think so. New Yorkers say, "Why charge $3 for a video? You should charge $5." The ordinary family, with two or three kids--they take home two videos, and it's $6. Raise the price, and it's $10. That might mean they rent only one video. We don't need to be any greedier. It's better to have more customers than to raise the price.

It all gets back to the notion that if you're going to do something and be successful, you have to be the low-cost provider.

You're known for being tireless. Tell us about your personal style.

When I first started out in the waste business, I'd wake up at 2 a.m. I'd go get in the truck, run the route, be finished around noon. Then I'd throw on a shirt and tie and go out soliciting new business all afternoon.

At Blockbuster, a big joke at the company--I didn't realize it for a couple of years--was whether anybody could get to the office before me. Nowadays I get in around 8:15. That's late for me. I'm 65 now, and I ought to be able to come in whatever time I want, right? I still work hard. We [Huizenga Holdings] have a saying: "We fly after sunset and before sunrise." We work all day in a city, and then when everybody else is eating dinner--boom!--we get on a plane and fly to the next place. We don't waste time flying around the country during daytime. When you're in business, every hour counts.

Currently you're heavily involved with hotels. What have you identified as an underserved niche in that industry?

I'm chairman of a company called Extended Stay America. It has 457 hotels and is listed on the NYSE. Extended Stay America identified a core customer who is staying in a town for longer than a night or two. Often it's someone who has moved to a new city, and maybe the wife and kids can't join him until school ends in the spring. Or it's someone who has an out-of-town assignment to help install a computer system for a client company. Our average guest stays three weeks. It's a good niche.

Our hotels are small, between 100 and 125 rooms. Each one features a very small lobby area, no meeting rooms, no restaurant. Every room has a kitchen with a stove and a microwave. We change sheets and towels twice a week rather than every day. By taking out the frills, we can cut costs and run the hotels with just a handful of people.

What kind of business could be the next Blockbuster?

If I knew, I'd be in it by now. It's hard to find those things. We're constantly looking at different businesses, but nothing has jumped out yet. I fly a lot. I'll be flying along at night, and I'll be looking down, and you just see roofs, hundreds and thousands of houses down there. I always say to myself, "You know what? In every one of those houses down there, somebody is trying to figure out how to make a buck." The competition is fierce.

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