12 ideas and observations from the 56-minute conversation with Andrew Wilkinson, the the founder of Tiny, on building a 30+ business holding company:

1. Starting companies is fun, but anyone who has done it knows it is a lot of work. Buying established businesses with existing cash flow isn’t as sexy so I suspect it is wildly underrated as a way of building wealth.
2. He will occasionally pay 10x for an amazing business, but that is rare.
3. Some CEOs will go 6 months or more without speaking with Andrew.
4. Portfolio companies are not at all connected. They each operate independently.
5. Cash is kept in the company based on historical working capital needs and any extra goes to the head office for new acquisitions.
6. Andrew is willing to pay up and hire CEOs that have managed similar businesses at larger scales already before instead of trying to find underpriced less-experienced talent.
7. They have a 60-70% success rate on hiring CEOs.
8. Favorite interview question "What's the worst job you've ever had?" He finds that people that haven't had crappy jobs are less motivated.
9. Incentives act as a magnet to get what you want done.
10. Money is more meaningful to new CEOs than to founders that have been making great money for the last 5 years.
11. The first CEO he hired was paid $250k base + a couple hundred thousand variable.
12. Andrew’s strengths are: Laser focused on problems for a short period of time. Moves fast; Very good at 0 to 1. Burns bright for 15 days; Inch deep and a mile wide; Not good at execution or day to day details.

All of these highlights come from an interview with Andrew, founder of Tiny and the research I did on him.

Listening to this episode is the easiest way to download Andrew’s ideas into your brain. I hope you enjoy.

Show notes:

00:00:00 - Intro

00:00:19 - Ruthless and money focused Andrew on his early 20s

00:05:42 - 1st business, billing in USD while living in Canada

00:08:37 - First realization that it is better to buy a company compared to starting it

00:10:28 - Buying the very first business for 3x ARR and $1.5M cash

00:13:25 - Looking at companies that make a whopping $100 million in revenue but very little profit

00:19:25 - Having extreme patience while waiting for excellent companies

00:23:23 - Inefficient market and what many investors don’t understand

00:27:32 - Everything post-acquisition and delegation

00:33:45 - Andrew’s strengths and weaknesses in managing Tiny Group

00:39:04 - A huge lesson about tech businesses: small $500k businesses get big

00:43:52 - Big mistakes in pricing a product/service

00:48:20 - Lessons from Jason Fried, Sam Parr and Sahil Bloom

00:52:31 - Equity is forever. Never just give it away

Follow Mikk/PrivatEquityGuy on Twitter: https://x.com/PrivatEquityGuy⁠⁠⁠

Andrew on Twitter: ⁠⁠⁠https://x.com/awilkinson

This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.