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My First MillionAndrew Wilkinson's $20,000 to $260,000,000 story (#521)
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At a glance
WHAT IT’S REALLY ABOUT
Andrew Wilkinson on boring profit levers, networking, and barnacle strategies
- Andrew Wilkinson argues that unglamorous 'lever pulls' like raising prices, cutting shipping costs, and checking a Stripe setting drive more profit than flashy features, and that simple online businesses like We Work Remotely beat bakeries on ease and returns.
- The hosts and Wilkinson discuss the Profit First approach of sweeping profit out of a business first so leaner spending is forced, with Wilkinson leaving only two to four weeks of expenses in some companies while Tiny can inject cash when needed.
- Wilkinson and Shaan Puri show how aligning incentives changes behavior, using Shaan's home-sale deal with his agent and Chris's $1,000-per-offer arrangement for stink bids.
- Wilkinson describes how he built his network by cold emailing, buying a $57,000 charity lunch with Bill Ackman, and writing letters to Charlie Munger, while his Oscars afterparty experience taught him to earn his way into rooms.
- His 'barnacle on the whale' strategy turned about $20,000 of Shopify theme work into a business sold for about $7 million, bought back for $25 million, and taken public at $260 million, and he closes with views on silent suffering and whether people change.
IDEAS WORTH REMEMBERING
5 ideasBoring operational tweaks often beat exciting innovation
Wilkinson cites a 30% price increase, smaller packaging, T-bill investing of gift card deposits, and Shaan's Stripe card-update feature as small efforts with outsized profit. Shaan notes that the link between effort and result is far looser than people think.
Sexy businesses can be the hardest ways to make a living
Wilkinson's bakery needs 30 to 40 employees, swings between profit and loss, and might make $150K a year. We Work Remotely, a job board with two employees, grew from about $400K of profit to about $4 million of EBITDA.
Taking profit first forces spending discipline
Wilkinson compares it to using a smaller plate: sweep out a set percentage of profit and the business must justify each expense. He says some of Tiny's businesses can run at 80 to 90% margins, while a dreamer CEO would burn the cash.
Incentives determine behavior, so design them carefully
Shaan's agent only gained about $3,000 from pushing a higher price, so Shaan offered 15% of anything above $2.1 million plus a goofy penalty. Chris's $1,000-per-offer fee likewise turned a reluctant realtor into a willing partner.
Earn your way into rooms rather than buying in
At the Vanity Fair Oscars afterparty Wilkinson had no shared language with the guests and no value to offer, so people turned away. He concluded you should wait until you're interesting, noting that he later bought Letterboxd.
WORDS WORTH SAVING
5 quotesYou have to wait until you're interesting.
— Andrew Wilkinson
The link between effort and result is so much more disconnected than you think. And the more mature you get, the more you realize like you should just work backwards from what's actually gonna work, not like what's the cool or difficult thing to do.
— Shaan Puri
I realize that everything comes down to incentives. And if you just think about the incentive, you'll see the exact behavior that they're gonna have.
— Andrew Wilkinson
I think the fundamental principle is be of value to other people, and then also say yes to interesting people.
— Andrew Wilkinson
People will always assume silence equals malice.
— Andrew Wilkinson
High quality AI-generated summary created from speaker-labeled transcript.
