The Pursuit of Wealth: Barista to Billionaire - Andrew Wilkinson

Andrew Wilkinson 0:00 People just have all these weird ways of measuring your worth, and I just don't wanna spend time around people who measure worth and things like that because it's a path to misery. Wearing a fancy watch does not help me meet my goals. It doesn't give me freedom, it doesn't help me connect with others, it doesn't help me be a good dad, and it doesn't help me give away money. I'd say spending money on material possessions is the height of misery.

Ali Abdaal 0:21 What you're about to hear is a conversation between me and Andrew Wilkinson, the first billionaire that we've ever had on the podcast, a billionaire with a B, and he has recently written a book. It's titled Never Enough: From Barista to Billionaire.

Andrew Wilkinson 0:34 It's really my midlife crisis, honestly. I wrote it when I was thirty-six years old, which is about the halfway point of most people's lives, and I was just feeling kind of lost and needed to work it out, and so I worked it out via writing.

Ali Abdaal 0:46 A big topic of conversation in this podcast between me and Andrew is that we are talking a lot about money. But we start off by talking about the downsides of being a billionaire.

Andrew Wilkinson 0:55 It's not great. There's lots of really interesting downsides that nobody thinks about. Having twenty-five million bucks or even ten million bucks or five million bucks is a lot better than being a billionaire, in my opinion.

Ali Abdaal 1:06 I'm curious to ask why that is.

Andrew Wilkinson 1:07 So-

Ali Abdaal 1:07 We talk about the power of delegation and anti-goals. We talk about what are the things you can spend money on that actually do buy happiness. We talk about the different challenges associated with fame. And then towards the end of the conversation, we riff a little bit about business ideas and the idea of building holding companies with small bets.

Andrew Wilkinson 1:22 Run a profitable business, pay yourself well, and live a good life the entire time

Andrew Wilkinson 1:27 instead of deferring gratification for ten years and then hoping you can sell it for some silly number.

Ali Abdaal 1:32 Yeah.

Andrew Wilkinson 1:32 I like cash flow. I've found that the best way to feel rich is to have cash flow.

Ali Abdaal 1:39 Andrew Wilkinson, welcome to the podcast. How are you doing?

Andrew Wilkinson 1:42 I'm doing great. How are you doing?

Ali Abdaal 1:43 I'm doing really good. Uh, I am seventy-five percent of the way through the advance reader copy of your book. So firstly, thank you for sending it over. Thank you for writing it. I've actually, I've actually been following your journey-

Andrew Wilkinson 1:53 Oh, thank you

Ali Abdaal 1:54 ... for freaking years now. I don't, I don't remember when I first came across MetaLab and started following you on Twitter. Um, but when you announced the tiny stuff and then the AeroPress stuff, it was just like, damn, Andrew. And, and then, like, before I knew it, like, in, in my mind, when I, when I was into-- in, like, web dev Twitter, like, maybe ten years ago or something, I was trying to build software stuff, stuff on the side in med school. You and MetaLab and, like, stuff al-al-always sort of kept on coming up. And then next thing I knew, you're, like, a freaking billionaire or something. Like, [chuckles] that's pretty insane. [chuckles]

Andrew Wilkinson 2:27 It's pretty insane to me too. I mean, I, I started as a barista about twenty years ago and got into web design kind of randomly, and my goal was I just wanna, uh, wake up whenever I want in the morning and make enough to pay my rent, and, uh, I somehow woke up here twenty years later. So it's a weird thing for me too. And it's so, it's so bizarre how small the world is. I feel like, uh, it's all ships passing in the night. The, the tech world is like everybody is two degrees of Kevin Bacon. It's fun that you, uh, were aware of us.

Ali Abdaal 2:57 Yeah. So, um, one of the things that really, you know, we, we were talking just before this, like, I really wanna make a kind of main channel YouTube video about your book, which i-is... It, it's, it's not the sort of book I would normally make a video about because normally I make a video about, like, uh, an-- Atomic Habits or a, a, a clearly self-help how-to guide. Whereas your book, it's not really a self-help how-to guide, but it sort of is because I feel like there, there was so much in it that really resonated with me. Your, your philosophy about money, like, even the title Never Enough is like the, the, the question of when is enough enough is a question I've been grappling with for y-years now. And it almost felt-- feels like one of those books that I should just, like, study because you are a few years ahead of me, [chuckles] um, in terms of the career that you're on, that, that, that you're in, in terms of all of that sort of stuff. And so I feel just-- I just have so much to learn by just really almost, like, studying the book and thinking, "Okay, I'm actually a very good target audience for this book, [chuckles] and I need to take the lessons," because, you know, one of the quotes is, you know, wisdom is learning from other people's mistakes, that, that general sort of idea. Have you, have you had that sort of feedback from other people as well about the book?

Andrew Wilkinson 4:13 I have. And, uh, it's funny, people read the book and then they go, "Oh my God, you figured it all out." And, uh, I can assure you, I'm just as miserable as you are, still stressed out and just thinking about different problems. Uh, one of... My, my business partner, Chris, um, has a really funny saying. He goes, "Stress is like water. It will find a way." And so if you eliminate one stressor, a new one will appear. And so, um, you know, the book is really me working through a big existential-- It's really my midlife crisis, honestly. Um, I wrote it when I was thirty-six years old, which is about halfwa- the halfway point of most people's lives, and I was just feeling kind of lost and needed to work it out, and so I worked it out via writing. Um, so I've, I've changed my path. But, uh, yeah, I mean, I'm still just as stressed out and miserable and anxious as I've ever been.

Ali Abdaal 5:02 Hmm. Interesting. Okay. So normally on this podcast, what I like to do is just turn, turn, turn the interview into more of like a personal coaching/therapy session. So I wonder if I could just talk you through some of the things I'm thinking about, and I would just love for us to sort of riff, riff on those sorts of topics which very much overlap with, um, the s- the stuff you talk about in the book and, yeah, the stuff that I know, I know you write about. How, how does that sound?

Andrew Wilkinson 5:24 That sounds great.

Ali Abdaal 5:25 Nice. Okay. So I'll give you a little bit of context and, you know, you, you might be familiar with some of this. Uh, but, uh, so I'm twenty-nine years old. I used to be a doctor and quit a few years into working the day job to go full-time on my YouTube channel. And now I have a team of like twenty-something people, and, uh, we make YouTube videos and sell online courses off the back of it. And I'm at the point where, you know, I read Tim Ferriss when I was eighteen, decided to pursue, uh, the dream of financial freedom and passive income, and then I sort of got there. And if my eighteen-year-old self could look at You know, we did 5 million in revenue last year with sixty percent margins, so that's like, you know, a decent, a decent chunk of profit. And if my eighteen-year-old self could look at that, it's like, obviously you've already made it. And I speak to some friends and they're like, "Bro, you never have to work a day again in your, in your life." But I still feel this, somewhat of this sense of scarcity that it's, it's not enough. And one of the things you say fairly early on in your book is when you ask even extremely rich people how much they need to feel safe, the answer is always double or triple what they already have. [sighs] Why, why... Like, I've, I, I've heard this from so many people, but, like, why do, why do I still feel this sense of it's, it's not enough and I need to, I need to strive for more? What's going on here, Andrew? [chuckles]

Andrew Wilkinson 6:39 Yeah. I mean, it's bizarre. So I, I'll never forget, I, um... When I was, uh, you know, pretty young, I was pro- it was probably ten, 10 or 12 years ago, I had this, uh, client who was an Irish entrepreneur named Gerry Kennelly, very successful guy, and I flew to Ireland, in the, the south of Ireland, um, in Killorglin, and I was walking through town with this guy, and he had sold a business, I think, for hundreds of millions of dollars to Getty Images or something. And as we walk through town, he's pointing out all the buildings that he owns. You know, "Oh, I own that, I own that, I own that." Every single person in town is tipping their hat to him. They all know who he is. He's like the king of town. And we get to the pub, and we get two pints of Guinness, and I say to him, um, you know, "What is it like? You know, you, you're where I wanna be. What do, what does it feel like?" And he just kinda looks a bit sad, and he goes, "Well, I'm drinking the same pint you are." And I remember in that moment just kind of like dismissing that offhand. But at the end of the day, um, these people that have so much are still living their day-to-day lives. They're still fighting with their spouse. They're still sleeping poorly. Uh, they're still getting irritated by people at work and having interpersonal problems. And so, uh, that, that just doesn't change. At the end of the day, it's kind of like travel. People think that if I travel to Bali, I'm gonna feel good, but the problem with traveling to Bali is that your brain comes with you, and your brain is anxious. Whatever chemical concoction is happening that day will happen in Bali or it'll happen in London. Um, there's another story. I met a guy who was worth $2 or $3 billion, and we were talking about Jeff Bezos. And he goes, "Oh my God, Jeff Bezos is just so fucking rich." And I said to him, I was like, "Well, you know, you're worth billions of dollars. What can Jeff Bezos do that you can't?" And he goes a bit glassy-eyed, and he's like, "Superyacht. He can buy a superyacht." And so it's just this bizarre thing. As I've continued to work my way up the ranks and meet all these amazing people who have been profoundly successful, I just notice that

Andrew Wilkinson 8:53 every single one of them, in some way, is still striving or competing. You know, you have billionaires competing for another zero on the end or to be number ten on the Forbes list instead of number a hundred. And I think it's just kind of human nature. People are inherently competitive and miserable, and, uh, it just doesn't stop. And so the book was really me pulling that thread for myself because I grew up with two parents who would fight about money, and so I decided that money was the bomb for all of my problems. And then I got money, and it actually, you know, it has lots of wonderful benefits, but it adds tons of complexity. And so trying to determine for yourself when to stop playing the money game is really hard. Um, I read an incredible book that you should read called, um, How to Get Rich by Felix Dennis. Have you read that?

Ali Abdaal 9:43 Yeah, I read that about two months ago. It's great. [chuckles]

Andrew Wilkinson 9:46 Yeah. Yeah, and I mean, if you read... It's funny, like I read the book about 15 years ago, and in the book, it's the story of him building a publishing empire. He's the guy who had, um, I believe a bunch of, um, technology magazines and Maxim and a, a whole big publishing empire, and in it he says, "I wish that I had stopped at age 35 when I had $50 million and become a poet," because his true passion was poetry. But he was a money monster. He couldn't stop, and he kept going. And, uh, it-- I mean, that book is so poignant. It's one of the only books written, uh, with a very garish title, How to Get Rich, but it's really a book about why you don't wanna get rich. Um, and so, you know, this is my own version of that. I don't think most people should wanna be a billionaire. It, it's not great. There's lots of really interesting downsides that nobody thinks about. Um, I think, you know, having 25 million bucks or even 10 million bucks or 5 million bucks is a lot better than being a billionaire, in my opinion.

Ali Abdaal 10:49 I'm curious to ask why that is, but I'm gonna ask you that in a moment, because one of the things that I-- 'cause I've, I really enjoyed the book How to Get Rich as well, and I also, uh, saw this, saw that line in it, which was like, you know, something like 40, 50 million. I wish I'd just quit at that number and then done the thing that I really wanted to do. I think... I couldn't quite take that at face value because what I... So thinking out loud, what was going through my mind as I, as I was reading that, or rather I was listening to it on Audible. It's really funny on Audible as well. The, the, the guy who's, like, reading it is, like, very, like, dry humor. I'm getting good vibes. But what was going through my mind as I was, as I was, as I was listening to that was, "Okay, so does that mean I, I should, I should be aiming for 50 million as the goal?" [chuckles] Um, and also, like, he-- this guy says that really poetry is his passion, but I think for me the passion is... The passion genuinely is reading and learning and teaching stuff. And I think you and I sort of have that in common, that y- you have a shit ton of money and yet you still write books and write on Twitter. I often ask myself the question of, "If I had 100 million in the bank, what would I do?" And the answer is, I would still continue to make YouTube videos. I still do podcasts with cool people I can learn from, and I'd still wanna write. And that's sort of what I'm doing. But then there's all sorts of like these extra... Well, you could, you know, leverage your personal brand and build a software business or buy a software business and then seeing the stuff that you've done with Tiny and seeing the whole James Clear thing and speaking to James Clear where he's like, "Yeah, I didn't really wanna do this, but then I thought, ah, the opportunity came by, and then I'm gonna work with Andrew. It's kinda cool." So like, cool, yeah, why not? And i-it's, it's sort of-- I guess it's sort of FOMO. I'm like, you know, I think, I think I have, I have the money that I want to live a very comfortable life. The stuff that I enjoy doing is the stuff I would do anyway. But there's all these shiny things around like, should I do software? Should we do hardware? Should we try and buy boring businesses, Cody Sanchez style? Should we try and acquire tech productivity businesses, Andrew Wilkinson style, and use our audience to direct traffic to the tech productivity businesses? But then I don't really wanna be the ones running them. But then there's the whole, well, well, you could hire a CEO and he-- It becomes this whole like FOMO game where I'm just like not sure. So how, how would you go about approaching that? How would you go about like disentangling that?

Andrew Wilkinson 13:00 So we've had a lot of different offices. So I've done everything from working in cafes to having really corporate, fancy, beautiful offices to Chris and I, um, bought a house, and we worked out of it. We've worked out of it for years. And no matter where you go, work will follow. And I think that, um, whatever you do, the stress will come, right? And so if you look at, at, you know, making YouTube videos, you probably think about your halcyon days when you first started and how fun and scrappy it was, and you're doing it all yourself. And now you pro-probably go, "Man, I have to manage..." I don't know how many direct reports you have. How many, how many do you have?

Ali Abdaal 13:44 Uh, I just have one. I have a GM who then manages everyone else, which is super nice. [chuckles]

Andrew Wilkinson 13:47 That's pretty good. That's pretty good if that works. But, um, but you know, that GM needs to be managed and fed, and you need to negotiate contracts. And over time, I think the more stuff you do, everything has a cost. And I guess the question is: what is that taking from? And I've always struggled with this because, um, like for example, I just bought a building. I was-- There's this wonderful corner spot that I've had my eye on for, for years near my neighborhood, and I'm so excited about the idea of redev-developing this building and making it somewhere that's vibrant for the community. But, uh, when I-- now that the initial excitement of buying the building has worn off, I'm realizing that I'm gonna have to hire an architect, and I'm gonna have to hire designers, and I'm gonna have to go source businesses to rent space in it. And every single one of those represents a person who can be let down, who I have to have meetings with, uh, you know, who cannot pay their rent. Suddenly, my life has all these additional complexities. And so I kind of go through these periods of expansion and contraction. So I'll expand and do a lot of generative activities. I'll get really stressed out, and then I'll delegate it all to CEOs. Um, and delegating to CEOs is amazing. I mean, it's abs-- the abstraction of business. And it sounds like you've done that in a really, really smart way. If you have a great GM who runs all that and that's invisible to you, and what you're really doing is I always joke like you're building a machine, and then you're putting the raw, uh, materials into the machine, and something's coming out the end. So if your raw material is sitting in front of your camera and talking to me, and they'll go edit it, they'll do everything, you don't have to have that much, uh, involvement, that's a pretty magical thing, and that's hard to reproduce. So I'd be very, very cautious about expanding unless you have great partners like you seem to have to do this stuff. But I mean, I don't know. I think I always really respect people like James. Um, so James Clear, I've known him for probably five years, and we've talked about doing a ha- a habits app for some time now. And he basically called me up a year ago, and he said, "Look, we're gonna build, um, an atomic habits app. I'm not gonna put a cent into it. You're gonna fund everything. You're gonna build the team. I only wanna do a few meetings with the team and oversee it and approve it, and then I'll just promote it, and you can use my ideas, and we'll work together on the content." And so for him, it's been this relatively seamless process, but that's only worked because he's working with us, and we've done that a million times, so we can abstract it away. And we'll see how it goes. I mean, we just launched it. Um, but even that, I mean, James has to now think about this. His reputation is on the line. You know, there, there's a lot that can go wrong. So I think the fundamental question to ask yourself is: are you Jiro from Jiro Dreams of Sushi, or are you the guy who created Chipotle? You know, Jiro is a master chef who hones his craft. He does one thing incredibly well, and he does it in a very narrow band. Or the guy who created Chipotle, they have, you know, he created the concept and scaled it to ten thousand restaurants. Which do you wanna be? And one has a financial payout, but the other one has a really intrinsic payout. And like I wrestle with this all the time, so I've, I've abstracted business away, right? So what I've done in my business was I started a web design agency. I delegated the operations of it to somebody else, and it was a huge relief. And then I just started starting and acquiring more and more businesses and hiring CEOs. And what I found over time was that I really missed having my hands on the tools. I missed a flow state. My life became Zoom meetings and contracts and deals, and I didn't produce anything. I wasn't generative. And so that's partly why I started writing the book. That's why I w- why I write on Twitter. That's why I do live events. Uh, that's where I get my flow state. But ultimately, the fundamental question as well is, you know, what, what's your ideal flow state, and how do you design your life around that? 'Cause I do think that is pure happiness. Like for me, a good day is a day where I lose myself in thought, reading, writing, something where I'm focused.

Ali Abdaal 18:09 One of the things I think you mentioned in the book is this idea of anti-goals. Um, and I thought that was in, in interesting in the sense of... Now, what- whenever I, whenever I speak to [chuckles] whenever I speak to rich people [chuckles] uh, I, I always like to ask what are the characteristics that make someone rich and happy as distinct from rich and unhappy? 'Cause it seems to be like fifty-fifty from the people I've spoken to of like, you're rich and you're happy or, or you're rich and you're, and you're unhappy. Maybe even skewing towards unhappy rather than happy. And I thought the concept of anti-goals was interesting in that sense. Um, but yeah, so what, what are anti-goals? And broadly, as a sort of, sort of two-pronged question, what are in, in your view, the things that make someone both rich and happy rather than rich and unhappy?

Andrew Wilkinson 19:00 Well, I guess the question is, is it-- are they happy in an adaptive way or a maladaptive way? And I think there's a lot of rich people who live an unexamined life, who are not self-aware, who ultimately are constantly just moving forward towards the goal, and they don't think about why, they don't think about the broader context of, you know, what they're gonna do with the money. This is just what they do. They're like an automaton, and they're designed to make money. Um, and, and I think that's fine. What makes me sad, I think, is that some of those people don't allocate that capital to anything interesting. So they're like somebody who's baking chocolate chip cookies, and they have a warehouse full of them, and they're not feeding them to anybody. They're... You know, yes, their, their money is in a stock or a business or something, but there's no purpose to their existence. Um, so I think that's one, is people who lived unex- live unexamined lives. Um, the other is people who do exactly what they want. Um, I know a few rich people like this. Uh, one is Jason Fried from Basecamp. Do you know him?

Ali Abdaal 20:08 I've been reading his stuff for a couple of years now, probably.

Andrew Wilkinson 20:09 So Jason, Jason's my hero.

Ali Abdaal 20:11 Yeah.

Andrew Wilkinson 20:12 Yeah. Ja-Jas-Jason's incredible. For-- If your audience doesn't know, so Jason started, um, a company called Basecamp, uh, used to be called 37signals about twenty years ago, and they make SaaS software, project management software, email software. They make hey.com. Jason has a business, I would guess, I don't know, but I think it does probably over a hundred million dollars of revenue and tens of millions of dollars of profit, all recurring revenue, and he owns it fifty-fifty with his business partner. And more than any other person I know, Jason just doesn't do anything he doesn't wanna do. So I remember we were negotiating a deal with Jason, and, uh, he just didn't wanna sign a contract. I said, "I'll give you free stock in my company. I just want you to advise me. I just need you to do this DocuSign." And he just goes, "I don't like doing contracts. I'm not doing it. I'll talk to you on the phone once in a while, but I don't want the equity." So he was willing to sacrifice an opportunity and equity and upside just because he doesn't like contracts and he doesn't like doing that kind of thing. And there's a cost to that, right? You miss... To your point earlier, there's a FOMO. You're, you've got a bit of opportunity cost. You're missing out on things. But Jason just doesn't do anything he doesn't want to, and there's such a power to that, to being a contrarian. I mean, they've-- by all logic, if you're gonna run a software company that big, you should have hundreds of employees. You should be a public company. There's all these things that come with profound cost but are logical. And him and David, his business partner, haven't done any of those things. Um, so I think that that's incredible, and I'm-- I really admire people like that. Um, the third are people who have profound meaning. So, um, someone like Elon Musk or, um, you know, James Dyson, where they believe that what they're doing makes the world better and is making an impact, and they're innovating and doing great science and engineering. I think that those people have a lot of meaning. I don't know that they're happy. I do think there's examples of those people being happy. But I think in the same way that having children is suffering in many different ways, I think it gives you a lot of meaning. And I think they have a lot of meaning, and I would assume, if not happy, that creates a lot of purpose in their life, and I think that is probably really meaningful. And then the fourth and last would be, um, rich and anonymous people, so people who are incredibly successful and famous in a very, very narrow band, and their day-to-day life is completely unaffected by wealth. So I think of someone like Mark Leonard from Constellation Software. Uh, he's a Toronto-based multi-billionaire. He started a company called Constellation, and all they do is they buy SaaS software companies. They've been doing it for something like thirty years. And he looks like Gandalf. He's got a massive gray beard. Uh, he is completely anonymous outside of the nerdy little world of investing that he inhabits. So if Mark goes to a conference for investors, he's famous and everyone wants to talk to him. But if he's in Toronto walking around, I don't think anyone ever recognizes him. He doesn't have a public presence. He doesn't post on social media.

Andrew Wilkinson 23:19 Um, and I think that's probably ideal. Um, you know, if you were to be a celebrity, just as an analog, you don't wanna be a Lea- Leonardo DiCaprio. You wanna be Joel and Ethan Coen. Top, you're the absolute best at what you do, you're highly admired, but outside of a narrow circle, no one recognizes you or cares.

Ali Abdaal 23:39 Hmm. What's your purpose and stuff these days? Like, what, what was the conclusion of your soul searching around this?

Andrew Wilkinson 23:46 Well, I would say that ultimately I realized that a few things make me happy. One is a flow state, which we talked about before, which I was really missing based on the way I was structuring my work and how I was running my life. Two is, uh, children, family, friends, connection, and things that foster that. Um, three is me-meeting interesting people. So I would say that those things really drive me, and I wanna optimize for those. Um, that's what I like in my day-to-day life. And then in terms of meaning What I was struggling with was that chocolate chip cookie problem. So I remember about three or four years ago, we took a company public, and I'd always owned private companies, and so all I ever knew was what was in my bank account and how much cash flow was coming in. And when you go public, suddenly someone values your stock. They say, "Oh, you know, Andrew has 100 million shares and they're worth X amount." And when you look at what that, uh, you know, what that appears as in your bank account, for me, it was... I remember I looked and it was like $270 million. And that was just a small part of what I own. That was, that was one of my companies, one of my 40 businesses. And so I remember in that moment, it would slap me in the face. I was like, "What am I doing?" Like, "What am I gonna do with all this money?" For the first time ever, I felt guilty that I needed to figure that out. And so, um, you know, if you read the book, um, ultimately, what I decided was that I was gonna give it all away, that, you know, Felix Dennis is right. You really don't want more than 25, 50 million at most. Um, uh, ultimately, it's really messed up to have all these chocolate cookies and not do anything with them. And so I'm still sorting out how to do good with that money. Um, but my plan is to give away almost everything over the course of my life. Uh, my kids are gonna be told that they're not gonna receive, uh, much more than, you know... They'll be fine. They'll, they'll, you know, be able to go to college and they'll, um, have enough money to maybe buy a house at some point, but that's it. I, I want all the money gone. I don't want, uh, to be funding, you know, third-generation polo players or something like that.

Ali Abdaal 26:00 Yeah. When, when Morgan Housel released his new book and was doing the rounds on podcasts, um, you know, [chuckles] people would ask him the question of how do you not spoil your kids? And his conclusion seemed to be [laughs] that you basically just give them less money. It's, it, it sounds like-

Andrew Wilkinson 26:15 Yeah

Ali Abdaal 26:15 ... that's the conclusion you've landed on as well. [laughs]

Andrew Wilkinson 26:17 Yeah. I think, um, I think money is a really toxic force for families and friends and everything. And, you know, I write about this in the book. But I, it-- for me, growing up, I was always not the poor kid. I really don't wanna... You know, I was, I was middle class, but I went to school. I went to a public school, but in a, in a nice neighborhood, and all the kids around me were children of wealthy real estate developers and bankers and stuff, and I felt, um, hard done by. And so it put this chip on my shoulder. And then I always thought... I-- So I was always the guy who was like, um, bumming money off people. I'd be like, "Hey, can I, you know, borrow two bucks and I'll go buy a bag of chips in the vending machine? I'll pay you back in a week." And so when I finally had money, I wanted to share it and, um, you know, spend it with my friends. And I started doing that, and it had all these weird unintended consequences of making people feel less than, or I'm being flashy and showing off, or I'm saying they can't afford it. And so, and, and that's a microcosm of a much broader thing that happens in society. When you have money, people want things from you. People expect things from you. Uh, you know, you don't know who your friends are. There's a lot of really bizarre problems. And when it comes to families and money, um, don't get me wrong, there's lots of wonder-- I know lots of wonderful second and third generation, um, people, but I, I think it creates a lot of politics. Suddenly, your family is a... It's like Game of Thrones or something. Who's gonna take over the business? Who's gonna-- How much are we gonna inherit? Um, they're tied to their name meaning something. You know, being a Rothschild means something. I don't want being a Wilkinson to mean something. I want everyone to do what they wanna do. Um, so I, um, yeah, I just, I don't wanna have it in my life, um, long term. And, I mean, I'll have it in my life, but I don't, I don't want my kids to have to grapple with that. I think it just creates, um, a lot of really negative things in families.

Ali Abdaal 28:24 So, okay. So on the, on the concept of then anti-goals, um, sort of what I'm hearing is that, uh,

Ali Abdaal 28:31 something that I should be mindful of, and I guess [chuckles] by extension anyone listening to this, is that chasing success, generally monetary success, but also like, you know, I know a bunch of academics who just live for the academic publishing cycle and all that. Like, the, the- there is always a game that we're playing in the work domain to some degree. But chasing that at the detriment to, at the detriment of other things that are more important, like time and flow state and not having too much shit in the calendar and being able to spend time with your family and friends and stuff.

Ali Abdaal 29:01 Is, is, is that where this idea of anti-goals comes in? Like figuring out what are the things you want to avoid?

Andrew Wilkinson 29:06 Yeah. Um, so Charlie Munger, Warren Buffett's longtime business partner, he has this great saying. He says, um, uh... I think it's, it's someone else, but it's, "Show me where I'm going to die so I don't go there." So the idea would be you wanna instruct yourself of all the bad things that can happen, and then you can avoid it and you can invert. And he says it's much easier to think in reverse. It's hard for us to know what will make us happy. You know, I might imagine that owning a bigger house will make me happy, or, uh, buying a big screen TV will make me happy. But what I do know for a fact, everyone fundamentally knows what makes them unhappy. Um, you know, for me personally, I don't like, um, I don't like owing things to people. I like to be able to dictate my own day. I don't like, um, being overscheduled and having a busy calendar. Um, I don't wanna feel guilty and feel like I'm being a bad dad. Um, I don't like email. I hate being trapped in my email all day. And so about five or six years ago, Chris and I sat down and we made a list of what, what are all of our fears? What are, what are all the things we wanna avoid? How, how... If we were to des- design a most miserable life for us, what would that be? And then how do we avoid it? And so I've always found that has been a much easier way to, um, to do almost everything. So when we hire a CEO My favorite question is I say, "What are your fears? How does this go wrong? Let's list them all out." Well, one would be, um, you know, we don't structure your pay properly. Another one would be we don't... You don't hit your bonus. Another one is we have mismatched expectio-expectations for the business, or we're not aligned on strategy. Uh, maybe we just don't get along personally. And then we'll mitigate each of those. We'll sit down and we'll say, "Okay, how do we mitigate all of those things now instead of later?" And I find it's an incredibly valuable way to think. Uh, and it's, it's so simple, right? It's so freaking simple. What do you not like? Everybody knows that.

Ali Abdaal 31:07 To what extent do you think that there's this... You know, it's, it's easy to say this when you're already rich, but, like, if you're hustling to try and make it, or you're... You know, a lot of the people listening to this podcast and watching my channel are in their, like, twenties, early thirties, um, some very optimize-y pr-productivity focused teenagers as well. And a lot of people that I interview are all about, like, the work-life balance and stuff. But when you look at their own past, they were often very, very hustly and sacrificed their work-life balance to get to a certain point, and then once they get to that certain point, they start saying, "Hey, it's okay to say no to money," and, and all that sort of stuff. So d- I guess, do you feel like this is a privilege reserved for once you've already made it, by whatever definition that is? Or do you think actually this idea of anti-goals we can be... Like, someone who's fresh out of college, who's in their first job and maybe wants to start their first business, is it feasible for someone to, someone like that to, to employ this particular strategy?

Andrew Wilkinson 32:06 No, I think if you're aware of it. So, so for example, when I was running Metalab, the design agency that I started about twenty years ago, um, I realized that I did not like traveling. And so, um, I knew that, and I did travel. I had to. I had to run the business. But once I identified that I didn't like it, I tried to design around that. And the way that I designed around that was realizing that, well, hey, there's all these people I know who are wonderful, you know... Uh, my, my college roommate Mark, for example, is a wonderful guy, and everyone always likes him. He's just, uh, you know, super, super friendly. And I said, "I wonder if I could teach Mark to have these meetings for me." And so... And, and Mark had never really traveled, and so he was super excited to travel. He was getting paid a ton, and he was incredibly excited to do the thing that I hated. So what I've tried to do always is just design in reverse and say, "Okay, I hate this thing. How can I delegate it to someone who loves it?" The same is true often of accounting, legal work, administrative work. There's peoples whose, whose brains just work in a different way. And so I think that ultimately your job as an entrepreneur is to be Teflon for tasks. You wanna avoid all tasks that don't bring you joy. Um, and if you do that well, you'll be incredibly successful as a byproduct. So I think people should embrace this early. I think a lot of people get into this hustle culture, and they think that they need to be sleeping under their desk and, you know, working weekends. I'll, I'll confess, I have never worked more than a six-hour day probably at absolute most. Often I work a two to four-hour day, and I w- I've been doing that for my entire twenty-year career, right? I've just delegated really, really well. I've always known that if I take my foot off the gas, there's other people that are picking up the slack that I've delegated to. And that doesn't mean I'm not working hard. It means that I'm, I'm working the way I want to. And the only reason I was able to do that was because I didn't read all the business books, and I read Jason Fried's books, and Jason advocates for doing what you want, and I really tried to embrace that, and it worked.

Ali Abdaal 34:24 That's fun. Um, one of the [chuckles] one of the things you talk about, uh, in, in the book is how you suddenly started, like once, once you made some money, started looking at watches and, you know, like mechanical watches and all this sort of stuff. Like, w- yeah, this is a, a, a question that's always intrigued me because people sometimes ask me that, like, "Oh, why do you just have a basic Apple Watch?" And I'm like... I mean, I, I have never even tried to get into the world of watches. I know that lots of rich people collect watches for some reason. I know nothing about it, and I almost don't want to know anything about it [chuckles] because I know that, like, if I get into that world, it's j- it's just a dangerous, a dangerous place to be. Yeah. So what's, what's your relationship with, like, fancy watches and I guess other forms of luxury?

Andrew Wilkinson 35:09 So I think that, um... Think about when you meet... So, so, you know, you and I are both productivity nerds, and I'm assuming we like great gear.

Andrew Wilkinson 35:19 I've seen your videos on gear. I know you like it. I'm the same way. That's my favorite part of tech. Um, when you meet somebody and they're wearing an Android, a really shitty Android watch, or they're, you know, a Chinese knockoff Apple Watch, do you have a bit of judgment?

Ali Abdaal 35:37 No. No, not really. [chuckles] Yeah.

Andrew Wilkinson 35:40 I think, I think it's like, um, there's a, there's a unspoken status in every group, right? And so if you're... And let's say, let's, let's put a... Let's give a really simple example. When I text with someone and they have green bubbles, I'm like, "Oh, you know, oh my God. This is so annoying. I can't believe that they... You know, I have to use WhatsApp now. I can't believe they use Android." You know, I, I'm a snob, right? I'm an Apple, Apple person. The same is true of different circles. And so as your circle changes, let's say that your circle right now is all productivity nerds. But let's say that you, uh, it sounds like you're, you're really struggling with this question of do you expand your business? Do you get bigger? Do you go for wealth? And let's imagine that you do. Let's say that your friends start changing. Suddenly you're hanging out with people that are in finance in London, or they're in business in London, and let's say that- Um, they're all wearing really beautiful watches, you know, Patek Philippes and nice Omegas and Rolexes and stuff. They will judge you, which is ridiculous, just like me judging the person for having the green bubbles or the ugly Android watch. Silly. They'll judge you a tiny bit, and you'll notice all these beautiful watches. And what I've always found is that something called mimetic desire kicks in. So if all of your five best friends get into cars and they all start driving new Teslas, you're gonna suddenly have a desire to buy an electric car or a Tesla. It's just this natural thing that happens in groups and tribes. People start doing similar things. And so I think that if you join a tribe, you have to be very careful what tribe you join. If you join a tribe where status comes from fancy things and going to Saint-Tropez in a yacht or wearing a fancy watch or what cool conference you're invited to or what clothes you wear, um, then, you know, you get it-- yourself into trouble. And I think the, the important thing is to keep your distance from those kind of people. I think that if you surround yourself with people who don't care about those things, then you'll be fine. And so I've gone down a variety of different routes like this. I mean, one has been buying nice clothes, another is buying fancy watches, uh, you know, buying sports cars. I've bought a bunch of really ridiculous sports cars. Um, people-- I, I find billionaires talk about what jet they have, and they'll, they'll... You know, I remember, um, I was talking to this billionaire, uh, I, I won't, I won't say who, and, uh, he, he kind of was ignoring me, not very interested in talking to me. And then I said, uh, "Oh, I, you know, I flew, I flew down here," blah, blah, blah. And he goes, "Oh, what, what plane do you have?" And I said, "Oh, I just chartered, um, like an old Citation Sovereign," which was like a, you know, twenty-year-old plane. And he immediately lost interest, right? To him, if I'd said Gulfstream, he'd suddenly have this reverence for me and be excited. And so-- Which is absurd, right? So people just get-- They have all these weird ways of measuring your worth, and I, I just don't wanna spend time around people who measure worth and things like that because it's a path to misery. It's not made me happy in any way. Wearing a fancy watch does not help me meet my goals. It doesn't give me freedom. It doesn't help me connect with others. It doesn't help me be a good dad, and it doesn't help me give away money, right? So I really try and only spend money on things that actually deliver that. Uh, so an example of how I would use money in a positive way is I bought a cabin for our family. And every summer, I go up to the cabin, and I just check out of work, and it's this special place where it's like bait for family and friends. Everybody wants to go to this wonderful place, and we just get lost there in the summer. I think that's a wonderful use of money. I think that, um, caring about your time is a great way to spend money. I think that, you know, having somebody who can clean your house, uh, if you don't wanna do that is wonderful. Having somebody go shopping for you. Dude, those things are great. Um, but I'd say spending money on material possessions is the height of misery.

Ali Abdaal 39:49 Mm. Okay. So spending money to save time, very much agree. So spending money

Ali Abdaal 39:54 to create connection, definitely. Um, what other categories are there in which you found or your friends have found that spending money actually leads to more happiness?

Andrew Wilkinson 40:05 So I would say that spending money on, um... The only, the only rich person thing, in my opinion, uh, that's worth it, um, is, one, having a house with a view. So it could be a tiny little house, but having a view is one thing that psychologically, uh, there's a bunch of studies around this. I think that... At least my friend told me there are. I'll, uh, I'll try and find one. But apparently, there's studies that show that you never get sick of a view. And I have this-- I have a house on the water, and I love looking out. I see eagles and, uh, seals every single day. That's special to me. That, that's worth investing in, and I absolutely love that. So that, that's one nice perk of wealth, is being able to have a beautiful space and a, a calm environment and a view. Um, the other one is, um, I gotta say, like the only rich person thing that's worth it, private jets. That's one thing that is-- It sounds so ridiculous. I'm sure lots of people are laughing right now. But the idea that I can go to Los Angeles and have dinner with someone really interesting and be home to put my kids to bed is incredible. And it's the most absurd thing from a climate perspective. It's incredibly expensive, but that is the only thing that I've been able to identify that is worth it. And I've tried, you know, yachts, multiple houses, fancy clothes, watches, cars, all that stuff. Nothing. Um, but I would say that is very much worth it. And then the other is, um, you know, getting to meet interesting people. Um, so, you know, that could be traveling to them. The other would be, uh, I've flown people up to come and speak in Victoria, uh, and gotten to connect with them. That's how I met Shane Parrish. That's how I met, uh, Andrew Huberman. Um, just I love doing that. I love bringing interesting people to my hometown, exposing them to interesting people, and spending time with them. Um, and then the other one is hosting events. So every year I host an event called Interesting People, and it's, uh, about a hundred people that I invite, friends and new people that I just find interesting. Uh, and it, you know, costs a lot of money. It's a pain in the butt to put on, um, but I love doing it. And so those are great uses of money in my opinion.

Ali Abdaal 42:22 Okay. That's awesome. That very much vibes with, um, what I've, what I've heard from others as well. Um, one of the Just like what-- just, just sticking on this point just briefly, one of the, one of the, one of the things I highlight-- one of the lines I highlighted from your book is the, you know, you're, you're telling the story of where you and Chris are going out to meet a bunch of billionaires and stuff, and you say, "We had set out to glean some wisdom from these business titans, which we had, but had come away feeling they lived in a bottomless pit of envy." I wonder if you can expand on that a little bit. Like, what, what is it like inside their minds or, well, seemingly like inside the minds of a lot of these billionaires that you, that you met?

Andrew Wilkinson 43:04 I said it earlier, but they're all in competition. And it's kind of like, I think if you own the most beautiful house on the block, let's say all the other houses are run down and you own the most beautiful house, I think that you have a bit of a sense of where you're at, right? You have context. You go, "Okay, I'm at, I'm at... I've got the nicest house." The problem is that what these billionaires do is they do the equivalent of always upgrading neighborhoods and, um, and then seeing all these other beautiful houses. And so it's kind of like the, the point two percent competing with the point one percent, and they lose context of where they're at. They don't realize how incredible their lives are. And so you'll hear people say things like, um, "Oh, well, you know, his yacht has a helicopter pad. His yacht has a tennis court. Um, you know, that guy's got a, a global, uh, Bombardier Global jet," or whatever it is. And I, I don't, I don't see a lot of people looking down. Uh, I see them looking up at others and competing with one another. And don't get me wrong, I mean, I have so many wonderful friends who are, you know, billionaires, multi-billionaires. They're amazing people, and there's some lovely, happy, calm people that are doing wonderful things for the world. But I still think there's just this, um, this natural thing that happens where when they all congregate in one place and they don't have context, they compete to the same degree. What I was saying about watches is true with The Hamptons. Um, you know, if you go to The Hamptons, it's every house is worth 100 million or more in, in certain areas, obviously, and they're all competing for who has the most toys and who has the fanciest house. I'll never forget, um, I was, I was in The Hamptons, and there's this famous house that some guy spent, like, $300 million building in the '80s. And one of the, one of the guys in, in his, like, $300 million house-- or sorry, $100 million house was like, "Can you believe it? Like, that's crazy." And I was like, "Oh my God. Like, dude, you, you know, people in glass houses shouldn't throw stones. You have a $100 million house." But he doesn't have context. To him, it's this ridiculous thing. Um, so yeah, it's just this bizarre world, and, uh, I think it's human nature. I, I don't, I don't judge them, to be honest. I really don't. I understand how it happens. Uh, and this is why it's important to stay out of places like that. It's an echo chamber.

Ali Abdaal 45:41 Okay. So what I'm taking away from this is in my pursuit of growing my business, which, you know, s-sometimes there are mo-- I think most of the time I view it

Ali Abdaal 45:54 as I, I have a fa-fairly healthy relationship with it, which is sort of viewing it kind of like, kind of, kind of like playing a video game. It's sort of just like, you know, going from 5 million to 10 million in revenue. Yeah, it's not really gonna change anything in my life. But you know what? It's kind of fun. It's fun to play the video game at a different level as long as I-- as long as doing so does not lead to me having to do things that I actually don't wanna do. And as long as I'm, you know, just chilling and reading stuff and speaking to cool people and reading books and making videos every now and then and doing talks, 'cause that's fun, then I'm in my, I'm in my happy place. And great if someone on our team wants to whip up a product or if I happen to wanna work with a friend to build some software, fantastic. Like, just good vibes, good vibes all around. But it sounds like kind of the trying, try-trying to chase the 10 million, the 25, the 50, whatever that is, for the sake of the money itself is [chuckles] probably a pretty terrible idea.

Andrew Wilkinson 46:49 Well, I think you're already rich, and you don't realize it. I think you already have 25 million. In a net worth statement, you do, right? So let's say your business does 5 million of revenue, $2 million of profit. Um, if you value it, let's say it's growing at 20, 30% a year. I think that business would be worth between 20 and 30 million. Uh, now add on all the optionality of all the other things you can do, maybe more. And now I know that's made up, uh, but most things are made up. Even the stock market is made up in terms of valuation. It's just people kind of guessing what it's worth. And unless you sell it, it's not worth that. Um, and so I, I think you're probably already there, and that's something I didn't really get. Um, you know, I, I think I would have relaxed a little bit more. I think that people like you and me who run cash flow businesses, uh, as I said earlier, they only know what's in the bank, and so they think, "Well, that's, that's my net worth." But you're, you're equivalent to somebody who own-- has a 25 or even a $50 million business, may-maybe even more. So I wouldn't, I wouldn't feel like you're a slouch. And in, in fact, I'm very jealous of what you have. You have a business where you're doing what you wanna do when you wanna do it, it sounds like, and you don't really have any direct reports. The business is abstracted away. Um, and, and it's funny, like, I think the grass is always greener. Maybe you look at me and you say, "Well, Andrew is involved in AeroPress, and, you know, he's got his Yerba Mate company, and he's g- doing the James Clear stuff." But I... All-- I would give almost anything just to focus on one thing every day, you know? Uh, and I'm trying to go your direction. I'm actually trying to focus more on writing and speaking and interviewing people and events. That, that's where I'm finding I'm getting the most satisfaction out of my life. Um, so be careful what you wish for, 'cause, I mean, you read my book. You're almost done it sounds like. I mean, there's a lot of weird downsides

Ali Abdaal 48:47 Interesting. Yeah. So, um, I did a, I had a really fun interview with, uh, Ryan Holiday a few years ago. I think this was when our business had just broken about like one million in, in revenue, in, in, in annual revenue. And, you know, I was-- As, as the business has grown, because I'm in this personal development space and been following Jason Fried's and DHH's stuff for like a decade and all, all that stuff, it's like I've sort of drunk the Kool-Aid of there is such a thing as enough. And so I asked Ryan Holiday this question, and he said, he s- he said something interesting. He said that, um, you know, every now and then he gets the desire when he hangs out with his real estate friends to get into real estate. He thinks, "Oh, you know, they're making all this money in real estate." And then after a while, he realizes that all of his real estate friends would just love to sit in a library and write self-help books. And he's like, "Huh, I've got the life that these guys kind of want." So, hmm, let's ju- let's just keep that in mind because it's, it's so easy to forget, right? It's so easy to... You know, I look at what you've done and I'm like, "Oh, man, tiny.com, that must've been an expensive fricking domain name. Nice. So that's cool. It's got-- You've got these like forty companies under it. That's like, it's really cool, and you can do whatever you want." And like, I guess [chuckles] you know, Tim Urban has that blog post, which is, you know, life is a picture, but you live in a pixel, and the happiness comes from what you're actually doing in the day-to-day. And if the day-to-day is good, it's like drinking the same Guinness, reading similar books.

Andrew Wilkinson 50:07 There's a Pascal quote I love, which is, "All of man's miseries arise from an inability to sit quietly in a room by oneself." And I think it's so true. I think that, um, if you can sit quietly in a room by yourself and be content, that's a good life at the end of the day. What's fascinating about wealth too is that it has a cost. So think about, um... I'll, I'll never forget, I worked with somebody, I won't say who, but I worked with somebody who is one of the wealthiest people in the world about ten years ago while I was still at Metalab, and we were working on a project with them, and there was a school shooting, a really bad school shooting in the United States. And I read it, and I, yeah, I felt bad, and it struck me, and then I moved on with my day, and I met with this person, and they were incredibly upset. They were much more upset than anyone else that I had spoken to about it. And the reason that they were upset was because they were working on gun policy. That was one of their passions and their foundation. And what happens when you have a lot of money is that you feel that you can impact the world, right? Right now, if you have just enough for yourself and your family, and maybe you take care of your f- maybe a couple friends or something like that, you don't feel a responsibility when something bad happens in the world. You, you think it's terrible. When you're a, you know, a multi-billionaire, when you're one of the wealthiest people in the world, and you actually do have the power to talk to world governments, to fund projects, to make things happen, and a bad thing ha- happens, y- I think you feel it in a very different way, and I think there's a lot of responsibility that comes along with it. And I certainly feel that. I'm, I'm nowhere, I'm nowhere near as wealthy as some of these people I'm talking about, um, but I feel this burden of the money, of giving it away. So think about, you know, I run my business, and then I also have to figure out how to give the money away in my foundation. That's a whole second job that I've now gotta do. And again, it's-- so it's-- The money has a weight. I've gotta figure out how to manage it. I've gotta figure out how to, um, how to give it away. I've gotta deal with my children. There's all these legal structures. There's liabilities. Uh, it, it's, it's like it's a burden. A-and again, I don't wanna, like, m- cry no tears for me. Uh, it's not, not-- It's a f- the ultimate first world problem. But it, it, you know, you gotta ask yourself a fundamental question of is it better to be you or me? And I think it's way better to be you. The only thing I don't like about, um, what you've got is that you are tied to it. So let's say that you wake up one day, and you decide you wanna go and play violin, and you don't wanna do YouTube anymore. Well, there goes your business, um, one. And then two, if you keep getting famous, I think your life can get bad. So I'm, I don't know. I'm curious to ask you actually, what-- how often do you get recognized?

Ali Abdaal 53:04 On average, like once or twice a day if I'm walking around London. If I don't have my glasses on, it's less. But if I have my glasses on... It's, it's almost like a disguise where I try not to wear my glasses in public. Um, but i- I, I feel like it's a good level of fame. But then, you know, I read Tim Ferriss' blog posts and, um, you know, speak to other friends who are at similar kind of follower counts who have experienced like stalkers and people coming after them and the press going after them because... Like, I'm not main- Like, like the press doesn't care about me. I'm like niche famous on the internet.

Andrew Wilkinson 53:39 Well, you're not, you're not political in any way either.

Ali Abdaal 53:41 Exactly. [chuckles] So it's, it's, it seems like a good level. But this is something that I've been talking about with, um, yeah, with my partner quite a lot in terms of when we have kids, what-- Like, you know, I'm fairly open about the fact that our business does five million revenue a year. It's like it's nothing compared to, to com- compared to what you guys do, but, like, I'm fairly open about it, and that is still a big number for potentially, that potentially paints a target on my back. I'm fairly open about my personal life. People know I live in London. Uh, there's this sense of if I continue on this current career trajectory, it will res- and it goes well, it will result in me getting more famous. And I feel like I'm already at like a very strong sweet spot [chuckles] of fame. And so th- there's a sense of like my personal mission is to just continuing, to continue to do the content thing and to write more books and give talks and stuff. But then the fame is gonna trend into sort of downside territory. And I'm not, I'm, I'm actually n-not sure how to, how to navigate that. Any, any tips? [chuckles]

Andrew Wilkinson 54:47 Well, Tim Ferriss has that, that post I think you're alluding to where he talks about somebody Um, was having a psychotic break and was obsessed with him and sent him an, a video of them killing themselves, I believe. Um, and he's had stalkers and all sorts of other stuff. So you're right, and y-you think about it as Tim Ferriss is a pretty harmless guy. I mean, he's doing productivity in life and philosophy, best practices. Um, he's not controversial, and he's experiencing that. And I think when I speak to people like Tim, they often say, "I just wish my face wasn't recognizable." You know, it's one thing to have your voice recognizable, but your face, and I think being on YouTube is interesting. Um, I... In the book, I share an anecdote where... So I, I was really anonymous until about 2020. You know, I was known kind of in the design world, but I started posting on Twitter more c- over COVID. I was kind of bored, and then I started going on My First Million, which when I started going on, it was a tiny little podcast. I just was friends with Sam and Sean, and then it blew up, and all of a sudden I started getting recognized. I'd be in a cafe, and someone would walk up to me and say, "I loved your podcast. Can we have coffee?" And I'm very extroverted, so I, I really loved that. It was one of my... I, I... It's still one of my favorite things when people come say hello to me 'cause I get to meet interesting people I wouldn't meet otherwise. Um, but there's a story I share in the book where, um, one day I, I live on the water, um, like I said, and I have a private beach, and no one can get to the private beach other than by boat. And I open my back door and have a coffee, and I'm walking out onto my patio, and there's a guy standing there with a sign on the beach, and it says, "15 minutes of your time." And so I, I yell to the guy. I'm kind of nervous, and I say, "Hey, um, can I help you?" And he says, "I wanna pitch you my business." Um, and I said, "Oh, okay." Like, "I really appreciate the hustle, but, you know, just send me an email. Don't come to my house. That makes me a bit uncomfortable." And so, um, I give him my email, and I promptly go and lock the door and get my dog spray and nervously wait for the guy to leave. And, uh, I get an email from him, and I look at the email, and it looks innocuous, and I think, "Okay, this guy is just, um, an entrepreneur who took hustle too far," right? You know, he just miscalibrated a little bit. That's okay. Um, and I don't respond to his email. The next morning, I get in my car, and I drive down my driveway, and I open my gate, and at the end... Oh, right at the end of my gate is that guy, and he's standing there with his fists bared, and he looks angry. And I say, "What, what are you doing here?" And he goes, "You didn't respond to my email," and he's angry. And I just... I mean, I bolted my car, um, you know, was totally freaked out. And so that's a very... That's an example of the sorts of weird things that can start to happen as you get more exposure, and I have way less exposure than you. I have way less exposure than Tim Ferriss. And so it is one of those things like, you know, Bill Murray's got this great quote: "If you think you wanna be famous, try being rich first," right? I, I don't... I'm struggling with this too because I wrote this book because it's meaningful to me, and I wanted to share my story, and I wanted to write, and I love being known by people. I love meeting new people and using that to meet interesting people. Um, but it has a lot of downside as well. I think it's a really interesting question.

Ali Abdaal 58:23 Yeah, when I read that in the book, I was like, "Holy, holy shit." [chuckles] Felt that.

Andrew Wilkinson 58:26 Yeah, it was really freaky.

Ali Abdaal 58:29 You've hit the nail on the head in that I have a, a great thing going in that I can do what I want and make content about things I care about, but have also hit the nail on the head on I am tied to this right now. The business has no enterprise value distinct from my own, uh, me showing up and sitting in the seat. And I was chatting to, you know, Chris Williamson, who you might also know. He's, he's kind of going through the same thing of recognizing that, yeah, you know, the podcast is big, but it, it requires him to sit in the seat three times a week and do the interviews, which is fine for now while it's fun, but, like, we can both foresee a world in which, like, 10 years from now, 20 years from now, maybe it's gonna be less fun doing videos or doing podcasts with the same frequency that we're currently doing. And so that's partly where, you know, my goal for the ne- uh, my kind of work-themed goal is, yeah, you know, g- g- grow the business from five to 10 mil, but also kind of try and dissociate the business as a entity and it, and sort of the reliance of the business on me showing up and continuing to churn out YouTube videos and podcasts.

Andrew Wilkinson 59:34 Well, I think that's the best argument for acquiring or starting businesses that benefit from your brand, right? Like, what's something that people look to you for, and then how can you sell them a product that has high integrity there? I mean, again, it'll come with cost. It'll have financial cost to do so. It'll have management cost. There's, there's stress that'll come from it. But I do think having a backup plan... I mean, I-- my goal is to be unbreakable financially. So my goal is that, um, every single business I own could fail, and I would still have enough money outside of that in conservative investments that I'd be okay. And then in a worst-case scenario, I even wanna have, like, a second passport in New Zealand with $500,000 sitting in New Zealand, right? Like I, I am... There's a great quote by Andy Grove, "Only the paranoid survive." I have that in me, and so I'm like a prepper, but not in like the, you know, I want a gun and a backpack kind of way. I want, uh... I'm a financial prepper, and that's how I, I got here. And I think you would be wise to have either a business or, I mean, an easier option would literally just be that you say you're gonna take a million dollars a year, and you're gonna keep putting it into a bunch of dividend-ending stocks, and those divid- you know, it'll dividend 6%. And once you get to a point where you pay for your lifestyle, well, then you have that freedom. The problem is you might get attached to your lifestyle. You might say, "Well, I'm gonna have kids, and I bought, um, you know, a beautiful flat in London, uh, 'cause I wanted to... I wanted to do something with the money. I've worked so hard. I wanna do something with the money, so I bought a town home." And, uh, suddenly your monthly expenses go from 10,000 to 40,000 a month. Now your old dividend-ending portfolio isn't enough. Never enough, right? And, you know, ad nauseam repeat.

Ali Abdaal 1:01:27 Yeah, mate, that's literally [chuckles] literally the struggle right now.

Andrew Wilkinson 1:01:31 Yeah.

Ali Abdaal 1:01:31 It's such a, it's such a first world problem. But-

Andrew Wilkinson 1:01:33 It's hilarious.

Ali Abdaal 1:01:34 Yeah. [chuckles]

Andrew Wilkinson 1:01:35 But it's, but it's applicable to everybody. I mean-

Ali Abdaal 1:01:37 Yeah

Andrew Wilkinson 1:01:37 ... it's-- I, I talk to people where they're, you know, they're making 30K a year, and they say, "If I could just make 60K a year." Um, you know, it's just so universal.

Ali Abdaal 1:01:47 Yeah.

Andrew Wilkinson 1:01:47 The human condition is, is to be ungrateful.

Ali Abdaal 1:01:50 Yeah. There's always, always more. And, you know, ju- ju- just a few years ago, I would g- I would get on a plane, and I would scoff at the people who were, who were flying business class, thinking, "Oh, these people, they're so unenlightened. They don't, they don't know that it's the same, it's the same airplane. Clearly, they, they don't realize it's getting to the same destination. They've just been, you know, swindled by the marketing." And now I get on a plane, and I turn left, and I'm like, "Oh, this is nice." [chuckles] Uh.

Andrew Wilkinson 1:02:22 Totally.

Ali Abdaal 1:02:23 Like, "Ugh, ugh."

Andrew Wilkinson 1:02:24 But there's, there's a-- I love, um... Tim Ferriss, about five years ago, produced a, um, audiobook called, I think it's Letters to Euclius. I forget who the, the philosopher is. But there is this whole section about practicing poverty. So Tim Ferriss talked about, you know, um, once every couple months, sleep on the floor for a night and eat bean-- eat rice and beans and dress shabbily. And I, I do find, uh, I don't do that exactly, but I do find roughing it or h- just, you know, having, having experiences where you, you know, you go traveling, you stay in a horrible hotel, you fly economy. Like, I do that. I do that a couple times a year, and it always is a nice reminder of, "Okay, I'm, I'm fine," right? We get so attached to these silly little luxuries like that. Um, but yeah, it is, it is ridiculous.

Ali Abdaal 1:03:16 It's, it's ridiculous. I'm sure people listening to this will be, will be chuckling to themselves.

Andrew Wilkinson 1:03:19 They'll barf. Yeah.

Ali Abdaal 1:03:20 They'll barf.

Andrew Wilkinson 1:03:20 They'll barf. Yeah.

Ali Abdaal 1:03:21 Be incensed in the comments.

Andrew Wilkinson 1:03:22 Yeah.

Ali Abdaal 1:03:22 The, the other one I realized recently, so, um, I, I have a, a Tesla Model 3, and I've been thinking, "Oh, you know, at some point be ni-" I went to LA, and I was in my friend's Porsche Taycan, and I was like, "Ooh, this is a nice little Porsche Taycan. At some point, maybe I'd like to get a Porsche Taycan." And then I moved back to London for a bit because my mom was having work done in the bathroom, and she needed someone to supervise the builders. So it's like, cool, I'm chilling in my mom's house in a tiny-ass bedroom where I sleep and make videos from the same, like from the same desk. And I'm like, "This is not so bad. It's actually, actually kind of nice," except the drilling in the background. It was kind of annoying. And then, you know, I, I accidentally, like, crashed my car or something, like in a parking lot, so it was, it was out of action. And so we got this courtesy car, which is some tiny-ass, like, Peugeot 5,000-pound car. And driving that car was an amazing experience because I realized after like 30 seconds, driving a 5,000-pound car feels exactly the same as driving a 50,000-pound car. And I'm pretty sure [chuckles] that will be true for a 500,000-pound car as well. And I was like, "Oh," you know, that thing of, is this the condition I so feared? I'm like, "Actually-

Andrew Wilkinson 1:04:26 Totally.

Ali Abdaal 1:04:27 Yeah. It's great. [chuckles]

Andrew Wilkinson 1:04:27 No. I, I have the exact same experience, and I would say that, um, upgrades-- I mean, there's, there's, there's intrinsic upgrades. So for example, when you upgrade, um, software, right? Let's say you go from, uh, you, you have a tool you use, and it gets way better. Uh, I love that. That's a really exciting thing, and I think it's legitimately useful. And I'd argue that with a car, unless it's giving you additional utility or something that you really desire, you're just gonna get accustomed to it. It's just hedonic adaption. So don't get me wrong. I'm the same way. I, I, um, you know, I bought a Porsche Turbo, uh, what was it? Two years ago. And I, I sold it. I was like, "This is only negative," right? When people see me, they think I'm an asshole.

Ali Abdaal 1:05:11 [chuckles]

Andrew Wilkinson 1:05:12 It's loud. It's uncomfortable. Uh, it is not within my values, right? And I ended up just going back to a Tesla, and I feel very comfortable in the Tesla, and I blend in. And for me, what I actually like about it is I like the software. I, I like the design of it, and I can actually-- I feel like that's something that I intrinsically appreciate. Um, but yeah, I mean, it's just a, it's a slippery slope. Now, the interesting-- My, my business partner Chris talks about this idea of grandiose humility. So that's when you see someone who's a billionaire, and they wear a Casio watch, and they drive a Honda Odyssey. You gotta be really careful not to become one of those people because... And not to say it's negative to do so. But if you've, if you are grandiose about your humility, where you say, "Well, I'm a billionaire, but I wear a Casio," and you say that to people, or you, you, um, judge others based on that or whatever, that can also be a very toxic trait, in my opinion. So it's, it's kind of an interesting delicate balance. How do you be authentic to your true wants without being flashy and ridiculous? And how do you also remind yourself you don't need those things?

Ali Abdaal 1:06:19 Yeah. I really like the stoic, um, idea. I think-- I'm sure the stoics themselves didn't, didn't come up with this, but in William Irvine's book, The Guide to the Good Life, and I think also in Derren Brown's book, Happy, they talk about the idea of preferred indifference. Like, yeah, flying business class, you know, I prefer it, but ultimately, business or economy, it's like, like ultimately I'm indifferent to it. At least that's what I try and tell myself. Being in a Tesla versus being in a cheaper car, eh, preferred but indifferent at the end of the day. I try and have that sort of arm's length relationship with like fancy things. One of the notes that I like from my little like podcast prep sheet is this idea of the personal monopoly. And like, okay, so if you were, if you were my m- business mentor, Andrew, [chuckles] and I had a sign outside of your house, even though I wouldn't do that. I was like, "Andrew, help me, help, help, help me build a... Help me like have a-- build a durable business that is not reliant on me continuing to churn out videos," where would your mind go? Would it be software? Would it be D2C? Would it be like physical goods, like an AeroPress for productivity? Like what are the sorts of things someone in my position should be considering when it comes to trying to de-risk the business from the personal brand stuff?

Andrew Wilkinson 1:07:29 Yeah. So, um, one of the most important things is learning to discern what a good business is and what a bad business is, what's easy and what's hard. And the way I learned this was by starting a lot of really bad businesses. So what I did is I got lucky. I went... I started a web design agency, Metalab, and I got so lucky. I had the right skill set. Um, there was no operating startup costs. I could just get moving. It was me and an, an internet connection. Uh, and I happened to stumble into all these great people that I worked with. Um, and before I knew it, I was making a ton of money. So I thought I was a genius. I thought I was a business genius. And I started making, um, profit, and I said, "Okay, well, I don't understand stocks and real estate or investing, so what I'm gonna do instead is I'm gonna start more businesses. And since I'm such a great entrepreneur, I'm sure I'll be successful." And so I started a skincare company. I lost all my money. I started a pizzeria. I lost all my money. I started a cat furniture company. I lost every cent. Uh, I, I have-- I could name, like, 10 or 15 different businesses where I failed. And with each of those, I learned something about a different business model and why it's hard. And I-- Charlie Munger has that quote that you referenced earlier about it's much better to learn from other people's mistakes, much less costly to read about their mistakes and avoid those. It's really hard to do that. I think that everybody has hubris, and everybody says, "Well, I'll be different." You know, it's like 80% of people think they're a better than average driver. Uh, obviously, that can't be the case. And basically, what you end up having to do is stick forks into electrical sockets and try a lot of different things. And I think what you have to be careful about is not walking into the gym and being the guy who says, "I'm gonna deadlift three hundred pounds on day one," right? You're gonna hurt your back. And so ultimately, um, what, what that resulted in was me, um, trying to understand, okay, what worked about Metalab? Why was that a good business? Um, and how can I recreate that? And as I began to, um, as I learned more and more, I realized that ultimately, there's only a few things that make a business exceptional. Um, two specifically on the internet generally work. One is a network effect. And so that means, um, you know, if you're using a social network, you wanna be on the one where everyone's at. You don't wanna be on a social network if your friends aren't there. And so Facebook, you know, the more people that join Facebook, the stronger the network gets, the m- the more people join because that's where their friends are. That's very hard to compete with. So we own two businesses that have that. We have Dribbble, which is the largest social network for designers, and then we also have Letterboxd, which is the largest social network for film buffs. Um, now those are really hard to compete with. If you took a hundred million dollars and I said, "Go recreate Letterboxd and compete with us," it would be really hard for you to get going because everyone would say, "Well, you know, yours seem really... it seems really cool. It might be better designed or faster or have more features, but all my friends are on Letterboxd and all my reviews are on Letterboxd. I'm not coming over." So that's one. The other is a brand moat. And what I mean by that is, let's say that you walk into a restaurant and you say, "I'll have a Coke." And they say, uh, "We don't have Coke. We don't have Pepsi. We have, uh, Acme Cola." You, you're not gonna wanna pay for that. You, you want Coke, right? People expect Coke, and they're willing to pay a premium. Even though you can create Acme Cola and it tastes great and everyone agrees, they've done studies and they show that it tastes... it's preferred to Coke, people want Coke, and that is a brand moat. And that same thing can be true, um, with, you know, business like AeroPress, where, um, you know, there can be infinite coffee makers. People can copy it. At the end of the day, there's something to that name. An example of that would be Kleenex. So Kleenex is a facial tissue, but it's the, it's the verb. It's, or it's the, it's the word. Um, it's a category-defining brand. So something like that. And I think that what's wonderful about influencers is that people have parasocial relationships with you that can't be recreated. A parasocial relationship is a relationship that's one way, where they feel they have a relationship, they know you, but you don't know them. You've never spoken to them. And so if you think about it, let's say that, um, I like and trust Andrew Huberman, and I listen to Huberman Lab, and that's where I get my health information. That can't be competed with. He is unique. His personality is unique. He looks unique.

Andrew Wilkinson 1:12:03 And until AI can create virtual people that are far more engaging than normal people, which might happen, I don't know, um, you have what I would call a personal monopoly. You have a monopoly over you and your personal brand, and I think that's really, really interesting. You know, the downside is, like we talked about, you have to get on camera to operate your business. But at the end of the day, um, no one can compete with you other than just trying to create other productivity content. But if I've, if I have a three-year parasocial relationship with you, uh, that's pretty incredible as a moat. Like, I think, um, I, I met Tim Ferriss about two years ago, and I'd felt like I'd known him for decades because I did. I'd read his books. I'd listened to hundreds of hours of interviews. Him and Kevin Rose have all these inside jokes that I knew. Very weird, right? It must be bizarre for him to meet me, and then I'm, I, I'm, I'm like, "Hey, we're friends," and he doesn't know me. Uh, you've got that with hundreds of thousands or millions of people.

Ali Abdaal 1:13:03 Hmm. Yeah. It's very true. It's just like the question of how to kind of convert that into... I guess the thing that I defaulted to in this world was, oh, let's just make an online course and sell the online course. And great. It's, it's taken our business to, like, five million a year. Um, but then I met Sahil Bloom about, uh, a y- two... a year ago, two years ago for the first time, and he came in, he came to London. We did a pod. We had dinner. And I realized his monetization strategy was recognizing he had all this social proof and personal monopoly And instead of thinking, "Let me sell an online course," he said, "Let me build or buy an agency." Because people were asking me, "How do you grow on YouTube?" And I thought, "Let's make a course." People were asking him, "How do you grow an email?" And he decided, "Let me buy or build an agency and charge high ticket prices." And it's just my courses

Ali Abdaal 1:13:56 business is I-- Sure, I've got a, I've got a bigger audience than him, but he's making way more money than I am, and in seemingly a more durable way because the agencies are not relying, relying on him to be lead gen. He posts, posts one tweet, and then they've got, like, the wait list sorted for the next, like, three years. And that's just, like, a different vehicle. I'm just like, "Bloody hell, I've been on this courses vehicle, but actually there's this whole, like, freaking agency vehicle." And so I've been on, I've been on a bit of a mission to see, like, okay, what else am I missing? Like, what are the vehicles out there? And in, like, in your view, what are the sensible vehicles that someone like me should be thinking about?

Andrew Wilkinson 1:14:27 Well, this is, um... So my friend Sean Puri from My First Million, um, you know, they were, they were selling ads. They were making quite a bit of money from ads. Um, and he was doing some venture investing and some other stuff, but ultimately, I think he just wanted cash flow. He wanted to be making real money every year, and venture doesn't really achieve that. And ads are good, but they can only give you so much, and it's non-recurring. You're not building enterprise value. There's nothing you can sell in the future. And so he went-- he did something really smart. Um, he bought, I believe, ten percent of a company called Shepherd, and what they do is they recruit people in the Philippines and Latin America to work as assistants and salespeople and all sorts of other stuff in, um, in North-- for North American companies mostly. And he has the perfect audience for that. He's got all these scrappy entrepreneurs who wanna outsource, and so he was able to connect what's a thing that people ask him for, um, and he's gonna own part of that business and just recommend it. And all he did was buy ten percent and then start dropping it on My First Million, talking about his investment, why he made it, why he loves the business, plugging it. And I believe, 'cause we are familiar with some of the numbers, he has grown that business in a stagger- to a staggering degree, and he hasn't had to deal with any of the operating complexity. So he bought ten percent, you know, he tripled or quadrupled the value of the business, and then I don't know what his plans are now, but he's getting dividends, and he can sell something in the future. And I think that's, um, if all the influencers only knew how much value they were adding to all the brands they're advertising, they would realize they're in the wrong business. I mean, someone like Squarespace has paid a lot of money for advertisement on podcasts over the last ten years, but the founder, uh, Anthony, has made hundreds of millions or billions of dollars from those podcast ads,

Andrew Wilkinson 1:16:20 and he probably only paid twenty million dollars total, um, for all the fees. So I think that, um, ultimately, I think it's really smart for influencers to start building businesses that are durable and separate from them, whether that's as a minority shareholder or as a, um, an, you know, a whole, uh, majority-owned business.

Ali Abdaal 1:16:41 I just had a bit of a sort of d-d- uh, a bit of a, a dopamine spike as you were saying that, because one thing I've always been thinking is like, you know, a company might pay us twenty K to advertise in a YouTube video. That's, like, cool. I've always been saying to my team that, like, if they're paying us twenty K, they're definitely getting more than twenty K of value. So surely, if we just plugged our own product, we could make that... we could make more than twenty K of value.

Andrew Wilkinson 1:17:05 Yeah.

Ali Abdaal 1:17:05 But then we tried this, and we generate less than twenty K of sales for an online course if we plug it in a video, unless it's a very, very salesy plug, and but I don't like doing that. I like to do a casual mention. But what I haven't been taking into account is that it's not actually twenty K of cash flow that they're, what they're thinking about. What they care about is enterprise value, which is a massive multiple [chuckles] a massive multiple. And so I've just, I've just been playing, playing the wrong game. [laughs]

Andrew Wilkinson 1:17:28 Yeah. It's not only that, but it's they, they make the money back. Let's, let's say that they're selling SaaS software. So, um, when I was running Flow, we had, we had a productivity tool years ago. I might buy an ad, and I'd pay twenty K, and then I'd get maybe fifteen K back in the first six months. But what you forget is that that customer stays with me for five years. You know, some of them do at least. And so the actual lifetime value of a customer is very, very significant. So let's say that you're selling, um, insurance. Let's say it's monthly insurance for your computer, what-whatever. I'm just making stuff up. And they pay ten bucks a month. Well, if I pay twenty, you know, thirty, forty bucks for that customer, that's okay because they'll probably keep coming for years. And then, like you said, the enterprise value of the business is so much bigger. So I think, like, with Huberman, we, you know, we had advertised on Huberman, and we realized there was a lot of value, and we went to them, we said, "Look, we're happy to keep advertising, but at the end of the day, you should really own some of these brands." That's why we partnered with him to, um, to buy Matina, the yerba mate business. Um, and I think, I think that's, that's just an incredible deal. When you... One of the biggest costs in a business is customer acquisition, and you solve that, right? Like, you are the dream business partner to somebody because their P&L is like, for every hundred dollars they make, they spend thirty or forty dollars on customer acquisition and marketing. So by partnering with you, suddenly their P&L goes down very-- their expenses go down significantly. They don't have to raise money, uh, and the enterprise value of the business is significantly larger. It's what I call one plus one equals a hundred.

Ali Abdaal 1:19:08 Mm. Okay. While, while I have you here, I'm gonna mine you for some more advice. So, um, I was very intrigued when James put out his tweet, or was it you? Was it James? I follow you both. I can't tell. Uh, about, about the Atoms app, and it was, it was interesting that the ownership split was sixty-forty in his favor. So I have a business partner on software, and we're doing two software ventures, and the deal that we decided based on various factors before I heard about the James Clear thing was twenty percent me, twenty percent him, and then, like, you know, early employees, he, he's bullish on really incentivizing them with lots of equity, so he can get, like, really pro people. He's, like, a third-time founder, so he kinda gets it. And I was like, "Yeah, that seem, seem reasonable." But then I looked at the James Clear thing, I was like, "Whoa, that's 60%. Sixty/40." Uh, what's your sense of what should... How should a, like, let's say, a software deal be structured if, for example, I was partnering with a business partner and we, we were building productivity software, which is I guess is what you guys, you guys have done with James?

Andrew Wilkinson 1:20:07 Well, I think, um, it ultimately comes down to who can add the most value and in what way can they do that. And I think that, um, if, if a smaller influencer came to me and said they wanted to do it, you know, maybe I would have struck a different deal. I had so much faith in James abil- James' ability to promote it via his massive audience, that I was happy to ride shotgun, and I had enough people vouch for him in my network who knew him and said he was a good guy and straightforward, and we'd known each other for a while. So I was willing, in that instance, to, to take 40%, which for me is usually low. I, I like to own 60 to 100% of most things 'cause I'm a bit of a control freak, and I like to actually be able to implement what I want. Um, so I would say there's no rules. I mean, if you guys made the decision to give a bunch of equity up to employees, I think that's wonderful. My only concern would be those employees can outvote you and take over the company if they own 60%. Um, so you might, might be in a bit of a weird position. The other risk there is that a lot of those early employees might be really valuable in the beginning and not in year three or year five. And, and so it sucks. Imagine if you started a restaurant and you gave equity to, um, the general manager that was there for the first two years, but then he leaves and the restaurant goes on for 30 years, and forever he gets 10% of the profits of the restaurant. Does that make sense? No. And so I think equity is something that has to be thought about incredibly carefully. Um, and I like to give equity to people who risk things. So I'll, I'll say like, "Look, I'm risking things 'cause I'm starting the business, I'm putting in all the money, I'm signing all the credit agreements," blah, blah, blah. "And if you're willing to take a risk as well, then I'll give you equity." So if somebody's, um, salary is two hundred thousand usually, I'll say, "Okay, would you be willing to take a hundred and forty? And then I'll give you 5% of the company," or whatever it is. Um, so I, there's no, there's no rules. You can do it a million different ways. If you talk to 10 different people, you'll hear 10 different ways of doing it. Um, but I, I like to be thoughtful about control, and you gotta remember how much value you're bringing. You are bringing a profound amount of value because forever, as long as your name is attached to it and you're marketing it, you are giving them a insane amount of value because they don't have to spend money on marketing. If I was you, I'd try and do something where you're, you're owning a lot of it, because i-unless that business gets to a big scale, the 20% won't deliver that much cash flow to you.

Ali Abdaal 1:22:45 Hmm. Yeah. And I'm, I... And I should care about cash flow rather than potential, uh, exit value?

Andrew Wilkinson 1:22:52 For now. I think, um, I don't really think about exit personally, um, because exit usually comes along with lots of golden handcuffs and complexities, and I prefer just to own a great business forever. But the only re- in my opinion, the only reason to sell a business is there's two reasons. One is you think that that business is going to, uh, be disrupted or something or get worse over the long term. Um, so that's like if you own a newspaper in 1999, you might wanna sell. Um, and then two is that there's someone who's irrational, who's willing to pay too much for it. If someone comes along and says, you know, you, you, you look at this and you go, "Wow, over the next 10 or 20 years, I can harvest X amount," let's say, $10 million out of this business, and someone comes along and offers you 30, well, it's probably pretty logical to sell.

Ali Abdaal 1:23:40 All right. Interesting. 'Cause I guess a lot of people play the game of entrepreneurship with this whole like build it and then sell it model, and I hadn't really questioned that when it came to the software stuff. Yeah.

Andrew Wilkinson 1:23:53 It's the dumbest. I-in my opinion, it's a horrible way to live. I, I know so many of these people who they're rich on paper. There's these founders of like unicorn companies, and they've been living like paupers for 10 years, and they're desperate to sell their business because then they can live a good life. I took a different approach. I took the Jason Fried, Fried approach of h- run a profitable business, pay yourself well, and live a good life the entire time instead of deferring gratification for 10 years and then hoping you can sell it for some silly number.

Ali Abdaal 1:24:23 Yeah.

Andrew Wilkinson 1:24:23 Um, I like, I like cash flow. I've found that the best way to feel rich is to have cash flow. Um, the people who feel poor, y-you know, it's-- there's no point in having a big net worth number on paper if it doesn't actually equal money in the bank at some point.

Ali Abdaal 1:24:40 Hmm. So the businesses, these 40 businesses that you have, 40 plus businesses that you guys own, these are all cash flow businesses. You're not trying to go for valuation and enterprise value and all that shit. [chuckles]

Andrew Wilkinson 1:24:51 No, no. We-- We're simply-- When we buy a business, we're asking ourselves one question. We say, "How do we pay ourselves back in five years only using the cash flow of that business?" So, uh, ultimately, we're, we're betting. If we buy your bus- Let's say you owned a business that's doing a million dollars a year. Um, if, if it's not really growing, I might pay 5X, so I'll pay five million bucks and I'll pay myself back a million dollars a year. If it's growing really fast, I might pay 10 or 15, but the business needs to double or triple in order for me to get my money back in five years. But that's the simplest way I can put investing. Just try to make your money back in five years via cash flow, and you'll do very, very well.

Ali Abdaal 1:25:31 Okay. So I'm in, I'm in the productivity space. It would make sense to buy or build a to-do list, a calendar, a note-taking app, you know, the, the stack that a productivity bro [chuckles] or gal might wanna use. Now, initially, what I was thinking was, "Okay, I've got this business partner. He and I are great, are great friends. He knows how to build software. I know how to market it. Fantastic. We'll do one to, one to three different products each year and turn them into nice, easy cash flow businesses. If we can get them to like a million or two ARR, great, fantastic, life is good. But then I was speaking to another friend and this friend was like, "Why bother with 10 small bit- bits of software when you could go for one mega hit? Like, why not put all of your, all of your eggs in like the, the ultimate productivity app? What if you could build the next Notion rather than building a handful of like small to-do list apps or calendar apps and you... That, that sort of thing." What do you reckon? Multiple portfolio of small, small-ish cash flowing apps or, and double down on what works or go for a big ultimate productivity app to rule them all kind of vibe?

Andrew Wilkinson 1:26:35 So I don't remember if it's in the book, but I started a company called Flow. Uh, w- is that in the book? Do you know that story?

Ali Abdaal 1:26:43 I, I haven't come across it in the 229 pages I've read so far.

Andrew Wilkinson 1:26:47 So I, I don't think I put it in there. Um, so I, like I mentioned, I started this design agency, and I love Jason Fried. And what Jason Fried did was he started his own design agency, got sick of doing client work, and then, um, they started pro- uh, a project management SaaS software to help them manage the business, and eventually that got so big that they just shut down the agency and they started doing Basecamp full-time. And so I wanted to do the same thing. And I was a productivity nerd. I still am. And I found that there was no good way for me to do GTD, Getting Things Done, with, uh, my team. And so I s- started, uh, you know, I took one of my developers and I said, "Hey, let's, let's build our own productivity software. We're gonna call it Flow, and it's gonna be GTD for teams." And we had this big splashy launch and, uh, announced it and, and it just blew up. All of a sudden I had, you know, $40,000 a month of MRR and, uh, people are talking about it. It's in TechCrunch. And just like Jason Fried, I decided I wasn't gonna raise any money. I was gonna bootstrap this. And about six months after we launched, there was an announcement that the co-founder of Facebook had left Facebook and was building a product called Asana. And I looked at it and I dismissed it. I said, "Oh, this is very, you know, this is ugly and it's d- done by developers and their mobile app sucks and, you know, we're just so much better than them. We're g- we're gonna win on merit." Well, I underestimated that he was a billionaire and he'd raised hundreds of millions of dollars of venture capital. And before I knew it, they were just outspending us in every way. First it was just marketing, so I got annoyed because, you know, everyone was using their product because they didn't know about our product 'cause we weren't marketing it. And then very quickly they started out- outflanking us in terms of features and even design. They figured that out eventually. And in the end I realized it was like I was Fiji and he was the United States and I was trying to invade him and that's really, really stupid. You, we all know how that ends. And so this is a... The problem with productivity... And I just, I ended up losing about $10 million and because I bootstrapped it, it was all my own money.

Andrew Wilkinson 1:29:07 So that was $10 million that today would probably be $30 million if I just invested in Apple stock or something. And, um, so the problem with productivity is that every day someone like you or me or a designer or developer wakes up and goes, "I don't like Notion. I wanna make a better one. I don't like calendars. I wanna make a better one." And so there's infinite competition and it's a terrible business because people are not loyal. You and I are not loyal. We try new productivity software all the time. We're always looking for the new hotness. And so it's not something where you build a, a, a loyal user base unless you get very, very lucky like Notion or something like that where people base their life around it. And the analog- the analogy I always use is imagine if you were starting a pizza restaurant, uh, let's say a pizzeria, a buck a slice pizzeria, and every day a new pizzeria opened next to you that was funded by venture capital and gave out their pizza for free. That's, that's productivity. Uh, as far as I'm concerned, um, getting into productivity is crazy. Now you have something very unique. You have a very loyal following and you will be able to promote this and it will be successful. I promise you you can start a software business that will be successful. But to do it well, it usually requires building quite a large team to maintain that software and build the software. The R&D cost of building something on, you know, iOS, Android, web, making it good, it's probably gonna be two years and it's probably gonna be between two and $10 million to build. So when you compare that to a course or something simple, a digital good that, you know, you can sell infinitely like that, it's kind of a brutal business. The only good part about it is it has recurring revenue. So what I would recommend is actually finding more of a niche. You know, what is something that all of your... Let's say that a lot of your audience are freelancers and they run their own businesses. Well, one of the fears that freelancers have, at least in the States, is that they're not gonna be able to have medical care if they need it, right? And so, you know, for example, you could find an insurance provider that's cute and well-designed and awesome and you go and you just buy a little stake in it or you get equity in it or you even buy it and you just say, "Hey friends, if you need insurance, there's a lot of freelancers, you should use this insurance product." That's what Sean did. That's really smart. I think if Sean had tried to build, uh, you know, a recruiting business even, that would be hard. It'd be okay. Um, but yeah, you don't wanna get into productivity software in my opinion. Now be careful not to listen to, over listen to my opinion 'cause I'm someone who lost money there. Maybe if I'd done well, I would be saying a different thing.

Ali Abdaal 1:31:58 Hmm. Okay. That's very interesting. If, if, if we abstract productivity away from it, um, what's your take on the build one piece of software rather than build... You know, there's all these, like, little cute, um, uh, so- software design firms that will spin up, like, an, a very simple Pomodoro app for the App Store and sell it for $2.99, and that's a nice product. Or a very simple FTP client or a very simple something that does a very specific thing. It's cute, it's vibey, it doesn't take... It's not too hard to build.

Andrew Wilkinson 1:32:28 Mm.

Ali Abdaal 1:32:29 Maybe iOS only. That kind of idea. Software as sort of these multiple bets, almost like the Nick Huber po- holding, holding company [chuckles] kind of model, but for cute little software, versus, you know what? Let's, let's try and build something big.

Andrew Wilkinson 1:32:43 I like that a lot more. I think, um, you know, if you, if you did something like, um, you know, Bartender, right? Cleaning up your menu bar in macOS, or a simple, a very, very simple piece of software. This is the thing, simple, boring software is phenomenal. It's the best business model ever.

Ali Abdaal 1:32:59 Mm.

Andrew Wilkinson 1:32:59 Complex multi-platform software with a lot of demands is really, really hard. Uh, I love that idea. I love the idea of a utility, so one really simple utility. The only downside is the recurring revenue is small, and the lifetime value is small. So you're gonna be chipping away and, you know, you might be able to do one YouTube video, and you talk about this cool thing you built and, "Hey, if you want it, go, go buy it for $2.99." But it might b- not be logical to replace all your ads with ads for that. What I would try and find though is, like, that insurance idea or, you know, something that's high value, high profit.

Ali Abdaal 1:33:38 Hmm.

Andrew Wilkinson 1:33:39 Like, I always say you're, you really wanna be selling to a, a... You wanna sell something boring to a rich person. You don't wanna be selling to people who are, um... You don't wanna be selling a complex product to cheap people.

Ali Abdaal 1:33:54 Hmm. Yeah. Yeah, 'cause my instinct was that trying to build something like Notion is really fricking hard. [laughs] And I, I really wanna build a utility for the Mac menu bar that tracks your word count across different apps.

Andrew Wilkinson 1:34:09 Love it.

Ali Abdaal 1:34:09 So whether I'm writing in Google Docs or in Notion or in Ulysses, it can tell me how many words I've written, and that's it.

Andrew Wilkinson 1:34:15 Yeah.

Ali Abdaal 1:34:15 Ignore the rest. [chuckles]

Andrew Wilkinson 1:34:16 Totally. Totally. Something like that would be great.

Ali Abdaal 1:34:19 Okay. Interesting. Um, question on recurring revenue. Um, so a lot of people in the creator world ha- have seem, uh... You know, the whole, the whole shtick these days seems to be launch a membership community, paid membership community type thing. Use School. Homozy's going all in on School, all that stuff. There's Circle. There's a bunch of... Mighty Networks, all these different things. And the idea is like, well, you basically get a SaaS, uh, in the sense that you get a recurring revenue product. So we've j- as of, like, last week, launched a thing called Productivity Lab, which is a $100 a month membership thing that gives you... It's sort of like Peloton for productivity. You know, that's that, that, that general idea. But then this is the sort of theoretical recurring revenue, but every person I know who actually has a paid membership, their average customer length is about three months.

Andrew Wilkinson 1:35:10 Mm.

Ali Abdaal 1:35:10 And if they can do longer than three months, then you're like, "Whoa, you're, you're... Wow, that's a really, a really sticky membership." And so in the past, my theory was always like, well, if the average LTV is three months worth, why don't I just sell a $300 course and just get that in one s- one fell swoop rather than th- thinking I can theoretically create a recurring revenue product, but where the average customer is only staying for three months? Am I missing something? Like, is there value in recurring, recurring revenue, even if the average customer timeline, or whatever the word is, is, is actually just three months?

Andrew Wilkinson 1:35:43 Yes. I would say that, um, recurring revenue is incredibly valuable, especially if you're selling advertising primarily. I don't know how much of your revenue comes from advertising. But it smooths things out, right? It, it allows you to have a really weak quarter and not lose sleep because you know there's a certain amount coming in. The kind of recurring revenue that I like is where you do something you're already doing anyway. So, um, you know, and I, I always say, like, if you own a sawmill, you should sell the sawdust that comes out, right? You know, you make a sawm- you have a sawmill, all the... You create this, these big piles of sawdust. Well, it turns out you can take sawdust, and you can convert it into wood pellets, and you can sell those wood pellets. So an example of how you might do that would be every po- every podcast episode like this, at the end of it, you do a rapid fire one-minute or two-minute with me, and you say, "Who is the most insightful, impactful person that you've learned about in the last year? What is one supplement that you take or health ritual that you do that keeps you sane? What are the three most impactful books that you've ever read? You know, what's one tech tool that you can't live without?" And what you do is you cut that off. So on the podcast, you say, "Andrew..." You start it, you tease it, and then you say, "To keep listening, uh, click the link in, in the show notes, and you can keep listening to the premium feed, and you'll get this extended thing." And you do that with every single guest. And what I find is with productivity, with... So with two things, with health and productivity, people will pay a lot of money for something like that. So

Andrew Wilkinson 1:37:21 when I listen to Tim Ferriss, I hear, you know, all these amazing people and their strategies and stuff, but what I really want are tactics. I want them to tell me the cheat codes, tell me what to do, tell me what to say, tell me what to take, what do I buy. And I think that I was encouraging Tim to do this. He still hasn't done it. Um, but I really think that- Uh, having that kind of actionable, um, cheat code list is very valuable, and it's incredibly easy to add, and it costs you nothing. It adds two to five minutes to the interview, and I think that could probably equal, um, you know, between 500K and two million dollars or more of recurring revenue. We have a business called Supercast that I started. I helped, um, Sam Harris monetize, monetize his podcast and then worked with Dr. Rhonda Patrick, Peter Attia, Huberman. And we do, we do the same thing, um, to a varying degree. So if you can have exclusive episodes where you give away half the interview for free and then it cuts off, or you just have the tail end be exclusive, I think you can do very well.

Ali Abdaal 1:38:25 Hmm. Yeah, this is why I'm a paid subscriber to Sam Harris because it's like, "Ah, I only get to see the first hour? Oh, come back."

Andrew Wilkinson 1:38:30 Exactly.

Ali Abdaal 1:38:31 Fine.

Andrew Wilkinson 1:38:31 Exactly.

Ali Abdaal 1:38:32 [laughs]

Andrew Wilkinson 1:38:32 Yeah. And, I mean, the challenge might be that your, you know, most of your traffic might be on YouTube, so you gotta figure out how to do that elegantly. But in the podcast player, it's very elegant. Like, I've had it where I'm listening to an interview on, um, the Knowledge Project, and it's fascinating, and then it cuts off and I actually pull over... pulled my car over, and I subscribe to keep-

Ali Abdaal 1:38:52 Yeah

Andrew Wilkinson 1:38:52 ... listening. Uh, getting people at the moment of conversion where they wanna keep listening, I think is really powerful.

Ali Abdaal 1:38:59 Mm-hmm. Okay. That's a very good idea. Um, general question. So with this new productivity community membership thing that we've launched, we launched it with annual billing only for now. And I spoke to a couple of people who were like, "Well, an- like, y- why not offer monthly billing as well?" And I was like, "Well, if I know that the average churn on these sorts of things is three months, why would I offer monthly billing? Why not just offer annual billing?" Um, and the response was something like, "Well, if you offer monthly billing, it keeps you honest. It means you actually get a real sense of what your, what your churn is gonna be because people will vote with their wallet. Whereas if you do annual, really you're just f- fundamentally you're selling a one-off product because you actually have no idea what the convert-- what the sort of, uh... how many people will continue their subscription a year from now." And now you get back into this problem of very spiky revenue where you can't really make predictions and stuff. What's your view on if you can sell annual, should you, or should you offer monthly or quarterly or, you know, for this, for this sort of thing?

Andrew Wilkinson 1:40:03 I think it's like saying, what, what should the cost of an apple be at the market, right? I mean, there's a, there's a pricing demand curve. There's math you can do around this, and you're really not gonna know without a lar- quite a bit of data and experimentation. First of all, I wouldn't ch-- Do you charge 100 or 99?

Ali Abdaal 1:40:19 Oh, um, well, we charge $19 a week, which is like 984 billed annually. [laughs]

Andrew Wilkinson 1:40:24 Right. Right, right.

Ali Abdaal 1:40:24 But it would be like 97 a month kind of thing, yeah.

Andrew Wilkinson 1:40:26 Right, right. Okay. I mean, I, I'm really unopinionated because I don't know what your data is. Uh, I like, I like if you have the, the cojones to do it and just say, "Look, I know I'm providing a lot of value."

Ali Abdaal 1:40:39 Mm.

Andrew Wilkinson 1:40:39 "It's, you know, it's 299 a year," or whatever, whatever the flat rate is. "If you wanna be a part of it, that's what it costs." I'm a big fan of that, but other people would think differently and would wanna do cohort analysis and try different things and stuff. Ultimately, I'd say that's a question for your business folks. Um-

Ali Abdaal 1:40:56 Yeah

Andrew Wilkinson 1:40:57 ... but no, I don't have a, I don't have a great opinion there. And you can get pretty tricky in terms of psychology with, um, you know, saying it's, it's 899 a month if you subscribe annually and some of that stuff. I'm not a huge fan of that, but you can... You know, there's a lot of stuff you can do.

Ali Abdaal 1:41:15 Yeah. Sure. Okay, nice. I mean, I like, I like the cojones attitude of just like it's either annual or nothing 'cause it's like-

Andrew Wilkinson 1:41:21 Yeah

Ali Abdaal 1:41:21 ... it's a productivity community.

Andrew Wilkinson 1:41:22 What are you-

Ali Abdaal 1:41:22 We don't want it to be-

Andrew Wilkinson 1:41:23 What are you, what are you giving them? You're giving them like a Slack or what, what are you providing them?

Ali Abdaal 1:41:27 Oh, so it's a circle community, but basically three times a day there's Zoom co-working sessions. Every week there's a facilitated weekly review. Every month there's monthly goal setting. Every month we're gonna do a book club and try and get the author of the book potentially to come on the thing if someone's releasing a new-

Andrew Wilkinson 1:41:41 Do you, do you get involved in this?

Ali Abdaal 1:41:43 Uh, I will be facilitating quarterly planning sessions 'cause I like-

Andrew Wilkinson 1:41:46 Mm

Ali Abdaal 1:41:46 ... like doing those, but we've got coaches who are facilitating everything else, and I'll just rock up as and when I feel like it.

Andrew Wilkinson 1:41:52 What I don't like about that is it's linear. So, you know, if you... You can't scale from 1,000 to 10,000 members because you'll have to hire coaches. I would try and do something that's non-linear, and I would price it lower. Like I, I would rather you charge $30 instead of $100, but there's no coaching and there's no people. All they're getting is something exclusive, um, or, or that quarterly time with you. So what I do, um, people, people are like, "Oh my God, why?" You know... So I do, um, I do Twitter subscriptions. I charge $29 a month to be, to subscribe to my Twitter. And the reason I do that is 'cause I get so many emails from people saying, "Hey, would you mentor me? Can I, can I pay you for your time?" Like, you know, "Can I pick your brain?" And so what I do is I root out all those people and I say, "Well, if you're not willing to spend $29, which is the cost of, uh, taking me out for lunch, I'm not gonna engage with you. And if you are, I'm gonna do a Zoom once a month for one hour, and anyone who wants can ask me anything, uh, on this Zoom." And so for one hour a month, I think I make 10 or $15,000 a month or something from Twitter, but I only do that one thing, and that can scale pretty big before it becomes a problem, right? All I'm offering is that one thing. I'm not gonna do any more, any less-

Ali Abdaal 1:43:08 Mm

Andrew Wilkinson 1:43:08 ... hire anyone else. You know, I don't even do like a Slack or anything like that because I don't wanna-

Ali Abdaal 1:43:12 Yeah

Andrew Wilkinson 1:43:12 ... administer it. So that's been my approach. Um...

Ali Abdaal 1:43:16 Hmm. Okay, interesting. 'Cause, so, so in, so in our case, I thought my model was somewhat scalable because whether it's 1,000 people in a Zoom call or 10,000 people in a Zoom call, it's a co-working session, and it's, it just, it just means we pay more money to Zoom webinar. [laughs] Uh-

Andrew Wilkinson 1:43:31 Well, I think if... when you say coach, i- if it's not cohort-based, based coaching, like if there's one coach for 1,000 people, I think that's fine.

Ali Abdaal 1:43:39 Yeah, that sort of thing.

Andrew Wilkinson 1:43:39 But if it's-

Ali Abdaal 1:43:40 Yeah

Andrew Wilkinson 1:43:40 ... one coach for every 20 people, I don't like that.

Ali Abdaal 1:43:43 Oh, yeah. No, I agree. Yeah, we're, we're, we're thinking potentially down the line, like, you know- Kind of like, uh, Nerd Fitness does. Ha- ha- maybe offering a one-on-one coaching service where one coach manages, like, 80 people and it's like an accountability coach thing. But that's a further down the line type, type of idea.

Andrew Wilkinson 1:43:57 I would, I would... You know, the one thing I don't like about that, I don't-

Ali Abdaal 1:44:00 Yeah

Andrew Wilkinson 1:44:00 ... I don't know how your, what your conversion funnel looks like, but I think that, um, you know, if I was to go... I've watched all your videos, and I'm not aware of this, right? So it's like where, how do I get converted? And I think your conversion funnel has to be your videos, right?

Ali Abdaal 1:44:15 Yeah.

Andrew Wilkinson 1:44:15 Or your, or your podcast. And that's why I love, like, the podcast cutting off-

Ali Abdaal 1:44:19 Mm-hmm

Andrew Wilkinson 1:44:19 ... or click here at this mo- You know, for example, if you were to say, um, [lips smack] "In order to listen to the rest of my interview with Andrew, click here and join my learning community. You get exclusive access to the podcast and this other thing," or whatever. But I love, like, digital delivery, where there, I can't, I can't be upset for getting 30 minutes of a podcast, but I can be upset if I join a Zoom and there's 10,000 people there, and it's like a cacophony of people talking, and I can't really connect with anyone, and it's not well-facilitated and stuff, right? It's easier to let your customer down. The more you provide them, the more hands-on it is, the more you're letting them down.

Ali Abdaal 1:45:01 Yeah.

Andrew Wilkinson 1:45:01 Um, so I don't know. I'd, I'd be thoughtful.

Ali Abdaal 1:45:04 Okay. Yeah.

Andrew Wilkinson 1:45:06 The other one is AMA. You are perfect for AMA. So Huberman does an AMA every month, and if you wanna ask him questions, which everybody does, 'cause everyone wants to ask him weird health questions, um, they pay to access the AMA and listen to the AMA. Uh, that would do very well with your community.

Ali Abdaal 1:45:22 Nice. Thank you. That's very helpful to get your, to get your take on this. Um, so let's say someone's listened to this last hour and, uh, half or hour and 50 minutes now that we've been, that we've been recording. Um, what, what would be your pitch for why they should buy and read the book?

Andrew Wilkinson 1:45:43 Well, I think we talked about the importance of learning from other people's mistakes, and what I've done is basically taken all of my mistakes from my life, and, uh, there's some I've omitted, more personal mistakes. Um, but it's really watching me fail upwards. I mean, I, I made a million different errors throughout my career, and I've put it into a book, and I hope that people will read it and learn something from it. And, you know, ironically, we mentioned How to Get Rich. You know, that's a book, like I said, about how y- you really shouldn't try and get super rich and how you should kind of stop at a certain point. I read that book. I didn't take the advice. Um, and maybe my book will be the same for a lot of people. But I think it peels back the curtain on something that not many people have talked about, which is, what does it actually feel like to get super rich? And, uh, you know, I don't think it's that great. Uh, you know, there's lots of things that are wonderful about it, flexibility and comfort, obviously, but at the end of the day, um, I hope that it encourages people to focus more on their intrinsic values and what actually makes them happy and gets them out of bed versus trying to be, uh, you know, a billionaire, which is kind of an absurd, uh, goal. If you think about it, being a billionaire, that is saying, "I need, you know, $10 million or more a month," or some crazy number, to be happy. Most people need, I don't know, 20 grand a month to be happy, and then if you amp that up and give them a crazy lifestyle, hundreds of thousands of dollars a month. And I think not enough people work backwards from that. You know, what do I actually need in cash flow and cash in the bank to live the life that I wanna lead? And I think they'll find that being a billionaire is really irrelevant.

Ali Abdaal 1:47:36 [laughs] Andrew, thank you so much. That's a great place to leave this. Thank you so much for taking the time.

Andrew Wilkinson 1:47:40 That was awesome.

Ali Abdaal 1:47:40 Uh, I am 75% of the way through the book. It's gonna be my bedtime reading for tonight, and I can't wait to reread it multiple times, uh, to figure out my exact thoughts about it, uh, for, for a book club video on, on the YouTube channel. So thank you so much for taking the time. Really appreciate it.

Andrew Wilkinson 1:47:53 Thanks, dude. This was really fun.

Ali Abdaal 1:47:54 [keyboard clicking] All right, so that's it for this week's episode of Deep Dive. Thank you so much for watching or listening. All the links and resources that we mentioned in the podcast are gonna be linked down in the video description or in the show notes, depending on where you're watching or listening to this. If you're listening to this on a podcast platform, then do please leave us a review on the iTunes store. It really helps other people discover the podcast. Or if you're watching this in full HD or 4K on YouTube, then you can leave a comment down below and ask any questions or any insights or any thoughts about the episode. That would be awesome. And if you enjoyed this episode, you might like to check out this episode here as well, which links in with some of the stuff that we talked about in the episode. So thanks for watching. Uh, do hit the subscribe button if you aren't already, and I'll see you next time. Bye-bye.