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My First MillionAsking A Billionaire Investor How To Prepare For The Economic Collapse (#371)
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WHAT IT’S REALLY ABOUT
Andrew Wilkinson’s recession playbook: stress-test, hold cash, buy businesses later
- Andrew Wilkinson explains how he prepares for “economic winter” by stress-testing revenue and cashflow scenarios and prioritizing liquidity and certainty over aggressive risk-taking.
- He describes pivoting investment focus away from high-valuation venture bets toward structured, downside-protected deals and “default alive” businesses that can survive without new funding.
- He outlines Tiny’s approach to incubating capital-light ventures by turning internal expenses into standalone services, including negotiation/procurement offerings like Buyer and DealMaker.
- He shares a 2020 hedging story using put options as an insurance policy—profiting initially, then losing gains after re-betting—and frames the right mindset as paying for insurance rather than chasing returns.
- The conversation broadens into personal operating philosophy: using content and books to be “known well,” creating “surface area for serendipity,” and choosing renting over accumulating assets that create ongoing management overhead.
IDEAS WORTH REMEMBERING
5 ideasStress-test for survival and for the ability to capitalize on downturn opportunities.
He described building simple scenarios (e.g., revenue down 20/50/70%, customers paying 90–120 days late, or no payments for months) to see whether the business can survive and still seize opportunities. He framed this as "over-engineering" for worst cases so you can "sleep at night."
Illiquidity can be as damaging as losses because it blocks opportunistic moves.
He said the worst outcome is bankruptcy, but a quieter failure mode is being unable to act on opportunities like cheaper ads or attractive acquisitions due to lack of cash. He emphasized maintaining liquidity so you can avoid missing high-upside moments.
In “winter,” shift to downside-protected deal structures and resilience-focused startups.
He said he’s avoiding “crazy venture bets” and pivoting toward secondary/minority buyouts, structured deals, and non-binary pricing where valuation changes based on performance. He also said he wants “default alive” businesses that won’t die if they can’t raise another round.
He’s positioned defensively with cash-like instruments while preparing to buy businesses later.
He said his personal portfolio is mostly Treasury bills plus a single stock position (Pershing Square Holdings), and that he’s waiting to buy businesses personally. He noted he’s ~90% in Tiny overall, with personal assets intended as a backstop if Tiny “goes pear-shaped.”
Incubate businesses by productizing internal pain points—only if they’re capital-light and fast to revenue.
He said Tiny incubates “low downside” ventures by turning internal spend (P&L expenses) into standalone businesses, citing Buyer (negotiation for software, later sold to Ramp) and DealMaker (negotiation/procurement for non-software spend). He emphasized capital-light builds that can earn revenue quickly rather than long, unprofitable projects.
WORDS WORTH SAVING
5 quotesI stress-test my business.
— Andrew Wilkinson
I think what people miss is there's two ways that, you know, something like this can go bad, right? The worst way it can go bad is total loss, right? You go bankrupt, your business fails, you're embarrassed, it's terrible. I think that's the worst. But the less bad option that no one really talks about is missing opportunity.
— Andrew Wilkinson
I play poker, right? I wanna play with very good odds in my favor, and I wanna know the odds. I don't wanna play roulette where it's almost totally random.
— Andrew Wilkinson
At the end of the day, if you know what your business is worth, it's irrelevant what the stock market says it's worth.
— Andrew Wilkinson
Don't make your goal well-known. Make it known well.
— Unattributed
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SPEAKERS
Sam Parr
hostCo-host of My First Million and entrepreneur who sold The Hustle to HubSpot.
Andrew Wilkinson
guestInvestor and operator; co-founder of Tiny (a holding company) and builder of multiple cash-flowing businesses.
High quality AI-generated summary created from speaker-labeled transcript.
