I Ranked the Best & WORST Businesses to Start Before 2026 | Andrew Wilkinson | My First Million

We have $65 million of ARR.

We do over $40 million of EBITDA.

We also manage a $200 million fund.

So we're over $300 million... in revenue across 30 businesses.

And all the businesses in the fund are profitable as well.

I don't know.

I'm kind of like, if that's failing, like sign me up, right?

You've owned a number of agencies.

How much revenue lifetime has Metalab generated for you?

The hundreds of millions of dollars of profits, not revenue.

I don't know that I would still rank it very highly though.

SaaS.

Where are you putting SaaS?

I would say it's a... What do you think about marketplaces?

Well, I would say it comes down to scale.

A good marketplace like Airbnb, I'd say an A. I'd rank marketplaces in general as...

That's the one I would disagree with you.

I feel like I got to ask you this because I think you get a lot of shit nowadays.

I think a lot of people go look at the tiny stock and then they click like max.

And basically you see just a downward trend.

A lot of people I see on Twitter want to kind of look at that and say oh, this guy calls himself the Warren Buffett of the internet.

And he says he buys these great businesses, but what's going on?

Um, I feel like I can rule the world.

I know I could be what I want to.

What's up?

Andrew is here.

Andrew is one of the most visited guests on the pod.

Always good to have you, man.

I wanted to play a game with you.

You've done many types of businesses.

You've done agencies and private equity, and you've started e-commerce companies.

You've done a huge number of companies in the last 20 years.

So I want to do a game where we rank the different types of businesses that you could start.

And we could work out this criteria together, but I think the idea should be we're not looking at the outlier scenarios.

So in every industry, right?

The world's best plumber makes a fantastic living.

That may not mean that plumbing is the best trade to go into.

No offense to the plumbers out there listening, but we're not looking at just the extreme outlier.

So I think that here's my criteria for a great business, Andrew.

It's going to be the median successful outcome.

Okay.

So like the sort of like normal case, if you can make it work.

That's the first that's the first criteria.

The second thing is we're thinking, we're taking into account both the lifestyle as well as the, the result, the upside.

So you know, if one thing is just makes you miserable or overworks you like crazy, then that would be obviously worse than a business that lets you have a great flexible schedule and flexible location, for example.

So lifestyle matters.

Upside matters.

And we're looking for kind of the median success case.

But.

But you know, in some of these it's going to be like dude, it's Median success, I mean only the top 01, make it.

So you have to factor that in.

The likelihood of success matters in these scenarios, okay?

If you're listening on audio, it's going to be a little more fun if you go to YouTube or go to Spotify and actually you can see on screen the stuff that we're sharing.

All right, so here we go.

Here's the tier list.

If you've never seen a tier list before, they're ranked as you would expect, sort of A B C D E F, A being better than F, But there is of course S tier here.

And I don't even, I don't even really know what S tier stands for.

I think it's like from the gaming world, but it's basically like S tier is sort of like God tier.

It's the best you can, it's the best of the best.

Okay.

So we're going to start with a little layup here.

Uh, and for each Andrew I want you to give me your almost like rapid fire.

Take on like you know kind of what this business is, why it's either great or why it sucks.

Okay.

So the first one we're going to do easy and MLM, which is actually a surprisingly common business that people get into.

Uh, if you just look at the raw numbers of people who take part in MLMs.

So MLM, where are you ranking it?

I mean, I would rank an MLM as an F. It's a fundamentally unsustainable business that breaks.

I mean.

The problem with an MLM is it's reliant on recruiting other people and it doesn't actually make money based on selling services.

It basically makes money by finding the next sucker.

And if the person that starts the MLM finds a lot of suckers, they can make a lot of money.

And the first couple layers can make a ton of money, but then it always explodes or they get indicted or something like that.

So where are you ranking it?

I would say that's an F. Okay.

It's going in the F, Although it does sound like for the MLM owner.

You know it's not necessarily an F.

You know one of the associates, or as they call them.

You know the business owners that they like to call themselves, that are underneath.

Yeah, that's F tier for them.

I think, if you are willing to go to jail too, like you can make a lot of money, but I mean like 50-50 odds you go to jail.

All right, next one up is one that I think you did.

And by the way, say if you've done any of these, okay?

So freelancer, which I believe is how you started your career.

You were a freelance, what, web designer?

Yeah, yeah.

I started making websites out of my apartment, basically.

I would rank that probably a D. I think it's a really good business.

I'd say it's a living business.

Right.

I think there's nothing wrong with freelancing or a restaurant or a corner store or that sort of thing.

But fundamentally it's an owner operator model and it doesn't really scale unless you scale it, which is what I did.

Yeah.

OK, well, that's the kind of the next one, which is actually agency.

You've owned a number of agencies you've probably made.

I don't know.

I don't know what the number is, but Metalab has to have generated something like 200 million plus in revenue.

How much?

How much revenue lifetime meta lab generated for you, your design agency?

I don't know the exact math, but i think we're probably well over into the hundreds of millions of dollars of um profits, not revenue.

Okay, so i'm assuming you might have agency higher than most people.

So i i think well, you know what, i don't know that i would still rank it very highly, though.

Um, you know the reason.

Some you know my story.

I started a web design agency.

I scaled it.

I got clients like YouTube and Uber and Walmart and all these big companies.

And I was terrified.

I mean, it's a business where you're either making a ton of money or you're about to go out of business constantly and you swing between those two things.

And so because of that lumpy nature I'd maybe give it a C, but it'd be a tentative C.

It would kind of yeah, it's really really a hard business.

And the hard part is you're saying clients come and go.

It's that one, it can be feast or famine with clients.

Is that the reason why?

Or is it the headache of operating and delivering the service?

What is it about the agency that makes it like not A and B?

Instead of web design.

Let's imagine you're an accountant and you started an accounting firm and you start auditing 30 companies.

Now, companies don't like to switch accountants and they don't like to switch auditors.

So if you have that, that's a really high quality consulting business.

However, if you have a 500 let's say that you hired 30 people in the Philippines and you do graphic design for 500 you might have months where you're making 300000 and then you might have months where you're making nothing because you're not getting any clients.

The worst thing that happens in these businesses is you win a client like Walmart, let's say.

They come along and they say, hey, we want to give you $10 million of work over the next year.

And so you start panicking.

You go out, you hire 30 people and then a new PM takes over that team at Walmart and they just cut your budget.

And all of a sudden, you're left with 30 people you have to lay off.

So I think it depends on the nature of the business, honestly.

So you did MetaLab.

You've also had a game design agency.

You've had a no-code agency.

You've had probably what six to 10 different 10 to 15 agencies and services business copywriting, social media, web development, design a lot of different stuff.

What were the sort of top two agencies you did and what were the sort of bottom two agencies you did?

Well, I would say that we really haven't had a lot of success with recreating the success of Metalab.

Metalab was the business.

Like I said, I started with zero and now does very significant earnings and revenue.

A lot of the other agencies have not hit in the same way.

And I think the distinction with Metalab is it did so much better defining work in like 2008 2015, where we, you know, we designed the first version of Slack.

We worked on, you know, all sorts of projects that were kind of groundbreaking.

And we planted our flag and built a reputation.

And so I think the reputation piece is hard to recreate.

And so we've had a lot of success with Metalab.

We had a lot of success acquiring a company called Z1, which is in Spain.

They're a smaller web design agency.

And The theory there was literally just Metalab gets a ton of leads that are too small for it.

So let's buy another smaller agency and let's just send them those leads.

And so I think we acquired that business for $300,000 or something.

And we've probably made single digit millions of profit in it.

So it's not, we didn't knock it out of the park, but it's just an amazing base hit.

Right, right.

Hey, what's up?

If you're liking this episode.

The research team at HubSpot has taken all the rankings that we're doing today in this episode and they made it a downloadable thing in case you want to go see the final tier list.

You want to download it and maybe have a little breakdown of our commentary for each one.

It's available in the show notes below.

You can go ahead and download it totally free.

Okay, next one up, SaaS.

Where are you putting SaaS?

I would say it's a B, probably.

I think, again, it depends on... the type of SaaS.

If you have a SaaS software that is a chat GPT thin wrapper and does something like put a funny nose on your friend's face and you trick people into subscribing to it for six months and they always churn, I'd say that's a pretty bad SaaS business.

If you have a SaaS business that, let's say, has become the dominant player in funeral home management and all the funeral homes use it and they don't want to switch because it's the standard, that's an incredible business, SaaS business.

I mean, SaaS businesses, they're often highly recurring, really good margins.

I mean, they can be incredible, but you really have to find something with a limited amount of competition or high switching costs.

Tell the quick story of the DJ software SaaS business, because that's kind of like the funeral home example you have.

So you're saying it's a vertical niche tool that's like mission critical for an industry to run on.

They're unlikely to ever switch.

And, you know, that's going to be super, super sticky for a long time with high margins.

It sounds like I don't know a lot about the DJ software business, but like, can you just tell the quick story of that one?

Yeah, I mean for the last 10 years everybody has been basically like obsessed with buying software companies and thinking you can't lose in that industry, which right now is still true.

Over the last two years, like i got really scared of buying software companies because you know you look at vibe coding and llms and i just think like llms increasingly can build software and it's not that it's going to put all these businesses.

Let's say you have a sas software company and there's 10 competitors five years ago.

I just think there's going to be 50 or 100 competitors in the future and when that happens, competition equals margin compression.

So We've basically said no to almost every single SaaS software company we've looked at over the last two years.

But one came across our desk that we could not say no to, and that was Serato.

Have you ever DJed, Sean?

Did you ever go through that life crisis?

You know what?

I appreciate that you even think it's possible that I look like a guy who's DJed before.

So I take that as a compliment, but no.

I had a phase in 2012 where I was trying to meet girls, and I learned how to DJ.

And so I kind of knew the industry.

And the dominant software company in that world for the last 20, 25 years, I think, is a company called Serato.

And it's an incredible piece of software.

I mean, DJs all over the world use it.

I think like Diplo, you know, a gazillion of the top DJs and these two guys in New Zealand built it.

And what they did was really smart.

They partnered with the hardware manufacturers like Pioneer and they deeply integrated into the hardware.

And so what that means is that A, it's become the standard, right?

So when you're the standard, that is really exceptional.

Most DJs use one of two pieces of software, either Rekordbox or Serato, right?

So very limited competition and there's lots of upstarts and stuff.

But once someone really integrates into an ecosystem like Serato, they're buying like 5000 of hardware.

They're not gonna switch off really easily.

And the manufacturers.

Frankly, they don't want to integrate with some random college kid who's vibe-coded some AI DJ.

Not to say that people can't come and compete with us.

It's just harder because it doesn't have a hardware mode.

So I think SaaS with a hardware mode is pretty incredible.

That business, we shared some of the numbers when we bought it.

I mean, it's doing $45 million of revenue, $15 million of EBITDA.

It's been growing like crazy, moving into a SaaS model from licensing.

I'm a huge fan of that business.

Why does a business like that grow?

Are there just way more DJs or something else?

I think as long as a DJ is a desirable thing to be.

If you think about it, one of the weirdest phenomenons.

When I would go to a nightclub, it doesn't matter how much money I have in my bank account.

I remember looking around and going oh man, there's all these great girls here, but none of them know that I've got all these businesses and I'm a cool guy or whatever.

You were literally that meme, like, they don't know I have a design agency.

Exactly.

They don't know how much eBay I have.

I actually had a friend who's a DJ and he would get paid like 200 bucks and some beer tickets and he'd be swarmed with girls and he'd have status.

And throughout the city, he'd be the man.

And so I think as long as that's true.

As long as young men think DJs are cool.

Uh, and women I mean.

Increasingly there's way more female DJs now.

I just met an amazing one yesterday.

Um, but as long as that's true, I think people are going to want to do it.

I mean, it's just fun to mix music and you can, you can become famous.

You can, uh, you know, express yourself.

So I don't know.

As long as that's true, it's like we've got one of the toll roads to achieving that.

Yeah.

I like the analogy of the toll road.

Okay.

Next one I'm going to do, uh, Actually, I'll do an easy one.

Restaurant.

I think you own or still own a restaurant.

Yeah, I own a bunch of restaurants, actually.

And I always say a restaurant is a really good passion.

If you're really passionate about it, you love food, it's a labor of love.

As you know, I know you had a sushi restaurant.

But when I meet somebody and they say I have a successful restaurant, I want to, like Wayne's World, get down on my knees and say I'm not worthy.

Because...

If you're successful in a restaurant, it is one of the hardest businesses.

If you think about for you to go in and eat a good meal at 6 pm.

People had to wake up at 3 in the morning.

They had to bake bread.

A million things had to go right.

They had to train 30 people.

It's just like a Rube Goldberg machine of business.

So I would rank it as an E, probably one of the hardest businesses and low margin and difficult.

Yeah, for people to get context Most successful restaurants, even the big chains like a Subway or Chipotle or things like that 10 margin is the good case scenario.

It's like that's doing well.

Of course you know there's exceptions, like luxury, you know sort of Michelin star restaurants might have higher margins.

But on the whole, if 10 is winning and then your bunch of revenue is capped at what you can produce because again you're working seven days a week.

You're there for breakfast, lunch, and dinner.

You know, you basically, you can't, You always have to be there.

You always have to go in and make the product again, fresh every single day.

And you're only as good as your sort of last interaction with the customer.

It is just such a brutal business.

It is an absolutely terrible business.

In fact, it's funny that the only business you've ranked below it so far is an MLM.

It's pretty much a crime.

It's the only thing that's been worse so far.

And, you know, like I said, like we own restaurants.

I think they're really important.

But I just don't.

If you want to make money and you want to get rich, I don't think that's a good way to do it.

It's like, I always use the gym analogy.

If you go into the gym and you try and deadlift 300 pounds on day one, you will hurt your back and never come back.

And I think entrepreneurs who go into restaurants, they have a rough go.

All right, next one, marketplace.

So an online marketplace, how do you think about marketplace?

This would be something like a whether it's a Etsy or an eBay or an Amazon, or it could be, you know, even marketplaces like AngelList as a marketplace.

Twitch is a marketplace.

Anywhere where there's suppliers, there's supply and demand, right?

There's creators and viewers.

YouTube is a marketplace of creators and viewers as well.

So what do you think about marketplaces?

Well, I would say it comes down to scale.

Like you've got Airbnb on the side there.

I think small marketplaces are really hard.

We own some.

And I think it's like lightning in a bottle.

If you can get supply and demand to match, they're phenomenal businesses, but they're highly competitive.

I like a business where it becomes a verb.

So Airbnb is a great example.

If I think like, oh, maybe we should rent a house, Airbnb, the word just pops into my head.

I go to the browser, I look up Airbnb, and I'm going to use it.

That I would say is probably a a B or an A business.

So very, very highly ranked.

But if you started a marketplace for people who want to borrow, let's say like construction tools or something like that?

Oh my God.

Like I've just seen a million of these fail.

They're so difficult.

And so where are you ranking marketplaces?

I would say a good marketplace like Airbnb.

I'd say an A.

I'd rank marketplaces in general as a C.

Wow,

First big controversial pick there.

I can't believe you're Rank it as a C. That's the one I would disagree with you with.

I think if you get a marketplace to work like an Airbnb, it's S tier.

Well, are we saying a working marketplace?

Because we're talking about business model.

If you're one of the very few successful marketplaces, you're an S.

It's one of the most defensible, lucrative businesses in the world.

But because the likelihood of success is so low, I would have just knocked it down to probably an A, if you can actually get one going.

Even

Let's put Airbnb as an A.

I'm down with that.

I just can't agree with the business model in general being a C, because we're basically ranking in terms of quality and difficulty right.

Yeah, exactly.

And I just think, for example, we could say that the services business, the accounting firm, let's say PwC, right

PwC, 75 years ago, was just one accountant and with a few partners.

And now today, if you want to get audited, you're a public company.

You have basically five options, right?

You are going to pay a fortune for their rubber stamp, right?

So I'd say like we could rank that as a B or an A, but we're talking about the business model.

Okay, fair enough.

Agree to disagree on that one.

All right, this Airbnb is not the company Airbnb.

It's owning Airbnbs, short-term rentals.

So saying, oh, you know what?

Here's how I'm going to make money.

I'm going to get a property.

I'm going to get a home.

I'm going to put it on Airbnb and I'll be a short-term rental unit owner.

Maybe I'll do two.

Maybe I'll do three.

What do you think of that plan?

I'd say it's a D, similar to freelance.

The risk there, regulatory.

I bought a beautiful apartment in Vancouver.

I go to Vancouver a lot and I said oh, I don't want to own a second home, but the 28 days a month I don't use this place, I'll Airbnb it.

So I Airbnb it.

I'm making a fortune.

It's great.

I love it.

All of a sudden, city of Vancouver changes the regulations.

Boom.

There goes my margin.

There goes my business.

Total nightmare.

And now I just, it's fine.

I have a tenant, but it's just not nowhere near as profitable.

The same thing happened to my parents.

They were Airbnb-ing their house in San Francisco, making a killing.

And then San Francisco changed the rules, said you can only Airbnb 90 days out of the year.

So basically three out of the 12 months you can Airbnb.

So then nine out of the 12 months, their cash cow disappeared overnight.

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All right, I want to do content creator.

So for the person who says I want to create the next podcast, I want to be the next YouTuber, I want to be an Instagrammer, I'm going to build a following and then I'm going to make a ton of money because I'm going to get brand deals or launch my own products or whatever who knows what, but I'm gonna go all in on being a content creator.

So I think that's probably a D.

I would argue that if you become the next Andrew Huberman, you're an A.

You think about it in a world of AI.

If somebody has a trusted relationship with you, it's a phenomenal business.

The issue with it is it just doesn't scale.

So in terms of defensibility, it's amazing. highly profitable, very simple to operate.

But one of the problems with it is and I know a lot of these people if you don't show up and you don't bring the fire on the camera every single day and you stop posting, your business goes to zero.

And I think that's a bit of a prison, I think, for some people.

Why did you say Huberman?

Is it because of the trust factor or because it's in health or wellness or medical?

Is that the important factor there, the niche, or is it just the level of trust that people have.

If Huberman was doing the same sort of podcast, but he was doing it about candy.

He's reviewing candy.

And if you sell candy, the affiliate margins are not that good.

The candy company won't pay that much to do it.

If you're doing health, if you think about Huberman is basically promoting Athletic Green's health supplements, that kind of stuff, those things can be very, very profitable and the customer lifetime value is high and so he can charge a hell of a lot for advertising.

And then also, i mean, if you think about it like huberman, we own, we're friends with with andrew, we own a yerba mate business with him he is able to basically bring i would call it 20 million dollars of free marketing to any business he becomes a part of, and so if he takes equity in businesses or owns businesses, he grows them massively.

I mean, we took the Yerba Mate business, I think it's grown 300, 400% since he got involved with us.

All right, next one, owning real estate.

So buying properties, either cash flowing them or flipping them.

Obviously this is a big space, right?

So there's like a thousand variations of how you do this.

So I think it's a little bit of a tough one.

But just give me your general thoughts on going into real estate, as whether it's multifamily, it's commercial real estate and saying I'm going to try to buy these properties using some debt.

Maybe I'm just going to cash flow these properties, or maybe I'm going to try to improve them and sell them for a higher cap rate when I exit.

The beauty of real estate is predictability, I think, depending on the sort of real estate.

I think there's really a big distinction between real estate ownership, where you just buy something and you rent it out, and then there's real estate development, where you actually buy a piece of land or you buy something.

You add value.

I remember talking to your I think it's your brother in law who does the real estate, where he he was like look like I know all of the people that um, you know, need space and I just go and I acquire a strip mall and before I close I already know that I'm going to put someone new in and you know it's going to be a way higher quality asset and then you can refinance it out or whatever.

To me, that's kind of a no brainer way to make money.

Um, so I, I would rate that a C probably.

Go and see.

And why is that not higher?

Because if you're not doing the value add or you don't have that unfair advantage like my brother-in-law has,

The reason I don't really do much real estate is because I don't like anything with a ceiling.

You know, if you buy let's say you buy a 40 tenant apartment building or something like that the rent is going to be let's say, some old lady owns it.

She hasn't increased the rent in, you know, 30 years or something like that.

You're going to buy the building, right?

Over time you can get an increased yield by increasing the rent, but there's a ceiling on that rent and you can't innovate to make more money.

Whereas in a business let's say a digital business, like a web design agency or a software company, you can take your profits and you can actually grow the business and you can increase revenue.

It's very difficult to do that in real estate without massive capex.

Yeah, well, I think they do the same thing, right?

They take the profits or they refinance and go buy a second property.

What's wrong with that?

That works.

Yeah, I mean, you can do it.

I don't know.

It's just not something I've spent a lot of energy on.

When someone tells me that they're going to go do it, I think of all the things they could do.

That's a pretty solid approach.

And I think, one of the things I've noticed.

I know a lot of really wealthy real estate people and I've been fascinated by how illiquid it is.

So you'll meet people who have 2 billion of real estate, but the actual profits that come out of it are like 20 million a year, which is amazing, right.

It's made their family wealthy.

The bank understands it.

They live a good life, but they don't actually have that much liquidity and it's often tied up in the next project and the next project, and the next project.

So I think it's a great way to make your kids really, really wealthy and ruin a few generations, and then they'll buy an F1 team and then lose all their money.

All right.

We have nothing in the S tier yet.

So I got to try to get there.

I think this is the guy to do it.

So I have an icon here of Warren Buffett and this represents investing.

So just being an investor generically, but I think maybe the way I was really thinking about this, because I think Buffett is a little unusual in the way that he's structured his company

So really, this is to me owning an investment fund or being in the money management business, investing other people's money and taking fees and a profit off the top of it.

Is that?

Well, no, I would argue a little bit differently.

I'd say investment management is an incredible business, but I wouldn't put Buffett in that category because he doesn't actually manage other people's money.

Yeah, I know.

That's sort of the exception here.

So the distinction I would make, let's say you're a hedge fund manager, like my friend Bill Ackman.

So Bill, for example, he went out, he raised hundreds of millions of dollars.

He bought a bunch of stocks, would go and advocate for these companies to improve and then he would take fees on that.

And if you think about that business model, you actually don't need to really put that much money into it yourself and you can make a profound amount of money if you perform.

The structure of hedge funds is typically two percent of managed assets plus twenty percent of the profits.

So let's say that you raise a hundred million dollars and you triple it in a short period of time.

You can suddenly make 30 40, 50 million of carry and fees and stuff.

So those are really tremendous businesses, in my opinion.

The problem with them is that your investors can pull their cash out.

And so what Bill has done that's so smart, and I would rank Bill as S and Buffett as S, and then other asset managers lower.

They have permanent capital.

That's the real distinction.

And that means their investors can't pull their money out.

Um, they're going to make those fees no matter what, and they can literally.

I mean, if you think about sorry, why is it permanent capital?

I can sell my Berkshire stock today.

I can sell my Pershing square today.

What do you, what do you mean?

It's permanent.

What's permanent about that part?

Is that, or are you not talking about that?

Is there some other.

You're just trading little stock certificates of ownership between the businesses.

But what I mean is typically a hedge fund manager would say um, let's say, I give a hedge fund manager a million dollars.

I can withdraw that capital.

And the only way that they can give me that money back is by selling stock.

So let's say that you let's say you're the hedge fund manager.

You go out, you invest in some company.

The stock goes down.

I lose faith.

I say, Sean, I want my money back.

You have to go sell part of your stake, potentially losing quite a bit of money.

Whereas someone like Buffett or Ackman, people are just trading the stock certificates.

Right.

Those are just ownership shares.

Sure.

Even when I'm out.

Whoever I sold it to, they're in.

So the money is essentially there even if the stock price goes down.

Exactly.

And if you think about it just in terms of the beauty of their business model, Buffett's is more complex.

Bill's business, for example, he simply just goes out and he buys 10 stocks.

And he has 50 employees and he makes hundreds and hundreds of millions.

Sometimes, some years, I think he makes billions.

Wait, wait, wait.

So Bill Ackman's firm only has 50 employees?

Yes, exactly.

50 employees.

I think he manages.

How much does Bill Ackman manage?

So 16, 16 to 20 billion, somewhere in there.

So, okay, let's call it 15 billion.

So he's got 15 billion under management.

You know what?

We got to break the rule and we got to do a little public math here.

I know he takes the 2% fee or he doesn't take the fee.

He takes a fee on.

I think it's a blended fee of between one and 2, depending on the pool of capital.

Let's call it 1.5%.

So let's say he's taking 1.5%.

So his firm with 50 employees whose job is to go and analyze and find 10 stocks to own, is making 200 million plus a year in cash flow off of just the fees.

Well, you got to remember.

So that's revenue cost.

There's cost to it transaction legal, all the other stuff.

And again, I think that number swings around based on the performance and stuff as well.

Right.

But how high could that cost be?

He's got 50 employees and is legal.

He's not doing M&A with private companies.

He's doing public company investing.

I believe.

I mean, we don't need to do the public math.

People can look it up.

But if you look at Pershing Square Holdings, his public company, you can basically see what they pay him in fees every year.

OK, that's incredible.

So that and that's let's not forget, that's no matter what.

That's not, that's not the reward.

That's not the 20% reward.

I remember.

I remember talking to him in 2020.

He was freaking out about COVID and he had put 25 million into a derivatives position, betting kind of buying fire insurance against COVID dropping the market.

He made $2.4 billion of profit or something insane off of that.

I think it was $25 million bet.

And you think about he got fees on all of that.

Like it's unbelievable.

And he also owns, let's not forget, he owns like $6 billion of that capital he manages.

So that's his money.

Okay, that's incredible.

What about the other side of it, where you talked about the hedge fund managers?

So where are we putting them?

So if Buffett and Ackman are your first S tier, where are you putting the general hedge fund manager, money manager who's got assets under management but not permanent capital?

I'd give it a B, just because of the nature of the swings.

You can...

You're pretty much guaranteed as a.

Let's say, you have a large venture capital fund or you have a large hedge fund.

You're pretty much guaranteed, over 10 or 15 years, to become a decamillionaire, almost no matter what, which is kind of a crazy thing about the model.

But you might get blown up at some point.

But explain the inconsistency, because I believe Ackman also has like blown up or almost got blown up.

You know a couple of times.

What's the difference in your mind between what you're talking about?

Bill keeps getting shot and then miraculously getting back up.

He's the 50 cent of the investment world.

I mean, he has a great line.

He just says the secret to success in business is just getting back up over and over and over again.

And what happened to him was Bill has made so many incredible investments.

But I believe in 2014, he bet against Herbalife, which was an MLM.

And then he also bet on Valiant Pharmaceuticals, which was a pharmaceuticals company that was basically increasing prices.

It was a very elegant, very smart model, but it was run in a kind of unethical way and the company blew up.

So between Herbalife and Valiant Pharmaceutical.

His investors lost faith in him and a lot of them pulled their cash.

And so suddenly, his whole hedge fund is blowing up.

And fortunately, In 2012 or 2013, Bill had raised I believe it was like 4 billion of permanent capital in Pershing Square Holdings.

And Bill was able to basically bet on himself.

He went to JP Morgan.

He went to Jamie Dimon, who he's buddies with.

And he got a $500 million or something loan to bet on himself and buy more stock.

And he managed to come out the other end absolutely killing it.

And I think the big lesson for him was don't short stocks because he was shorting stocks and be a lot more disciplined about investing in businesses with leverage or exogenous risks.

I think there's this funny story.

Bill went out and he bought these little plaques and he puts them on every single person's desk at Pershing Square.

And it's the Ten Commandments.

It's like, thou shall not short stocks.

Thou shall not invest in a business with too much debt, etc.

So Bill has really learned the lesson and been through it.

Do you know how in venture capital the sort of the normal VC fund isn't going to?

It's basically like a pretty poor performing asset class because you're illiquid for 10 years.

And then the sort of you know, the IRR that you get out of it is less than if you just kept it in an index fund.

So like venture capital on the whole is a pretty bad asset class.

Of course, the top funds perform pretty well.

Is basically hedge fund management, the same distribution, or do they, on average, do better?

So uh warren, there's this great story.

Um, there's this guy, ted saeeds, who's a.

He's a fund manager, a fund of fund manager, and he had lunch with buffett and he said warren, i'll bet you i think it was a million dollars that i can choose a basket of hedge funds and they'll outperform the s?

P.

And i believe he lost that bet to buffett.

Buffett basically said on average, funds do not outperform, which is very true.

I mean, most hedge funds, most venture capital, do not perform, and i think That's kind of what's distinct about private equity.

I think.

I don't know for sure, but I think most private equity funds at least have a reasonable return.

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All right, we got a couple more I want to do.

Local services.

So you're starting a local pest control business HVAC things that are.

I got the handyman icon here because it is something that you do with a guy wearing boots and overalls that comes and does something in your local area.

So I would say that's a C.

Those are hard businesses, but if you can dominate a local industry let's say you're really good at internet marketing and you own an HVAC business and you're able to hire great technicians there's only so many technicians out there.

And so they're kind of fundamentally difficult to compete with.

And I think they're challenging.

I know a lot of people over the last few years who have bought HVAC businesses or plumbing companies and they're like, you know, guys that look like you and me and they, you know, they come in and they're dealing with all these blue collar guys and they're like who the fuck are you?

Why would I come and work with you?

Uh, and so I think, I think they're, they're good businesses.

If you're like, let's say, you're a very enterprising HVAC technician and you want to start one of these businesses, you can do phenomenally well, but I think they're actually quite difficult to operate for a outsider.

All right.

I got a couple more um venture capital slash angel investing, although they're a little bit different.

One's investing other people's money.

One's investing your own.

I bucketed them together here.

I would pay angel investing as an E.

I think um.

I view angel investing a little bit like playing roulette.

I like to play poker.

It has better odds.

I look at private equity or buying businesses more like poker.

And I just know.

I think the classic entrepreneur story that you guys have talked about a million times is you make some money as a founder.

You want to pay it forward.

You don't really get stocks in real estate and businesses or acquiring other businesses.

Or they seem slow or they seem a little too boring, a little too common.

And you hear a Jason Calacanis, you know, I'm the first investor in Uber and you know, whatever.

And so you want to do that same thing.

And it's a little bit like um you ever been pitched by a founder?

And they have like a popsicle company and they say like well, I know we're like tiny right now, but there's this one company that sold to Procter and Gamble for 300 million.

It's just, it's all story driven.

Um, and don't get me wrong.

There's amazing angel investors like Lockie groom and people that do amazing stuff.

But I think for laymen, it's a terrible, terrible thing to do with your money.

Yeah, it does feel a little bit like golf.

It's an expensive hobby, but if you enjoy it, fantastic.

Give it more power to you.

We talked about this, I think, on the last episode or two episodes ago.

When I first started out, I got in the habit of angel investing.

I have $30 million or something tied up in angel investment.

Completely illiquid.

I have no access to it.

I'd much rather own stocks and real estate or something.

All right.

I have one more here that's buy a local sweaty startup.

Oh, we have Cody Sanchez entered the chat here.

I couldn't find a good icon.

So I just put Cody on here for lack of a better term.

It's a picture of Cody at a laundromat.

And I think she's, I don't know.

I don't actually know, by the way, if Cody really pushes that you should buy laundromats, but I think that's a little bit of a narrative.

I'll use her as a figurehead for this idea that you should find a local sort of brick and mortar, a sweaty business.

Go buy a boring main street business And you're going to cash flow.

Then you reinvest the cash flow and you buy the second laundromat and then you buy car wash and you keep going in that direction.

Where does Andrew Wilkinson rank that model on the tier list?

I mean, I love Cody, and I love Nick Huber.

I think what they're advocating is basically look, don't go and work for someone else when you can create your own job.

And I think if you can be an owner-operator.

But they don't say that.

I think if they said that, it would be a lot more of an honest broker, right the way you.

You said one key word, which is what they say is own your own business, and you said own your own job, and i think there's a big difference between those two things.

Well, i think that's a fundamental question are you buying your own job?

Are you buying a business?

If the business returns more than the cost of the owner's salary, then i'd say that's great.

I'd say that's a c chris, and i always say like, if you can skip the line And instead of working up, working your way up and starting businesses, you can just buy a already working business and just improve it.

I think that's phenomenal.

I mean, it's really a lot of what we've done.

So, you know, my story, I started the web design agency metal lab, um, that business grew.

I then took almost all my profits and I started like 10 other businesses and almost all of them failed.

It was really exhausting.

And at the end of that process, I had one business that I could sell.

Another one that was kind of alive.

But I started 10 and I'd put almost $10 million or $15 million into all these terrible businesses.

If I had just taken 1 million, 2 million a year, and just bought businesses and just improved them, I think I'd be much farther ahead than I am today.

Well, that's what you eventually started doing, right?

What you did at some point was you guys decided to switch into buying businesses that are already working as your main business to be in.

And I believe you guys invested.

You can correct me if I'm wrong, but I think the initial kind of seed capital was you took something like five or six million bucks from Metalab profits.

And you were like, this will be the base.

And then we'll try to find these sort of compounding businesses that we can hold for a long time what you guys call wonderful businesses.

Great.

And that's what has become tiny.

The, you know the public company.

Today, I think, the market cap something like 200 something million dollars.

Yeah.

Basically, we just started buying businesses.

And 2013, when we read about Warren Buffett and we're like, oh my God, this guy's doing easy mode.

Why are we doing hard mode?

But, to be honest, Buffett has this great quote I'm a better businessman because I'm an investor, and I'm a better investor because I'm a businessman.

And I think that in order to be a good investor, you need to have run or experienced the chaos behind the scenes at different businesses.

And I think the beauty of what we did was we got really lucky.

So we went to the gym.

We didn't deadlift 300 pounds.

We got really lucky with Metalab and it worked.

So that built our confidence to go try more stuff.

Then we tried every bad business model.

You know, we did drop shipping.

We started a restaurant.

We did a skin care company, like all sorts of dumb stuff.

We always joke we put forks into electrical sockets.

We learned a lot.

And then we started investing.

And so what we could do is we could look at these businesses and say oh wow, this is actually a really high-quality business.

And I know that because I've operated a similar one.

And do you remember how much capital you started doing that with?

Once you stopped starting new businesses, you decided to go start buying?

I think it was like four or five million bucks.

We basically sat down and said, okay, we're going to start this thing called Tiny.

I'm going to own 80%.

You're going to own 20%.

And that was only because I had more capital because I was the one who owned most of Metalab.

And Uh, Chris put in 500 K or a million bucks and I put in the rest and that's it.

We never put any more money in.

So that's what I was going to ask you.

Did, was that just a seed or did every year?

Oh, we found a new business.

Let's take more metal lab profits and put it into tiny or no, no, nothing.

I mean, we merged, so it was interesting.

So I actually own metal lab myself.

I own 90 of metal lab and then my brother and Chris and a few other people were small shareholders in it.

And so, um, That's what basically I diversified with.

So I went off and in my family office did all the venture investing and bought some real estate and bought newspapers and restaurants and other dumb stuff.

But tiny itself really just grew from that original amount.

So that's pretty incredible.

I feel like I got to ask you this because I think you get a lot of shit nowadays.

I think a lot of people go look at the tiny stock.

And basically you see, I think you guys went, or you like did this reverse merger.

And so then the stock basically like shoots up in 2021 at the kind of like peak era at that time.

And then basically it's just a downward trend since then.

And I think a lot of people I see on Twitter want to kind of look at that and say oh, this guy calls himself the Warren Buffett of the internet.

And he says he buys these great businesses, but what's going on?

Look at your stock.

And so they see that and they say man, is this guy like many other people on the internet who maybe either overstate their claims or whatever right?

That's a common problem on the internet I would say on the whole is that you don't know who's real, you don't know who's actually good, and so you have this public company.

That's a little bit of a public scoreboard in a way, and people get really riled up about that.

On the other hand, and this is kind of like, you know, the two parts of the trial, right?

You have the prosecution and the defense in a way.

The other hand you say look, there's a guy who took four or five million, you know, first created this design agency.

That was really successful as a business has generated, you said, over 100 million of profit lifetime.

And then you took, you know, four or five million bucks and you compounded that into a 200, between 200 and 300 million business that holds all these interesting assets.

And, you know, cool, like the stock prices go up and down.

That's not necessarily the end all be all.

And even if you said, look, that's how big it was, that's still fantastic.

I don't know a lot of people who are listening to this that have done anything that's more impressive than that.

So I admire, even if your worst case, least generous interpretation is today's current stock price, that's still pretty damn impressive.

So I guess, what's your reaction to this?

You're sitting there.

You don't wanna go out there and fight all the internet trolls or anything like that, but how do you see this?

What's your take on this?

It's pretty funny because we started in 2006, basically 20 years ago, bootstrapped this business until 2023, when we went public.

And over the last 10 years, I think since we started Tiny, we've compounded our earnings at 25%.

We do almost $250 million of revenue.

We have $65 million of ARR.

We do over $40 million of EBITDA.

And Chris and I still own the majority of the public company.

And these are all things you can look at the public filings and see.

If you...

Also, we talked about asset management.

I mean we also own or we manage a 200 million fund managed by the public company, with 40 million of it our own capital.

And that owns Aeropress, Letterboxd, all sorts of other businesses.

If we include that, that adds another $65 million of revenue.

So we're over $300 million in revenue across 30 businesses.

And all the businesses in the fund are profitable as well.

I don't know.

I'm kind of like, if that's failing, like sign me up.

Right.

And, and I don't know what to say to the trolls.

Like, you know, don't feed the trolls.

Right.

Well, let's take the, the, the vulnerable side a little bit.

Correct.

Cause I, I always ask myself this whenever I get criticized and my first reaction is like, what the hell are you guys talking about?

Like, do you not see, do you not see that?

And I want to like kind of defend myself, but at the same time I always ask myself this just for my own learning which is basically like what about?

This is fair, but what is the fair criticism?

And I think that's always been an important question for me.

It keeps me honest because, you know, look, either I'm just going to ignore it.

I got nothing from it.

I'm going to get mad about it and think they're stupid.

I get nothing out of it.

Or I mostly, you know, disregard what I think is the sort of like off-base line of thinking.

But maybe there's, you know, some things, some part of it that's fair.

Oh, it is fair that I said this.

It is fair that I didn't do this.

Or it is fair that I thought it would be X and actually it turned out to be Y.

You know, those are some things that are fair, right.

So, What would you say is fair criticism about you?

First of all, I just want to say, I really empathize with people.

I remember watching like shark tank and I'd be like, oh wow, Kevin O'Leary, you know he sold his business for billions of dollars.

And then you go read the juicy gossip that you know he he got 10 million or whatever out of that deal.

And I think it's very easy to kind of have the one blurb and then judge someone.

And I think, before I went through this experience, I would just believe what I read on the internet and

And you kind of enjoy it, to be honest.

I think there's this dirty, horrible part of humanity, myself included, that loves when somebody who's on an upswing falls.

Talk about Bill Ackman.

Bill's an amazing investor, but he's loud, right?

And I'm loud, too.

I'm extroverted.

I like talking about what I'm doing.

I like talking about our companies and everything.

And it's really, really fun to watch someone loud like me fall in the mud.

Right.

And I see this in myself.

You know you kind of cheer and enjoy it like celebrities.

Go through this too, where it's like they're awesome and everyone loves them.

And then all of a sudden you know they like to shit on them for a few years and then they love them again.

Like Justin Bieber, everyone hated him for the last five years.

Now everyone loves him again.

I just kind of think that's the course of things.

And I think it's kind of I just got to eat humble pie.

And there's a lot of great things I get out of being loud on the Internet.

Uh, and talking about this stuff,

I've connected with so many incredible entrepreneurs.

I get to, I've made so many new friends.

Uh, you know I I love talking about this stuff and teaching people about business and stuff, but this is the price and I'm willing to pay the price and it sucks.

Um, and, and for me it's a button, right?

Like when I was a kid, I was always I have ADHD and like I'd always fuck up and I'd always be the one in our family that was blamed for everything.

And so being misunderstood is a big button and I really have to resist uh, getting on the horn and trying to argue with everyone, because it really doesn't help.

So I think, for me, we're just focused on delivering good results and building great businesses, which we're continuing to do.

And people on the internet are going to twist it however they want to.

The reality is, 60 of the businesses that went public in 2023, when we did, are still under their IPO price.

So Asana, Sweetgreen, Coupang, like all these other businesses are They're all under IPO.

Does that instantly mean that what the founder has built is invalidated and they're a moron?

No.

And I think that you know the fair, the really fair criticism though of us is our business is a bit confusing, right?

Even our stock chart, like starting businesses.

So I made all this money from the web design business, started a bunch of companies.

One of those companies became the dominant seller of themes in the Shopify ecosystem, and And Chris and I always had it in our head

We were like, let's take a business public.

We'd love to do that.

And so we actually went and we partnered with Bill Ackman.

We had sold the business to a family office.

We bought it back and we took that business public.

And we took it public in January 2021.

Do you remember what was happening in January 2021?

Every stock was going to the moon.

And so you have this business that's doing...

40 million or something in revenue and like 7 million of EBITDA.

And it goes to literally the day we took a public.

It jumps from a 250 million market cap to 12 billion.

And so we didn't take a public at 12 billion, but that first day.

That's where the chart starts, right.

And then the mania is over and the chart starts going down.

And as the chart started going down, we ended up deciding, hey, let's take tiny public.

So we merge into it.

So really, like the tiny story, is this right?

We've been compounding at 25 from almost nothing and what people see unfortunately, because that's what's in the public market is this little you know, this little dip down here and, to be honest, like i get it, i think it's like you really have to take the time to understand the business and the story and why the you know why it looks like that.

But i'd encourage people to do their research and actually dig in and understand what we own, because From my perspective, I think we own a lot of pretty incredible businesses.

And you still own the majority of the business?

I do.

And is that still the majority of your net worth, basically?

How much skin do you still have in the game?

Yeah, this is what's so funny.

People have said, oh, you did a pump and dump.

And I'm going, what are you talking about?

I've sold almost no stock.

And the only stock, I did one large transfer, I think of...

$8 million, I moved it to my foundation so I could start doing philanthropy.

I haven't taken any cash out.

I still own all the stock.

And people will say, oh, you're a pump and dumper or something.

I don't know.

It's kind of sad.

Yeah.

And so you hear all this, and you've also talked about this idea of the courage to be disliked.

I think maybe that was the right book at the right time for you during this period.

I haven't actually read the book.

It's a killer title.

What is the thing that I can learn from that book?

So Sam just did that great.

I love that episode he did where he basically said here's the recipe to a miserable life, and let's invert.

And one of my favorite inversions is that you actually want people to hate you.

You do not want to be liked by everybody.

I think that's a great signal that you're doing life wrong.

And I think if you told me this 10 years ago, like, I would think that's insane.

I remember I read this Warren Buffett quote it takes 20 years to build a reputation and five minutes to ruin it.

And for me, I really internalized that.

I was like, oh my God, I need to make sure that, you know, everyone thinks positive of me.

Right, I better protect this reputation then.

Every founder I meet for coffee, I have to, you know, woo them and make them like me or whatever.

And I really felt that I had to be like consistent and predictable.

So, for example, like you know, I buy companies and I'm you know, I'm a Warren Buffett, like a wannabe value investor kind of guy, but I also really like startups.

I like starting restaurants and all this other chaotic stuff and people don't like that.

And I remember the moment, like I kind of realized what was going on.

My dad retired.

My dad was an architect and he retired and I took him out for a beer and I said dad, what now?

You know, what are you gonna do with all your time?

And he was saying he didn't really know.

And I said, well, dad, I've got money.

Why don't we team up and you can become a real estate developer?

You can build the things that you've always wanted to build.

And he goes, what do you think someone's going to say if I suddenly call them up?

They know me as architect David.

And all of a sudden I'm pitching them on a real estate development.

People don't like it when you leave your box, Andrew.

And I was like, oh my God, I know that feeling.

Have you ever had like a, a restaurateur friend who, like pitches you on a tech startup?

They're starting all of a sudden or, you know, your yoga instructor gets their real estate license.

They want to sell your house or whatever it is.

My mental reaction, I hate this about myself.

My mental reaction is stay in your lane.

I don't like it.

It makes me uncomfortable.

I don't know why.

And it's incredibly hypocritical because like, I'm, I'm a flip-flopper.

I love jumping around.

I'm an inch deep in a mile wide.

And so it's like, I hate in others what I hate about myself.

And I realized we're all like prison guards, you know, like we all have these labels.

Like for me, it's like, you know, I'm an investor and an entrepreneur, but then it goes deeper.

It's like, I'm in tech, not real estate, you know, no real estate allowed.

I'm bootstrapped.

You can't do venture.

That's weird.

If you do that, I'm pro crypto or anti crypto.

And these labels kind of lock you into this identity.

And I've seen this in a lot of big public figures.

So like Do you remember when the CEO of Goldman Sachs, David Solomon, it came out that he was like a DJ?

He loves to DJ, right?

This guy on the weekends and evenings, he DJs.

And the press went crazy.

There's an article in The Economist about how you know is Goldman Sachs suffering because he's DJing?

Do you think they would have said that if he was playing golf, right?

Or, like you know, we see like Kim Kardashian get passionate about prison reform.

Like fuck you vanity project.

Right, jonah hill starts surfing.

Let's make mean memes about him.

Michael jordan plays baseball.

You know betrayal.

And so, like i realized like our brains are just prediction machines and they get upset when things don't match.

And so for me, like i realized like i don't fit cleanly in a box and it's it's messy, like everyone else.

And so i remember like i was sick and i started like asking all my friends about this and stuff, And I was sitting up at my lake house with a group of entrepreneurs.

And I talked to these guys and I said, look, what would you do if no one was looking?

And one of my friends runs this massive industrial business, like you know, billion dollar business.

And he says, you know, my happiest moment is behind the oven cooking for people.

And I actually would want to start a restaurant.

And I said, oh, would you want to you just want to own a restaurant?

He said, no, no, no.

I want to be the chef. of like a Michelin star restaurant.

And he said I feel like I could never do it though, because I have so much of my ego tied up in being a business person.

And everyone would think that I'd gone insane.

And at that moment I was like, no, I wouldn't.

But when I think about it, I would definitely be gossiping and going, oh my God, he's lost his mind.

And so he's escaped the prison and we need to beat him with our batons.

And you see this with legal degrees, bad marriages, disappointing your parents, the industry you've spent 20 years in.

And the issue is all these promises were made by the person you were before, not the person you are now.

And so I realized I'm in this quicksand.

I don't know what to do about it.

And in January, I found this book called The Courage to be Disliked.

And it's one of these books where you see the cover and you just instantly kind of know.

You're like, okay, I kind of get it.

And it's really interesting.

It's written in this very odd way where it's a dialogue between this wise old man and a young guy.

And the core idea is just seeking recognition is a trap.

It's impossible to make everybody happy.

And if you try, you're going to end up living somebody else's life.

And so you have to be hated.

You have to have the courage to be disliked.

And reading this book, it was like someone had gave me the keys to my cell.

You know, I'm in this cell and there's no walls on either side.

They're like, by the way, there's no walls.

You can walk out.

And so my New Year's resolution this year was I'm done with the likability game.

I'm going to have the courage to be disliked.

And I'm going to say what's true for me.

And so you might have noticed, like I've been writing a newsletter.

I'm talking about all sorts of stuff.

I'm talking about, you know, having ADHD and, you know, all my weird businesses or whatever.

And I'm just saying, fuck it.

If people don't get it, that's fine.

And, you know, I'm going to keep buying businesses and doing great stuff.

And on this side, I'm going to have a bunch of hobbies.

You know, I like that.

When I was in high school, I used to wear mismatched socks.

I still wear mismatched socks, but I would like I would leave the house and I would be wearing two different socks.

And to me, I didn't even think twice about it because I don't know.

I was just not even, who cares?

It's just socks.

But I

Everybody would comment on my mom and commented on it about the way out the house.

What are you doing?

She was like horrified.

Like, I can't believe you're doing this.

And I was like, what do you mean?

It's just they're both socks.

It does.

Yeah.

The pattern doesn't matter.

Who gives a shit?

And at school, people would make fun of me for it.

But they sort of realized like, oh, we made fun of him and he just continued doing it.

But also, I wasn't even doing it really as like some statement.

I just didn't care.

Like, I just didn't.

I just decided not to care about socks the same way everybody else did.

And I decided that the idea of matching socks really didn't matter to me.

And maybe it matters to other people, more power to you.

But it just didn't matter to me.

And I don't think I realized at the time how important of a like mini lesson or trait that would be in the future.

I remember moving to San Francisco and we were self-funding or not self-funding, but like I had basically like a billionaire backer.

So Michael Birch was funding like the lab we were using to do startups.

We didn't take any outside funding.

But one of our companies started to pop And we got I don't know like a million users, 2 million users, 3 million users.

And, you know, VCs got a little bit excited.

So there was an investor at Founders Fund that reached out.

And I took the meeting because I was always intrigued by Peter Thiel.

And I thought, I don't know, maybe this will somehow lead to me meeting Peter Thiel.

So let me take this meeting, even though I really didn't want investment.

And we go in and I started asking, you know, he's supposed to ask me about the business.

I'm just asking him questions about Founders Fund.

Because again, I don't really care if he invested in me or not.

I'm just here to like learn about them.

And I'm asking all these questions that if you ask a normal VC, what stage do you normally invest in?

Answer, proceed.

What's your typical check size?

Answer, 500K to a million dollars or whatever.

Everybody's got like these predefined boxes, labels.

What industries or what categories do you invest in?

B2B SaaS, enterprise, blah, blah, blah.

They have these labels that they were like, you know.

And I went to the Founders Fund guy, I'm asking the same questions.

He's like, we just, I don't know, we just try to find the singular businesses.

And then we, I don't know, Back up the truck.

Like, how much money do you need?

How much money can we put in?

How much money do you need now?

Then we'll put more money in later.

What stage?

Who cares?

Let's go.

And so he said that when Peter started Founders Fund, he had almost like a Fight Club style rule.

And the Fight Club style rule was the only rule is that there are no rules.

The rules that we set as a fund are going to limit our ability to find the singular business.

And this is why Founders Fund was one of the only VCs to own a shit ton of Bitcoin in And you know, starting 2014 2015, most VCs couldn't even like buy crypto like by their bylaws, basically.

And they didn't even see Bitcoin as a like.

They were so blinders on to like.

We need to find the next Facebook right.

We need to find the next Mark Zuckerberg.

That they didn't think that this anonymous Soshi Nakamoto open source project creating a currency like it broke all the rules.

But that was the thing that mattered.

And so Founders Fund has had a few of these really contrarian bets.

They backed Andoril.

When silicon valley, like.

At the time, it was completely unpopular to back a weapons company.

It was like so, like the the time, the.

The narrative at the time was that that was a bad thing.

In fact, google had to shut down their weapons project.

Uh, they were doing a, they had a big contract with the department of defense and google just turned it down because their own employees were like this is not right, i don't want to sign up to be part of making weapons and killing you know.

And so the companies you know bowed down and the venture capitalists bowed down and there was only a couple of investors and Elad Gill came on this podcast and he said the day I saw that Google shut that project down, I knew there's a huge opportunity.

If anyone was willing to go against the grain and actually build a weapons company, they were going to do phenomenally well.

Like it makes total sense for the U.S.

We're going to have a defense department, right?

I think everyone agrees in that.

And the defense department is going to need weapons.

And if the weapons are built by a high tech company, that's going to be better than building low tech old school weapons.

Like this all makes sense.

And that's when he backed Anduril and Founders Fund backed Anduril.

And so I just saw the payoff.

You know, in Silicon Valley, they call it being contrarian, but what does it feel like in practice?

I think it's what you're talking about.

The courage to be disliked, the courage to look stupid, right?

The ability to think differently, right?

All these terms that have been floating around, they all sort of apply to this thing.

And I'll share one more story that kind of reminds me of this, which is one of my business heroes is Jesse Itzler.

And he came, you came to one of our hoop group events, the basketball camp we do.

So Jesse was there and Jesse was laughing.

We were at the table, he's just laughing.

He's like, All these guys, he's like, they're all talking about their like crazy ambitious plans.

Like this guy's building a city.

This guy's building a religion.

This guy's building rockets.

This guy's building this.

And he goes I'm literally selling a calendar because his project right now is called the big ass calendar is literally a calendar you put on your wall.

So you can be a little more intentional about how you're going to spend your time this year.

And he's like, I think it matters.

But like in the grand scheme of this, I sell a $19 calendar.

You know, it's just funny.

I'm even funny.

I'm even here.

And here's the guy who reinvented himself 10 times, did not stay in any box, right?

Started as a white guy rapper.

And that wasn't really fully working out.

So he writes a jingle.

It becomes the New York Knicks song.

He sells a sports jingle company.

When he sells the company, he gets to ride on this guy's private jet.

He's like, this is amazing.

Starts a private jet company.

Gets involved in a coconut water brand.

He now hosts a big running event because he loves running.

He has a sauna company because he loves sauna.

And he basically is just like almost productized himself.

And none of the labels...

That you would, you try to whatever label you try to apply to this guy.

Like, oh, he must just be a biz, a brand builder.

Then he tells me about how he, you know, invests in this.

Like he, he decided that water was going to be really important.

He bought, he invested in like land that produced really pure water.

And I was like, oh wait, so you're an investor.

He's like, well, no, I don't really, I don't really care about investing.

I just, so he was unlabelable.

And so I, I really find a lot of inspiration in people like this.

And the thing that he said that really stuck with me.

I was like so what are you going to do after this?

And you know, in this room, when you're surrounded by these hyper ambitious, hyper talented people, it's very tempting to just be like oh, I need to ratchet up how big my thing sounds.

You know that I'm working on.

Otherwise I'm sort of low status in this room.

And he told me he goes.

Oh, I think I'm going to go be an assistant basketball coach with this like local like uh, like this all black college that's nearby.

Like, I want to go be the assistant coach.

Like I love basketball.

He's like, but dude, I was like, I was like, what are you, why assistant basketball coach?

Like, Clearly not for the money, like, you know, because you want to get into basketball.

He's like, no, dude, I just want to be on the bus.

He's like, some of the best times in my life were on the bus going to a game.

He's like, if I could just be on the bus, oh dude, that's going to be good for the soul.

And I just admire this guy having the courage to be like yeah, I'm going to go do this thing.

That sounds completely random.

But as soon as he says it, it instantly resonated.

And like I'm actually now an assistant coach for a high school basketball team near me, because I was like dude, I want to get on the bus.

That actually makes total sense to me.

That was a huge part of my childhood.

I would have so much fun doing that, even though I don't know how that fits with the rest of the stuff.

It doesn't really need to fit.

It just needs to be something I want to do.

All that totally resonates.

I mean, I think... Do you ever listen to Invest Like the Best?

Amazing, amazing podcast.

He has some great guests.

But there's definitely an archetype.

And the archetype is the autistic super genius investor who's like, I...

You know, I buy laundry or not laundromats.

Let's say, uh, you know, it's like Brad Jacobs.

He's like I just you know, I choose an industry and then for five years I buy every company in it and I take a public and then I make you know I compounded 30.

And then I go do it again and again, and again.

And there's a very clear formula.

And I have never, I've never had a formula.

And I think the benefit of like, there's okay.

Like I was on Kauai, the Hawaiian island.

And someone goes, you've got to go to this donut place.

They fry their donuts in coconut oil, and they're these purple donuts made of sweet potato.

And I'm like, okay.

So I go, and it's amazing, delicious donuts.

And I start talking to the guy behind the counter, and he says, oh yeah, we're expanding.

We just did one in LA.

And I said, what?

You're like a little tiny donut shop on Kauai?

How did that happen?

And he goes, do you know Kevin Rose?

And I'm like, yeah, I know Kevin Rose really well.

What are you talking about?

And he goes, Kevin came and he ate these donuts and he loved them.

And so he invested like $10 million in our business.

And now we're scaling it across the country.

Now, Kevin is a fascinating guy.

I mean, last time I talked to Kevin, he's like, yeah, I did the donut company.

And then I'm flying to Sweden tomorrow and I'm meeting with a teenage engineering which is like this audio file company or whatever.

And then, you know, he told me about this Alzheimer's company, this company that's doing an Alzheimer's drug he invested in.

None of those things fit together in a box.

And Kevin is a great example of when I see Kevin on a podcast, I jump.

I have to listen to it.

The Random Show with Tim Ferriss is my favorite show in the world.

And both of those guys have been so good at not allowing anyone to put them in a box.

And as a result, they've created this magnet.

I had two options.

Let's say I can be value investor Andrew with my formula.

It'll be very good for raising money.

I can go on and invest like the best.

I can tell my clean story.

I'll look like a duck and quack like a duck, right?

There's a lot of positives to that.

You get less hate, easy to raise money, investors like it, whatever.

But if you're just interesting and you share what you're doing like Kevin Rose does, really interesting things come to you.

And, I would argue, most of our best businesses come from me.

It's like you know, I was a barista and I got obsessed with coffee and I bought Aeropress.

I love movies and I tried to invest in film.

So I actually like had this period where I was like flying down to Hollywood and meeting people and looking into investing in movies and stuff.

And I looked at it and I was like, I'm going to lose so much money.

And at that same time, I happened to be in Auckland with Tim Ferriss randomly.

And I...

I was in town and I went, oh, there's this guy who runs Letterboxd there.

I should have a coffee with him.

And that coffee, literally I had coffee with Matt and I made an offer for the business within four hours.

So like these things happen randomly.

And I think you need to create that magnet for interesting people and entrepreneurs to seek you out.

And I don't know that anybody listens to.

You know the autistic super genius.

Talk about his formula and spreadsheet for buying things, a type of business and goes I want to do business with that guy.

I want to sell my business to that person.

Maybe there's a certain type where that is appreciated, but that's not my jam.

And I'm going to get my 2% to 3% hate quota for that, and that's just fine by me.

You're going to get the hate either way.

You think the ASG crowd doesn't get the hate?

Of course they do too, right?

Totally.

You're going to get the hate either way.

If you're not getting the hate, it's just a signal you haven't really done enough.

Yeah, you haven't made.

How jealous are you of you?

Are you, by the way, of those guys, right i?

I wish that i could be that focused.

I wish i'd get that excited about buying.

You know waste management businesses?

I do it, but it's just not true.

You know it's not true to me or you exactly.

Why would i be jealous of something that i would be miserable of you?

Imagine my first million if every time you just talked about one vertical right be the most boring podcast of all time.

Dude, the greatest hack in the world is if you're going to be jealous, be jealous of the inputs, not the outputs, All right.

I just said something profound.

Pull over your car, write this down.

Okay.

Listen, everybody looks at the result that somebody has in their life and they get jealous of the result.

And that leads you astray, because you don't even really know what it takes to be that, to get that, to have that right.

If you're going to be jealous, it's hard.

So most people try to just turn off the jealousy knob.

I'm just not going to do it.

Well, good luck with that.

It's a pretty tough thing to do to really, truly kill envy inside you. right?

There's a certain level of enlightenment and wisdom you need to reach to truly just never feel that envy again.

So instead, just redirect it.

Get envious of people whose inputs you're jealous of, their day-to-day, the work that they do.

And if you're like, man, I would love for my day to look like that.

I would love to work like that.

Not the results of the work, but the work.

And so, for example, Bill Simmons is a guy like this.

I don't know how much you know about Bill Simmons, but he's a sports podcaster.

But before that, he was a He was a blogger.

You know, he tried to get hired by a newspaper.

They rejected him.

So he starts his own Boston sports guy blog.

And he's just sitting there writing about his hometown sports.

Cause you know, since he was four years old, his dad's been taken her to Boston sports games.

And he somehow like blogged his way literally to like ESPN ended up giving him his own section.

Then when he's at ESPN, he's like, I'm not just like any.

And by the way, they're like, he's a call.

He's a journalist.

No, well, he doesn't do journalism.

He's just writing as a fan.

So I guess we'll call him a columnist.

No, he's not really a columnist.

I guess he's a blogger.

We couldn't, by the time they were trying to figure out one label, He goes and creates 30 for 30.

He reinvents the sports documentary space.

And he pulls that off.

And then he gets fired at ESPN for speaking his mind.

And he goes and he leaves and he starts The Ringer.

And it's a podcast network.

And now he's Bill the Podcaster.

He sells it to Spotify.

He makes hundreds of billions of dollars.

And there's this great clip the other day that came out of like this big trade happened in the NFL.

And there's this clip in The Ringer office.

And Bill is carrying a microphone in one hand and a chair.

And he's like basically like jogging through the hallway because he wants to go join the one of the other ringer podcasts to come talk about this trade that just happened.

Like that's not his podcast.

He doesn't need to be there.

He's got all the money in the world.

He could be on a yacht.

He could be on an Island.

And he's sitting there running with a chair and a mic.

Cause he really wants to go talk to friends about what's going on in the world of sports.

Cause that's what he loves to do.

So I'm jealous of bill Simmons, not because he sold his company for hundreds of millions of dollars or has a popular podcast, but because the guy gets to talk to his buddies about the thing that he loves all day.

When he doesn't have to be, right?

And so I'm jealous of the inputs.

And so I think that's a thing that if more people did, you could kind of use your jealousy as more of a compass to figure out what do you really want to go do.

I think if more people knew the behind the scenes of a lot of these super wealthy people, they wouldn't want that life.

There's a lot of sad, very wealthy people, as you know.

I think the trick is, How do you figure out what you're great at and you actually enjoy?

Because there's things I'm great at that I just don't enjoy, like sales.

I love pitching and selling and talking to people.

Or sorry, I'm very good at it.

But I actually, it drains my life force.

It's misery, right?

And so I think for me, I started out headphones on, coding, making websites.

20 years later, I've realized I can write and talk about things I'm passionate about.

And that creates... opportunity, which I can then funnel into all my various businesses.

Like I think being a human router and just doing the thing you're great at, you're doing this too.

I mean, it's like Ben might run all the day-to-day operations.

You just get to go and do the thing you're amazing at, and it benefits your business in a profound way.

And I think that's the trick.

Well, I would even push back.

It's not even that, oh man, there's all these wealthy people who are miserable.

There's a lot of people who are happy doing something that you would be completely unhappy doing.

I remember when we got bought by Twitch and I was like, oh, you know, I get to meet Emmett.

He was my boss.

He's the founder of Twitch.

He did the thing that I had been trying to do.

He started a tech company.

It like took over the space that he was in.

It became like one of the few social networks I was out there.

That's what I was trying to do before that.

And, you know, the guy sold his company for a billion dollars and here he was running this thing.

And it was like a big part of the internet.

I think Twitch was like the second biggest consumer of bandwidth or something that year.

Like, is it crazy?

And I saw his day.

And he was happy doing it, which was basically he sat in the boardroom on the ninth floor of the office on a long table.

And he sat at the front and the CEO sat next to him.

And then teams would come in 30 minutes at a time.

And they would sit down.

They would put a memo in front of him.

He would read it.

He would ask them questions.

He would grill them.

And sometimes he'd be like, this sounds fantastic.

Can't wait to see what's next.

And sometimes he'd be like, this doesn't make any sense to me.

And he would kind of rip them apart.

And then they would be like, leave, go back.

They would do a week of work and come back again the next week for their weekly 30-minute meeting with him.

And that's what he did all day.

And I just remember looking at that and being like thank God I saw this, because this is not what I would want.

I thought this was my dream.

I thought literally what he had done was the dream for me, dream outcome.

And I realized that would be kind of a nightmare of a life.

And so wait, if that's the nightmare, not the dream, then what's the dream?

And then you start asking that and you start looking around and you start thinking about what would be really interesting.

And that's when I started the podcast, because I looked at Tim Ferriss and others and I thought that sounds pretty fun.

And so an easy hack is, Cause I'm starting a new content project.

My first new kind of big content project since my first million.

And the hack.

The trick is instead of asking, instead of trying to think about what would be really popular, what would get millions of views, what would get millions of subscribers.

The better question is what would I have fun doing 3000 times?

Cause if I do it 3000 times, I'm probably going to get good at it and I'm probably going to stick with it and I'm probably going to get a good result.

Sure.

But like more importantly, like I'm going to go do it 3000 times.

I better really be like, let me optimize for that instead of, Optimized for what might work.

Let me ask you this.

Are you leaving your cell?

Are you breaking out of your cell?

Is it something that people go, wow, this is like crazy.

It's like when Tim Ferriss launched his card game or he wrote his like he made that weird crypto project.

Is it one of those?

I've explored that wide, like totally weird.

Go make a movie, create a Broadway play.

Like I've explored all that.

And there's like things, but that's not the active thing I'm working on.

One of them is, I would say different in that it's a different mode to be in.

So for example, this podcast is live, it's improvised, it's unedited.

I get on here and I just do me.

And then I don't really think about it after the fact.

There's a team that basically takes it, they edit it, they title it, they package it, they send it out there.

And I don't really think about it again.

Whereas the thing I'm doing right now is a little bit more of a craftsman approach.

It's like, I'm not just going to improvise it.

And it's this like, you know, three weeks later, that's kind of gone.

I'm going to make a new one.

It's like, no, I'm gonna make one thing.

It's going to be great.

But that means I'm going to really like have to be a craftsman about this.

And I'm going to really have to go and take a take a scalpel to this and try to like make it as great as I possibly can, which is not a mode I'm normally in.

That's awesome.

I mean it's like a.

The happiest I've been in the last 10 years is writing my book just headphones on, doing something and actually shipping something that will be relevant, hopefully in 20 years that you can go back to.

Yeah.

There's something so ephemeral about podcasting and tweeting and all the other stuff.

So nice to zoom out.

Totally.

Well, Andrew, thanks for coming on again, man.

It's always good to hang.

And yeah, you want to shout out anything, your newsletter, anything you want to shout out?

Yeah, I mean, that's mostly, I haven't really actually been tweeting very much.

I've been posting on my newsletter and I really love it.

I sit down like once a month and I kind of do like what Tim Ferriss and Kevin do.

I just like write about all the random things I'm excited about.

Sometimes it's about business.

Sometimes it's about other stuff.

But yeah, people can sign up neverenough.com.

The newsletter's there.

And I love it.

It's been so much more enjoyable to just sit down and actually write something formally and take my time, instead of tweeting out toilet thoughts randomly and then fighting with trolls.

All right, man.

Good to see you.

Yeah, great to see you, dude.

Hey, let's take a quick break.

I want to tell you about a podcast that you could check out.

It is called The Science of Scaling by Mark Roberge.

He was the founding CRO of HubSpot, and he's a guest lecturer at Harvard Business School.

The guy's smart and he sits down every week with different sales leaders from cool companies like Klaviyo and Vanta and OpenAI and he's asking about their strategies, their tactics and how they're growing their companies as head of sales or chief revenue officer.

If you're looking to scale a company up, if you're a CRO or a head of sales that's looking to level up in your career, I think a podcast like this could be great for you.

Listen to The Science of Scaling wherever you get your podcasts.

[Ranking Business Models: Insights from Andrew Wilkinson on Scaling, Strategy, and the Courage to be Disliked]-[I Ranked the Best & WORST Businesses to Start Before 2026 | Andrew Wilkinson]

📋 Summary

The Business Tier List: A Framework for Evaluation

The Bottom Tier: High Effort, Low Scalability

The Middle Tier: Service and Real Estate

The Top Tier: SaaS, Marketplaces, and Investment Management

The "Courage to be Disliked" and the Trap of Labels

Wisdom for Aspiring Entrepreneurs

🎯Key Sentences

📝Key Phrases

📖 Transcript

[Ranking Business Models: Insights from Andrew Wilkinson on Scaling, Strategy, and the Courage to be Disliked]-[I Ranked the Best & WORST Businesses to Start Before 2026 | Andrew Wilkinson]

📋 Summary

The Business Tier List: A Framework for Evaluation

The Bottom Tier: High Effort, Low Scalability

The Middle Tier: Service and Real Estate

The Top Tier: SaaS, Marketplaces, and Investment Management

The "Courage to be Disliked" and the Trap of Labels

Wisdom for Aspiring Entrepreneurs

Deep Learning with ListenLeap

🎯Key Sentences

📝Key Phrases

📖 Transcript

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