Framework
Most people shouldn't build the next Facebook — buy a portfolio of small bets
Codie Sanchez argues most people don't need a world-changing startup; they want Maslow's basics covered. She prefers buying a diversified portfolio of small, operator-run businesses, treating it like buying stocks.
“Most people should not be out there trying to build the next Facebook. And I think it's kind of fucked up that a lot of people try to tell people that's what they should do. Most people want Maslow's hierarchy of needs, right? You want your family taken care of, you want food on the table, you want to be able to do the shit you want to do on the weekends, and that's it. And so I like the portfolio actually better of a portfolio of small bets. I think of buying businesses a lot like I think about buying stocks.”
Steal thisBuild a diversified portfolio of small operator-run businesses instead of swinging for one venture-scale startup.
Billy
Pieter Levels runs ~$1M/yr off one PHP script
Steph holds up Pieter Levels as the archetypal indie hacker: Nomad List and Remote OK each do roughly half a million a year, run almost entirely by him, with the whole stack famously powered by one PHP script.
“And Nomad List has grown a ton. Now, it does probably, I think, half a million a year. Then he expanded that to Remote OK, which also does around half a million a year, and it's all done through him. And then I think he contracts out his servers to one guy that he pays like $2,000 a month for or something.”
Framework
Position sizing: never risk more than 1-2% of net worth per deal
Altucher's core risk rule is that he never invests more than 1-2% of net worth in any single company, but lets winners run far past that. He invokes the Buffett line about not trading Michael Jordan just because he improved, preferring private companies that keep compounding 50-200% a year.
“So I never invest more than 1 to 2% of my net worth is the maximum I will ever invest in any company. Right now, I'll let the, I'll let the investment grow to much more than that. It's sort of like what Warren Buffett says. If you've got Michael Jordan on your team, you don't trade him just because he got better.”
Steal thisCap any single angel bet at 1-2% of net worth, then let the winners run uncapped.
Take
Real wealth comes from backing 10 entrepreneurs, not running one company
Once you've had a successful exit and built a reputation, Hinde argues the path to real wealth is to fund 10 entrepreneurs in a space you believe in — giving each a half million or a million dollars and acting as their mentor or board member rather than operating yourself.
“now I can take 10 entrepreneurs, 10 different businesses that are all in a space that I truly believe in and that are all showing signs of life and increasing velocities and doing well on the shelf and give them each, you know, a half million bucks or a million bucks and let them run with it and then be, you know, sit back and be more of a mentor, a coach, advisory board, board of directors, that type of thing. And I think that's where real wealth, as I observe it, that's where real wealth is created.”
Steal thisAfter one win, spread capital and mentorship across many founders with traction rather than betting it all on a single operating role.