20VC: Andrew Wilkinson on Building The Berkshire Hathway of Tech, Sustainable vs Unsustainable Growth and The Relationship Between Money and Freedom

Andrew Wilkinson is the Managing Partner @ Tiny, a vehicle that buys, builds and invests in wonderful internet companies. Within their family of companies is Dribble; home to the world's best design professionals; MetaLab and Supercast to name a few. Tiny does also make venture investments in the likes of Superhuman, SpaceX, Pitch and Buffer. Today Andrew oversees a group of companies with over 300 employees and tens of millions in revenue. In Today’s Episode You Will Learn: 1.) How Andrew made his way from founding a design agency in Canada to starting Tiny and building a family of companies with over 300 people? 2.) What does Andrew mean when he says, when buying companies he looks for companies like New Zealand? What qualities/features do they have? How does Andrew think about price sensitivity when acquiring these companies? What determines paying a premium price to Andrew? 3.) How does Andrew assess and analyse true defensibility within company strategies today? Why does Andrew not believe they will lose any companies? How does Andrew think about grow vs profitability? Are they mutually exclusive? When does one pour fuel on the fire and raise big? 4.) How has Andrew seen himself develop and change as a leader over the last 5 years? What does truly great delegation look like? What is Andrew's biggest weakness? What is his biggest insecurity? How does Andrew think about sink the boat vs non-sink the boat decisions? 5.) Does Andrew believe we will see the unbundling of social networks moving forward? What are the core characteristics that determine whether a social network will win? Why does Dribble have defensibility as a brand against all large incumbents? Items Mentioned In Today’s Show: Andrew’s Fave Book: Tao of Charlie Munger: A Compilation of Quotes from Berkshire Hathaway's Vice Chairman As always you can follow Harry and The Twenty Minute VC on Twitter here! Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Harry Stebbings?

  This is the 20 minute VC with me, Harry Stebbings. And if you'd like to see more behind the scenes of my newly Peloton addicted, no alcohol life, you can on Instagram at H Stebbings 1996 with two Bs. I always love to see you there. But to the show today, and a very special one, as this guest does not only invest in businesses, but he also builds them and buys them. From that alone, I'm sure you've guessed, but I'm thrilled to welcome Andrew Wilkinson to the show today. So Andrew is the managing partner at Tiny Capital, a vehicle, as I said, that buys, builds and invests in wonderful internet companies. Within their family of companies is Dribbble, home to the world's best design professionals, Metalab and Supercast, to name a few. Tiny does also invest in businesses, including the likes of Superhuman, SpaceX, Pitch and Buffer, to name a few.

• 0:42Harry Stebbings?

  Today, Andrew oversees a group of companies within the Tiny family with over 300 employees and tens of millions of dollars in revenue. But before we move into the show today, I wanted to take a moment to mention HelloSign, a great example of a company that found success in building a product focused on user experience. HelloSign is an effortless e-signature solution used by millions to securely send and request legally valid digital signatures and agreements. And they've raised a total of $16 million in funding and then recently got acquired by Dropbox for an impressive $230 million. Check out hellosign.com/20vc to join the thousands of companies and founders who value fast, secure and simple e-signatures. And speaking of signatures and getting deals done there, you really need to build that relationship

• 1:26Harry Stebbings?

  and there's nothing like meeting face to face and there's nothing like Zoom to make that happen. Zoom lets you connect and do business across town or around the world. Zoom ties together all of your communication needs into one easy platform for video conferencing, phone calls, group chat, webinars and your conference rooms and connect from anywhere easily with your mobile phone, your laptop or conference room. Zoom is how business gets done. Get your free account at zoom.com today. Meet happy with Zoom. And finally, I've always been a big history man, and so I do want to talk about Cooley, the global law firm built around startups and venture capital. Since forming the very first venture fund in Silicon Valley, Cooley's formed more venture capital funds than any other law firm in the world with 50 plus years working.

• 2:10Harry Stebbings?

  With VCs, they help VCs form and manage funds, make investments and handle the myriad of issues that arise throughout a fund's lifetime. So to learn more about the number one most active law firm representing VC-backed companies going public, head over to cooliego.com and check out coolie.com also. But that's enough from me tonight. I'm very excited to welcome Andrew Wilkinson, managing partner at Tiny Capital.

• 2:37Speaker 01

  You have now arrived at your destination.

• 2:40Harry Stebbings?

  Andrew, my word, it is such a pleasure to have you on the show today. I've been an admirer of yours from afar for a very long time on Twitter. So thank you so much for joining me today, Andrew.

• 2:48Speaker 02

  Great to be here. Thanks for having me, Harry.

• 2:50Harry Stebbings?

  Not at all, but I would love to kick off with a little on you. So tell me, how did you make your way into the wonderful world of tech and startups? And what was that founding moment for you with Tiny in a very succinct three to four minutes?

• 3:01Speaker 02

  Yeah, I've really had three careers. So accidental entrepreneur, CEO and operator, and then now investor. Basically, when I was in high school, I started a tech news site and it just totally took off. And so I started getting hundreds of thousands of visits to this site. I started writing news. I hired a team of writers, started selling ads and negotiating ad deals. And so I basically got my MBA in high school, running this website, and pretty much skipped all of high school. And so through that, I got to interview Steve Jobs, I got to travel all over the world and have all these incredible experiences. But at the end of it, I was kind of left not sure

• 3:43Speaker 02

  what to do. What I ended up doing when I graduated high school is I decided to move to Silicon Valley. I really wanted to go work at Apple or Google and learn how a big company was run. But I didn't have a ton of money and I decided that I would start freelancing to make some extra money. And one really great insight I had was that if I pretended to be an agency, I could probably win more work. And so I came up with the name Metal App. I designed a very, very slick looking site that made me look like a big agency. And I started using the sales skills that I learned running this website. And I called up founders of Silicon Valley companies that had raised money. I'd go on TechCrunch and see that someone had done a raise and I'd call them up.

• 4:27Speaker 02

  And I would say, hey, can I help you with your marketing site? Can I help you design your product? And I don't know if you remember, but back in two thousand and five, nobody thought about design. Design was something you add later. You hire twenty developers, you work for a year, and then a month before launch, you spruce it up. And so I became the go-to guy in Silicon Valley to jump in there and basically design people's mobile apps and web apps and marketing sites. And before long, I started getting more and more work. And within the first couple of months, I was making thirty, forty, fifty thousand dollars a month. And I started asking myself, well, why do I want to go work at Apple or Google? This is pretty incredible. And what I didn't realize was that agencies are usually terrible businesses.

• 5:11Speaker 02

  They don't really make very much money. But because I was living in Canada, there's this amazing arbitrage where I could afford to pay people really great salaries here, but I could charge Silicon Valley prices. And so I actually had a profit margin and was profitable. The agency ended up winning more and more work and eventually got Apple, Google, Walmart, Facebook, Amazon. Also worked with a lot of startups really early on, Shopify, Tumblr, Coinbase, Pinterest. We designed Slack. But this whole time, so while I'm successful in this agency, I kept looking over and seeing all these SaaS companies sprouting up. And running an agency is really hard work. You've always got to be winning new clients and finding your next dollar.

• 5:53Speaker 02

  And so when I looked at SaaS and recurring revenue, I became obsessed with this idea of making money while I slept. And I started reading about Basecamp and what David Hanna-Meyer Hansen and Jason Fried were doing. And I said, I'm going to do that. And so I started multiple SaaS software companies while I was running the agency and used the profits from the agency to fund those. And the software we built was basically project management software, time tracking software, estimate software. And I got my first taste of recurring revenue. I'd wake up in the morning and I'd made three hundred bucks. And from that moment, I was totally hooked. And so I kept diversifying, I kept taking. Taking the profits from all those businesses and starting new companies. And at the end of the day, in 2013, I was totally overwhelmed.

• 6:38Speaker 02

  I had over a hundred employees. I was the CEO of five different companies. And I went to a mentor and I said, I hate my life. I'm not enjoying this. What do I do? And he said, look, why don't you go and sell one of your companies? If you sell one of your companies, that'll give you some money to put in the bank. You can have a lot less stress and maybe you can start thinking about learning how to invest. And so I did that. I sold one of our businesses to a family office. And suddenly, for the first time, I had cash in the bank. I'd always had cash flow, but I was always rapidly redeploying it. And so I took a little bit of time off. I started thinking about learning about investing. I figured stocks would be something to learn about. And so I picked up a book about Warren Buffett.

• 7:21Speaker 02

  And when I read about Buffett, everything just totally clicked for me. Here's this guy with 70-plus businesses and 400,000 employees. And yet, all he does is read and think and look at deals and invest. And he leaves his CEOs to run all of his businesses and only helps when needed. And to someone who is running five companies and hating his life, that was very, very appealing. And as I read more about Berkshire, I started asking myself, well, why hasn't anyone done this for tech? Anyone that's done this for tech had built kind of a synergized conglomerate like GE, where everything's interdependent. But nobody had truly copied the Berkshire model of running all these distributed businesses and leaving them to do their thing.

• 8:03Speaker 02

  And so my business partner and I started acquiring businesses instead of starting them. We hired CEOs to run all of the existing portfolio of companies. And we took a big step away and we founded Tiny, which is our holding company. And what we do is we acquire wonderful internet businesses. We make a few small improvements. We plug in CEO typically, because often the founder wants to leave and do something new. And then we hold them for the long term and we don't mess with them. Our focus is on buying wonderful businesses that'll be profitable and being able to really have them be sustainable. Sustainable and exist in ten years, whereas most other acquirers have a thesis around slamming them into another company,

• 8:46Speaker 02

  or they're gonna flip them in two to four years. And that's really resonated with founders. At the end of the day, it's been pretty cool. I live in Victoria, Canada, which is kind of the middle of nowhere. I get to dress like a schmo. I don't think anyone here knows what I do. I live in a beautiful place, spend my time hunting for wonderful companies, and I get to talk to interesting people like you. So it's quite a nice life.

• 9:07Harry Stebbings?

  I mean, that is just wonderful for my ego. I do wanna tap on so many different elements there that you mentioned. If we start on kind of the element of Berkshire for tech, and when we think about the assets that you're looking at, I heard you say before that you look for companies that are like New Zealand. Now, I love this analogy. But what did you mean by like New Zealand? And what qualities, requirements really get you excited when looking at those assets? Because it's different to venture.

• 9:29Speaker 02

  New Zealand is located in the middle of nowhere, and nobody's paying any attention. It's quietly successful, it's profitable, and they have a reasonably good economy. And it's not where other investors are looking. There's this great Charlie Munger quote, "Fish where the fish are." And most investors are fishing in these very big fishing holes with thousands of other fishermen. So an example would be VR and AR or crypto. Everyone has the same idea and they're all fighting for it. And there might be some big fish in that fishing hole, but only a few people are gonna get it. We try and find quiet, sleepy fishing holes off the beaten path, where there's only one or two other fishermen, and we just quietly enjoy ourselves. We find that a lot less stressful.

• 10:11Speaker 02

  So, New Zealand is, you know, no one's paying attention. It's food and energy independent, so it exists on its own. And what I mean by that is, in a technology business, there's no middleman. So there's no Google or Facebook risk. There's no algorithm between us and the community or the customer. And then New Zealand's also away from nuclear war. It can withstand the test of time, and it doesn't need to compete with venture-backed businesses with unlimited money. So we don't wanna be in a situation where we're buying a company where billions of dollars are gonna flow into competing with it tomorrow. We just think that's too difficult. So that's why we like to choose industry. Trees that are sleepy, where nobody really cares about them, where maybe there's not a multi-billion dollar opportunity,

• 10:56Speaker 02

  but there's a 10 or 100 million dollar opportunity.

• 10:59Harry Stebbings?

  Can I ask, when you think about that 10 or 100 million dollar opportunity, the thing that becomes even more important than ever is your entry price. How do you think about price sensitivity when entering? And how do you think about effectively pricing these assets? And also, is it challenging because the tech founders and they see tech crunch and they see hundreds of millions of dollars of valuation? And it's a very different thing if you're doing a social network for fishermen or whatever that may be. How do you think about price sensitivity and communicating that to the founders?

• 11:27Speaker 02

  I mean, at the end of the day, the price to the founder, we're not talking typically about venture-backed businesses. We're often talking about businesses that have been bootstrapped or started by accident by a founder. And they're often five to 10 years in, they have a nice income from the business and it's profitable. And so what we do is we basically pay a fair price based on where the business is at. And that's typically based on what earnings are expected to come out of the business over the next five to 10 years. And then the other way we think about price is just risk. So yes, it's paying us a million dollars a year in profit, but will that million dollars a year disappear as soon as the Google SEO algorithm changes or ad rates go up?

• 12:11Speaker 02

  And so if it's risky, we're willing to pay a lower multiple. And if it's less risky and there's a competitive moat, we'll pay a much higher multiple.

• 12:18Harry Stebbings?

  Can I ask you a question? Sorry, this is off schedule, but I'm too interested. How does COVID impact the revenue models and kind of revenue protection that you have? Because when you have venture-backed companies, you know, some of them have three to five years of runway and often large fundraises. With this model, it's obviously leaner and although profitable, the profits can and often do get hit. How do you think about COVID's impact on the kind of profitability and margin?

• 12:40Speaker 02

  So like anybody else, we don't know what the second and third order consequences of the lockdown will be. I'd like to think that most of our businesses participate in a knowledge economy online. And so we have a huge advantage in that all of our companies operate remotely. That's always been part of our DNA. And if they're not remote, maybe they have an office, but everybody's free to work remote. So we've been able to pivot really easily into that. Some of our businesses will certainly be affected, but generally they're low fixed costs. And so we can scale costs down as needed to make sure that we can continue to be sustainable. And then there's other businesses that kind of be anti fragile in an environment like this.

• 13:21Speaker 02

  So one example of that is Dribbble, which is the largest social network for designers. Where do designers go when they're stuck at home, but they want validation and feedback and a sense of community? Well, they're going to go to Dribbble. We also own the largest remote job board in the world. I think that's going to do very well in this environment as more companies start hiring remotely. We also own a meal planning app called MeLime and people are cooking a lot more. They're trying to plan their groceries out. They're trying to make a dollar go further. That does well in an environment like this. The places where we're going to be hit are more on our services businesses. We own multiple agencies in addition to Metalab and we're watching those very closely. We expect those to be affected, but again, we always keep our fixed costs very low.

• 14:04Speaker 02

  We've never done a fancy 10 offices around the world kind of strategy. It's always been very lean, so I think we'll be okay.

• 14:11Harry Stebbings?

  I am interested though, because you said about kind of the growth of some of those businesses there. And I had someone on the show the other day and they said about kind of growth versus profitability and it being levers. And really them being fundamentally at odds. You increase growth, you decrease profitability and vice versa. I'm intrigued, how do you think about this, given your perspective and would you agree with that?

• 14:29Speaker 02

  So I would say like, we just have a culture of profitability. So because we started in Canada, we really had no access to capital. We had to focus on profitability and understand our P and L and make sure that if we had $30,000 in the bank at the beginning of the month, we had a little more than that at the end. Because that's so part of our DNA, we really exclusively Buy profitable businesses or at the very least businesses that can be immediately pivoted to profitability. Now, obviously, we think there's many instances where a company should forego profitability to grow. But the key here is sustainability. If I can spend a dollar on marketing and make it turn into a dollar fifty in three months,

• 15:10Speaker 02

  then absolutely, we should check that and cut that check a million times. However, if it's one dollar turning into thirty cents over two years, I really don't think that's a good use of capital. And I see way too many venture-backed companies buying thirty cent dollars to show growth and get their next round of funding. So we aren't anti-growth, we're just anti-un sustainable growth. And you know, regardless of our focus on profitability, almost all of our businesses are growing their top line and their bottom line at thirty or forty percent a year and doing it profitably. I think it's one of these odd beliefs that people think they need to burn money to make money. We just haven't seen that in reality.

• 15:49Harry Stebbings?

  Speaking of kind of burning money to make money, we've seen many do it over the last five or ten years in venture. It's led to a lot of, you know, sadly, companies shutting down. I am intrigued because as we said that, it's a very different model to venture. How do you think about loss ratios stay within the portfolio and then diversification in terms of portfolio construction as a result?

• 16:08Speaker 02

  So we don't really think a lot about portfolio construction. We really just try and focus on individual companies and buying wonderful companies. We look deal by deal and evaluate whether we think this is a business that can stand the test of time and exist in two to five years. I mean, for me personally, I'm very comfortable having a few eggs in a basket and watching it closely rather than diversifying to death. For ten plus years, one of our biggest business was Metallab, and that was kind of one big egg. I'm pretty comfortable if I deeply understand the business. And so we don't really think about that. In terms of loss ratios, I'm not counting on having losses.

• 16:50Speaker 02

  We occasionally will and we will have business failures, but the more look like softness and bad returns, I doubt we're going to have zeros. It's just not like a venture. Game, these are generally businesses that will continue to exist. They might just be less profitable than we expect.

• 17:07Harry Stebbings?

  Can I ask, in the cases where there is like these huge outcomes available, like Dribbble, I mean, Dribbble, the largest social network for designers. That is absolutely a venture outcome and it could be a venture play in many respects. How do you feel about VCs encroaching on the tiny portfolio and how would you like to work with the venture community?

• 17:24Speaker 02

  I'm not anti-venture, like I really want to make that clear. We just haven't run our businesses that way and we haven't raised venture. So I would say that if we had a business that was obviously in need of a large amount of capital and we needed somebody at the table who was willing to take a big risk, where we knew that in order to grow it into a billion dollar business, we'd need to burn a hundred million dollars, but that's the only way to capture the market. I would absolutely do that. I would be calling Benchmark and Excel tomorrow, but I just don't see that. We haven't observed that in our portfolio. And I think about Dribbble is one of those New Zealand businesses. Every single day, hundreds of thousands of designers wake up every morning and they punch Dribbble into the URL bar.

• 18:09Speaker 02

  You know, we don't need to go out and buy customers. They just naturally, organically appear. And because Dribbble is the largest, the largest network is generally where people go. People want to be in a social network with others. And so when I think about what we could do if we had fifty million dollars in the bank, it doesn't look very different than where we're currently at, bootstrapping the business and continuing to ensure it's profitable. But again, like if we saw an opportunity, we absolutely would. That just hasn't been something we've seen yet.

• 18:38Harry Stebbings?

  I totally get you in terms of kind of seeing that opportunity. And this is totally off the bat, but I'm too interested. I constantly oscillate between thinking that we'll see the unbundling of social networks into your Dribbble-like communities of the world. And then I also think absolutely no, we won't. We'll see the bundling into Facebook groups, LinkedIn groups, whatever, incorporate into the main platforms. Where do you sit on the unbundling versus bundling of very specific niche communities and groups?

• 19:02Speaker 02

  Well, that's a really tough one. Like you think about meetup.com, for example, which is a business that we looked at buying and we just couldn't wrap our heads around it because ultimately when it comes to social networks, usually the largest network always wins. So you could see this with Google versus Yelp. Yelp had built this originally niche community. It had gotten to scale. It became very large. Everyone looked at it and went, okay, well, they have this tremendous mote, which is all of these user reviews. It would take 10 years for anyone to recreate these user reviews. Well, it turns out with Google, we're having Android in Google Maps. They can just ask every single person on earth how the restaurant was that they went to last night.

• 19:43Speaker 02

  Because they know that they'd visited it via Google Maps and suddenly Google Maps has better data and blows Yelp out of the water. So I think in instances like that, absolutely, it can be highly disruptive. But I always think like Dribbble is a bit of a unique snowflake. I mean, designers are very, very sensitive to anything seeming corporate or being part of something big or commercial. And I think that because it's a creative community, there's a risk in that, you know, maybe we mess it up and do something that's too aggressive. But there's also this huge blessing in that they don't want to be part of something big. They want to set themselves apart and be on an island.

• 20:24Speaker 02

  And so if LinkedIn came out with LinkedIn Design, whatever, and they started adding shots to their platform. The question is, would the designers feel that that was a nice place to be for them, that they felt good about? And I think the answer is probably no. And so, you know, when we look at Dribbble, we feel good. However, you know, we also own the remote job board business. I have no idea how long that'll exist because LinkedIn can easily come along and start adding remote jobs as a feature. And at the end of the day, our business is kind of a feature, not a product. And so when we're buying businesses like that, we really have to be disciplined around price because they can get washed away with, uh, with the tide at any moment.

• 21:03Harry Stebbings?

  Yeah, absolutely they can, which is absolutely why my question on price I was so interested by. And also interesting because I've read a lot of your writing and as we were chatting about before the show, listened to many of your podcast episodes before. And you said before, on paper, I'm a terrible CEO. So blunt question, Andrew, but why is that?

• 21:19Speaker 02

  Well, I think like a lot of founders, I'm very urgent and I love doing things quickly. I love ideas. I love strategy. What I don't really like is implementation and follow through and managing people. And what I've realized is that I'm very good at laser focusing for a short period of time on one company, deal, idea, strategy, whatever it is. But I don't enjoy spending the next sixty days implementing a plan and building that plan. To be honest, yes, I can run a company. I've done it. I did it for ten plus years and I was very successful at it. But I find one company, for me at least, isn't enough. I wanted more diversification of thought.

• 22:03Speaker 02

  I wanted to be able to jump into different ideas and different types of businesses. And I realized I just love business. I'm like an inch deep and a mile wide. And so it really suits me well to invest because it allows me to be on a high board level and interact with all the CEOs and understand all their businesses and help them grow them. But at the end of the day, I'm not managing people. I'm not overseeing implementation of ideas. And at the end of the day, there's people who love doing that. And I love to just step out of their way and let them do it because I would just not be happy doing it. I didn't enjoy being a CEO and running a large company. I like running a five-person company or a ten-person company.

• 22:43Harry Stebbings?

  Listen, I totally agree. I'm exactly the same, actually, which is why I like ventures so much. Can I also, you mentioned a couple of things that are striking. I think the first for me would be, you mentioned obviously also being on boards before. I've recently become a board member, you know, over the last eighteen months on my first couple of boards. What would your advice be to me on what makes a great board member? And how do you think about being the best board member you can be?

• 23:04Speaker 02

  Well, I think the biggest thing to remember is that you're not the CEO's friend, that you're not there to be a buddy, you're there to actually ask probing questions and to rub their nose in the consequences of what could go wrong. But one of the things I've also learned is that on a board, even when you own the entire company, you can't dictate what they need to do. You can only guide and you can set guide rails. And so at the end of the day, You're ultimately deciding, is this the right person to run the business or not? That's the key question. You're also thinking about incentives. How do I align this person with the outcome that I want? And ensuring that they're totally aligned with your goals? And other than that, like you could see, one of the things that's been interesting to me, and I've been on

• 23:48Speaker 02

  venture boards, I've been on private equity backed boards, and then the boards of our own companies. And I've seen this over and over again, where I've experienced something and I see the CEO making the same mistake. And I try and tell them. And I've found that generally, the CEO needs to actually go, take the fork, stick it into the electrical socket and realize that he gets zapped, which is unfortunate and infuriating because you're sitting there like a slow motion train wreck saying, oh, my God, he's making this mistake. I don't want him to do this. It's gonna ruin the company or whatever. But I've just realized you can't control people and all you can really do is give them soft advice.

• 24:26Harry Stebbings?

  So do you think like, hey, this isn't a sink the boat decision? Let him realize that on his own, or this is and I have to intervene? Is that the decision making for you?

• 24:34Speaker 02

  In the businesses that we own, I'm never gonna let a CEO make a sink the boat decision, right? But if it's a two way door, if it's something where, look, I think this business model idea is hokey, but they've got it in their head as the greatest idea ever. If I go in and I say, we're not doing that, that's a bad idea. They're just gonna resent me and they're always gonna bring that up at future board meetings. Well, we could have done that thing and we would have grown this year, but you know, you held me back from doing that. And so as long as it's a two way door, I will always let someone make a mistake. And I might register, like Bezos, what does he do? It's like disagree but commit, right? Saying, I don't agree, but I'm gonna commit to let you do this. So we do that a lot. If a CEO was to come along and say, I wanna go spend $10 million on

• 25:18Speaker 02

  a cryptocurrency strategy with a 5% chance of success, I think we'd have a very different conversation.

• 25:24Harry Stebbings?

  Yeah, I'm sure you wouldn't. I think quite understandably. My other question to you, listening to you there was like, I'm always oscillating, Andrew, and I'd love your advice. Between, do I focus on my strengths and just get better than? I often hear, hey, just focus on your strengths and be world class. Or someone said to me the other day, no, people arrogantly think that competitors killed you through your weaknesses. How do you think about that? And how would you advise me in terms of doubling down on strengths versus really coming back and nailing weaknesses?

• 25:50Speaker 02

  We always say every CEO has a superpower, right? I don't know if you know the saying, to a person with a hammer, everything looks like a nail. And I'd say each of us as a CEO or a leader or an investor or whatever has a lens through which they view the world. And we say, you know, generally it's product, sales, marketing, finance or operations. And they're basically looking at it and going, well, product is the secret to everything or marketing is the secret to everything or sales or whatever. What I've found, you know, I'm generally a product person. That's how I started when I was building my companies. I was the guy who would always say, well, we'll do better once we launch this feature. We'll do better once we redesign the marketing site and make it look prettier. And that's where I kind of default to.

• 26:35Speaker 02

  And fortunately, product often is the key thing. If you have a really shitty bakery that's ugly as hell and located in a bad location, but you have the best cinnamon buns in the city, people will probably line up and go there. But what I've learned over time is that I understand enough about marketing and sales to know what the right incentives and the right people to do those things are. And I've seen the results that can come from it. So what I'd say is you want to double down on your strength, but then you also want to be able to identify and know enough to know what the people you're going to delegate look like, right? So knowing what a good CFO looks like, a good head of marketing, a good head of sales. But I used to beat myself up and say, first it was I should learn how to code. Then it was I should learn internet marketing in depth.

• 27:17Speaker 02

  And at the end of the day, I always say, like, if you're a commercial real estate developer, you don't go and learn how to lay bricks. You don't go and learn how to pour cement, right? You focus on the spreadsheet and the design and selling the units and the key stuff that really matters to you and you delegate everything else out.

• 27:35Harry Stebbings?

  Can I ask, we mentioned the hiring element there. How do you determine greatness in a role where you're not equipped yourself? So be it for me, I'm not an engineer. If I'm doing CTO candidate interviews for portfolio companies, how do I determine greatness in those candidates when I'm not an engineer myself? How do you think about that?

• 27:52Speaker 02

  Well, I think you look at the outcomes, right? So we've learned this with hiring CEOs. So when we're hiring a CEO, we're looking at their resume and going, have they done this before? Right? So if you're going to go and build a new deck, you're going to hire a red seal carpenter. And so I'm going to go, well, how many decks have they built? How many years have they been at Carpenter? And so we'll go out and we'll recruit somebody who has run a similar business at a bigger scale. And we'll say, okay, this is going to massively increase our odds of success. Whereas if you hire somebody for potential, which is what I used to do, I'd meet somebody and go, I love this person's moxie, they're really sharp, they move really fast. They seem to kind of understand marketing. I think they can be a good CMO. We'll grow them into that.

• 28:36Speaker 02

  That's always failed, which seems like such a simple concept of just hiring people who have done it before. But for some reason, we don't do that because we don't know what those people look like. So I like to try and flip it around and just go, have they achieved the outcome I want in the past?

• 28:50Harry Stebbings?

  Yeah, and then it's, and I agree, and it's often the simplest of the best. I'm glad it's not the case always, otherwise I would never have ever got a job in my early days. But I do want to ask another thing, because you said there about kind of when you hit certain points, other things happen. And, you know, I had David from Basecamp on the show very recently, and he said about kind of how to think about your relationship to money. And you'll always think, when I have X, I'll be happy. When I have one million, I'll be happy. 10 million, I'll be happy. And that moment never comes. And it never came to him, and it doesn't come in human nature. I'm intrigued. One of your core principles is people over profits. How do you think about your personal relationship to money?

• 29:24Speaker 02

  So I grew up in Vancouver and my dad was an architect and money was always really tight. He'd run his own architecture firm and architecture is just a difficult industry. And so money was always this thing that my parents fought about and were stressed about. And at the same time, growing up in Vancouver, it's quite a wealthy city. And I happened to be in the catchment area for a wealthy public school. And so I ended up going to this public school where I was surrounded by the children of millionaires. And everybody's dad drove a Porsche and they had ski chalets and they went to Hawaii for vacations. And, you know, I'd go over to their houses and they'd be Palatial mansions and I just looked around and went, this is bullshit. I want this. I can't believe I've been so hard done by.

• 30:09Speaker 02

  And all I wanted was to get the things that all these other people had. And so when I started making money, I went out and I bought a fancy car and I bought nice clothes and fancy stereos and all these things. And I didn't find that it had any impact on my happiness. The only thing that had an impact on my happiness was not stressing out about rent. Knowing I had enough money in the bank that I was comfortable for two or three months. I could go and eat when I wanted and drink what I wanted. And so, once I kind of achieved Maslow's hierarchy of needs, I realized, well, there's no additional benefit to money, really. And I also realized that travel didn't make me happy at all, that it really just made me kind of miserable and anxious and then I'm a creature of habit.

• 30:53Speaker 02

  And so, in talking to people who are older, I've realized that ultimately, the main thing that matters are being a part of a community and having activities you can engage in, having great friends and having a wonderful family and grandchildren. And so, for me, I look at money first and foremost as a way to protect my personal freedom. And what I mean by that is building a wall between me and things I don't want to do, people I don't want to see, ways I don't want to spend my time, and then to protect my family, my friends and my community. And I found that really, really satisfying. And so I try and focus on just doing things I want to do. And I have a system that I call anti-goals, where every year, my business partner and I sit down and we say,

• 31:37Speaker 02

  what does our worst possible day look like? And how do we design our day to avoid that? The other thing that I love about money is that it allows me to explore new ideas. So if I get interested in a topic, I'll often start buying or investing in businesses in that space, which then lets me talk to interesting people and make new friends in that area and collaborate with them. And so I find that really rewarding. One example of that is podcasting. I got totally obsessed with this idea of subscription podcasting and dug into the business of podcasting. It seemed like this powder keg, this thing that had been growing for 20 years that was So obvious that was gonna supplant radio and yet money just hadn't come there. There was only five hundred million dollar market cap in podcasting two years ago. And so I went out and I bought

• 32:22Speaker 02

  a top indie podcast player. We ended up starting a business in that space and that's just been so fun. Like, I love just finding an area of passion and then almost buying my way in the door to skip the line and get a bunch of access to interesting people.

• 32:36Harry Stebbings?

  I mean, I absolutely love that. And sadly, my fifty bucks at the beginning of twenty minute EC didn't quite buy my way in, but I do love that access to interesting people. So I'm totally aligned to you there. I do wanna dive in, Andrew, into my favorite element of any episode being the quick fire round. So I say this short statement and then you hit me with your immediate thoughts. Are you ready to rock and roll?

• 32:53Speaker 02

  Yeah, let's do it.

• 32:54Harry Stebbings?

  Okay, so you have amazing views in Victoria. You've got to have a book to accompany them. What's the favorite book and why?

• 33:00Speaker 02

  So lately, it's been The Tao of Charlie Munger, which is just a collection of quotes of Charlie Munger, who's Warren Buffett's business partner. He's the most interesting person in business and investing, bar none. I highly recommend it. And I've read that book probably a hundred times.

• 33:15Harry Stebbings?

  What is your superpower and then weakness in company building? Thirty seconds on each.

• 33:19Speaker 02

  I would say my superpower is pace and delegation. So I'm like an icebreaker. I know how to make teams move quickly and blow down barriers and get things done very, very quickly using delegation. So an example of that is, over the last couple of months, I've started multiple companies and I've spent probably four hours in total on them, coming up with a high level idea and then delegating everything. And so it just allows me to move much faster and scale faster than I would normally. My weakness is follow through. Like I said before, I just don't like recruiting and managing people and running a roadmap and dealing with all the day to day stuff.

• 33:55Harry Stebbings?

  When I say success, who's the first person you think of?

• 33:58Speaker 02

  Well, you know, it's top of mind because he's your last guest, but I've always thought that Jason and David from Basecamp have it made. I think they've got an incredible business where they're bought in day to day on building it. They're still enjoying it after twenty years. They're making a ton of money and they have a huge market. And yeah, they haven't built a sauna, but who gives a shit? They're making tens of millions of dollars a year.

• 34:18Harry Stebbings?

  I mean, yeah, I totally agree. David is just so cool. Tell me, your father pointed to a gas station on a drive with you once and said, if you don't go to college, you could work there. Do you find you give similar career advice? I guess what career advice do you find yourself often giving?

• 34:33Speaker 02

  Now, for the record, my dad was dead wrong. I think school is often a waste of time, especially if you're in tech. My number one piece of feedback to people is get experience. If you want to be in business, start a business. Don't do an MBA. It's a little bit like someone coming to you and saying, I'd like to be an Olympic runner. And that person would not go to a running school. They would just start running every single day, longer and longer. And I just find it totally insane because you get all these kids that have spent four years learning about business, but they've never actually been involved in a business or learned anything.

• 35:06Harry Stebbings?

  And the thing that upsets me most is the levels of student loan, which if you pumped into a business or didn't have a tool, you'd have so much more financial freedom. So I'm totally with you there. As a university dropout after two weeks, I'm thrilled to hear that.

• 35:19Speaker 02

  I lasted a little longer. I think I was three months and I dropped out.

• 35:23Harry Stebbings?

  I'm very disappointed you managed to stick it out for so long, Andrew.

• 35:28Harry Stebbings?

  Tell me, what's your biggest insecurity?

• 35:30Speaker 02

  My biggest insecurity is probably if I'm misinterpreted in some way. Like if I do something and I'm perceived as a jerk, but I didn't mean it in that way. That, you know, it's just being blunt or something like that. That's probably an insecurity that I have.

• 35:43Harry Stebbings?

  Listen, I totally understand that as an insecurity. Probably mine is like just the requirement to always be liked, which is just.

• 35:49Speaker 02

  Oh, totally. I think it's part of that thread.

• 35:52Harry Stebbings?

  It's a, it's really a dangerous one, actually. But ultimate one, what would you most like to change about the world of tech and startups, Andrew?

• 35:59Speaker 02

  I think just showing people that there's a lower risk alternative to venture back startups that can still make you very rich.

• 36:06Harry Stebbings?

  Totally align to that. And I think David is too. Final one, next five years for you and for Tiny, what do you want to have achieved with Tiny in the next five years?

• 36:14Speaker 02

  Well, we don't really think a lot about that. We're really putting one foot in front of the other. I would hope that we own more wonderful internet businesses. And that we still are enjoying our day to day life. And that's about it. I haven't had a lot of success with long-term planning. I find it's just kind of guessing.

• 36:29Harry Stebbings?

  It totally is. That's why financial projections are always a slight anathema and comedy moment for me. But listen, Andrew, as I said, I've been a huge fan of yours on Twitter for a long time. I'm so pleased that we got to make this happen. So thank you so much for joining me today.

• 36:42Speaker 02

  Thank you, Harry. It's been a pleasure.

• 36:45Harry Stebbings?

  As I said at the beginning, such a fan of Andrew's model there. And if you'd like to see more from him, you can find him on Twitter at A Wilkinson. Likewise, it would be great to welcome you behind the scenes here. You can do so on Instagram at H Stubbings 1996 with two Bs. However, before we leave you today, I wanted to take a moment to mention HelloSign, a great example of a company that found success in building a product focused on user experience. HelloSign is an effortless e-signature solution used by millions to securely send and request legally valid digital signatures and agreements. And they've raised a total of $16 million in funding and then recently got acquired by Dropbox for an impressive $230 million. Check out HelloSign.com/20vc to join the thousands of companies and founders who value fast, secure and simple e-signatures.

• 37:30Harry Stebbings?

  And speaking of signatures and getting deals done there, you really need to build that relationship and there's nothing like meeting face to face and there's nothing like Zoom to make that happen. Zoom lets you connect and do business across town or around the world. Zoom ties together all of your communication needs into one easy platform for video conferencing, phone calls, group chat, webinars and your conference rooms and connect from anywhere easily with your mobile phone, your laptop or conference room. Zoom is how business gets done. Get your free account at Zoom.com today. Meet happy with Zoom. And finally, I've always been a big history man and so I do want to talk about Cooley, the global law firm built around startups and venture capital. Since forming the very first venture fund in Silicon Valley, Cooley's formed more venture

• 38:13Harry Stebbings?

  capital funds than any other law firm in the world. With 50-plus years working with VCs, they help VCs form and manage funds, make investments and handle the mirroring out of issues that arise throughout a fund's lifetime. So to learn more about the number one most active law firm representing VC-backed companies going public, head over to Cooleygo.com and check out Cooley.com also. As always, I so appreciate all your support and I can't wait to bring you a phenomenal episode this coming Friday with Low Tony, founder at Plexo Capital.