I Own 38 Businesses. Here's What Actually Makes Money.

- November 7, 2025 (4 months ago) • 01:18:33

Transcript

Start Time	Speaker	Text
00:00	Andrew Wilkinson	We have $65,000,000 of ARR. We do over $40,000,000 of EBITDA. We also manage a $200,000,000 fund, so we're over $300,000,000 in revenue across 30 businesses. All the businesses in the fund are profitable as well. I don't know — I'm kinda like, if that's failing, sign me up.
00:16	Shaan Puri	"Right. You've owned a number of agencies. How much lifetime revenue has Metalab generated?"
00:21	Andrew Wilkinson	You—the hundreds of millions of dollars in profits, not revenue. I don't know that I would still rank it very highly, though.
00:28	Shaan Puri	"SaaS — where are we putting SaaS?"
00:30	Andrew Wilkinson	I would say it's a...
00:31	Shaan Puri	"What do you think about marketplaces?"
00:32	Andrew Wilkinson	Well, I would say it comes down to scale. A good marketplace, like Airbnb... I'd say an A. I'd rank marketplaces in general as...
00:39	Shaan Puri	I would disagree with you on that one. I feel like I gotta ask you this because I think you get a lot of shit nowadays. I think a lot of people go look at the tiny stock, then they click "max," and basically you see just a downward trend. A lot of people I see on Twitter want to look at that and say, "Oh, this guy calls himself the Warren Buffett of the internet and he says he buys these great businesses — what's going on?" What's up — Andrew is here. Andrew is one of the most-visited guests on the pod. Always good to have you, man. I wanted to play a game with you. You've done many types of businesses: agencies, private equity, e‑commerce companies — you've started a huge number of companies in the last twenty years. I want to do a game where we rank the different types of businesses you could start, and we can work out the criteria together. I think the idea should be that we're not looking at the outlier scenarios. In every industry, the world's best plumber makes a fantastic living — that may not mean that plumbing is the best trade to go into. No offense to the plumbers out there listening, but we're not looking at just the extreme outlier. So, here's my criteria for a great business, Andrew: it's gonna be the median successful outcome. Like the normal case — if you can make it work. That's the first criterion. The second thing is we're taking into account both lifestyle as well as the upside. If one thing makes you miserable or overworks you like crazy, then that would obviously be worse than a business that lets you have a flexible schedule and flexible location, for example. So lifestyle matters; upside matters. We're looking for kind of the median success case, but, you know, in some of these it's gonna be... median success — I mean, only the top...
02:32	Shaan Puri	One percent make it, so you have to factor that in. The likelihood of success matters in these scenarios. If you're listening on audio, it's going to be a little more fun if you go to YouTube or Spotify, because you can actually see on-screen the stuff we're sharing. Alright — here we go. Here's the tier list. If you've never seen a tier list before, they're ranked as you would expect: A, B, C, D, E, F — A being better than F. But there is, of course, S tier. I don't even really know what S tier stands for; I think it's from the gaming world. Basically, S tier is like "god tier" — the best of the best. We're going to start with a little layup here. For each one, Andrew, I want you to give me your rapid-fire take on what the business is and why it's either great or why it sucks. So the first one we're going to do is an easy one: an MLM, which is actually a surprisingly common business that people get into if you just look at the raw numbers of people who take part in MLMs. So, MLM — where are you ranking it?
03:30	Andrew Wilkinson	"I mean, I would rank an MLM as an F. It's a fundamentally unsustainable business that breaks. The problem with an MLM is it's reliant on recruiting other people, and it doesn't actually make money based on selling services. It basically makes money by finding the next sucker. If the person who starts the MLM finds a lot of suckers, they can make a lot of money. Yeah, the first couple layers can make a ton of money, but then it always explodes or they get indicted or something like that."
04:04	Shaan Puri	So, where are you ranking it? </FormattedResponse>
04:06	Andrew Wilkinson	I would say that's an F.
04:07	Shaan Puri	Okay, it's going in the F. Although it does sound like, for the MLM owner [multi-level marketing], it's not necessarily an F. One of the "associates"—or as they call them, the "business owners" that they like to call themselves—who are underneath, yeah, that's F-tier for them.
04:22	Andrew Wilkinson	I think if you are willing to go to jail, too, you can make a lot of money. But I mean, it's 50/50 odds you'll go to jail, right?
04:29	Shaan Puri	Alright, next one up is one that I think you did. By the way, say if you've done any of these, okay? So: freelancer — which I believe is how you started your career. You were a freelance... what, web designer?</FormattedResponse>
04:40	Andrew Wilkinson	Yeah, yeah. I started making websites out of my apartment. Basically, I would—I’d rank that probably a D. I think it's a really good business; I'd say it's a living, right? I think there's nothing wrong with freelancing, or a restaurant, or a corner store, or that sort of thing. But fundamentally it's an owner-operator model, and it doesn't really scale unless you scale it — which is what I did.
05:07	Shaan Puri	Yeah, okay. Well, that's the kind of the next one, which is actually agency. You've owned a number of agencies. You've probably made — I don't know, I don't know what the number is — but Metalab has to have generated something like $200,000,000+ in revenue. How much revenue, lifetime, has Metalab generated for you, your design agency?
05:25	Andrew Wilkinson	I don't know the exact math, but I think we're probably well over — into the $100s of millions in profits, not revenue.
05:35	Shaan Puri	Okay, so I'm assuming you might have agency higher than most people.
05:39	Andrew Wilkinson	So... I think—well, you know what? I don't know that I would still rank it very highly, though. My story: I started a web design agency. I scaled it. I got clients like YouTube, Uber, Walmart and all these big companies. I was terrified. It's a business where you're either making a ton of money or you're about to go out of business—constantly. You swing between those two things. Because of that lumpy nature, I'd maybe give it a C, but it'd be a tentative C. It would, uh, kind of—yeah—it's really, really a hard business.
06:15	Shaan Puri	And the hard part is: you're saying clients come and go. Is it that—it can be "feast or famine" with clients? Is that the reason why, or is it the headache of operating and delivering the service? What is it about the agency that makes it like, "well, let's just A and B"?
06:29	Andrew Wilkinson	Instead of web design, let's imagine you're an accountant and you start an accounting firm and begin auditing 30 companies. Now, companies don't like to switch accountants and they don't like to switch auditors. So if you have that, that's a really high-quality consulting business. However, if you have a $500 business—let's say you hire 30 people in the Philippines and you do graphic design for $500—you might have months where you're making $300,000 and then months where you're making nothing because you're not getting any clients. The worst thing that happens in these businesses is you win a client like Walmart. Let's say they come along and say, "Hey, we want to give you $10,000,000 of work over the next year." You start panicking: you go out and hire 30 people, and then a new PM takes over that team at Walmart and they just cut your budget.
07:24	Shaan Puri	Right.
07:24	Andrew Wilkinson	And all of a sudden, you're left with 30 people you have to lay off. I think it depends on the nature of the business, honestly.
07:31	Shaan Puri	So you've — you did Metalab. You've also had a game design agency, a no-code agency... You've had probably, what, six to ten different [agencies]?
07:40	Andrew Wilkinson	10 to 15 agencies and services — business, copywriting, social media, web development, design... a lot of different stuff.
07:50	Shaan Puri	"What were the sort of top two agencies you did, and what were the sort of bottom two agencies you did?"
07:54	Andrew Wilkinson	Well, I would say that we really haven't had a lot of success with recreating the success of MetaLab. MetaLab was the business, you know. Like I said, I started with zero and now has very significant earnings and revenue. A lot of the other agencies have not hit in the same way. I think the distinction with MetaLab is it did so much defining work from 2008 to 2015, where we, you know, designed the first version of Slack. We worked on all sorts of projects that were kind of groundbreaking. We planted our flag and built a reputation. So I think the reputation piece is hard to recreate. We've had a lot of success with MetaLab. We also had success acquiring a company called Z1, which is in Spain. They're a smaller web design agency. The theory there was literally just: MetaLab gets a ton of leads that are too small for it, so let's buy another smaller agency and just send them those leads. I think we acquired that business for about $300,000, and we've probably made single-digit millions of dollars in profit. So it's not—we didn't knock it out of the park—but it's just an amazing base hit.
09:11	Shaan Puri	Right, right. Hey—what's up? If you're liking this episode, the research team at HubSpot has taken all the rankings we're doing today and made them into a downloadable file. If you want to see the final tier list, download it, and get a little breakdown of our commentary for each item, it's available in the show notes below. You can go ahead and download it—totally free. Okay, next one up: SaaS. Where are you putting SaaS?
09:38	Andrew Wilkinson	I would say it's a B, probably. I think — again, it depends on the type of SaaS. If you have a SaaS product that is a ChatGPT thin wrapper and does something like put a funny nose on your friend's face, and you trick people into subscribing to it for six months and they always churn, I'd say that's a pretty bad SaaS business. If you have a SaaS business that, let's say, has become the dominant player in funeral home management — and all the funeral homes use it and they don't want to switch because it's the standard — that's an incredible SaaS business. SaaS businesses often have highly recurring revenue and really good margins. I mean, they can be incredible. But you really have to find something with a limited amount of competition or high switching costs.
10:26	Shaan Puri	"Tell the quick story of the DJ software SaaS business, because that's kinda like the funeral-home example you have. So you're saying it's a vertical, niche tool that's mission-critical for an industry to run on. They're unlikely to ever switch, and that's gonna be super, super sticky for a long time with high margins. I don't know a lot about the DJ software business, but can you just tell the quick story of that one?"
10:52	Andrew Wilkinson	Yeah, I mean, for the last ten years everybody has been basically obsessed with buying SaaS software companies and thinking "you can't lose" in that industry — which, right now, is still true. But over the last two years I got really scared of buying software companies because you look at vibe coding and LLMs, and I just think LLMs increasingly can build software. It's not that it's going to put all these businesses out of business, but—let's say you have a SaaS company and there were 10 competitors five years ago—I just think there are going to be 50 or 100 competitors in the future. When that happens, competition equals margin compression. So we've basically said no to almost every single SaaS software company we've looked at over the last two years. But one came across our desk that we could not say no to, and that was Serato. "Have you ever DJed, Sean? Did you ever go through that life crisis...?"
11:46	Shaan Puri	I appreciate that you even think it's possible that I look like a guy who's DJed before. I take that as a compliment, but no.
11:52	Andrew Wilkinson	I had a phase in 2012 where I was trying to meet girls, and I learned how to DJ. I kind of knew the industry, and the dominant software company in that world for the last twenty to twenty-five years, I think, is a company called Serato. It's an incredible piece of software — DJs all over the world use it. I think, like, Diplo and a gazillion of the top DJs. These two guys in New Zealand built it. What they did was really smart: they partnered with the hardware manufacturers, like Pioneer, and they deeply integrated into the hardware. What that means is that it's become the standard. When you're the standard, that is really exceptional. Most DJs use one of two pieces of software — either Rekordbox or Serato — so there's very limited competition. There are lots of upstarts, but once someone really integrates into an ecosystem like Serato, customers are buying something like $5,000 worth of hardware; they're not going to switch off really easily. The manufacturers, frankly, don't want to integrate with some random college kid who coded some AI DJ. Not to say people can't come and compete with us — it's just harder because it doesn't have a hardware mode. I think SaaS with a hardware mode is pretty incredible. We shared some of the numbers when we bought it: it's doing $45,000,000 of revenue and $15,000,000 of EBITDA. It's been growing like crazy, moving into a SaaS model from licensing. I'm a huge fan of that business.
13:29	Shaan Puri	"Why does a business like that grow? Are there just way more DJs, or is it something else?"
13:33	Andrew Wilkinson	I think as long as being a DJ is a desirable thing to be... I mean, if you think about it, one of the weirdest phenomena is when I would go to a nightclub. It doesn't matter how much money I have in my bank account — I remember looking around and thinking, "Oh man, there are all these great girls here," but none of them know that I have all these businesses and that I'm a "cool guy," or whatever.
13:55	Shaan Puri	You were literally that meme: "They don't know I have a design agency."
13:59	Andrew Wilkinson	Exactly, exactly. They don't know.
14:00	Shaan Puri	How much eBay do I have? </FormattedResponse>
14:01	Andrew Wilkinson	I’d look up — I actually had a friend who’s a DJ. He would get paid about $200 plus some beer tickets, and he’d be swarmed with girls. He’d have status; throughout the city, he’d be the man. So, as long as that’s true — as long as young men think DJs are cool (and women increasingly do, too; there are way more female DJs now — I just met an amazing one yesterday) — I think people are going to want to do it. I mean, it’s just fun to mix music, and you can become famous, you can express yourself. So, I don’t know, as long as that’s true, it’s like we’ve got one of the toll roads to achieving that.
14:42	Shaan Puri	"Yeah, I like the analogy of the toll road. Okay — next one. I'm going to do, actually I'll do an easy one: restaurant. I think you've owned one, or I think you own one, or still own a restaurant?"
14:52	Andrew Wilkinson	Yeah, I own a bunch of restaurants, actually. I always say a restaurant is a really good passion project: if you're really passionate about it and you love food, it's a labor of love. I know you had a sushi restaurant. When I meet somebody and they say, "I have a successful restaurant," I want to—like in Wayne's World—get down on my knees and say, "I'm not worthy." If you're successful in a restaurant, I just... it's one of the hardest businesses. Think about it: for you to go in and eat a good meal at 6 p.m., people had to wake up at 3 in the morning. They had to bake bread. A million things had to go right. They had to train 30 people. It's just like a Rube Goldberg machine of a business. So I would rank it as an E, probably.
15:37	Shaan Puri	One.
15:37	Andrew Wilkinson	One of the hardest businesses — low-margin and difficult.
15:41	Shaan Puri	Yeah, for people to get context: most successful restaurants—even big chains like Subway or Chipotle—a 10% margin is the good-case scenario. That's considered doing well. Of course, there are exceptions. Luxury or Michelin-star restaurants might have higher margins. But on the whole, if 10% is winning, then your revenue is capped at what you can produce. You're working seven days a week; you're there for breakfast, lunch, and dinner. You basically can't step away—you always have to be there and make the product fresh every single day. You're only as good as your last interaction with the customer. It is such a brutal business. It is an absolutely terrible business. In fact, it's funny that the only business you've ranked below it so far is an MLM [multi-level marketing]. It's pretty much a crime—it's the only thing that's been worse.
16:34	Andrew Wilkinson	As I said, we own restaurants. I think they're really important, but I just don't think that if you want to make money and get rich, restaurants are a good way to do it. I always use the gym analogy: if you go into the gym and try to deadlift 300 pounds on day one, you'll hurt your back and never come back. I think entrepreneurs who go into restaurants have a rough go. </FormattedResponse>
17:02	Shaan Puri	Alright, next one: marketplace. So an online marketplace — how do you think about marketplaces? This would be something like Etsy, eBay, or Amazon. It could even be marketplaces like AngelList. Twitch is a marketplace. Anywhere there are suppliers and demand — supply and demand — right? There are creators and viewers. YouTube is a marketplace of creators and viewers as well. So, what do you think about marketplaces?
17:28	Andrew Wilkinson	Well, I would say it comes down to scale. Like, you've got Airbnb on the side there. I think small marketplaces are really hard. We own some, and I think it's like lightning in a bottle: if you can get supply and demand to match, they're phenomenal businesses, but they're highly competitive. I like a business where it becomes a verb. Airbnb is a great example. If I think, "Maybe we should rent a house," Airbnb just pops into my head. I go to the browser, I look up Airbnb, and I'm going to use it. That, I would say, is probably a B or an A business—so very, very highly ranked. But if you started a marketplace for people who want to borrow, let's say, construction tools or something like that... I've just seen a million of these fail. They're so difficult.
18:21	Shaan Puri	"And so, where are ranking marketplaces?"
18:23	Andrew Wilkinson	I would say a good marketplace, like Airbnb, I'd rate as an A. Marketplaces in general, I'd rank as a C.
18:28	Shaan Puri	Wow — first big controversial pick there. I can't believe you rank it as a C. That's the one I would disagree with you on. I think if you get a marketplace to work like an Airbnb, it's S tier. </FormattedResponse>
18:39	Andrew Wilkinson	Well, are we saying "I'm working market" because we're talking about business model? [Clarification: "working market" is unclear—possibly "working in marketing".]
18:42	Shaan Puri	If you're one of the very few successful marketplaces, you're an S [speaker said "an s"—meaning unclear]. It's like one of the most defensible, lucrative businesses in the world. But because the likelihood of success is so low, I would have just knocked it down to probably an A if you can actually get one going, even.
18:59	Andrew Wilkinson	Well, let's put Airbnb as an A. I'm down with that. This—Airbnb—I can't agree with the business model in general being a C, because we're basically ranking in terms of quality and difficulty, right?
19:12	Shaan Puri	Yeah, exactly... and
19:12	Andrew Wilkinson	I just think, for example, we could say that the services business—the accounting firm, let's say PwC [PricewaterhouseCoopers]—75 years ago was just one accountant with a few partners. Now, today, if you want to get audited and you're a public company, you basically have five options. You're going to pay a fortune for their "rubber stamp." So I'd say we could rank that as a B or an A, but we're talking about the business model.
19:39	Shaan Puri	Okay, fair enough — agree to disagree on that one. Alright. This Airbnb is not the company Airbnb; it's owning Airbnb short-term rentals. So saying, "You know what? Here's how I'm gonna make money: I'm gonna get a property, I'm gonna get a home, I'm gonna put it on Airbnb, and I'll be a short-term rental unit owner — maybe I'll do two, maybe I'll do three." What do you think of that plan?
19:59	Andrew Wilkinson	I'd say it's similar to freelance. You know, the risk there is regulatory. So, you know, I bought a beautiful apartment in Vancouver. I go to Vancouver a lot and I said, "Oh, I don't want to own a second home, but you know the 28 days a month I don't use this place, I'll Airbnb it." So I Airbnb it — I'm making a fortune. It's great; I love it. All of a sudden, the City of Vancouver changes the regulations. Boom — there goes my margin, there goes my business. Total nightmare. And now I just... it's fine, I have a tenant, but it's nowhere near as profitable.
20:33	Shaan Puri	The same thing happened to my parents. They were Airbnb-ing their house in San Francisco, making a killing. Then San Francisco changed the rules and said you can only Airbnb 90 days a year—so basically three out of 12 months you can Airbnb. Nine out of 12 months, their "cash cow" disappeared overnight. That is the unfortunate one. Alright, I wanna do content creator. For the person who says, "I wanna create the next podcast, I wanna be the next YouTuber, I wanna be an Instagrammer," I'm gonna build a following and then I'm gonna make a ton of money because I'm gonna get brand deals or launch my own products or who knows what—but I'm gonna go all in on being a content creator.
21:07	Andrew Wilkinson	So, I think that's probably a D. I would argue that if you become the next Andrew Huberman, you're an A—like, you're a B. You think about it: in a world of AI, if somebody has a trusted relationship with you, it's a phenomenal business. The issue with it is it just doesn't scale. So, in terms of defensibility, it's amazing: highly profitable and very simple to operate. But one of the problems with it is—and I know a lot of these people—if you don't show up and you don't "bring the fire" on camera every single day and you stop posting, your business goes to zero. And I think that's a bit of a... it's a bit of a prison, I think, for some people.
21:51	Shaan Puri	Why did you say "Huberman"? Is it because of the trust factor, or because it's in health, wellness, or medical? Is that the important factor there—the niche—or is it just the level of trust that people have?
22:04	Andrew Wilkinson	It's if Huberman was doing the same sort of podcast but he was doing it about candy — he's reviewing candy. If you sell candy, the affiliate margins are not that good; the candy company won't pay that much to do it. If you're doing health... if you think about Huberman, he's basically promoting Athletic Greens, health supplements, that kind of stuff. Those things can be very, very profitable, and the customer lifetime value is high. So he can charge a hell of a lot for advertising. I mean, you think about it: Huberman — we're friends with Andrew, and we own a yerba mate business with him — he is able to basically bring, I would call it, $20,000,000 of free marketing to any business he becomes a part of. So if he takes equity in businesses or owns businesses, he grows them massively. We took the yerba mate business; I think it's grown 300–400% since he got involved with us.
23:04	Shaan Puri	Alright, next one: owning real estate — buying properties, either cash-flowing them or flipping them. Obviously, this is a big space. There are, like, a thousand variations of how you do this, so I think it's a little bit of a tough one. But just give me your general thoughts on going into real estate, whether it's multifamily or commercial real estate, and saying, "I'm going to try to buy these properties using some debt." Maybe I'm just going to cash-flow these properties, or maybe I'm going to try to improve them and sell them, you know, for a higher — a higher cap rate when I exit.
23:37	Andrew Wilkinson	The beauty of real estate is predictability. I think, depending on the sort of real estate, there's a big distinction between real estate ownership—where you just buy something and rent it out—and real estate development—where you actually buy a piece of land or buy something and add value. I remember talking to your—I think it's your brother-in-law—who does real estate. He was like, "Look, I know all of the people that need space, and I just go and acquire a strip mall. Before I close, I already know that I'm going to put someone new in." It's going to be a way higher-quality asset, and then you can refinance it out or whatever. To me, that's kind of a no-brainer way to make money, so I'd rate that a C, probably.
24:20	Shaan Puri	Alright, go on, C. And why is that not higher? Because—if you're not doing value-add or you don't have that unfair advantage, like my brother-in-law has. </FormattedResponse>
24:29	Andrew Wilkinson	The reason I don't really do much real estate is because I don't like anything with a ceiling. If you buy—let's say a 40-tenant apartment building—the rent is going to be, well, limited. Suppose some old lady owns it and she hasn't increased the rent in 30 years. Over time you can get an increased yield by raising the rent, but there's a ceiling on that rent and you can't innovate to make more money. Whereas in a business—especially a digital business like a web design agency or a software company—you can take your profits, grow the business, and increase revenue. It's very difficult to do that in real estate without massive capex [capital expenditures]. </FormattedResponse>
25:14	Shaan Puri	Yeah, I think—well, I think they do the same thing, right? They just go buy a... they take the profits or refinance and go buy a second property. What's wrong with that? That works.
25:21	Andrew Wilkinson	Yeah, I mean, you can do it. I don't know — it's just not something I've spent a lot of energy on. I don't think it is. When someone tells me they're gonna go do it, I think, of all the things they could do, that's a pretty solid approach. One of the things I've noticed: I know a lot of really wealthy real estate people, and I've been fascinated by how illiquid it is. You'll meet people who have $2 billion of real estate, but the actual profits that come out of it are like $20 million a year, which is amazing, right? It's made their family wealthy. The bank understands it; they live a good life, but they don't actually have that much liquidity, and it's often tied up in the next project and the next project and the next project. So I think it's a great way to make your kids really, really wealthy and, you know, ruin a few generations. Then they'll buy an F1 team and then lose all their money.
26:15	Shaan Puri	Alright, we have nothing in the S-tier yet, so I gotta try to get there. I think this is the guy to do it. So I have an icon here of Warren Buffett [icon of Warren Buffett], and this represents investing—just being an investor generically. But I think, maybe—the way I was really thinking about this, because I think Buffett is a little unusual in the way he's structured his company—really, this is to me owning an investment fund or being in the money-management business: investing other people's money and taking fees and a profit off the top of it. Is that?
26:45	Andrew Wilkinson	"Well, I would argue a little bit differently. I'd say investment management is an incredible business, but I wouldn't put Buffett in that category, because he doesn't actually manage other people's money."
26:57	Shaan Puri	Yeah, no—that's sort of the exception, so...
26:59	Andrew Wilkinson	The distinction I would make: let's say you're a hedge fund manager, like my friend Bill Ackman. For example, Bill went out and raised hundreds of millions of dollars. He bought a bunch of stocks, he would advocate for these companies to improve, and then he would take fees on that. If you think about that business model, you actually don't need to put that much money into it yourself, and you can make a profound amount of money if you perform. The structure of hedge funds is typically 2% of managed assets + 20% of the profits. So, let's say you raise $100,000,000 and you triple it in a short time — you can suddenly make, you know, $30, $40, $50 million of carry and fees and stuff. Those are really tremendous businesses, in my opinion. The problem with them is that your investors can pull their cash out. So what Bill has done that's so smart — and I would rank Bill as [unclear] and Buffett as [unclear], and then other asset managers lower — is they have permanent capital. That's the real distinction, and that means their investors can't pull their money out. They're going to make those fees no matter what. And they can literally, I mean, if you think about
28:11	Shaan Puri	"I'm sorry—why is it 'permanent capital'? I can sell my Berkshire stock today. I can sell my Pershing Square today. What do you mean it's permanent? What's permanent about that? Are you not talking about that? Is there some other money?"
28:20	Andrew Wilkinson	You're just trading little stock certificates of ownership between the businesses. But what I mean is: typically a hedge fund manager would say, "Let's say I give a hedge fund manager $1 million. I can withdraw that capital, and the only way that they can give me that money back is by selling stock." So let's say you're the hedge fund manager. You go out and you invest in some company. The stock goes down. I lose faith. I say, "Sean, I want my money back." You have to go sell part of your stake, potentially losing quite a bit of money. Whereas someone like Buffett or Ackman—people are just trading the stock certificates, right? Those are just ownership shares.
29:02	Shaan Puri	Sure. Even when I'm out, whoever I sold it to is in, so the money is essentially there even if the stock price goes down.
29:09	Andrew Wilkinson	Exactly. And if you think about it, just in terms of the beauty of their business model, Buffett's is more complex. With Bill's business, for example, he simply goes out and buys 10 stocks. He has 50 employees, and he makes hundreds and hundreds of millions. Sometimes, in some years, I think he makes billions.
29:27	Shaan Puri	Wait, wait — so Bill Ackman's firm only has 50 employees?
29:32	Andrew Wilkinson	Yes</FormattedResponse>
29:32	Shaan Puri	50 employees. I think he manages... How much does Bill Ackman manage? So, Bill...
29:36	Andrew Wilkinson	Between $16.16 and $20,000,000,000 — somewhere in there. </FormattedResponse>
29:39	Shaan Puri	So, okay — let's call it 15 billion. So he's got 15 billion under management. You know what? We gotta break the rule and do a little public math here.
29:49	Andrew Wilkinson	Oh no.
29:50	Shaan Puri	"He takes the 2% fee, or he doesn't take the fee."
29:52	Andrew Wilkinson	He takes a fee — I think it's a blended fee of around 12%, depending on the pool of capital.
29:59	Shaan Puri	He's got a million—1.5%. So let's take it: say he's taking 1.5%. His firm, with 50 employees whose job is to analyze and find 10 stocks to own, is making $200,000,000+ a year in cash flow off just the fees.
30:15	Andrew Wilkinson	Well, you gotta remember: that's revenue. There's cost to it — transaction fees, legal, and all the other stuff. Again, I think that number swings around based on the performance and other factors as well.
30:26	Shaan Puri	Right, but how high could that cost be? He's got 50, and it's legal. He's not doing M&A with private companies; he's doing public-company investing.
30:33	Andrew Wilkinson	I believe—I mean, we don't need to do the public map; people can look it up. But if you look at Pershing Square Holdings, his public company, you can basically see what they pay him in fees every year.
30:42	Shaan Puri	Okay, that's incredible.
30:43	Andrew Wilkinson	So—that's, let's not forget—that's not the reward. That's not the 20% reward. I remember, I remember talking to him in 2020. He was freaking out about COVID, and he had put $25,000,000 into a derivatives position—kind of buying "fire insurance" against COVID causing the market to drop. He made $2,400,000,000 of profit, or something insane off of that. I think it was a $25,000,000 bet. And you think about it—he got fees on all of that. It's unbelievable. He also owns, let's not forget, like $6,000,000,000 of the capital he manages, so that's his money.
31:23	Shaan Puri	Okay, that's incredible. What about the other side of it, where you talked about the hedge fund managers—where are we putting them? So if Buffett and Ackman are your first S-tier, where are you putting the general hedge fund/money manager who's got, you know, assets under management but not permanent capital the way you see it?
31:40	Andrew Wilkinson	I'd probably give it to you just because of the nature of the swings. You're pretty much guaranteed—as long as you have a very large venture capital fund or a large hedge fund—over 10 or 15 years to become a decamillionaire almost no matter what, which is kind of a crazy thing about the model. But you might get blown up at some [point].
32:06	Shaan Puri	But explain the inconsistency, because I believe Ackman also has blown up—or almost got blown up—a couple of times. What's the difference, in your mind, between what you're talking about?
32:18	Andrew Wilkinson	Bill keeps getting shot and then miraculously getting back up. I think he's the best of...
32:25	Shaan Puri	The investment world... I
32:27	Andrew Wilkinson	He has a great line. He just says, "The secret to success in business is just getting back up over and over and over again." What happened to him was this: Bill has made so many incredible investments, but I believe in 2014 he bet against Herbalife, which was an MLM. Then he also bet on Valiant Pharmaceuticals, which was a pharmaceuticals company that was basically increasing prices. It was a very elegant, very smart model, but it was run in a kind of unethical way and the company blew up. So between Herbalife and Valiant Pharmaceuticals, his investors lost faith in him and a lot of them pulled their cash. Suddenly his whole hedge fund was blowing up. Fortunately, in 2012 or 2013 Bill had raised—I believe it was like $4 million or $4 billion—of permanent capital in Pershing Square Holdings. Bill was able to basically bet on himself. He went to JPMorgan, he went to Jamie Dimon, who he's buddies with, and he got a $500 million or so loan to bet on himself and buy more stock. He managed to come out the other end absolutely killing it. I think the big lesson for him was: don't short stocks, and be a lot more disciplined about investing in businesses with leverage or exogenous risks. There's this funny story: Bill went out and bought these little plaques and he puts them on every single person's desk at Pershing Square. They’re the 10 commandments, like: > "Thou shall not short stocks." > "Thou shall not invest in a business with too much debt." > etcetera. So Bill has really learned the lesson and been through it.
34:14	Shaan Puri	Do you know how, in venture capital—the typical VC fund is basically a pretty poor-performing asset class because you're illiquid for 10 years, and the IRR you get from it is less than if you just kept it in an index fund? So, venture capital on the whole is a pretty bad asset class. Of course, the top funds perform pretty well. Is hedge fund management basically the same distribution, or do they, on average, do better?
34:42	Andrew Wilkinson	So, Warren, there's this great story. There's this guy, Ted Seides, who's a fund-of-funds manager and he had lunch with Buffett. He said, "Warren, I'll bet you—I think it was $1 million—that I can choose a basket of hedge funds and they'll outperform the S&P." I believe he lost that bet to Buffett. Buffett basically said, "On average, funds do not outperform," which is very true. I mean, most hedge funds and most venture capital funds do not perform. And I think that's kind of what's distinct about private equity. I think—I don't know for sure—but I think most private equity funds at least have a reasonable return.
35:19	Shaan Puri	Alright, we got a couple more. I wanna do local services. So you're starting a local pest-control business, HVAC — things like that. I put the handyman icon here because it represents something you do locally: a guy in boots and overalls who comes and does work in your area.
35:37	Andrew Wilkinson	So, I would say that's a C. Those are hard businesses, but if you can dominate a local industry—let's say you're really good at Internet marketing and you own an HVAC business and you're able to hire great technicians—there's only so many technicians out there, so they're kind of fundamentally difficult to compete with. I think they're challenging. I know a lot of people over the last few years who have bought HVAC businesses or plumbing companies. They come in—guys that look like you and me—and they're dealing with all these blue-collar guys, and the technicians are like, "Who the fuck are you? Why would I come and work with you?" So I think they're good businesses if, say, you're a very enterprising HVAC technician and you want to start one of these businesses; you can do phenomenally well. But I think they're actually quite difficult to operate for an outsider.
36:34	Shaan Puri	Alright, I got a couple more: venture capital / angel investing. Although they're a little bit different — one's investing other people's money and one's investing your own. I bucketed them together here.
36:43	Andrew Wilkinson	I would say angel investing... and as an entrepreneur, I think I view angel investing a little bit like playing roulette. I like to play poker—it has better odds. I look at private equity or buying businesses more like poker. I just know— I think the classic entrepreneur story that, you know, you guys have talked about a million times is: you make some money as a founder, you want to pay it forward. You don't really get stocks and real estate and businesses or acquiring other businesses, or they seem...
37:12	Shaan Puri	Slow, or they seem a little too boring, a little too common. </FormattedResponse>
37:15	Andrew Wilkinson	And you hear a Jason Calacanis: "I'm the first investor in Uber," and, you know, whatever. You want to do that same thing. It's a little bit like—have you ever been pitched by a founder who has a popsicle company? They say, "Well, I know we're tiny right now, but there's this one company that sold to Procter & Gamble for $300,000,000." It's all story-driven. Don't get me wrong: there are amazing angel investors, like Lockheed Groom [name unclear], and people who do amazing stuff. But I think, for the layman, it's a terrible, terrible thing to do with your money. </FormattedResponse>
37:47	Shaan Puri	"Yeah, it does feel a little bit like golf. It's an expensive hobby, but if you enjoy it—fantastic. It gives you more power."
37:52	Andrew Wilkinson	So, we talked about this, I think, on the last episode—or two episodes ago. When I first started out, I got in the habit of angel investing. I have $30,000,000 or so tied up in angel investments—completely illiquid. I have no access to it. I'd much rather own, like, stocks and real estate or something.
38:10	Shaan Puri	Alright, I have one more here that's *"buy a local sweaty* startup." Oh — we have Cody Sanchez** entered the chat here. I couldn't find a good icon, so I just put Cody on here for lack of a better term. It's a picture of Cody at a laundromat. I don't actually know if Cody really pushes that you should buy laundromats, but I think that's a bit of a narrative. I'll use her as a figurehead for this idea: you should find a local, brick-and-mortar, sweaty business. Go buy a boring Main Street business. You're going to cash flow, then you reinvest the cash flow and buy the second laundromat, then you buy a car wash, and you keep going in that direction. Where does Andrew Wilkinson rank that model on the tier list?
38:51	Andrew Wilkinson	I mean, I love—I love Cody, and I love Nick Huber. I think what they're advocating is basically: "Look, don't go and work for someone else when you can create your own job." I think if you can be an owner-operator...
39:04	Shaan Puri	But they don't say that. I think if they said that, it would be a lot more of an honest broker, right? The way you — you said one key word, which is what they say: "own your own business," and you said "own your own job." I think there's a big difference between those two things.
39:17	Andrew Wilkinson	Well, I think that's a fundamental question: are you buying your own job or are you buying a business? If the business returns more than the cost of the owner's salary, then I'd say that's great. I'd say that's a... Chris, and I always say, like, if you can skip the line—rather than working your way up and starting businesses—you can just buy an already working business and improve it. I think that's phenomenal. I mean, it's really a lot of what we've done. So, my story: I started the web design agency MetaLab. That business grew. I then took almost all my profits and started, like, ten other businesses, and almost all of them failed. It was really exhausting. At the end of that process, I had one business that I could sell, another one that was kind of alive, but I'd started ten and I'd put almost $10,000,000 or $15,000,000 into all these terrible businesses. If I had just taken, you know, the $1,000,000–$2,000,000 a year and just bought businesses and improved them, I think I'd be much further ahead than I am today.
40:20	Shaan Puri	Well, that's what you eventually started doing, right? What you did at some point was you decided to switch into buying businesses that were already working as your main business. I believe you invested—correct me if I'm wrong—but I think the initial seed capital was around $5–$6 million from Metalab's profits. You used that as the base and then tried to find these compounding businesses that you could hold for a long time, which you call "wonderful businesses." That's what became Tiny, the public company today. I think the market cap is something like $200‑something million.
40:55	Andrew Wilkinson	Yeah, basically we just started buying businesses in 2013. When we read about Warren Buffett we were like, "Oh my god, this guy's doing easy mode — why are we doing hard mode?" To be honest, Buffett has this great quote: "I'm a better businessman because I'm an investor, and I'm a better investor because I'm a businessman." I think that in order to be a good investor you need to have run, or experienced, the chaos behind the scenes at different businesses. I think the beauty of what we did was we got really lucky. We went to the gym, we didn't deadlift 300 pounds — we got really lucky with MetaLab and it worked. That built our confidence to go try more stuff. Then we tried every bad business model, you know. We did dropshipping, we started a restaurant, we did a skincare company — like all sorts of dumb stuff. We always joke we put forks into electrical sockets. We learned a lot. Then we started investing, and what we could do is look at these businesses and say, "Oh wow, this is actually a really high-quality business, and I know that because I've operated a similar one."
42:01	Shaan Puri	And do you remember how much capital you started doing that with? Once you—once you stopped starting new businesses, you said you decided to start buying.
42:09	Andrew Wilkinson	I think it was like $4.04 or $5,000,000. We basically sat down and said, "Okay, we're going to start this thing called Tiny. I'm going to own 80%, you're going to own 20%." That was only because I had more capital, because I was the one who owned most of Metalab. Chris put in $500k or $1,000,000, and I put in the rest. That's it — we never put any more money in.
42:32	Shaan Puri	So that's what I was going to ask you: was that just a seed, or did every year you say, "Oh, we found a new business. Let's take more Metalab profits and put it into Tiny"—or no?
42:41	Andrew Wilkinson	No, nothing. I mean, we merged, so it was interesting. I actually owned Metalab myself — I owned 90% of Metalab, and my brother, Chris, and a few other people were small shareholders in it. So that's what I basically diversified with. I went off into my family office, did all the venture investing, and bought some real estate. I bought newspapers, restaurants, and other dumb stuff. But Tiny itself really just grew from that original amount.
43:13	Shaan Puri	So that's pretty incredible. I feel like I have to ask you this because I think you get a lot of shit nowadays. A lot of people look at the tiny stock and say... basically, you guys did this reverse merger, and the stock shot up in 2021 at that peak era. Since then it's been a downward trend. I see a lot of people on Twitter pointing to that and saying, "Oh, this guy calls himself the Warren Buffett of the internet and he says he buys these great businesses—what's going on? Look at your stock." They see that and say, "Is this guy like many others on the internet who overstate their claims?" That's a common problem online: you don't know who's real, you don't know who's actually good. You have this public company as a little public scoreboard, and people get really riled up about that. On the other hand—kind of like the two parts of a trial, the prosecution and the defense—there's another side. You took $45,000,000, first created this design agency that was really successful and generated, you said, over $100,000,000 of profit lifetime. Then you took $45,000,000 and compounded that into a business that now holds all these interesting assets. The stock price goes up and down, which isn't necessarily the end of the story. Even if you say, "look, that's how big it was," that's still fantastic. I don't know many people listening who have done anything more impressive than that. So I admire it—even if the least generous interpretation is today’s current stock price, that's still pretty damn impressive. What's your reaction to this? You're sitting there—you don't want to go out and fight all the internet trolls—so how do you see this? What's your take?
45:10	Andrew Wilkinson	It's pretty funny because, you know, we started in 2006—basically twenty years ago—and bootstrapped this business until 2023, when we went public. Over the last ten years—since we started Tiny—we've compounded our earnings at 25%. We do almost $250,000,000 in revenue, have $65,000,000 of ARR, and do over $40,000,000 of EBITDA. Chris and I still own the majority of the public company. All of these are things you can look at in the public filings. We also talked about asset management: we manage a $200,000,000 fund through the public company, with $40,000,000 of it being our own capital. That fund owns Aeropress, Letterbox, and all sorts of other businesses. If we include that, it adds another $65,000,000 of revenue, so we're over $300,000,000 in revenue across 30 businesses, and all the businesses in the fund are profitable as well. I don't know—I'm kind of like, if that's failing, sign me up, right? And I don't know what to say to the trolls. "Don't feed the trolls."
46:25	Shaan Puri	Right. Well, let's take the vulnerable side a little bit. I always ask myself this whenever I get criticized. My first reaction is: "What the hell are you guys talking about? Do you not see that?" I want to defend myself, but at the same time I always ask this for my own learning, which is basically: what about this is fair? What is the fair criticism? I think that's always been an important question for me. It keeps me honest because, you know, either I'm just going to ignore it — I got nothing from it — I'm going to get mad about it and think they're stupid, and I get nothing out of it. Or I mostly disregard what I think is an off-base line of thinking. But maybe there are some parts of it that are fair. "It is fair that I said this. It is fair that I didn't do this. It is fair that I thought it would be X and it actually turned out to be Y." Those are some things that are fair, right? So, what would you say is fair criticism about you?
47:17	Andrew Wilkinson	First of all, I just want to say I really empathize with people. I remember watching "Shark Tank" and thinking, "Oh wow, Kevin O'Leary—you know, he sold his business for billions of dollars." Then you go read the juicy gossip that he got $10,000,000 or whatever out of that deal. It's very easy to take one blurb and judge someone. Before I went through this experience, I would just believe what I read on the internet and, to be honest, kind of enjoy it. I think there's this dirty, horrible part of humanity—myself included—that loves when somebody who's on an upswing falls. Talk about Bill Ackman: Bill's an amazing investor, but he's loud. I'm loud too. I'm extroverted. I like talking about what I'm doing, I like talking about our companies, and it's really fun to watch someone loud like me fall in the mud. I see this in myself: you kind of cheer and enjoy it. Celebrities go through this too. They're awesome and everyone loves them, and then all of a sudden people shit on them for a few years, and then they love them again—Justin Bieber is a good example. Everyone hated him for the last five years; now everyone loves him again. I think that's the course of things. I just have to eat humble pie. There are a lot of great things I get out of being loud on the internet and talking about this stuff. I've connected with so many incredible entrepreneurs. I've made so many new friends. I love talking about this stuff and teaching people about business. But this is the price, and I'm willing to pay it. It sucks. For me, being misunderstood is a big button. When I was a kid I always—I've got ADHD—and I'd always mess up, and I was always the one in our family blamed for everything. So I really have to resist getting on the horn and arguing with everyone because it doesn't help. We're just focused on delivering good results and building great businesses, which we're continuing to do. People on the internet are going to twist it however they want. The reality is 60% of the businesses that went public in 2023, when we did, are still under their IPO price—Asana, Sweetgreen, Coupang, like all these other businesses, they're all under IPO. Does that instantly mean what the founder has built is invalidated and they're a moron? No. A fair criticism of us is our business is a bit confusing, even our stock chart—starting businesses can look that way. I made all this money from the web design business, started a bunch of companies, and one of those companies became the dominant seller of themes in the Shopify ecosystem. Chris and I always had in our heads, "Let's take a business public." We'd love to do that. We actually partnered with Bill Ackman. We had sold the business to a family office, we bought it back, and we took that business public in January 2021. Do you remember what was happening in January 2021? Every stock was going to the moon. We had a business doing about $40,000,000 in revenue and roughly $7,000,000 of EBITDA, and literally the day we took it public it jumped from a $250,000,000 market cap to $1,200,000,000. We didn't take it public at $1,200,000,000, but that first day is where the chart starts. Then the mania is over and the chart starts going down. As the chart started going down, we decided, "Hey, let's take Tiny public," so we merged into it. The Tiny story is this: we've been compounding at about 25% from almost nothing. What people see—because that's what's in the public market—is this little dip down here. To be honest, I get it. You really have to take the time to understand the business and the story and why it looks like that. I'd encourage people to do their research and actually dig in and understand what we own, because from my perspective, I think we own a lot of pretty incredible businesses.
51:36	Shaan Puri	And you still own the majority of the business.
51:40	Andrew Wilkinson	I do.
51:41	Shaan Puri	And is that still now the majority of your net worth, basically? So you’re, like, skin in the game — how much skin do you still have in the game?
51:48	Andrew Wilkinson	Yeah, this is what's so funny. People — I mean, even people have said, "oh, you did a pump and dump." And I'm like, "What are you talking about?" I've sold almost no stock. The only stock I did — one large transfer, think of $8,000,000 — I moved it to my foundation so I could start doing philanthropy. I haven't taken any cash out. I still own all the stock. Yet people say, "Oh, you're a pump-and-dumper," or something. I don't know... it's kind of sad.</FormattedResponse>
52:17	Shaan Puri	Yeah. So you hear all this, and you've also talked about this idea of The Courage to Be Disliked. I think—maybe that was the right book at the right time for you during this. I haven't actually read the book; it's a killer title. What is the thing that I can learn from that book?
52:34	Andrew Wilkinson	So, Sam just did that—great. I love that episode he did where he basically said, "Here's the recipe to a miserable life," and then suggested we invert it. One of my favorite inversions is that you actually want people to hate you. You do not want to be liked by everybody. I think that's a great signal that you're doing life wrong. If you told me this ten years ago, I would have thought that's insane. I remember reading this Warren Buffett quote: "It takes 20 years to build a reputation and 5 minutes to ruin it." For me, I really internalized that. I was like, "Oh my God — I need to make sure that, you know, everyone thinks positively of me,"...
53:12	Shaan Puri	"Right. I better protect this reputation, then."
53:14	Andrew Wilkinson	Every founder I meet for coffee feels like I have to woo them, make them like me, or whatever. I felt that I had to be consistent and predictable. For example: I buy companies. I'm a Warren Buffett–wannabe value investor kind of guy. But I also really like startups. I like starting restaurants and all this other chaotic stuff. People don't like that. I remember the moment I kind of realized what was going on. My dad retired—he was an architect. I took him out for a beer and asked, "Dad, what now? What are you going to do with all your time?" He said he didn't really know. I said, "Well, dad, I've got money. Why don't we team up? You can become a real estate developer and build the things you've always wanted to build." He responded, "What do you think someone's going to say if I suddenly call them up? They know me as Architect David and all of a sudden I'm pitching them on a real estate development." People don't like it when you leave your box, Andrew. I was like, "Oh my God—I know that feeling." Have you ever had a restaurateur friend who suddenly pitches you on a tech startup they're starting? Or your yoga instructor gets their real estate license and wants to sell your house? My mental reaction is, "I hate this. Stay in your lane." I don't like it; it makes me uncomfortable. I don't know why. It's incredibly hypocritical, because I'm a flip-flopper. I love jumping around. I'm an inch deep and a mile wide. I hate in others what I hate about myself. I realized we're all like prison guards; we all have these labels. For me, it's like, "I'm an investor and an entrepreneur," but then it goes deeper: "I'm in tech, not real estate—no real estate allowed." "I'm bootstrapped—you can't do venture, that's weird." "I'm pro-crypto" or "anti-crypto." These labels lock you into an identity. I've seen this with big public figures. Remember when the CEO of Goldman Sachs, David Solomon, it came out that he loves to DJ? The press went crazy. There was an article in The Economist asking, "Is Goldman Sachs suffering because he's DJing?" Do you think they would have said that if he were playing golf? Or we see Kim Kardashian get passionate about prison reform and we're like, "Fuck you—vanity project." </FormattedResponse>
55:53	Shaan Puri	Right.
55:53	Andrew Wilkinson	Jonah Hill starts surfing; let's make mean memes about him. Michael Jordan plays baseball — betrayal. I realized our brains are prediction machines, and they get upset when things don't match. For me, I realized I don't fit cleanly in a box. It's messy, like everyone else. I remember sitting at my lake house with a group of entrepreneurs and asking everyone, "What would you do if no one was looking?" One of my friends runs a massive industrial, billion-dollar business. He said, "My happiest moment is behind the oven, cooking for people. I actually would want to start a restaurant." When I asked, "Would you just want to own a restaurant?" he replied, "No, no, no. I want to be the chef of a Michelin-star restaurant." Then he said he felt like he could never do it because he had so much of his ego tied up in being a business person, and everyone would think he'd gone insane. At that moment I realized I wouldn't be immune either. I would definitely be gossiping and saying, "Oh my god, he's lost his mind." We treat people who leave the expected path like they've escaped a prison and need to be beaten with our batons. You see this with legal degrees, bad marriages, disappointing your parents, or the industry you've spent twenty years in. The issue is that all those promises were made by the person you were before, not the person you are now. I felt like I was in quicksand and didn't know what to do about it. In January I found a book called The Courage to Be Disliked. You see the cover and you instantly kind of know what it's about. It's written in an unusual way — a dialogue between a wise old man and a young man. The core idea is that seeking recognition is a trap. It's impossible to make everybody happy, and if you try, you'll end up living somebody else's life. You have to be willing to be hated. You have to have the courage to be disliked. Reading that book felt like someone gave me the keys to my cell. I was in a cell with no walls, and suddenly I could walk out. My New Year's resolution this year was: I'm done with the likability game. I'm going to have the courage to be disliked and say what's true for me. You might have noticed I've been writing a newsletter and talking about all sorts of stuff — having ADHD, my weird businesses, or whatever. I'm just saying, "Fuck it." If people don't get it, that's fine. I'm going to keep buying businesses and doing great stuff, and on the side I'm going to have a bunch of hobbies.
58:49	Shaan Puri	You know, I like that. When I was in high school I used to wear mismatched socks. I still wear mismatched socks. I would leave the house wearing two different socks and, to me, I didn't even think twice about it. I was just like, who cares? They're just socks. But everybody would comment on it. My mom would comment on it when I left the house—what are you doing? She was horrified: "Can't believe you're doing this." I was like, what do you mean? They're both socks. Their pattern doesn't match—who cares? Who gives a shit? At school people would make fun of me for it, and then they sort of realized, "Oh, we made fun of him and he just continued doing it." I wasn't even doing it as some statement. I just didn't care. I decided not to care about socks the same way everybody else did. The idea of matching socks really didn't matter to me. Maybe it matters to other people—more power to you—but it just didn't matter to me. I don't think I realized at the time how important a mini lesson or trait that would be in the future. I remember moving to San Francisco. We were self-funding—or not self-funding, but I had basically a billionaire backer. Michael Birch was funding the lab we were using to do startups. We didn't take any outside funding, but one of our companies started to pop and we got, I don't know, a million users, 2 million users, 3 million users. VCs got a little bit excited. So there's an investor at Founders Fund who reached out. I took the meeting because I was always intrigued by Peter Thiel and thought, maybe this will lead to meeting Peter Thiel. I took the meeting even though I really didn't want investment. We go in and he's supposed to ask me about the business. I'm just asking him questions about Founders Fund because, again, I don't really care if he invests in me or not—I'm there to learn about them. I'm asking all these questions that if you ask a normal VC—"What stage do you normally invest in?"—the answer is "pre-seed." "What's your typical check size?" "500k to a million dollars," or whatever. Everybody's got these predefined boxes and labels: what industries, what categories—B2B, SaaS, enterprise, blah, blah, blah. I went to the Founders Fund guy and asked the same questions. He was like, we just try to find the singular businesses and then we, I don't know, back the truck. "How much money do you need?" "How much money can we put in?" "Let's put it in now and we'll put more later." "What stage?" "Who cares—just go." He said that when Peter started Founders Fund he had almost like a Fight Club–style rule. The Fight Club–style rule was: > "The only rule is that there are no rules." The rules that we set as a fund are going to limit our ability to find the singular business. This is why Founders Fund was one of the only VCs to own a shit ton of Bitcoin starting in 2014–2015. Most VCs couldn't even buy crypto by their bylaws. They were so focused on finding the next Facebook, the next Mark Zuckerberg, that they didn't see this anonymous Satoshi Nakamoto open-source project creating a currency. It broke all the rules—but that was the thing that mattered. Founders Fund has made a few of these really contrarian bets. They backed Anduril when Silicon Valley, at the time, thought it was completely unpopular to back a weapons company. The narrative then was that this was a bad thing. In fact, Google had to shut down their weapons project—the big contract with the Department of Defense—because their own employees protested, "This is not right, I don't want to be part of making weapons and killing people." Companies bowed down and the venture capitalists bowed down. There were only a couple of investors willing to go against that grain. Elad Gil came on this podcast and said the day he saw Google shut that project down, he knew there was a huge opportunity. If anyone was willing to go against the grain and actually build a weapons company, they'd do phenomenally well. It makes total sense—the U.S. is going to have a defense department and they are going to need weapons. If the weapons are built by high-tech companies, that's better than building low-tech, old-school weapons. That all makes sense. That's when he backed Anduril—and Founders Fund backed Anduril. So I saw the payoff. In Silicon Valley they call it being contrarian. What does it feel like in practice? I think it's what you're talking about: the courage to be disliked, the courage to look stupid, the ability to think differently. All these terms apply. I'll share one more story that reminds me of this. One of my business heroes is Jesse Itzler. He came to one of our Hoop Group events [the basketball camp we run]. Jesse was there laughing at the table. He was like, "All these guys are talking about their crazy ambitious plans—this guy's building a city, this guy's building a religion, this guy's building rockets…" He goes, "I'm literally selling a calendar." His project at the time was called the Big Ass Calendar. It's literally a calendar you put on your wall so you can be more intentional about how you're going to spend your time this year. He said, "I think it matters, but in the grand scheme of this I sell a $19 calendar. It's funny I'm even here." Here's a guy who reinvented himself ten times and did not stay in any box. He started as a white-guy rapper, then… that wasn't really fully working out, so he wrote a jingle that became the New York Knicks song. He sold a sports jingle company and when he sold the company he got to ride on a buyer's private jet—he said, "This is amazing." He started a private jet company, got involved in a coconut water brand, now hosts a big running event because he loves running, has a sauna company because he loves saunas. He basically almost productized himself. None of the labels you might try to apply to this guy—"brand builder," "entrepreneur," whatever—fully capture him. Then he tells me about how he invested in land that produced really pure water. I was like, "Oh, so you're an investor." He goes, "Well, no, I don't really care about investing." He was unlabelable. I find a lot of inspiration in people like this. The thing he said that really stuck with me: I asked, "So what are you gonna do after this?" In that room, surrounded by hyper-ambitious, hyper-talented people, it's tempting to ratchet up how big your thing sounds or else you're low status in the room. He told me, "I think I'm gonna go be an assistant basketball coach at this local college nearby. I wanna be the assistant coach. I love basketball." I was like, "Why assistant basketball coach? Clearly not for the money. You want to get into basketball?" He said, "No, dude, I just wanna be on the bus. Some of the best times in my life were on the bus going to a game. I could just be on the bus. Oh dude, that's gonna be good for the soul." I admire this guy having the courage to say, "Yeah, I'm gonna go do this thing that sounds completely random." As soon as he said it, it instantly resonated. I'm actually now an assistant coach for a high school basketball team near me because I was like, "Dude, I wanna get on the bus." That makes total sense to me—it's a huge part of my childhood. I would have so much fun doing that. Even if it doesn't fit with the rest of the stuff, it doesn't really need to fit. It just needs to be something I want to do.
01:05:59	Andrew Wilkinson	All that totally resonates. I mean, do you ever listen to Invest Like the Best? Amazing, amazing podcast. He has some great guests, but there's definitely an archetype: the autistic super-genius investor who's like, "I... you know... I buy laundromats—or not laundromats, let's say..." It's like Brad Jacobs: "I just choose an industry and then for five years I buy every company in it, I take it public, and I compound at 30% and then I go do it again and again." There's a very clear formula. I've never had a formula. I think the benefit of not having a formula is... well, okay. I was on Kauai [Hawaiian island] and someone said, "You gotta go to this donut place. They fry their donuts in coconut oil and they're these purple donuts made of sweet potato." So I went. The donuts were amazing and delicious. I started talking to the guy behind the counter and he said, "Oh yeah, we're expanding. We just did one in LA." I said, "You're a little tiny donut shop on Kauai—how did that happen?" He goes, "Do you know Kevin Rose?" and I said, "Yeah, I know Kevin Rose really well." He said, "Kevin came, he ate these donuts, he loved them, and he invested like $10,000,000 in our business. Now we're scaling it across the country." Kevin is a fascinating guy. Last time I talked to him he was like, "Yeah, I did the donut company, and then I'm flying to Sweden tomorrow to meet with Teenage Engineering," which is that audio gear company, "and then... you know..." He also told me about this Alzheimer's company that's working on a drug he invested in. None of those things fit together in a box. Kevin is a great example. When I see him on a podcast I jump—I have to listen. The Random Show with Tim Ferriss is my favorite show in the world. Both of those guys have been so good at not allowing anyone to put them in a box, and as a result they've created this magnet: interesting things come to them. If I had two options—say I could be "value investor Andrew" with my formula—well, it'd be very good for raising money. I could go and invest, tell my clean story, I'd look like a duck and quack like a duck. There are a lot of positives to that: you get less hate, it's easier to raise money, investors like it, whatever. But if you're just interesting and you share what you're doing, like Kevin Rose does, really interesting things come to you. I would argue most of our best businesses come from that kind of curiosity. For me, it was like: I was a barista and I got obsessed with coffee, so I bought an AeroPress. I love movies and I tried to invest in film. So I actually had this...
01:08:44	Andrew Wilkinson	Where I was flying down to Hollywood, meeting people, and looking into investing in movies and stuff. I looked at it and thought, "I'm going to lose so much money." At that same time I happened to be in Auckland with Tim Ferriss, randomly. I was in town and thought, "There's this guy who runs Letterbox; I should have a coffee with him." That coffee—literally, I had coffee with Matt—and I made an offer for the business within four hours. So these things happen randomly, and I think you need to create that magnet for interesting people and entrepreneurs to seek you out. I don't know that anybody listens to—you know—the "autistic super genius" talk about his formula and spreadsheet for buying a type of business and goes, "I want to do business with that guy; I want to sell my business to that person." Maybe there's a certain type where that is appreciated, but that's not my jam. And, you know, I'm going to get my two to three percent hate quota for that, and that's just fine by me.
01:09:45	Shaan Puri	> "Well, you get the hate either way. You think the ASG crowd doesn't get the hate? Of course they do too, right? Totally. You're going to get the hate either way. > > If you're not getting the hate, you probably haven't... you know, it's just a signal you haven't really done enough yet, haven't made..."
01:09:58	Andrew Wilkinson	How jealous are you, by the way, of those guys? I wish that I could be that focused. I wish I got that excited about buying—no, Waste Management. I do it, but it's just not true, you know. It's not true to me.
01:10:12	Shaan Puri	Or you—exactly. Why would I be jealous of something that would make me miserable?
01:10:16	Andrew Wilkinson	"You imagine my first million if every time you just talked about one vertical?"
01:10:19	Shaan Puri	Right.
01:10:19	Andrew Wilkinson	Be the most boring podcast of all time.
01:10:21	Shaan Puri	*Dude, the greatest hack in the world is: if you're going to be jealous, be jealous of the inputs, not the outputs.* Okay, listen: everybody looks at the result that somebody has in their life and they get jealous of the result. That leads you astray because you don't even really know what it takes to be that, to get that, to have that. If you're going to be jealous, it's hard to... most people try to just turn off the jealousy knob — "I'm just not gonna do it." Well, good luck with that. It's a pretty tough thing to do to truly kill envy inside you. There's a certain level of enlightenment and wisdom you need to reach to never feel that envy again. So instead, just redirect it. Get envious of people whose inputs you're jealous of — their day-to-day, the work that they do. If you're like, "Man, I would love for my day to look like that. I would love to work like that" — not the results of the work, but the work itself. For example, Bill Simmons is a guy like this. I don't know how much you know about Bill Simmons, but he's a sports podcaster. Before that he was a blogger. He tried to get hired by a newspaper; they rejected him. So he started his own Boston sports blog and he just sat there writing about his hometown sports, because since he was four years old his dad had been taking him to Boston sports games. He somehow blogged his way literally to ESPN. They ended up giving him his own section. When he was at ESPN, people debated what to call him. "He's a journalist?" No — well, he doesn't do journalism; he's just writing as a fan. So I guess we'll call him a columnist. No, he's not really a columnist. I guess he's a blogger. By the time they were trying to figure out one label, he goes and creates 30 for 30. He reinvents the sports documentary space and pulls that off. Then he gets fired from ESPN for speaking his mind. He leaves and starts The Ringer — a podcast network. He builds it, sells it to Spotify, and makes hundreds of billions of dollars. There's this great clip the other day from when a big trade happened in the NFL. In the Ringer office, Bill is carrying a microphone in one hand and a chair in the other. He's basically jogging through the hallway because he wants to join one of the other Ringer podcasts to talk about the trade. That's not his podcast; he doesn't need to be there. He's got all the money in the world — he could be on a yacht, on an island — and he's sitting there running with a chair and a mic because he really wants to go talk to friends about what's going on in the world of sports. That's what he loves to do. I'm jealous of Bill Simmons — not because he sold his company for hundreds of billions of dollars or has a popular podcast, but because the guy gets to talk to his buddies about the thing he loves all day, and he doesn't have to be right. So I'm jealous of the inputs. I think that's a thing that, if more people did it, you could use your jealousy as more of a compass to figure out what you really want to go do.
01:12:57	Andrew Wilkinson	I think if more people knew the behind-the-scenes of a lot of these super-wealthy people, they wouldn't want that life. There's a lot of sad, very wealthy people, as you know. I think the trick is: how do you figure out what you're great at and actually enjoy? There are things I'm great at that I just don't enjoy. For example, sales — I'm very good at pitching, selling, and talking to people, but it actually drains my life force. It's misery. For me, I started out, headphones on, coding and making websites. Twenty years later, I've realized I can write and talk about things I'm passionate about, and that creates opportunity which I can then funnel into all my various businesses. Think of being a human router and just doing the thing you're great at. You're doing this too. I mean, Ben might run all the day-to-day operations; you just go and do the thing you're amazing at, and it benefits your business in a profound way. I think that's the trick.
01:13:58	Shaan Puri	Well, I would even push back: it's not even that. Oh man, there's always a wealth of people who are miserable. There's a lot of other people who are happy doing something that you would be completely unhappy doing. I remember when we got bought by Twitch. I was like, "Oh, you know, I get to meet Emmett." He was my boss; he's the founder of Twitch. He did the thing I had been trying to do: he started a tech company, it took over the space he was in, and it became one of the few social networks out there. That's what I was trying to do before that. He sold his company for a billion dollars, and here he was running this thing — it was a big part of the internet. I think Twitch was the second-biggest consumer of bandwidth that year; it was crazy. I saw his day, and he was happy doing it. Basically, he sat in the boardroom on the ninth floor at a long table. He sat at the front and the COO sat next to him. Teams would come in thirty minutes at a time, sit down, put a memo in front of him. He would read it, ask them questions, grill them. Sometimes he'd say, "This sounds fantastic — can't wait to see what's next." Sometimes he'd say, "This doesn't make any sense to me," and he'd kind of rip them apart. Then they'd leave, go back, do a week of work, and come back the next week for their weekly thirty-minute meeting. That's what he did all day. I remember looking at that and thinking, thank God I saw this, because this is not what I would want. I thought this was my dream. I thought literally what he had done was the dream outcome for me. I realized that would be kind of a nightmare of a life. So, wait — what if that's the nightmare, not the dream? Then what's the dream? You start asking, looking around, and thinking about what would be really interesting. That's when I started the podcast. I looked at Tim Ferriss and others and thought, "That sounds pretty fun." An easy hack: I'm starting a new content project — my first big content project since my first million. The trick is, instead of asking, "What would be really popular? What would get millions of views or millions of subscribers?" the better question is: "What would I have fun doing 3,000 times?" If I do it 3,000 times, I'm probably going to get good at it, I'm probably going to stick with it, and I'm probably going to get a good result. More importantly, I'm actually going to go do it 3,000 times, so I should optimize for that instead of optimizing for what might work.
01:16:02	Andrew Wilkinson	Let me ask you this: are you leaving your cell? Are you breaking out of your cell? Is it something that people go, "Wow — this is crazy"? It's like when Tim Ferriss launched his card game, or when he did that weird crypto project. Is it one of those?
01:16:16	Shaan Puri	I've explored that widely — totally, totally weird moves: go make a movie, create a Broadway play. I've explored all that, but that's not the active thing I'm working on. One of them is different in that it's a different mode to be in. For example, this podcast is live — it's improvised, it's unedited. I get on here and I just do me, and then I don't really think about it after the fact. There's a team that takes it, edits it, titles it, packages it, and sends it out. I don't really think about it again. Whereas the thing I'm doing right now is a little more of a craftsman approach. I'm not just going to improvise it and then, three weeks later, have it be kind of gone while I make a new one. No — I'm going to make one thing, and it's going to be great. That means I'm going to really have to be a craftsman about this. I'm going to have to take a scalpel to it and try to make it as great as I possibly can, which is not a mode I'm normally in.
01:17:09	Andrew Wilkinson	"That's awesome. I mean, it's like the happiest I've been in the last 10 years: writing my book—just headphones on, doing something, and actually shipping something that will be relevant, hopefully in 20 years, that you can go back to. Yeah. There's something so ephemeral about podcasting, tweeting, and all the other stuff. It's so nice to zoom out."
01:17:28	Shaan Puri	Totally. Well, Andrew, thanks for coming on again—it's always good to, good to hang. And yeah, do you want to shout out anything? Your newsletter? Anything you want to shout out? </FormattedResponse>
01:17:38	Andrew Wilkinson	Yeah, I mean, that's mostly it. I haven't really been tweeting very much. I've been posting on my newsletter, and I really love it. I sit down once a month and I kind of do what Tim Ferriss and Kevin do: I write about all the random things I'm excited about. Sometimes it's about business, sometimes it's about other stuff. People can sign up at neverenough.com — the newsletter's there. I love it. It's been so much more enjoyable to sit down and actually write something formally and take my time, instead of tweeting out "toilet thoughts" randomly and then fighting with trolls.
01:18:12	Shaan Puri	Alright, man—good to see you.
01:18:14	Andrew Wilkinson	Yeah, great to see you, dude.

Discover

Listen

Catalog

Guides

Connect

I Own 38 Businesses. Here's What Actually Makes Money.

Transcript