#63 with Andrew Wilkinson - Buying cash-flowing internet companies, starting job boards and building no code projects

What's going on, listeners? We get asked all the time different bits of advice on the stuff that Shana and I talk about, and that's great. And it's actually something that Shana and I do all the time, which is ask people for different insights, particularly those who are a lot better than us. And one person who, who we've been heavily inspired by is Jordan Harbinger. I've known Jordan now for 8 years now, and I've been listening to him for about that long. And he's had podcasts for years and in fact has been in the top 100 for the last 13 years. And he has a new show called The Jordan Harbinger Show. And what he does is he talks about social engineering, in particular for helping men be more charismatic, which is great. But what I think is even more interesting is that he teaches social engineering to SEALs, to intelligence agencies, to special operations. And it's incredibly fascinating. And we actually have Jordan here for a minute to tell us some of his favorite episodes. In particular, one that I've listened to recently was How to Ask for Advice. Jordan, what's going on?

Hey, thanks for having me on. I really appreciate it. I think the reason I chose the advice topic was because I'm sure you get this too.

You get an email from somebody.

Maybe even somebody who's younger saying something like, "I want you to mentor me," or, "How do I succeed in my idea?" or, "How do I come up with a good idea?" And these are the wrong questions. A lot of people are asking for validation of their idea. They're asking for permission to do something. You really can't get a lot of value from that. You have to be sure if you're actually asking for advice, you're actually asking for permission, you're just asking for encouragement, or if it's specific, intentional, and explicit in detailing what you need. The other half, of course, is being able to implement implement that advice and then show the other person how you've implemented their advice in a very specific way. So I decided to write an article and do an entire show about this on episode 321 of the Jordan Harbinger Show, because it's been— it's helpful for people looking for advice, and it's also helpful for people who get asked for advice in the wrong way all of the time, because they can just say, hey, listen to this and then come back to me after you're done.

And I get maybe 3 or 4 dozen messages a day of people doing this and breaking the rules that you've just mentioned. And I've noticed that when people do it right, it can be career-changing. Has any listener came to you and said, thank you for giving this advice, here's what I've done effectively and how it's worked?

Oh, it happens all the time and it's great. It's really rewarding for me. Of course, when people write to me and say, my dream is to start a clothing line, any tips? All I can do is say, I don't know really what you want or what you're going to do. And then of course, any tip I give them that's not go for your dreams just leaves them feeling angry.

So I don't like to even field those questions.

Anymore.

That's crazy. I do the same thing. Whenever people ask advice, I just say, "Just start." If the question isn't specific enough, it's impossible. It's like saying, "How do you make art?" So, I think this is like an incredibly useful podcast. It's something that people need to listen to regardless of where they are in their journey of building whatever they're building. So, give this a listen. I mean, it's a great podcast. I actually have— I've paid for a handful of your products. So, this isn't just nonsense. I have really been a customer for a while and I appreciate you coming on. So, uh, where should people turn to if they, uh, want to listen to this?

Sure, you can find me at jordanharbinger.com, but honestly, the podcast is anywhere you get your podcasts.

Well, thanks for coming, and, uh, this really means a lot to us.

Thank you. What's up everybody? Hope everybody's doing good. We're all quarantining, um, but we're thriving. Um, at least that's what I tell myself. So I got Sam here, and then we got special guest, probably the most referred to guest on the podcast, even though he's never been a guest yet, but we, we speak your name all the time. So Andrew Wilkinson's here. Uh, Andrew runs something called Tiny Capital, which is cool. Just tinycapital.com, is that it?

Just, just tiny. Everyone does that. We, uh, we couldn't get tiny.com, so we got tinycapital.com, and so now everybody says Tiny Capital, and I have to call correct them.

But we have friends who own a, or used to own a company called Tiny as well.

No way. What is it?

Yeah.

Tiny Car. I'll sue them. Oh, he was first. Oh, shit. Maybe he'll sue me then.

And I was looking at the domain and tiny.co, I think is, is not like taken by somebody right now. I mean, you might have to buy it, but—

Oh damn. I'm going to jump on that.

Nevertheless. All right. So Andrew, give people like the 60-second version of what do you, what do you do now? Not your backstory, but just like, what is Tiny?

So what are some names that people have heard of, right? Dribbble is one that a lot of people—

Yeah, I mean, the original, the original business I started with was Meta Lab, which is one of the top, now top product design agencies in the world, which I started out of my parents' basement about 15 years ago. And, you know, Dribbble we acquired in 2017. We own WeWork Remotely, which is the largest remote job board on the internet. Pixel Union, which is the Shopify business. We own Mealime, which is the largest meal planning app on the App Store. We own Castro, which is one of the top indie podcast players. Just all sorts of different stuff.

Can I, can I even dumb this down further, Andrew, for the listeners, which is basically you had this thing called Meta Lab. Which was Slack or lots of different people who needed products designed. They would come to you and they would say, Andrew, we need you and your team to make our app look great and function well. Is that right?

Yeah, that's where we started. And then that became, hey, you know, if someone has a napkin sketch idea, we can actually not only design it, but we can build it as well. A lot of our work has been design only, but we've also built a lot of products and shipped a lot of products as well.

And so over 15 years, you've just built that into a great company and you own all of it, or you and one or two people own— I think your brother— own all of it. And it just made enough profit that you began acquiring and/or starting other companies. Is that right?

Yeah. Like when I started, I knew nothing about business. I knew nothing about investing, but it was profitable. And so I did bank balance accounting, right? I didn't understand anything, but I knew that there was more money in the bank account at the end of the month than there was at the beginning. And I went, well, what the hell do I do with this money? And I always had like a, just, I've always had like a million business ideas. And so I looked around and I saw the Basecamp guys making a ton of money with this SaaS business, Basecamp. And I went, I wanna do that too. And so I started building our own software products to help me run the agency and then spun those out. And I just kept starting companies. And then I realized starting companies is really fucking hard. I'm good at starting, but I'm bad at follow-through. And so we started buying businesses in about 2013, and we've been doing that ever since with much more success.

And what's the scale of your empire at this point? Can you give numbers so people understand?

Uh, well, we do double-digit millions, uh, revenue, uh, you know, very profitable business.

We usually look for businesses that can double digits revenue. What's that mean?

Sorry, double-digit millions.

So that's out of Betalab, or that's the total?

That's the total, all the businesses. So, uh, we haven't cracked $100 million yet, but we're getting close. Um, and then, you know, we generally are buying businesses that have really nice profit margins. So we have quite a bit of free cash flow, and we just reinvest that free cash flow in buying more businesses.

And I tried to sell you a business. Do you remember that?

Oh my God, I had no idea.

Many years ago, 5 years ago maybe, I was running this company called and making, you know, a few million bucks a year of profit. And, and I saw your— and I knew that that business wasn't going to grow at this, like, incredible pace. And I was trying to convince the— I'm not the main owner of it, but I had a piece, and I was trying to convince the main owner, hey, we should just flip this thing, we should just sell this thing and then work on, you know, bigger kind of moonshot type projects. And, um, he's like, well, if you can find a buyer, let's do it. And so, um, I had heard of your guys' thing because you do a good job of getting yourself out there to be like, hey, we buy— you have this like thing, like, is it like a 20-minute term sheet or something like that? Like, you basically have— you advertise how simple and painless the process is, which I think most founders like.

And ultimately we didn't do a deal because I wanted like a 10x multiple and you were like, well, how about 3 or 4? And I was like, nah. And then we—

it's funny, I'll have to go through those emails.

Yeah, should you have taken that looking back?

Um, I personally think so, but you know, the reality is that that business, like, you know, if you're gonna hold— he's held it for a long time, and if you're gonna hold it for 4 or 5 more years, you would have, you know, you'd make your money back along the way. And so I think the reason to sell would be because you want to go do something else. And in that case, uh, you know, I went and did something else. The main and the main owner of the business, he does other things. So it's not like a drain on time. And so he doesn't mind holding it. But in my opinion, yeah, we should have sold for 4x and gotten out.

Yeah, I think what a lot of people don't get is that, you know, these internet businesses can disappear in a year, 2 years. And so when we're evaluating something, we're going like, what's the staying power? What prevents this from, you know, having a bunch of competitors destroy it or Google changing an algorithm and the whole business going away? So paying 10 times is like, I'll pay that for an amazing business, but depends on the quality, right? Right. Not, not that I remember this business. There's a— I was just being a cheapskate.

There's a thing called the Lindy effect, right? Is that the name of it? The, uh, are you familiar with that? Where it's like, no, uh, it's basically a principle was an observation, uh, sort of like observing nature and you basically—

by the Black Swan guy.

Yeah.

It's basically if something's been around for 10 years, there's high probability it's gonna be around for another 10 years. And, uh, so basically the amount of time something has already survived and been around is a very high predictor of how long it will continue. So when something's hot and it's been around for 2 years, it has sort of a sort of lower, lower probability of being around longer than 2 years. And then as something— so this business had been around for 15 years, so it's highly likely would sort of endure and be durable for another few. Yeah, we see all these destructive though.

We see all these people and they come to us and say, hey, we've been around for 2 years, we're growing at 80% year over year. We're going to keep doing that for the next 5 years, therefore you should pay us, you know, 30 times earnings or whatever. And I, I always think like, yeah, maybe you'll do that, but odds are the law of large numbers catches up with you. This gets more hard, more challenging. It's a lot easier to grow a business from $10,000 MRR to $30,000 MRR than it is from $30,000 MRR to $1 million. So we're always, we're always skeptical, and ultimately at the end of the day, we still have to buy something. With some sense of how we pay ourselves back.

Right. Uh, okay, cool. And so, you know, we could do one of two things in this conversation. We could be like, hey Andrew, tell us your life story, which I think is actually pretty interesting, and tell us how you run your business, which also is pretty interesting. But I actually think what would be more fun, if you're down for it— and Sam, you let me know what you think, we can sort of decide on air here— um, my view is that Andrew is just like one of us. Uh, he's sort of a, you know, a third amigo of the crew. And what we usually do is we, you know, Sam, it's not like you interview me or I interview you. We just talk about what's going on in the world. We give our crappy opinions and people seem to like it. It seems to be entertaining. And so I actually think we should just do that. I think we should just talk about what's going on, stuff we think is interesting and treat it that way. And then maybe a different time we can go and say, hey, give us the full story of how you built Tiny.

Yeah, I'm down to do that. And I would also, after we get done with that and throughout, I have a few specific questions I want to ask you, Andrew, so, but we can, I'll weave those in.

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Has MetaLab been okay? Because I would think that would be hurt.

So far, we've been really lucky. I've got a couple friends who run agencies, but they're more on the marketing side, and the first thing to get cut has been ad spend. And so I've seen a few friends get hit hard by that because of what Meta Lab does, which is like R&D, like deep R&D for big Fortune 500 companies. A lot of the time it's so core to their product roadmap that so far we haven't seen it get cut. But I mean, we could be in the eye of the storm. We have no idea what's going to happen. So we're just, we're just kind of battening down the hatches in general and preparing for whatever could come.

And what was the reaction when you were basically saying, hey, look, even if there's a low odds, even if there's a low chance of becoming something really serious and spreading globally, but I'm going to take these precautions? You started talking about it on Twitter, you started, you know, taking certain actions. What was most people's reaction? Did people for the most part understand? Did you— were you treated as sort of an overreactor? You know, what was the reaction?

Well, so at home, my wife literally pulled me aside and she's like, I'm worried about your mental health. You seem really paranoid, like, are you okay? And, you know, I kept saying to her, look, like, I hope we can laugh about this in a month, but, you know, it's worth having our house be a shambles and being covered in Amazon boxes just to be prepared. And then, you know, she's very grateful once it all happened that we didn't have to worry about stocking up on all the basics. On the company side, we have a CEO mailing list. So basically, if there's something we want to blast out to all the CEOs, we'll send it there. I think a lot of people were kind of like humoring me and going like, oh man, another one of Andrew's ridiculous concerns. But, you know, eventually it obviously played out and I'm glad that we were aggressive about dialing everything in early.

How many CEOs do you have on that mailing list?

I think there's like 10 or 12 of them, something like that. I don't know the exact number.

And can I pay money to be on that mailing list?

Yeah, get me on the list, dude.

It's mostly, mostly me saying, hey guys, look, we should save money doing this or that. There's, there's not much interesting stuff on there.

Get us on the list.

Well, you guys got to come and run a company for me. That's the bargain.

So Andrew, what do you, okay, so what you, or when we, before we started this podcast, you were saying how you're a control freak. You said that you have to be, you move quickly and you're really good at starting things. You're not great at follow through. Like I imagine you met once it like becomes something. Yet now you own or co-own 10 companies, including Meta Lab. I imagine you have 500 employees or no, I don't know what, 200. You have a fair bit.

We have, we have about, I think there's 350, 400 employees across about 20 companies. And the reason we have fewer CEOs than companies is that some of the CEOs oversee platforms. So like we have a business called Tiny Boards that manages all the job boards we own and that has one CEO.

In order to do that, you aren't operating these things. I mean, that'd be— I think that would be close to impossible. How are you delegating out all of your to-dos and how hands-on are you with different companies?

What was that transition like at MetaLab? And the reason I'm asking is I've not quite— I haven't done a transition like this, but I have— I was running everything and then I hired a president, and that made my life way better, and it was highly influenced By You and a couple other books that I'd read. And people ask me all the time how to do it, and I can advise how I did it, but you're doing this at a much larger scale. Can you— and I also think that people are shocked when they hear that not everyone is like the Mark Zuckerberg where you— or at least what they think Mark Zuckerberg is, is where you start something and then you're the guy who's like running it into while it gets large. So can you talk about the transition that you used at Metalab?

Well, I feel like really entrepreneurship is just delegation, right? So if you think about it, you know, you imagine if you own a software company, um, it's really hard at first to delegate the support. You don't trust anyone to do the support. You don't trust anyone to write the copy on the home page or whatever. And then over time you hire a bunch of really shitty people and it's horrible and it makes your life worse. And so you tell yourself, oh man, you know, I can't hire other people, I have to do everything myself. Now I see a lot of businesses that are kept really small because the founder never breaks through that bubble. And for me it was, you know, I hired a bunch of the wrong people and then I kept rehiring and eventually I'd hire the right person. And that's when I would see that part of the business explode and start doing really well. So, for example, with Metalab, I— one of the stories I told myself is that I have to always be involved in sales because I can close the deals, right? So I would have someone who'd do the initial phone calls and all that kind of stuff, but ultimately I was the guy who could get a really big deal over the line. When I started delegating it, you know, at first we went through a variety of different people And, you know, eventually we came upon a team where we could just fully delegate that and they would actually close way bigger deals than I would have ever closed. And the nice thing is you can specify how high to jump and you can incentivize people to do the things you don't want to do. So an example was, you know, for let's say like 5 years into running MetaLab, I was making quite a bit of money from the business and I had actually reached my point of like my Maslow's hierarchy of needs was met. I was like totally content. I drove a sweet car, I had a nice house, I had a nice life. I bought the clothes I wanted, and I ate out whenever I wanted.

What's that?

At that point, I was— for me, it was like $100,000, $150,000 or something like that a year.

A year?

Hiring— what's your best resource for learning about that operating system?

Uh, I think the one of the books that helped me was, um, Principles by Ray Dalio, um, which I thought was quite interesting. He talks a lot about some of those ideas. The E-Myth was really big, the Michael Gerber book. It's super freaking cheesy, but it's, uh, it's actually a good read. And, uh, I'm trying to think of what else. I think those were the, the key ones. But to be honest, like, I'm a profoundly lazy person. Like, I know that sounds ridiculous given like a run all these companies and stuff, but I hate doing anything I don't enjoy doing. And I'm never somebody who pushes through something. I just always want someone else to deal with it. And so that's actually meant that I've been a good delegator, and I've naturally done that. Whereas a lot of founders, they like— it's like they're precious and they're like Gollum, right? They can't let go of their company, and all their value comes from that. I've always had a lot of different stuff I've been doing. So when I give away one of my precious, I have 5 others to fuck with, and I always have enough stuff going on. So hasn't fazed me.

I like one phrase you just said, which was when you're talking about, you know, you said the story I used to tell myself is— and, you know, for you it was about having to— I got to be the one who closes the sales. That's how, you know, the clients need me, and I can close the big sales, and I need to be involved in that. Um, that's something that, um, I see all the time is just like, what story are you telling yourself? And so I have this with employees that I manage. I have this with myself, um, where it's like, okay, what story am I telling myself? For example, before, before we sold Bebo, we were doing this business and I was talking to, um, I was talking to a buddy and I was like, hey, you know, he was— I was like, hey, can you help me out? He's somebody I look I look up to as sort of like, you know, smarter, wiser than me in terms of business. So I was like, can you help me out? I feel like there's something wrong with the business. I don't think we're gonna get where we're trying to go. On the outside everything looks good, but on the inside I'm not sure. And he was like, all right, talk to me about it. So we were eating dinner, I was telling him about it, and he's like, it sounds like you don't really believe that this is gonna work like you used to. And I was like, yeah, you know, honestly, I don't think we're gonna get to the size I thought we were gonna get to. I think it's gonna be okay, I think it's gonna be mid-sized. And he was like, um, so why are you still doing it? And I was telling myself the story of like, well, you know, I don't want to let down the investors, I don't let down my team, I don't feel like we can pivot again, blah blah. I was like, I had this story I was telling myself, and as I was saying it out loud, I had that moment where I was like, this is just like a story. Like, I bet if I just talk to my investor, I bet if I just talk to my team, I bet if I, you know, uh, thought about the other options, I could come up with something. And then sure enough, we came up with the option of, hey, you know, this might be small for us, but if this is part of a bigger platform, this could actually be kind of valuable if a big company owned this and they had all the distribution. And then I went and talked to them and we ended up selling the company. But like, it was literally just recognizing there's a story I'm telling myself that is not true but is causing me to do— causing me pain, basically.

Totally. And I think when you have— it's different when you're an employee, but when you have full control over a business like you did there's no excuse, right? You create— everyone I know, there's so many of these people that create their own hell, right? So they're in meetings all day, every day. They fly all over the place. They're away from their families. They're not doing things that are intrinsically motivated, and they've created this hell for themselves because they just haven't examined how they're spending their time or why they do the things they do. And so often, like, over and over and over again We've just proven at Tiny that you just don't have to follow the private equity playbook. So many of the things that they do are just ridiculous and waste people's time. And again, like we've done that consistently. Like people would say, you're going to work with like Apple and Google and Facebook. You have to be in the Bay Area. You want to be a big agency. You have to be down here. You want to run a great company. It has to be down here. We just said like, why the fuck can't we just run it from a small town in Victoria, or in Canada. And, you know, it just, it just works. So I'm a big fan of not limiting growth because you're tired. It's instead finding other people to run the marathon for you and just incentivizing them in the right way and letting the people that do, that love this stuff, do it. If you don't love it, give it to someone else.

Right. Andrew, what business do you guys own or you are associated with or have like really close insights into? Because I know you have that with way more than 20 that you think is like the perfect cash flow company. Like has the, like what do you think?

Like you said at the beginning, we buy wonderful internet companies and wonderful means X, Y, and Z, right? Right. You know, it's durable, it spits off cash flow, it can grow.

And I think I know which one of yours I like best, but I wanna hear your opinion.

Is it profitable? I mean, of course it's profitable, but does it have great revenues and profit now, or is this something that you think is going to be 10 times bigger?

It's going to be 10 times bigger. I mean, right now, you know, it's nice and healthy and profitable, but we've been really reinvesting in R&D and, you know, future opportunity. Um, and we think there's, there's just so much more. We think it's going to be 10 times bigger over the next 5 years.

And when you say you're in, in investing in R&D, you said earlier that Metalab was an R&D company. So I have a business that has an audience. Sean has a podcast that has an audience. A lot of people here maybe have audiences. What does that R&D process mean?

Well, so, you know, with a website like Dribbble, we have to build, if we wanna, let's say that we wanted to do, here's an example. So all these huge companies wanted to recruit designers like Facebook and Google and stuff. And they would come to Dribbble and they'd say, "Hey, look, we really need white glove service, we need help with recruiting." So the CEO had to build a special service for them where they would be able to screen candidates and we'd deal with payments and all that kind of stuff. That would be the sort of thing we're investing R&D in.

But what does that mean?

Or maybe we have to build a sales team for that. 2 or 3 people? Yeah, we have some developers building that, we have a couple salespeople who we need to front for a few months while we get rolling with it, that kind of stuff.

And then just like each quarter, your CEO, Zach, he like makes the decision on which— not moonshot, but like what bet do we like— we're going to prioritize our bets every quarter.

Yeah, exactly. So we, we generally, you know, if he wants to say, look, like I'm going to go and spend $500K, $1 million on X or Y or Z, and it's way above what we've budgeted, he might nudge us and say, hey guys, what do you think of this idea? Are you down with this? But yeah, he's really driving all the decision-making there.

Do you guys buy with debt or do you do like full equity deals?

We're super conservative, so we generally want to be able to pay off our debt in like 6 months if we can. So we use a little bit of debt, but as a company globally, but it's very, very conservative. It's like less than Berkshire Hathaway uses.

You're in Canada. So what debt do you use? Is that— is that just private lending or— because I don't think you have like the SBA infrastructure.

We have, it's very similar to SBA, we have the BDC, which is the Business Development Bank of Canada, which is like a government-funded bank that will kind of take a little more risk and be a little more friendly to small and medium-sized business. So we use those guys, or we'll use Royal, you know, RBC or BMO or any of the big national banks. But we have access to capital globally now, at the scale we're at, we can go to JP Morgan or whoever else.

You can go to Sean Morgan too, and I'll lend you money. Um, so, so if you, uh, we— you're a Canadian guy, so, uh, are you actually Canadian or you just live in Canada?

Yeah, I'm Canadian.

Um, so perfect. So you can explain something that's been on my— we have this like one Google Doc we use for the podcast that's just like, there's no formatting, we just— whatever's at the top, that's like the topics. So there's been one topic on here that, um, I wanted to talk about, which was Shred Credits, and, um Unfortunately, I only know like 20% of a lot of things. I don't know 100% of anything or even close. And so I haven't been explaining it because I'm like, do I really even want to research shred credits? I don't know. But I know enough to know how interesting and valuable this could be. So can you explain shred credits to people?

I visited Andrew up there, I visited Andrew up there, and when he's talking, I'm like, why do we not live here?

Yeah, it's insane. I actually, I have a friend who, uh, who ran a company in San Francisco. It was like super hot, got money from Andreessen. It was a Y Combinator thing. He's like one of the youngest YC founders ever. He was like, you know, the golden child. And, uh, of course, you know, sometimes tough times happen, so the business started to like not just continue to grow to infinity. And over time he was like, man, hiring in San Francisco is so hard. They needed like a data scientist. He's like, you know, we're making offers and they're getting offers of $350,000 a year, $400,000 a year, $500,000 a year for applied scientists. Like, he's like, this is so competitive. And so they actually made a pretty radical decision. They just moved their entire company to Canada. Some people didn't want to move, obviously, and they were like, okay, no problem. We'll give you a nice severance package. You can go and find a new job. And we're going to restart our company like at year 7 in Canada. We're going to take advantage of this. And I think what ended up happening, if you layer on those 3 arbitrages, the currency arbitrage, the salary/cost of living arbitrage, and then the shred credits, I think— and tell me if I'm exaggerating here— he was effectively paying the same engineer that in San Francisco he's paying $200,000, $250,000. Ultimately, it was out of pocket like $30,000 to $35,000 in Canada after everything. Wow.

I would say that's crazy. That's a crazy level of arbitrage. We certainly don't see that level. But what I would say is it's roughly, roughly 60%, 65% the cost depending on— I mean, you're talking about data science, right? That's like pretty hefty salary or whatever. But let's say you hire a dev in San Francisco. I don't know what a dev is like. A reasonable dev is like $160,000 to $250,000. Yeah, you would probably see see $130 to $200 here, but it would be in Canadian dollars. So, right, which is effectively, let's call it like, let's call it on a good day, on a normal day, it's like 30% off, right?

So let's say that that's about $100, and then if you do the credit, isn't— aren't you able to— maybe some people just use them more loosely because I think the, the R&D thing is like where it's a bit subjective, right? Um, and some people are a little more loose with their—

what they're calling. You got to be careful, like you can get audited, and it's not like you go to jail, it's just like a pain in the ass. So we're pretty conservative with it.

And but can't you get up to 80% with the credits or no, that's not the case anymore?

I think if you're really early and small, this is, this is the crazy thing. You guys had kind of mentioned before, like think through some ideas for people. One of the big ideas that we've had a lot of success with is taking these bloated companies from San Francisco where they've raised venture or they just have a really bad P&L and just pivoting it to Canada or just hiring remote, just hire a bunch of people in Oklahoma or something, right? It's really not rocket science.

Yeah. And there's also like one weird thing you can't fire the person, right? There's some restriction around that.

Oh, I don't know about that. Okay. Generally, the labor laws are— the labor laws are very similar to California, I'd say.

I see. Okay. Anyways, that's Shred Credits. I don't even know if we can call that 101. Maybe it's the precursor to 101.

Let's talk about, Andrew, I wanna talk to you about one job or one business that you have and then let's talk with some ideas. Cool. The business that, so I, what's the guy's name? Fred Wilson. Is that the guy from Union Ventures? Fred Wilson?

Yeah.

He invested in the seed stage of Indeed.com, which eventually sold to a Japanese company for multiple billions I believe, and it's probably worth way more than that now. He said that indeed.com had the best business model he had ever been part of because all the incentives were aligned and he just loved that business. And so I, since then I've been obsessed with job boards. And then when I hung out with you, you told me about Tinyboards, your job board company. And to me that sounded like the, like similar to Indeed. I'm like, this is a perfect business. The way that you guys have it set up, Andrew, I've told you, I don't know if I— I don't love your— the model, but I'll let you explain what it is. But can you like talk about some of the economics of job boards? Because I think that that is one of the best businesses out there and you guys own a nice size one and it sounds like an awesome company.

So you're using a job board for Dribbble as the business model, not the product. The product is Dribbble.

Exactly.

The job board is the business, is the monetization channel.

What should our niche be, Andrew?

Well, I don't know. Startups. I would say startup jobs are just tech businesses or something like that, whatever, whatever your audience looks like.

There you go.

Thanks.

You want to talk about more ideas? Sure. What, uh, what do you want to talk about?

Yeah, here's the deal, you bring the ideas.

Sure. Okay, so, uh, one of the things here, I'll, I'll, I'll, I'll, I'll give you some alley-oops. Things that, uh, you're interested in buying at the moment, things that, um you're on the lookout for in the next 6, 12, 24 months, uh, companies that you would start right now if you had more free time?

So, you know, one of the things I'm really, really excited about is no-code. So I started—

I see you post about that constantly. Yeah.

So where are other opportunities in this space?

Well, I mean, the cool thing about no-code is aside from just being able to prototype super quickly and, you know, build real businesses, like it's not just for prototyping. Like I literally built a job board for a project I'm working on in a few days in no-code and it has Stripe billing. Like it's a fully functional job board and I don't need to pay an engineer or anything to maintain it. I can do it all myself. So that's cool. But I think what's really interesting about it is looking at businesses that don't need to be as complicated and expensive to run as they currently are. So an example would be, you know, let's say you find a startup that is starting a, like I said, a marketplace for recording studios for podcasters. Right. So let's say this, some dingus went out and he raised $1 million from YC and he built this thing and it's only doing $700K a year of revenue, but he's gotta pay like 5 developers to maintain it. If you could duplicate that in no-code, you buy the business, you strip out all the cost and you structure it in a really simple way with no-code, you could actually have a sustainable business where previously you never could before. So it allows you to build smaller businesses that are actually profitable. Whereas right now, if a business is doing that much revenue, it's hard to make it profitable.

And didn't you say that you wanted to do a no-code agency?

We actually did. We launched one called 80/20, uh, run by my friend Max, and, uh, it's killing it so far. It's been awesome.

And when you launch stuff like that, that quickly, you tweet it out, you go, I'm gonna do this. Did you, so did you just hire one CEO to run it and was he responsible for getting the first sales, or did you go out and close like a $50,000 deal and then be like, hey, I got this deal, you got a week to figure this out?

Yeah, I'm a big fan of like public statements, so it forces me to actually do something. So that's why I'll tweet it out. And, uh, my general way of doing this stuff is if there's a business idea, I have it in my head, and it'll only stay in my head, and I'll only be able to focus on it for 1 to 2 weeks at most. And so within that 1 to 2 weeks, I have to identify who's going to operate this business. I have to hand off like, here's the structure, here's what the marketing should be, you know, here's a really high level and go. And so someone like me can't function without good operators. I need follow-through people. So, you know, an example of that is I tweeted this out too, but I was playing tennis with a guy like I don't know, 4 or 5 months ago. He told me he's a furniture designer. I was in the parking lot, I looked at his stuff and I was like, this is dope. Do you sell this online? He says no. And I just started texting, uh, Hector, who runs one of our agencies, and I said, hey, I've got an e-commerce project for you, you know, go figure out a brand, design all this, build a Shopify store. And 4 months later, suddenly we're launching a furniture brand. And in total I've probably spent 5 hours giving feedback on it, rewriting a little bit of copy and helping kind of structure it. But otherwise I've had no involvement.

But in, in, in doing the cost. Okay. So the e-com thing, the cost was just the, the agency's time. So I guess they just had some flex time that they could work on that. Is that right?

I paid, I pay everybody. So it was like a fully one thing, one mistake a lot of people make is when they own a whole bunch of companies, they try and synergize them, get them to help each other, and it just ends up meaning that one of the CEOs feels resentful and they feel annoyed of doing favors. And so I just fully pay full rack rate. So with Z1, the agency I used, you know, I spent $30 grand with them or whatever. Andrew did? Or Tiny did? Yeah, me, Tiny, Tiny, my holding company. And that $30 grand formed my stake in the business.

Okay, so Tiny paid paid $30 grand to get that built. Yeah. And then with the 8 no-code agency, how did that, how did the, how do you do those things?

So that was literally, I tweeted about it and then I, uh, I went to this guy Max who had run Designer News, one of our other businesses. He had left the company to go take a job somewhere else, but I knew he was interested in coming back if he could run something. So I texted him and I just said, hey, look, dude, I love you. Would you come back and run this thing? You'd be perfect for it? And he said, yeah. And we pulled in again Z1, the agency we, uh, we own in Spain, and we had them do a brand and help him build a site. And then I took it down.

You paid those guys like another 30 grand?

Yeah, another 30 grand there. And so if you look at it, you know, I really just had a high-level idea, and I know how to run a services business. And so, you know, it's me saying, okay, here's the playbook on how we run an agency Here's the people you're going to need. Here's the— here's a few intros to various friends of mine who I know will need work or whatever. And then here, I'll get you guys to build on my dumb ideas. So I've got 80/20 doing a bunch of projects for me as well. But that's usually how I get going.

And then did you pay the CEO a little like 3 months salary to get them started for you to go get sales?

Yeah, it was like a month or 2 of salary, but he's a super scrappy, incredible guy. So I just knew he'd be perfect for it. So, I think he closed his first deal within a week.

So, then it's safe to assume that a lot of your projects take like $10,000 to $50,000 to get off the ground as well as a really competent network of operators.

Well, so, I mean, for years, so the hard part for me was when I was an operator, when I was running all the businesses, I had shiny object syndrome. So, I'd always have a new business idea and I'd always go and start start something new. And when I read about Buffett, I realized that, hey, this guy doesn't start anything. He takes things that are already at scale and makes them better. And so I would say Tiny's primary business is writing large checks and buying majority stakes in businesses, hiring an exceptional CEO and getting them to run it. And then I have this irresistible urge to dabble in areas I find interesting, like podcasting or no-code or you know, e-commerce or whatever. And those are just me satisfying my urges and hopefully doing it profitably. So those businesses are kind of like the, the sawdust that comes out of the sawmill. They're not the core business.

And tell us about a business that didn't work. So one of your kind of your brainchild, you got excited, you spent 2 weeks on it, you spent 4 weeks on it, and, uh, then you decided to pull the plug. Because I think It's easy when you hear about like hit after hit or kind of like good idea after good idea, but what people miss is that there are misses in between. You just sort of move on from them and you learn from them. And so tell us about an idea that you were excited about that didn't pan out. Oh my God, the last—

yeah, it's super ridiculous, particularly if you're not single.

Oh my God. Well, I wasn't— I wasn't— when I started originally, it was a nightclub.. And then I met my wife in a nightclub. That's lame. And so then it became, well, no, it was, it was, I was a DJ and I was in a nightclub and I met my wife. And so I ticked that box off. And in the meantime, I'd been negotiating to buy a nightclub because I was single. And then it became a restaurant as I, once I got married and the restaurant was just a complete fucking disaster, clusterfuck. Now it's a day job. And we lost a lot of money. Oh my God.

It was a disaster. Now it's Take care.

But, you know, I'm like, I'm like, I walk around sticking my, my, like, a fork into electrical sockets and learning lessons. Right. And I've done that a lot over the last 15 years. And I've realized through trial and error what a good business looks like and what a bad business looks like. And right now we own a lot of great businesses and we've owned in the past a lot of really shit businesses and we've learned that lesson.

Have you ever been broke? Like, Like, it seems like things have been going well, but in the last 5 years or so, I mean, your businesses have been in 8 figures, I imagine, in the last 5 years, at least the last 5 years. Has there ever been times where you've almost lost it all and went broke? Because it sounds like you— well, go ahead.

And we should, we should wrap up in a second. And I think you got to be a recurring guest. I told you that the first time we talked, the first time we talked on the phone, I was like, dude, you got to do this. And at the time you were like, oh, I don't like to do podcasts. And then you said something and before I could even counter, you were like, but that's probably stupid. You're like, you're like, I like to be stealthy and blah, blah, blah.

But what? That's such a silly thing of him to say. His Twitter is great.

Yeah.

What were you thinking back then?

You just didn't know me back then or what? Uh, well, at the— I, first off, I don't really like doing like the generic podcast interview. This is way more fun just to kind of jamming on ideas and stuff. But at the time, your podcast was kind of like a How I Built This, right? And I don't know, like, I've just— I did a lot of the— a lot of podcast interviews like 5 years ago, and I just found at the end of the day, I was like, okay, I'm just repeating the same story. But no, it's super fun to do this. I'd love to come back.

Okay, cool. So I got a question for you, and then I got a thing to plug. So my question is, your thing is Your business is called Tiny, but I have this question that I always ask anybody who I find really interesting, especially people who are busy because they have a successful thing that they run. And my question is, what's the biggest idea in your head right now? And basically, like, what is the big audacious, ambitious, holy shit, what if you, what if you did that type of idea? I know that's not your MO. Your MO is buying often small, wonderful internet businesses, but I'm just curious, do you have like What's the biggest idea in your head right now?

Man, Sean, we need to do this. Let's just go ahead. We keep pussyfooting around. Andrew, what should we do for this podcast?

What I think you guys should do is do an AMA. So allow people to submit questions once a month, like 20, 30 questions of, hey, what should I do about my business? Or what do you guys think of this or this or this? Or, you know, whatever. Let them pepper you. And then also offer extended, maybe extended interviews. So once in a while you get some huge titan of industry and you, you know, you get Ted Turner and you make the first half free, the second half only on the paid feed. And then the other interesting thing I do is when you have someone cool on, ask them 5 or 10 questions like, what's the best book you've read in the last 5 years? What's one personal habit that you do every day that, you know, nobody knows about? Or whatever. And have those insights only appear on the private feed, because ultimately what we've realized is people want access to interesting people. They want to know what they're thinking, and they want to know what those people are doing. Uh, what are the cheat codes to life that they can use to be better?

Yeah, we need to, we need to do this. I signed up for Supercast and I've poked, I poked around. It's pretty cool.

Yeah. You've told us this idea like 3 times. Every time it's a good idea and, uh, we just haven't done it yet. But the good news is the podcast just keeps growing. And so the time when we do do it, it's like you need those super fans or sort of the obsessed people who are like, yeah, like you give me $5 of value per month.

Uh, they have to build, they have to build the habit and love you guys. And I don't think there's any rush. The one thing I'll say though is like people get a weird— they think like it's all or nothing where they're like, oh well, I like my advertisers, I don't want to say no to the ads. You don't have to say no to the ads. You just say if you're a premium subscriber, there's a special feed you get. It has no ads and it has all the extra stuff. And then on the public feed, you tease all the special stuff. So the episode shows up with Ted Turner, but it cuts off after 30 minutes, and then you got a recording saying to keep listening, you know, pay up and go on this premium feed.

Last question from me. Is that okay, Sean?

Yeah, go for it.

My last question is, Andrew, at what point— what was the cash flow number that you hit from Meta Lab that you started pursuing buying or investing in other companies?

And what year did you buy your first company?

Uh, 2013. We bought Designer News. That was our first buy.

So, and, um, do you, do you think that that was the right point for you guys, or what did you wish that you'd waited or started sooner?

Yeah, you know, it's a tough thing, right? There's a— Jason Fried says this really well, but like, you shouldn't ask people who are so far along in their career for advice because they forget what it was like. Right? There's so many lessons I've learned from operating businesses, and there's so many things that— like, if I went back in time and I talked to myself in 2006 and I started saying, you should go out and buy businesses, I don't even know what a good business was. I thought a dry cleaner was a good business, right? And so you have to build the scar tissue and come to this stuff. What I have seen, though, is that people who read Buffett and Howard Marks and, you know, Mohnish Pabrai and all these like value investor books, those— the people that really get it, like where it really jives with them, it's almost irresistible. You like have to do it. And then there's other people where they're just hardcore operators. They don't get excited about investing money. They don't get excited about tweaking businesses unless they're the ones doing it. And so I think it's a question of like, well, what camp are you in? Are you a capital allocator and an investor, or are you an operator?

Love it.

Um, this is amazing.

So we're gonna wrap it up. Uh, one quick plug. So I, uh, speaking of no-code, so last night, uh, you know, quarantined out, I was like, okay, I want to build something that will help the podcast. And, um, because podcasts are hard to grow, they just sort of grow organically over time. They're not easy to— there's not like a— there's not really great growth hacks for it. But I was like, oh, you know what, one thing that might be cool is we do these podcasts and we brainstorm a bunch of ideas and, you know, a lot of times they're bad, but sometimes they're alright. There might be some diamonds in the rough. And I was like, what if I just distilled those out? And I did this first for myself because I was like, you know, what are the best ideas we've come up with? I want to have my own shortlist out of these, out of the last 30 episodes that we've done. So I made that list and I was like, okay, I should post this as a blog. But instead what I did was I used ConvertKit which is like, it's kind of hard to use honestly, but it's a pretty dope tool. It lets you spin up a landing page really quickly and automate an email sequence. And I bought the domain terriblehorriblenogoodverybadideas.com, and I spun up a page where basically every week you can get an email that has 2 or 3 new startup ideas. So it's for anyone who's like an idea junkie or kind of like, you know, the listeners to this podcast, people who like hearing about new interesting angles, new interesting opportunities. And, uh, we launched on Product Hunt today. So any guesses? Uh, we're currently the number 5 product on Product Hunt. Uh, it's called Terrible Horrible No Good Very Bad Ideas. And, uh, any guesses? Sam, Andrew, guess how many email subscribers we've gotten in the first, I don't know, uh, few hours, 6 hours, 5,000. So we got 5,000 from Andrew. What would you say, Sam? 1,000. All right, we're gonna check right now live and we're gonna see. I think we're under Both of those, that's my guess, but we're currently number 5 and we have 636 email signups for this so far today. That's awesome. I think we'll cross the 500.

Well, that's where— look, Andrew, I'm doing exactly what you've described. This is my meta lab where we're going to build multiple companies on top of New Zealand or in New Zealand. Yeah. And it's funny you said New Zealand. I told Sean in the last podcast, I even took off my pants. And I, and I, I have this tattoo of a pirate ship on my upper thigh and it says Bold Fast Fun. And I got it one day because we hit some revenue number that I didn't think we were gonna hit as soon as we did. And the prize was I had to get a tattoo in front of everyone. But anyway, I always tell people my email list is like my pirate ship and every email subscriber is like a little bit of wind in our sails. And so it's very similar to that.

Um, what has to happen for you to get a face tattoo?

I would totally do that, by the way. Like, I don't know, maybe like our first like $3 million. If we get like $3 million in monthly sales by like June, I'll get— I'll get anything tattooed on my cheek.

Okay, can you see me right now, Andrew?

Can you see my face?

No, I don't have it. Oh yeah, now I can see it.

Yeah, I mean, I look like a crazy man already. The quarantine has made me insane.

Yeah, what's the next evolution of that hair, by the way? You gonna do anything else to to that little mohawk?

No, I'll shave the whole thing. I shaved my head like with a razor the other day. Have you guys ever wanted to feel your scalp?

I'm worried I'd have like a bunch of weird moles or something there.

I don't know. Yeah.

But who cares? Don't ask, don't tell policy for me.

Yeah, totally.

Like I, I've always wanted to shave my head to feel like my bald scalp and it feel, it felt amazing. Oh my God. So I highly recommend you do it.

Uh, we gotta put this part at the front of the podcast.

This is the best segment so far. Yeah.

I mean, but look at me. I look like a crazy bad bat. I look like a nutty person right now. I'll get a tattoo on my face. Easy. Adam Ryan, if you're listening, 3 million in sales by June, face tattoo. I'll get your face on my face.

I want the, I want the Mike Tyson style tribal.

I don't give a fuck. I've been, I'm self-employed. I'll do that in a heartbeat. I'm already married. I'm self-employed. What do I have to lose?

Perfect. My dog loves me.

Yeah.

I think, um, my, my favorite podcast, the Bill Simmons Podcast, they do this thing at the end of every episode. It's called Parent Corner. It's like 5 minutes and they just talk about, um, like something like just another story that their kids being crazy or dumb or whatever. Um, we need to come up with our own. I think you've, you've sort of organically started this the last two, which was first dropping your pants and showing the pirate ship. Uh, this time showing up with the mohawk and talking about your face tattoo. So I think we need one, which is like, you know, uh, how quarantine is driving us crazy.

Yeah, I'm going insane, but whatever.

I'm finding, I'm finding it's weird. Like I'm vacillating between being happier than I've ever been. And then on days where I'm tired, I just fucking hate it. Like I'm just so angry.

Do you have a nice car?

Uh, yeah, I do.

So I don't, I only, I have a Land Rover, which is a plenty nice car, but it's not like fun to drive. If I had like a nice car to drive, I think I would be excited because I would at least like have something fun to do at night. Like a Porsche or something.

Yeah, but you just don't, the thing is when you have kids, like for me, I have to be in bed at 9:30, otherwise I'm just bagged. So for me, there's just no, I put the kids down by 7. I've got an hour. I read a book or chill, go in the sauna or something, and then I'm done.

But maybe just like a 20-minute drive in Victoria would be nice.

Yeah, totally.

Totally. Yeah, totally. Yeah, sure.

Wait, just for the record, to wrap this up, you said sauna. I have a sauna too. I live in San Francisco. I have a 1,200 square foot place. It's not huge, but I have a garage. I have a sauna that I bought for $1,000, or it was given to me from by Ramon for my wedding. It was my wedding gift. He paid a grand for it. Awesome.

It's a game changer. It's like the— I've been meaning to tweet about this. It's like the number one thing for my sanity and stress. It's crazy.

Do you have an infrared one?

No, you need, you need to get the hot rock one. They've done studies on this and unless you're at 170 degrees or more, you don't get the same effects. Obviously infrared's still nice, but the infrared ones are, are so much small.

Like I had a, mine's just like a, a 2-person or 1-person sauna and the, the, the rock ones I think are a little bit bigger typically.

Yeah. I just got a Costco one. So we had a, we, we bought the house we're in. There was a hot tub in the backyard and I, my wife doesn't like hot tubs, so I went to Costco and I grabbed this like $2,000 or whatever sauna and plopped it down. And that's right, amazing. Yeah, Hot Rocks.

Yeah.

Wow. Yeah, it's so good, dude. It's like every night I feel like I've just got off like a 2-hour workout after I do it for 20 minutes. It's amazing.

Isn't it? Isn't a sauna like a big thing? How did you just pick this up and take it out of Costco?

No, no, you buy like a kit and then they deliver it.

Yeah, everyone's shocked when I say this, Sean. It's just like, it's like the size of like a big like wardrobe.

I just want to replace my shower. I don't need a shower. Just put a sauna in my bathroom and I'll be back.

It's like the size of a shower and it comes in like a box and it's just 4 walls.

All it is.

But Andrew said that yours ain't shit and now you need the Hot Rocks one.

That's what I heard. Well, it's, it's good. It's good. It's better than nothing.

But the Hot Rocks— First of all, mine was a gift, Andrew. Oh, mine was a, sorry. Mine was a gift. But you just, dude, all you do is lift these 4 walls up. It's just like IKEA furniture practically. And then it has this like microwave-sized heater that you—

I mean, it's pretty— Yeah. Sean, you could literally get one that's like you sit in a lawn chair and you like drape a thing over you and there's these little panels.

Like it's, are you kidding? Whoever is the biggest shitty DDC sauna company, you need to sponsor this podcast by getting me and Sam saunas. And, um, and so you need to give us a sauna and then we'll, you're the sponsor of the show.

I, I don't know if you guys follow Dr. Rhonda Patrick? Have you ever seen her on—

Yeah, yeah. That's the reason why I wanted a sauna.

She's like absolutely amazing. We love her. And we worked with her with Supercast actually. We helped her monetize her podcast.

Dude, she says infrared saunas are good.

She says they're okay, but they're not as good as hot rock. Look up the PDF. But anyway, the amount of science that shows the benefits of sauna is crazy. It's absolutely amazing.

And it feels like— 4 days a week is what you have to do.

Yeah. 7 days a week, every single night. I have my Apple HomeKit turn it on at 7. I get in, I go for 30 minutes, listen to a podcast, usually you guys actually lately, and it's awesome.

So it's like I'm there with you every single day.

We're with Naked Andrew.

Yeah, exactly. Are you going to listen to this episode or are you like us and you can't stand your own voice?

I can't. I was, I was actually interviewed in another podcast today and I listened and it's just pure cringe for me. Even, even though I don't disagree with what I'm saying, I just hate hearing my own voice. So I don't know about that. We'll see.

All right, let's get outta here. I'm gonna go microwave some hot water and throw it on myself cuz I don't have a sauna, uh, yet until our sponsor hooks us up.

All right. Thank you, Andrew. This was awesome.

That was fun, guys. Anytime.