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My First MillionMy First Million

Ranking The Best And Worst Businesses To Start w/ Billionaire Investor Andrew Wilkinson (#386)

No more small boy spreadsheets, build your business on the free HubSpot CRM: https://mfmpod.link/hrd - Episode 386: Sam Parr (https://twitter.com/theSamParr) and Shaan Puri (https://twitter.com/ShaanVP) talk to Andrew Wilkinson (https://twitter.com/awilkinson) - entrepreneur and co-founder of Tiny - about learning to be a successful entrepreneur in less than a decade. His hardest and easiest businesses to start. Plus, one business idea he hasn't acted on, yet. — Check Out Shaan's Stuff: • Shaan's weekly email - https://www.shaanpuri.com • Visit https://www.somewhere.com/mfm to hire global talent (like Shaan does) and get $500 off for being an MFM listener. Hire developers, assistants, marketing pros, sales teams and more for 80% less than their US equivalents. — Check Out Sam's Stuff: • Hampton - https://www.joinhampton.com/ • Ideation Bootcamp - https://www.ideationbootcamp.co/ • Copy That - https://copythat.com • Hampton Wealth Survey - https://joinhampton.com/wealth 💰 Pitch your startup for a shot at a $1M investment with Sam Parr as the MC https://clickhubspot.com/pitch ----- Links: * Tiny - https://tiny.com * Pixel Union - https://pixelunion.net/ * Warren Buffett letter - https://theoraclesclassroom.com/wp-content/uploads/2019/10/1972-Buffett-Letter-to-Sees-Candies.pdf * AeroPress - https://aeropress.com/ * Metalab - https://www.metalab.com/ * We Work Remotely - https://weworkremotely.com/ * Tenzing.co - https://www.tenzing.co/ * Mealime - https://www.mealime.com/ 📧: Sign up for The Hustle Daily Newsletter: https://mfmpod.link/2rs 🎙️: Download Our Podcast: https://link.chtbl.com/cE8g4wVg A podcast where we brainstorm new business ideas based on trends & opportunities we see in the market. Sometimes we have famous guests, and they do it with us. ------ Show Notes: (00:00) - Intro (02:30) - Mr. Business Builder (05:50) - Automatic revenue - Pixel Union (11:35) - Warren Buffett letter (16:30) - Bored of investing / AeroPress (23:13) - Cat furniture (25:05) - Hardest to easiest business to start (33:44) - Business idea to capitalize on (37:13) - New business (48:38) - Fraudsters (01:02:26) - non-binary term sheet ------ For more quality videos subscribe here ➡https://www.youtube.com/channel/UCyaN6mg5u8Cjy2ZI4ikWaug?sub_confirmation=1 🔔 Turn on notifications to stay updated with new uploads #shorts #youtubeshorts Like || Share || Subscribe

Shaan PurihostSam ParrhostAndrew Wilkinsonguest
Nov 17, 20221h 25mWatch on YouTube ↗

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At a glance

WHAT IT’S REALLY ABOUT

Andrew Wilkinson Ranks Businesses By Difficulty and Dissects Investor Fraud and Folly

  1. Wilkinson walks through his portfolio from hardest businesses (bakery, restaurants, cat furniture e-commerce) to medium (agencies) to easiest (We Work Remotely), explaining why physical goods and large staffs make businesses brutal.
  2. He shares costly lessons including selling Pixel Union for $7 million before buying it back and taking it public, plus losing $10 million on Flow against Asana.
  3. He describes his new venture Tenzing, a modern investment bank for bootstrapped founders, and floats an idea for a service that targets one person's attention across the internet.
  4. The hosts and Wilkinson discuss fraud and hype-driven public markets, including Canadian stock promotions, Nikola, Bird and the FTX collapse.
  5. They debate venture capital's fee incentives and Wilkinson's non-binary term sheet, with Shaan Puri arguing you can't outsource conviction to big-name investors.

IDEAS WORTH REMEMBERING

5 ideas

Physical, labor-heavy businesses are the hardest to run

Wilkinson says brick-and-mortar and goods-moving businesses with many employees, such as his bakery and deli with 40 to 50 staff, are far harder than internet businesses, while his e-commerce cat furniture venture earned only 2 to 3% margins versus 30 to 50% in agencies.

Failed ventures teach you what a good one looks like

Wilkinson says his failed pizza restaurant showed him what a badly run restaurant looks like, so he recognized a stable, long-running bakery and deli with a great general manager as a good buy.

Operating experience makes for better investing

Wilkinson contrasts operator investors with spreadsheet investors who assume margins can simply be raised 20%, not realizing that requires convincing 100 people to change.

Don't sell great, fast-growing businesses cheaply

Wilkinson sold Pixel Union for $7 million at about a 14x multiple while it was growing 50% a year, then bought it back for $26 million and later took it public at a $260 million valuation.

Recurring SaaS revenue is stickier than agency work

Wilkinson says agencies face feast or famine and supply-demand balancing, while a sticky SaaS business is rarely ripped out, and he prefers 10,000 people paying a little over 100 paying a lot.

WORDS WORTH SAVING

4 quotes

I always think it's better to have 10,000 people paying you a small amount of money than 100 people paying you a lot of money.

— Andrew Wilkinson

I will often do the wrong business before I find the right business.

— Andrew Wilkinson

You can't outsource your conviction.

— Shaan Puri

you're fighting an army that has unlimited budget. It's like Fiji fighting the United States, right?

— Andrew Wilkinson

Easiest to hardest businesses to runPixel Union sale and buybackAeroPress acquisitionOperator versus spreadsheet investingTenzing investment bank for bootstrapped foundersFraud and legal stealing in public marketsVenture capital fees and non-binary term sheets

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