Andrew Wilkinson's $20,000 to $260,000,000 story (#521)

Sam Parr

Alright, what's going on? This is Sam. We've got an awesome episode today. We have Andrew Wilkinson on the pod. Andrew is one of our good buddies. He owns a company called Tiny. Tiny basically started as an agency that made a bunch of profit. He took those profits and bought around 18 to 20 different companies. He took Tiny public, and I think today it's trading at a $600 million market cap. So, he has a really good perspective on what's going on in life. During this episode, I think it's about 20 minutes left when he actually says something that I'm sitting here taking notes on. It's going to change my business. It's about this thing he calls the "profit first mentality." He goes in-depth on how much money he leaves in each business and how the CEOs are able to operate them. It's really insightful stuff that I haven't really heard him talk about before. Also, Andrew is interesting to me because he is my close friend, but he's very wealthy. I get to ask him all types of questions, kind of like behind-the-scenes stuff on how he spends his money. He talks about how he's now a patient of Tia, which is this famous doctor, and how much he's spending on that and the outcome of it. I find it very interesting. He also talks about shooting his shot with his hero. He's done business with guys like Bill Ackman, who is worth $10 to $20 billion as a hedge fund guy. He talks about how he met Charlie Munger, who is Warren Buffett's partner. So, there are really interesting insights on how he lives his life and how he got in the doors that he did when he was still up-and-coming. Really fascinating! So, this is the episode with Andrew Wilkinson. Let me know what you guys think. You can hit me up on Twitter @thesanpar and let me know if you enjoyed it.

Shaan Puri

Alright, what's up? We got the man here, Andrew Wilkinson, fan favorite guest of the pod. Welcome, Andrew! How's it going?

Andrew Wilkinson

hey guys I'm good

Sam Parr

So, you gave us a list of ideas and things that you're kind of messing with. But you have this thing on here about **sexy versus non-sexy** things. You're like, "The things that everyone loves on the outside are the hardest ways to make a living." And so, you said here that I didn't know this... or maybe I did. I knew you owned a bakery. Is it true that you own a deli and a bakery? Is that two separate things or is it one thing?

Andrew Wilkinson

no that's combined that's one

Sam Parr

and it's a pain in the butt

Andrew Wilkinson

Total pain in the ass. So, yeah, I've been thinking about this a lot lately because I think when you talk to young entrepreneurs, they always want to do something sexy. I was like that too; I was a product CEO, right? You think every CEO kind of has their thing, and for me, it was making great products. So when I was running software companies and stuff, I'd always be thinking, "Oh, when we release this new feature, that's when everything will take off," or "When we get this partnership," or, you know, whatever big announcements. I think flashy. But one of the things I've realized after running a company for like 20 years is it's really not the sexy stuff that pays off. For example, we have a bunch of companies, and one increased prices by 30% after not increasing prices for 5 years. They massively grew profits. That took 10 minutes, a little bit of planning, and that paid off big. You know, one significantly reduced shipping costs by sizing down packaging. Another realized, "Hey, we've got insane SEO on certain keywords, and now we can drive affiliate revenue." One had a bunch of customer gift card deposits, and they were like, "Oh shit, we can invest these in T-bills and make 5%," which makes $500 a year of just pure profit. I just love these boring things like that, and I've realized that it's kind of sad. You know, I grew up being like, "Oh yeah, I want to be the next Steve Jobs or James Dyson or something," but the things I'm actually good at are these really, really boring things. I call them like lever pulls. You get in, you pull a lever, and revenue or earnings just grows, you know, by X%. This data is wrong every freaking time.

Hubspot

Have you heard of HubSpot? HubSpot is a CRM platform where everything is fully integrated.

Hubspot

Woah! I can see the client's whole history: calls, support tickets, emails, and here's a task from three days ago that I totally missed.

Shaan Puri

HubSpot, grow better. You know, the good thing about that is that the older you get, the more appealing those ideas become. For example, this is just in life: I've never seen a couch I don't like. The older I get, I'm just like, "Yeah, it'd be nice to sit right now." I feel like the same thing happens in business. I used to think I wanted to pull off some awesome feat of creativity and hard work. However, I actually very rarely want to do that. There are times, but most of the time, I'm like, "Oh, what's the simplest thing I could do that will just make this work better?"

Sam Parr

And you were the king of that. You owned a video streaming startup there. You were either "to the moon" or nowhere. You spent like 4 or 5 years doing it. I mean, you were all in.

Shaan Puri

Building crazy computer vision features and all this stuff even before AI became really big. The reality was, we had this other business called **Birthday Alarm**. Birthday Alarm was like a reminder that "it's your friend's birthday today," and they would send them a cheesy e-card if you paid $9 a year. That business had been printing cash—$1,000,000 every year for like 15+ years. I think it started in 2001, and I was working on it around 2016 to 2018, so, you know, 18 years later. At one point, we finally got our senses and thought, "Why don't we make Birthday Alarm a little bit better?" It pays all the bills, so we could just improve it, right? Even then, the team had a list of ideas: rewrite the whole thing in the new language, you know, make it in JavaScript. It was written in this old language because that was what was hot in 2001. We had to rewrite the whole thing, and then when we did that, we would be able to make it so much cooler. We added new features, redesigned it—our designer spent mockup after mockup on making it cleaner, more minimalist, and cooler. I tell you what, after a year of doing all that, there were really only two things that made a difference. **Number 1:** We raised prices. We raised prices by 30%, exactly what you said, Andrew, because the prices hadn't gone up in 15 years.

Sam Parr

you just delete the 0 and the $20 a month and change that to a 5 because it's 25 a month

Shaan Puri

Exactly. And then the second thing was we implemented Stripe instead of the old payments platform. Stripe had a feature where if somebody's credit card expires and they get a new one—like, you know, their credit card company gives them a new one—it would mess up your subscription. However, Stripe has a feature for just 25 cents; they would automatically update it with the new card without the user having to type anything in. That one feature is like a seven-figure feature that took honestly no work on our part. We just checked a box on Stripe to say, "Yeah, we want that. We'll pay the quarter for every time you do that." You know, we made like an extra $1,000,000 a year in profit just off of that one thing, basically. It was a big lesson learned: the link between effort and result is so much more disconnected than you think. The more mature you get, the more you realize you should just work backwards from what's actually going to work, not from what's the cool or difficult thing to do.

Andrew Wilkinson

These things, too, they're so often just one day of work. Right? Like, we had a similar experience. We had this invoicing software about 10 years ago called Ballpark. It was the first SaaS product that we built, and we realized we were doing, like, $100 million of payment volume through the credit card processing. So, you know, I send Sam an invoice for $10, and he has the option to pay by credit card. We just marked it up, too, and I think that was worth $100,000 to us. I remember it was like 10 minutes for me. I was going through Stripe and realized there was this setting. I checked the box, and suddenly we made way more money. I think this stuff is super powerful. And I mean, just to give an example, Sam mentioned that I own a deli and a bakery. When I was a kid, there was this bakery down at the end of my street that I would always go to on the weekends. I'd go and get a croissant, have a coffee, and sit and listen to a podcast or something. I knew the owner; my brother worked there. The owner would pay me like $10 an hour to fix his computer. About 8 years ago, he came to me and said, "Hey, I'm going to sell the business. I want to make sure it goes into good hands. Will you buy it?" I didn't know anything about the bakery, but I kind of wanted to protect this cool neighborhood institution.

Sam Parr

I don't know like a big shot you wanna be like oh I got come hang out at my place you know like would

Shaan Puri

you like some of my bread

Sam Parr

yeah totally

Andrew Wilkinson

there's like there's always like a pride of ownership right like if I tell someone low let's say like locally I'm like hey I own this huge social network for graphic designers dribbble they're like you know eyes glaze over they don't care but if I say oh I own otavio like the local bakery that everybody goes to with their kids they're like woah that's so cool so there's a lot of private ownership but there's like 30 or 40 employees you know we have to have make sure like a baker wakes up at 2 in the morning to bake the croissants a million different things have to go right to serve a customer and have them have a good experience right and this business is like you know it goes from making money 1 month to losing money for 6 months you know take huge swings if like one person quits it messes up everything super complicated to operate and if we're lucky at the end of all of that we'll maybe make a $150 a year now on the flip side we bought a business about almost 10 years ago called we work remotely.com and it's very simple it's a job board people pay money to post like a blue link kinda likes craigslist so you're hiring remote you post on wework remotely it'd be like you know I'm hiring a developer for you know automatic or whatever so we were char when we bought that business they were charging 199 and it was run by the guys from basecamp and they just didn't do any mark marketing or promotion didn't do any seo so we buy the business we pay 3 or 4 times earnings or something which was you know a fair price given what it was doing we immediately take the price from 199 to 299 because that's what all the other job boards were charging and we hire an seo consultant we start doing seo we start doing email marketing that business went from doing about 400 k of profit to I think couple years ago it did 4,000,000 of ebitda or something in that range so these in that business that had 2 employees and 1 or 2 part time contractors right and literally like the entire team could go pens down for 6 months and it would still keep printing cash and so you look at it and it's like business on harm hard mode versus business on easy mode but the inexperienced entrepreneur would look at the bakery and go oh sexy right and it's like online there's bakeries too right ecommerce businesses are bakeries in my opinion

Sam Parr

How much of what was... So for those who don't know, Andrew took his holding company public. I think today it's trading at many hundreds of millions of dollars—$500 or $600 million. What were your earnings that you reported for the last quarter? Or what's the public record for your annual earnings? I think it was between $30 million and $40 million—that's like the public number, I think. But what's crazy is that we work remotely, which would have accounted for something like 10% to 15% of, you know, this company worth hundreds of millions of dollars of your guys' earnings. That's pretty wild.

Shaan Puri

well and

Andrew Wilkinson

I think a lot of people forget that small things can get big, right? We grew that business from $400,000; we basically 10x'd it. We bought that business for about $1,500,000, right? So it's pretty wild how powerful this stuff can be. When you see a business where they're just myopic on something, they're not doing the best practices. Often, it's because they have other priorities. I mean, the Basecamp guys had a $100,000,000 ARR SaaS business. The last thing they're going to be thinking about is this little pimple on their ass, this you know, remote job board. So buying from someone like that is a great opportunity.

Shaan Puri

I was talking to one of your company CEOs last night, and they mentioned this "Profit First" book, which I think is interesting. Sam, do you know about this?

Sam Parr

Everyone is talking about it. Andrew told me about it months ago, and since then, I've seen like 8 or 9 friends bring it up. I don't know what it's about, though.

Shaan Puri

I'll give you my take, and then Andrew, you can fill in the gaps because I haven't read the book. I was like, "Can you just explain it to me in 5 seconds?" Then they explained it to me in 5 seconds, and I was like, "Oh, got it! That makes a ton of sense." So here's the ultra, I haven't read the book version of the book: In a normal business, you get revenue at the top line. Then you start, you know, you get your gross profits, and like, you know, revenue minus what it took to sell those goods. After that, you have all these other expenses, and then what's left is like the profit at the end. So, profits are at the end normally, and then you sort of take a distribution out of it. That's probably how you ran The Hustle, right? Oh, you take no distributions because you're just paranoid, and that's how I run my e-commerce business. I think what the Profit First mentality is, you take the gross profit and you put that in your bank account. Then, as you have bills to pay, you literally put it...

Sam Parr

in your bank account or figuratively

Andrew Wilkinson

I think you literally move it. You move it into a profit bank. You sweep it out of the company. Got it?

Sam Parr

it okay sweep it out of

Shaan Puri

The company then gets a bill from some vendor or some software. You have to go back and take money out of that pocket to pay it. There's something psychological about when you just accept the waterfall of expenses and you're like, "I guess I get what's left." You sort of leave the fat in the company. Versus if I paid you out everything and then I said, "Hey Sam, it's going to be $8 to use the software," or whatever, like $8,000 for this. I don't want to. I have to take $8 out of my pocket to pay for this. You start to question a bunch of these expenses, and it sort of forces you to get lean, even though nothing changed except for the order of operations.

Sam Parr

But does that ruin growth? Does that, like, ruin when you see an opportunity and you want to pounce on it?

Andrew Wilkinson

well no because you would just you would just you'd take that money and you'd invest it back into the company

Shaan Puri

and and first andrew did I did I bastardize it or or was that was that accurate description

Andrew Wilkinson

I think you nailed it. The way to think about it is like if you want to lose weight. You know, there are all these psychological experiments where they give people food on different sizes of plates, and the bigger the plate, the more they eat. This is because psychologically, they feel they have to get through all that food. So the idea here is to use a smaller plate. Yeah, if you make $100, you immediately take away $30, and people are just forced to "eat off of a smaller plate." As a result, they spend less and they're more thoughtful about expenses.

Sam Parr

but how do you do the math to figure out how much cash to leave in the bank

Andrew Wilkinson

Well, I think you would always say that. Let's say that your business historically has run with a **30% net profit margin**. You would always scrape out **30%**, and over time, if there's excess cash, they're more profitable. You keep increasing that threshold, right? Because you want to be running as optimal as possible. One of the weirdest things I've noticed in business is that every CEO seems to go, "You know what? **25% profit**? That's good. Let's, you know, that's what we should manage to."

Sam Parr

yeah that's how I feel I do that

Andrew Wilkinson

What I've seen is that some of our businesses, historically, can operate with **80% or 90% net profit margins**. If we have a dreamer in there, like a CEO, such as myself from 20 years ago, or Sean from 20 years ago, we might be thinking, "Oh, let's innovate! Let's do all these new things!" and they would burn through all that cash. So, I think it's a way of creating discipline. Now, we haven't actually implemented this yet. I've gone to all the CEOs and asked them to read it. Some of them have gotten excited and implemented it, but I think it's a really interesting framework, especially for smaller companies.

Shaan Puri

Our buddy Sully does this, so I was like, "How much should I leave in there versus, you know, distribute out?" Because our e-commerce bank balance is getting bigger. He was like, "I just distributed it all out." I was like, "All of it? What about like 3 months of working capital?" He said, "Okay, you can leave a month or two, but people act like you can't just put money back in the bank account. You can always put money back in the bank account. There's no penalty for this." He also mentioned, "I think you have way better discipline when there's not this huge bank balance sitting there." I was like, "Oh, okay, I guess you're right. There is no penalty for just sending the money back into the bank account when it's needed." But you will question, "Is this really needed? Why is this needed? What happened last month that is leading us to inject capital back in?"

Andrew Wilkinson

I've yelled at Sam over text a few times about this. Many times, but conservative.

Sam Parr

I'm really conservative, but I've changed. So starting January 1, we're making the change where I'm taking out a lot of the money and we're actually just putting it into T-bills in a different account to figure out what we want to do with the money. Maybe we'll pay ourselves a little bit. I haven't paid myself anything from Hampton at the moment, but maybe we'll pay ourselves money as well. But yeah, you've convinced me that that's the right way. I have to read this book. What I'm still trying to figure out is how much capital to keep in the business. I don't know if I want to... let's say your business is spending $500,000 a month in expenses. Do you just leave in like one month's expense? What's the equation for that?

Andrew Wilkinson

chris chris and I we used to leave 2 weeks expenses in the business

Sam Parr

no way really

Andrew Wilkinson

If it meant that if they don't collect their accounts receivable, they go off a cliff. Now, what they don't know is they're not going to go off a cliff because, tiny, the bank will just inject more capital. We're sitting on cash, and so we move it in. But it creates this sense of urgency to do collections and run the business very efficiently.

Sam Parr

So that math is basically, if you're doing $12,500,000 in revenue and you have $10,000,000 in profit, you're only leaving something like $500 in the bank.

Andrew Wilkinson

Yeah, so like basically payroll plus expenses for 2 to 4 weeks max.

Sam Parr

that's wild that's stressful but I I agree that's the right way to do it

Andrew Wilkinson

It's not... well, it's not though. Because, I mean, most of the time, especially in a recurring revenue business, right? Like, we'll do this with SaaS businesses because it's very predictable. We will say, "Okay, you know you always do $300K MRR, so we're gonna give you, you know, two weeks of cash because it's very predictable." Now, once in a while, maybe once a year, they'll say, "Hey, can you inject $100K to help us make payroll or something like that, or for R&D?" But to go back to Sean's point, they have to validate the R&D. Whereas if the money is there, they'll just take it and do the R&D.

Sam Parr

are you gonna do this sean

Shaan Puri

Yeah, I'm going to change it because I am very guilty of this. When I heard this, it was like, "Oh, I've heard a truth I can't unhear." This is specifically for bootstrap companies because, you know, otherwise I don't want to belabor the point. But yeah, it's so easy to just accept all your expenses as necessary or required. It's easy to think, "What's the difference between this much net profit per month or this much?" I'm not taking it out anyway, so I don't really feel the difference. Whereas if my paycheck is less, I'm like, "Where's the rest of it?" Then I have to go answer that question. I think this is such a valuable insight. I look for forcing functions, and I think this is an amazing forcing function. Initially, I was ready to pooh-pooh this book. I was like, "What is this stupid idea?" But as soon as I heard it, it flipped my opinion.

Andrew Wilkinson

There's a really good quote on this. I was talking to a friend about it who runs a SaaS company. I won't say who, but he has 65% net margins and he's been running this SaaS business for over 20 years, growing 20-30% bootstrapped every year. It's just an amazing, amazing business and a great entrepreneur. I was telling him about how we had not done this in certain businesses and how the CEOs had misallocated some of that cash. He looks at me and says, "If you ask the dinner guests what's for dinner, they will always say steak." I was like, "Oh my god, that's so true!" It's like, why wouldn't they? You know, it's not their money. Yes, don't get me wrong, a CEO is incentivized for a bonus, but for a CEO's bonus, they can spend $300,000 of your money, and that might only be worth a $10,000 or $20,000 bonus for them. They don't care as much. Every dollar counts when it's you and you're the owner-operator.

Shaan Puri

I did the same thing when I sold my house. I was like, okay, I forgot we were selling it for, let's say, $2.1 million, and I thought we could get $2.2 million. The agent was like, "I don't know, maybe it's $2.1 million." I understood he wanted to make the sale and move on, but I thought, "Oh, we're both aligned. If it's $2.2 million, he gets more and I get more." Then I realized, well, this guy gets 3%. He gets an extra $3,000, while I get an extra $97,000 if it's $2.1 million. I was like, this guy doesn't care about that $3,000. You know, he's getting whatever 3% of $2 million is anyway. This $3,000 is not worth the time, hassle, and risk of pushing a negotiation. So, I incentivized him. I said, "How about this? Let's cut a new deal." He was ready for me to cut him down, and I said, "No, for every dollar you get me above $2.1 million, you're going to keep 15% of it." Sure enough, I also had a penalty. I said, "If you don't sell it for at least $2.1 million, you have to buy my wife this bag." I didn't want to take money out of his pocket, but I also wanted him to feel the pain, so I made it a goofy gift. I was like, "Yeah, are these like expensive slippers that are clearly a waste of money?" Then, literally, we got down to it. We received an offer around $2.12 million, and I was honestly ready to take it at that.

Shaan Puri

But he was like, "It's about 2.1." I don't know, you know, let's see if we could push back. He's like, "I really don't wanna buy that bag." So he's like, "Well, I'm gonna for sure get it over this." He's like, "Let me see how far I can get it." And he said, "Let me go push one more time." And he pushed one more time, we got a better deal. It was just such a simple lesson around really understanding the incentives, and not just the on-paper incentives, but like... is this enough to move the needle for this person to behave differently or not?

Andrew Wilkinson

I think it's so crazy. The more I go through working with other people in business, I realize that everything comes down to **incentives**. If you just think about the incentive, you'll see the exact behavior that they're going to have. I did the same thing when I was selling a house. Chris had an interesting approach. He was making "stink bids" on houses. So, if you look at a $1,000,000 house, he would go and bid $650,000 or $700,000. He'd do that 10 or 20 times. The realtor was pushing back over and over again, saying, "Oh, you know they'll never accept that." Think about it: the realtor has to spend 30 to 40 minutes writing out the offer and sending it. For them, there's only a 5% chance of it being accepted. That's totally worth it for Chris, but not for the realtor, who is only going to get one commission. So, Chris started saying, "Hey, look, for every offer you send, I'm going to pay you $1,000 immediately." The guy was totally down to do the stink bids after that. But before that, he was saying, "Oh, you're going to get a bad reputation in the market. You're going to offend everyone. Don't do it." It's so funny.

Sam Parr

I don't know if this is public, so Sean will have to verify because he's closer to this person. But we've got buddies that, if you're like, "I've been with them in LA when we were there doing an event or when they're visiting New York," you'll be like, "Hey, what are you doing today?" And they'll say, "Oh, I'm gonna go see these three apartments or these three houses that I'm looking at." I was like, "You're looking to move?" He's like, "No, I just tour these constantly and I put lowball offers on all of them. Every once in a while, someone will take the bait and I get a screaming deal." Is that right, Sean? Is that what they do? Yeah.

Shaan Puri

that's right that's right

Sam Parr

And they just like are doing this constantly. They do the exact same thing. Have any of those stink bids ever worked?

Shaan Puri

Yeah, I mean, dude, it's just like some people like bargain shopping at Ross to try to find that hidden gem that's in the basket that they know is worth more. Some people like to go to garage sales, and then if you're just a little bit richer, you do the same thing on the level of houses. Essentially, you're like, "Oh good, if I can lowball these houses." You know, touring houses is also pretty fun, and yeah, they've picked up a couple of assets.

Sam Parr

In that way, we have a mutual friend, all of us. He buys companies, and he was telling me about his funnel. He basically said they own 18 companies. They looked at 1,000 companies and met with many, many—100, I think. Then he said they did letters of intent (LOIs) for about 200 of them, and only 15 or 18 or something like that actually closed. I didn't realize, Andrew, how much... when I think of a holding company or whatever you're doing, I think of it this way. Mostly because you give off this vibe, which I think you mean to do on purpose, but I don't think it's the reality. It's like, "Oh, I just sit back, and everyone does the work." Maybe they're doing a lot of the work running the companies, but what I've learned about buying companies—and I think Sean's learning this too because I know he's meeting with a lot of people—is that it is a sales job. You are hitting the phones, and you are creating a funnel. That funnel still has like a 3% conversion rate. So, in order to buy three companies, you have to talk to 100 people. I didn't realize how sales-oriented this whole thing was that you guys are doing.

Andrew Wilkinson

Well, for us, I wouldn't say it is. I would say in the early days, it was for sure. But we've realized that cold outreach is not the way to go. We would much rather have a public presence and a reputation, and have people actually seek us out and say, "Hey, I want to sell you my company." I've... I want to connect with you. I don't want to be some random private equity firm that's like, "Hey, you know, let me tell you about us," and do the dog and pony show and stuff. I want...

Sam Parr

To go pop, you're still doing marketing. So instead of doing sales, you're doing marketing. The funnel still exists.

Andrew Wilkinson

yeah totally

Shaan Puri

and I

Sam Parr

and I did not realize that have you noticed that sean while you're trying to buy stuff

Shaan Puri

Yeah, I mean, we just started this process, let's say, a year ago. Very much inspired by you, Andrew, of like, "Hey, this is a wonderful way to basically own businesses without having to create them from scratch." It gives a good win to the person who's selling them. We will buy a minority stake in them, which I don't know if you guys always do, but the thing that's... yeah, Sam, you're absolutely right. It's obviously like you have to sort through so many just to find something worth buying. Then, even when you find something worth buying, it doesn't mean the deal's gonna happen. Even when you think a deal's gonna happen, it doesn't mean a deal closes. So, you end up with this tiny, tiny funnel, and you have to be okay with it. Hey, we might do one deal this year or no deals this year. It's so different than entrepreneurship, where it's all about action. It's all about features. It's all about, you know, more customers, more, more, more, more, more. Actually, less, less, less is almost, you know, the name of the game when it comes to being very selective and picking the right asset.

Andrew Wilkinson

The hard part, I think, is that a lot of people overinvest in building that funnel. They have a lot of conversations. What I've done is when someone emails me and says, "Hey, I want to sell you my business," I'll respond with, "Okay, I want to make sure I don't waste any of your time. So tell me these three things." It'll be like: 1. Who runs the business? 2. Is that you? 3. Do you want to stay or go? 4. What are your earnings? After that, once I have that information, I say, "Okay, we would probably pay about X." If they say, "You know, let's talk," then I know I should spend the time to talk. But I think a lot of people will actually have three or four conversations in a slow roll. I'm like, via email, I want to send the first offer. I want them to say, "Yes, that's interesting," and then I'll spend time on it. What I used to do was spend all this time getting to know people and unboxing the business, only to realize that their expectations were insane. We would waste a ton of time. Just like with bidding on real estate or anything else, we throw out letters of intent (LOIs) constantly. I have no qualms about that; they're not binding documents. You know, we'll send someone an offer, and there's something about it. If I read an email and say, "Hey, I'll offer you $2,000,000 for your business," I don't think people take it as seriously as when there's a formal document laying it out. "Hey, on April 30th, you will get $2,000,000 in this exact structure. This is what we commit to." People take it seriously, so we send them out all the time.

Sam Parr

So, I've never told this story publicly, but Sean, about 4 or 6 years ago, the hustle was 2 or 3 years old. I was down in the dumps. I was feeling really bad about myself and about the business. I told this person that I was not feeling great, and they said, "You know, have you thought about selling it? I would really be interested in buying it." This guy, I was like, "Oh, maybe." He goes, "Look, let's just hang out and meet. Come up to where I am and fly up here." I was like, "Okay, maybe." He goes, "Yeah, yeah, yeah, I'm gonna send the jet. I'm gonna send you a jet." I was like, "What do you mean, a jet? Like, I get to fly private?" He said, "Yeah, I'm sending the jet." So, I take all this... This is right when TikTok came out. One of my first TikToks was me on this jet. I was like, "I can't believe this!" I go to the private executive airport; it was my first time ever doing that. I get on the plane, I'm in my own jet, I have the Wall Street Journal sitting there, and they offer me champagne and all this stuff. I'm like, "This is the craziest thing! I can't believe this!" I was in heaven. I meet with the guy, and I'm wooed. I'm so floored by this, and I'm days away from being like, "Yeah, I'm willing to do something." Then, thankfully, I snap out of the mood and I'm like, "It's okay, I can keep going." But that, my friends, is how I met Andrew Wilkinson in real life. He was the one who sent me the jet. He sent me a jet, and then he totally wined and dined me. I was such a redneck. He goes, "I live in San Francisco." I said, "Oh, I'm in Vancouver." I was like, "I gotta go to New York, though, and I don't wanna have to... I guess I'll fly to New York, and then you could send a jet, and we'll just bolt right up." I was thinking Vancouver was Toronto. I didn't even know where it was. He goes, "Dude, Vancouver's right by San Francisco. It's only gonna be 2 or 3 hours." But he flew me up there. I don't know if he owned a bakery at the time, but he took me to a bakery, and you guys totally tried to wine and dine me. That's how I met Andrew. I was head over heels just because he sent this jet. It worked.

Andrew Wilkinson

you know that's actually the only time I've ever done that I think it's because you're

Sam Parr

afraid of full of shit

Andrew Wilkinson

It's because, no, I'm 100%... I've picked up friends and we've done that kind of stuff before. Like, if we're having an event, we've flown people in. But I've only ever done that for you. That's the one time, and I think it was because you said you're afraid of flying or there's...

Shaan Puri

It totally worked. It totally worked flying commercial. If only there was some other option.

Andrew Wilkinson

At the time, I was thinking a lot about newspapers. I was like, "Oh Sam, you've built like the modern version of the newspaper. You've got something really incredible." I think your deal with HubSpot, though, is better than what we would have paid.

Shaan Puri

well and it was like

Andrew Wilkinson

actually we got to the numbers and we would have been cheaper than hubspot

Sam Parr

Well then, it was like I think a 2-year difference. I remember we... I was supposed to get married on a Friday or Saturday, and you wanted to meet me on a Tuesday. I was like, "Sarah, you think I could swing this? This guy's gonna fly me private. I gotta do this." Well, you know, I'll be... I'll miss maybe one of the events, but I have to do this. That was in 2020, and we ended up selling a little bit later, so it worked out for everyone. But that's how I met you.

Shaan Puri

I will say one of the things I've learned from you, Andrew, is that you are a master networker. Normally, networking is like this compliment you don't want to get, you know? But you're actually great at it. Obviously, networking is valuable. People would love to have a great network, meet cool people, and have excuses to do things together. I've seen you kind of throw your weight around in that area. This might be like asking Michael Jordan, "How do you shoot a jump shot?" or "How do you jump so high?" It's like they can't really explain it; it's not conscious, or they don't really know how to explain it. But I've seen you do this with people. If you want to meet somebody who's really interesting, you'll find a good excuse to get connected with them. Even how we met: you listened to the podcast, and then you were like, "Hey, I'd love to meet you. Let's do a call." You really took the time to do something that you didn't otherwise have to do. That's how we met. We had a great conversation, and that led to us hanging out a little bit more. I've seen you do this with pretty influential people. I've seen you bring people up to Canada, where you're at, you know, the sort of home court advantage type of thing. So, if I were to ask you, "How do you do it?" By the way, I asked this when I was having dinner with the CEO of one of your companies the other day. They said the same thing: "Nobody's better than Andrew when it comes to building an awesome network."

Andrew Wilkinson

who'd you meet by the way

Shaan Puri

zach he lives like

Sam Parr

oh yeah

Shaan Puri

right on a minute away from this

Sam Parr

so so what's your what's your first date routine for meeting all these people and building a network

Andrew Wilkinson

Well, it totally depends. I mean, here's an example. In 2016, I was reading a profile on Dan Gilbert. Sean, I think you know, or both of you guys know who he is. He's the Quicken Loans, Rocket Mortgage guy. It was really cool. It was all about how he'd taken his entire fortune and basically was trying to rebuild the city of Detroit.

Sam Parr

and

Andrew Wilkinson

I just thought it was really cool. You see all these guys who get super rich, and then they put their money into mutual funds, right? I think that's incredibly boring. This guy's trying to rebuild the city. He's buying skyscrapers and starting all these businesses. So, I just emailed him. I cold emailed him at like 1 in the morning and said, "Hey, here are three bullets about me." I thought about what he might be interested in. I mentioned that I own a bakery, that I'm passionate about my city, and that I bootstrapped my business. I tried to find a few points of similarity and said, "I would love to meet you anytime, anywhere. If you're going to be in a random city in Delaware, I will fly to you. Just tell me when we could meet." I got an email response back like 20 minutes later saying, "Sure." We ended up meeting in Detroit, and he was amazing. We spent an afternoon together, he gave me a tour of the city, and I got to know a whole bunch of people on his team. It was awesome. So, I will take shots like that when I see someone I'm interested in. But there are certain people who are like inaccessible. I wanted to meet Bill Ackman. I'd been reading about him for years, watching every YouTube video, listening to every interview. At first, I thought, "Okay, he's an investor in Chipotle. Maybe we could redesign the Chipotle website. I own all these agencies; maybe we could do an app." So, I emailed him and said, "Hey, I'm a shareholder in your public company. I've got this amazing design agency, and I'd love to help in any way I can." He introduced me to one of the board members, and I was like, "Damn it! I just got handed off."

Shaan Puri

passed off but he but he he replied to

Sam Parr

the email though that was good I mean he replied

Andrew Wilkinson

To the email, I just... yeah, he basically just forwarded it to somebody. But I was like, "Okay, I know his email; something will happen here, and I just have to wait for it." Then I saw this charity lunch go up. Basically, every year he auctions off a lunch, and this year—this was in 2017—he was having a terrible down year. He got divorced, he had the Herbalife stuff, he invested in Valeant Pharmaceuticals, and everyone was kind of shitting on him. He was being very quiet, and so there weren't as many bids as usual for this. I ended up bidding $57,000 to go have lunch with him. My bet was that I had no expectation there'd be any business to do because he's a hedge fund manager and I'm a tech investor. But I knew he'd be an interesting person to meet. So I went, and we ended up connecting. At the end of the lunch, he kind of pulled me aside and said, "Hey, I like you. If you ever want to do a deal together, let me know." Years later, we ended up buying a business and invested with us.

Sam Parr

just like slipped you a piece of paper that says do you like me back yes or no like stick the box

Shaan Puri

That's amazing! You do the same thing, I think, with Charlie Munger and Buffett, right? You did the charity lunch. You bought the charity lunch, is that right?

Andrew Wilkinson

No, no. So that was a friend. That was totally random. That was my friend Andrew Marks, who knew Charlie personally. He said, "Hey, I'm putting together a dinner." Through that, I started sending Charlie letters. I knew that Charlie is not someone you communicate with verbally. He likes to talk a lot, and you can't communicate with him that way. You have to write him letters. So Chris and I started writing him letters. But yeah, I mean, I don't know. I like people. I'm very extroverted.

Shaan Puri

what are you saying of these letters

Andrew Wilkinson

I would just say, "Hey, here's who we are. This is the business, this is what we do." I said this before the dinner. He knew who we were as a result throughout the dinner, and then we started asking for his opinions and talking about different ways we could help him with stuff. I think the fundamental principle is: 1. Be of value to other people 2. Say yes to interesting people If someone appears to be interesting, I will have lunch with them.

Sam Parr

did he reply to the letters

Andrew Wilkinson

He would just call us. We would then call him, and he would communicate verbally. However, you have to write to him if you want him to remember anything.

Shaan Puri

that's amazing

Sam Parr

I love, like, my pen pal Charlie. You know, you gotta save all the letters in the back and forth.

Andrew Wilkinson

totally

Shaan Puri

I think it's great to see. I would say there are two takeaways for me. One is that I feel like you check your ego really well. You are humble about wanting to meet these people, and you're open about it. You're not above just shooting your shot and saying, "Hey, I think you're great. Here's what we do that might be relevant for you and helpful for you. We'd love to connect." I think the other thing is that you're willing to spend money. You're willing to hop on a flight, you're willing to buy the charity thing, and you're willing to be a part of their program that they're launching because you know they care about that right now. I think people generally understand that having a valuable network is important, but very few are willing to invest because it's not a clear "dollars in, dollars out" situation. That's one thing I've picked up from you.

Andrew Wilkinson

You gotta be really careful about it though. About 12 or 13 years ago, I remember when I was first starting my company. I would watch TED Talks back when they were really early, and I would always go, "Oh my God, I wanna be in this room!" Who are these people? It's like Jeff Bezos, Bill Gates, and you know, all these amazing people. So, probably like 13 or 14 years ago, I started going to TED Global. I started at that kind of baby event, the junior one—the only one I could get into. Then I slowly worked my way into going to the main event because I met Chris Anderson, who ran TED, and I pitched him on doing a TED app. I designed the TED app, and I used that to get into the main one. Then I ended up meeting all these interesting people. That was an example where I belonged, but I was like the baby. I was like the kid who's, you know, people would ruffle my hair and say, "Oh, isn't that cute? This 23-year-old with a cracking voice runs a company." But I kinda belonged. So, I think that's a great strategy sometimes. But this year, I went to the Oscars and I went to the Vanity Fair after-party. That was an example of something where I thought, "I should not be here." You do not want that experience, right? That's not what...

Shaan Puri

I'm saying tell that story

Andrew Wilkinson

so yeah so it's really random so I was at a conference about a year ago and I sat across from this guy and I asked him about his start up and usually when you're at these conferences they're like oh I own a b to b software company for doing hr or something and this guy said something that really caught my attention he goes I run a start up that helps people convert money into an interesting life and I was like woah okay what is this and so he has this company called myria m y r I a and the idea is basically they deep dive with you on you know what do you care about what are you excited about what do you want your life to look like so they kind of like paint out a blueprint like in 2 years you know do you want to be what kind of people do you want to be hanging out with what do you aspire to get involved with you know what are your passions what do you want to do with your money and then they help you figure that out and so I did it I signed up and they interviewed me and I said I love movies and they said well do you wanna go to the oscars and I was like I've never contemplated that but I was like you know what that sounds like a fun experience I think spending money on funny experiences like that is worth it and so we go me and my girlfriend go down they set up like a personal stylist we buy like ridiculously expensive clothes and tuxedos and you know I get like a $500 haircut like just silly silly stuff and you know it's it's kinda cool we're in the actual oscar event and we keep seeing famous people and it's great people watching and stuff but after that we go to the vanity fair after party and I don't know if you guys know but vanity fair after party is this like super exclusive event where literally everybody is famous if there's 5 people there 4 of them are b or a list celebrities and the one that you don't recognize is probably like a super famous director or producer or something so I'm standing at the bar and like to my right is jon hamm chatting it up with jeff bezos you know I see this guy checking out my girlfriend and I realize it's andrew garfield like very weird I can hear like seth rogen laughing behind me rihanna struts in like it's just pinch me like the weirdest thing in the world and then there's me and my girlfriend and over and over again every person that walks by us looks us up and down looks a bit excited looks us up and down realizes we're not famous and then immediately turns on their heel and we're just like you know this is kinda weird we don't belong here and I start making conversation with people I'm you know I'm very social I start trying to chitchat with people and as soon as I said oh I'm not in the film industry I'm in tech people would just immediately glaze over and start looking over my shoulder like did not care could not care less right and you know it was I kinda gave up at a certain.

Andrew Wilkinson

I just kind of was like, "Alright, let's just people watch or whatever." But I realized that I'm really used to being in rooms where, like, obviously I'm not famous, but I have respect. You know, even if I'm at a dental conference, I can probably chat with someone and be like, "Oh, you're the business guy at the dentist clinic," or whatever. We can talk business. But I realized I had no shared language for these people, and it's just not fun. You want to be in a room where you actually have value. So imagine if I was a web designer and I said, "I want to be an investor. I want to meet Bill Ackman." If I have no value to him or I'm not interesting to him, I should not meet him. You have to wait until you're interesting. Ironically, since I went to the Oscars, we ended up buying Letterboxd, which is a social network. It's like the largest social network for film buffs.

Shaan Puri

revenge buy

Andrew Wilkinson

If I go back to the same party, I'm sure people would be like, "Oh, cool." Right? But it's interesting.

Shaan Puri

You had a great phrase. You said, "I realized that you want to earn the room that you're in." I thought that was insightful because I didn't know at first what the takeaway of the story was. Sometimes you go to these parties and feel uncomfortable, but you're actually right about that. You don't want to buy your way into a room; you want to earn your way into a room. I do think that’s a great takeaway. Totally.

Sam Parr

Listen to the copy on Myria. So, it's myria.us. It says, "Parker Wayne Kent Stark, why should they have all the fun?" Myria memberships give you and your team special powers to make your life more enjoyable and the world a better place. They say, "Say open sesame to the world's top private clubs and make 'sold out' disappear from your vocabulary."

Shaan Puri

well done

Andrew Wilkinson

this is

Sam Parr

A very well done site. Is this company going to be something legit and big? I know they went through Y Combinator. It's only been a couple of weeks.

Shaan Puri

couple episodes ago too

Andrew Wilkinson

I think it's a really, really cool idea. Do you ever go to a city and you're like, "Shit, we didn't plan"? I remember my girlfriend and I went to Tokyo, and we kind of went last minute. We ended up eating bad food and didn't really see the best of the city. We just hadn't planned it, and it felt like such a waste. It's one of those instances where I wish I had something like this—it's like the key to the city. You're like, "Hey, I'm in Tokyo! I want to go to all the coolest stuff." You know, all my tastes curated for me. Or like Chris wanted to go to F1, and he doesn't know anyone at F1. He doesn't know how it works, and he wanted to go last minute. These guys got him in; I think he met Lewis Hamilton and went in the pit. You know, stuff like that is pretty cool. But yeah, it'll be interesting to see because they raised venture capital. We actually invested in their angel round immediately because I was like, "This is such a funny idea." But I don't know if it'll be venture scale. We'll see.

Sam Parr

They have a competitor that I looked at, and I was poking around the website. They say you have to spend **$80,000** a month in order to make it worth it. So, on average, that's **$1,000,000** a year to make these.

Andrew Wilkinson

I think it's **$25**, and then they take a cut of everything you do. So if you spend **$100,000**, I think they would take a **15%** fee or something on that. There's another service I just got invited to, and my friend tells me about it. It's basically last-minute, super high-end reservations at any restaurant you want to eat at in places like New York, London, and Miami. I'm like, "Oh cool, you should invite me." And he's like, "No, you don't get it. If you don't use this invite, I lose access, and the guy who invited me loses access," which I think is genius. So, it's like... I forget what it's called, but basically, if I invite Sean, he has to use it within **30 days**; otherwise, I lose my access. And if Sam invited me, he loses it too.

Shaan Puri

There's a little trend I've noticed: as people become more successful or notable, the number of times they hear "no" in their life goes way down. I've actually observed that there's a whole business centered around the concept of "no" for people who no longer hear it. This situation is twofold. First, they still encounter things they don't know how to handle. Their powers are useless in these situations. For example, if something is sold out, what do you want me to do? So, these guys with Myria have created a business around eliminating the last few "no's" in your life. I've noticed other people who say, "Hey, if you don't use this, I get kicked out." But I don't get kicked out of anything nowadays, right? I'm paying the fees, so why would they kick me out? There's a whole business model around giving people something to lose—those who never hear "no" anymore and never face rejection. It's like, give them some rejection, give them a way to experience some risk. It makes them feel like something matters when everything is on easy mode for them.

Andrew Wilkinson

So, I've been on the waitlist to go to Peter. Do you guys know who Peter Attia is? He's a super famous doctor. I've been on the waitlist there for like 3 years.

Sam Parr

his private practice you mean

Andrew Wilkinson

private private practice which is like you know I think he only has 50 patients

Sam Parr

it's like getting it's like getting huberman or someone to be your doctor

Andrew Wilkinson

Yeah, it's super expensive. I pay this absurd amount of money upfront, and they do this thing where they psychologically test you before they allow you to become a patient. So, I go through this test, and Peter calls me. He goes, "Andrew, there was something concerning in your personality test. I'm worried that you won't have good follow-through. Will you do what I say? Will you execute on the plan?" I'm like, "Peter, no! You got it all wrong. I pay attention to my diet. I track everything. I wear a glucose monitor. You don't have to worry about me." He goes, "Okay, cool." So, you know, I've been working with them, and last month I pull Peter aside and I'm like, "Look, be honest with me. Did I actually have something in my psychological test?" He goes, "You did." I was like, "Is that even a real test?" And he's like, "Yeah, that is right." So, I actually did flag something. But I was thinking, what a great strategy! Because I'm like the dream patient now. I'm terrified of getting booted out because of this thing he said. I think doing something like that, you're right, pushing someone away creates this desire to be a good customer.

Sam Parr

has it been worth it his his him being your doctor

Andrew Wilkinson

Well, I think it's a lot of money. Obviously, it's hundreds of thousands of dollars. But if you think about it this way: if you're gaining 5 years of life or 10 years of life, what is that worth? There have been quite a few things. I have an amazing primary doctor that I go to, who I love and he's amazing. But at Atia, they have a neurologist, a cardiologist, and an exercise physiologist who works with you. So, it's this team of people, and they caught a bunch of issues with cholesterol and other stuff that I may not have caught otherwise. I mean, I think it's worth it. But for a normal person, is that a good use of money? No, I would say that's a crazy use.

Shaan Puri

of money went to your primary doctor you're like doc I love you it's been a great 20 years

Sam Parr

yeah we have to talk

Shaan Puri

I met Angelina Jolie now, and we have a thing going too. We're now in an open doctor relationship.

Andrew Wilkinson

It's really... yeah, it's one of those things. I used to think you could only have one lawyer. I had one lawyer, and then I'd feel like I was cheating on my lawyer if I used other lawyers. Then I realized, like, no, you have lawyers for different things or whatever. But yeah, now I've got a polyamorous doctor relationship.

Shaan Puri

Let's do you have this idea of "be the barnacle on the whale." What does that mean?

Andrew Wilkinson

yeah so if you think about one of the biggest costs in most businesses it's marketing so you know if you think about it it's like 15 to 30% of most businesses is just getting people to know you exist and getting sales so if you can own a business that doesn't have to market itself then you're golden you can run a super super profitable business so let's say that with marketing you run at 15% cut marketing you could run at 45 50 60% so for example let's say that you're a fitness influencer so like think about like derek from more plates more dates so he sells supplements and energy drinks and he's got this shampoo for hair loss he's got a great business because he has free marketing he just talks about the product on his podcast his youtube his instagram and he gets free sales right so it would be an as an ecommerce business if he was paying to acquire those customers it'd be a crappy business but he's got free marketing right now the problem is most of us don't have access to that most of us are not influencers but anyone can do that in a different way by being a barnacle on a whale so here's a story of how we I kinda stumbled into this so I was at a conference about 12 years ago at the time I met harley and toby from shopify shopify was this tiny little start up they were bootstrapped they were like 15 people and they said hey we really like your design work would you design some themes for us but there's a catch this won't be client work we're not gonna pay you we want you to list them in our marketplace so the idea is like when people sign up for shopify they wanted people to be able to select a theme and pay like 49 to $250 to do that I started making $5,000 a month $10,000 a month as these themes sold and I was like hey this is really cool like I'm not having to promote it I don't have to think about marketing or seo or anything you know people they they send all the traffic to their marketplace and so we started building more and more themes and we ended up spinning out that business but what what I didn't realize was that in the theme marketplace there was only so many squares and it took time to build the themes and it took time for them to get approved and so I started owning more and more squares so let's say that in the early days if you were to choose a theme there's a 50% chance that it was one of ours so we had like saturation early in this marketplace that was very small when we joined it but then as shopify grew I mean you guys know what happened they go public they start pouring 100 of 1,000,000 of dollars into marketing I get free marketing I get to be the little barnacle on the whale and keep growing and it got to the.

Andrew Wilkinson

Where that business was big enough that we ended up taking it public at a **$260,000,000** valuation a couple of years ago. So, it's an incredible strategy. Now, I think Shopify is hard because you're late. You know, the marketplace already exists. It takes a lot of time to get approved. You know, that might not be the place to go. Where you might want to look is like Discord, Adapar, or any kind of software ecosystem that's not supersaturated. If you can go be a barnacle on a whale, you can make a ton of money.

Shaan Puri

I totally agree. I have a business that's cooking up. I'll tell you later offline because I can't announce it yet, but I totally agree with this strategy. I think it's amazing. You invested, so you said it went public at $260,000,000. How much did you invest to get there? It sounds like it was kind of some free labor to get the themes going, but how much capital did it take for you to get going? Because you were early.

Andrew Wilkinson

$20,000 maybe

Shaan Puri

so that's incredible

Sam Parr

And didn't you sell that business for $15,000,000? Or did you sell it for $10,000,000 and then buy it back for $15,000,000? There's like a story where you sold it and then bought it back, right?

Andrew Wilkinson

So, basically, I started it for $20,000, sold it for about $7,000,000, and then I ended up buying it back from the guys who bought it for $25,000,000. About a year later, we took it public for $260,000,000.

Shaan Puri

So, talk about that. Did you sell it? Did you regret selling it? Why sell it in the first place? Was that a mistake? And then psychologically, how'd you get yourself to buy it back for... so... three times as much?

Andrew Wilkinson

Yeah, like Sam, I was in this kind of existential crisis. I was super burnt out. I've been running... I had that business, I had Metalab, I had two SaaS companies, and I had an eCommerce business. I was running all of them, kind of running around like a chicken with my head cut off. Finally, I hit a wall and I was feeling really depressed. I talked to a friend, and he said, "Hey, why don't you sell one?"

Sam Parr

you were you liquid at that. Like were you financially secure

Andrew Wilkinson

No, no. I was liquid in that we had a lot of cash flow, but the problem was I'd be borrowing from Peter to pay Paul. At any given time, I'd have a highly profitable business and a startup, and the startup would burn all the profits. So, I didn't have a nice house. I was okay, but I always felt like I was going to go broke. Getting that cash influx was amazing. I sold the business, and suddenly I'm sitting on $1,000,000 and feeling very secure. The first thing I do is say, "Okay, now that I've got all this money, I gotta learn how to invest it." I picked up a book about Warren Buffett and started reading about this idea of competitive advantage and moats, and what a good business looks like. As I'm reading, I'm going, "Oh my God, I just sold the business that has all these qualities! What the hell was I thinking?" I was still on the board, so the nice thing was I helped them choose the CEO, this amazing guy named Ben Moore. I just kept watching, and eventually, the guys who we sold it to were fatigued. They wanted to transition to doing something different, so they wanted to sell the business. I just stepped on their foot and said, "Hey, if you guys want to sell, we'll do a deal." So we did, and then we did a bunch of M&A, packaged it up, and took it public.

Sam Parr

that's insane

Shaan Puri

So, the $20,000 you invested was the initial amount. But then you bought it back for $25, and then you guys bought a bunch of other Shopify plugins and apps, right?

Andrew Wilkinson

Yeah, I think our total amount, if you look at it from that perspective, was about $36,000,000. So we: 1. Started it for $20K 2. Sold it for $7M 3. Bought it back for $25M 4. Did about $10,000,000 of M&A Then we took it public. We optimized the business and grew it quite a bit over that year.

Sam Parr

God, that's awesome! That's a good insight. I mean, I remember seeing the press release for Pixel Union, and I remember you talking about it. But I didn't know that you actually had to buy it back for more than you sold it for.

Andrew Wilkinson

yeah it's 5 x basically

Sam Parr

it's insane sean where do you wanna go from here

Shaan Puri

Let's do the life philosophy. So, you said people always suffer in silence. What does this mean?

Andrew Wilkinson

yeah it's something chris and I have noticed so we have this real culture of autonomy at tiny so we always say that when we hire a ceo we leave them alone and there's certain people who really love that so for example often founders who sell their company to us when a founder sells their company to us and keeps running it often they sold because they wanted to buy out a cofounder or they wanted to buy out their vcs and they want to operate the business profitably so they're kinda saying look I've got this great business I know what I'm doing I want an investor who's gonna leave me alone I just wanna buy out these guys I wanna buy out a cofounder or something and so usually those guys they just wanna be left alone and we say great talk to us if you need anything and you know sail off into the sunset and run your business that works fine but often when we hire a ceo they're used to having somebody who oversees them so like a really active board or before they were in like some big corporation and there's constantly someone checking in and so they associate check ins with everything is okay and we don't do that we literally throw people in the pool and we say okay go and swim do whatever you need to do and and so often and because there's so many companies there's 40 companies now in tiny there's always someone we forgot about that we're not checking in on we're not texting they've just fallen off our radar or we think they're okay and so we look at their numbers and they seem to be good we assume everything is fine and so we just say you know they're not contacting us let's leave them alone well so often we found that people fester in silence they will actually assume that here I am I'm doing this great job for them and they won't even do me the honor of picking up the phone or checking in or you know whatever it is and and it's this I always I remember about 10 years ago I was complaining I was I was hurt somebody I'd sent someone an emotional email and they didn't respond and my friend says do you know what hanlon's razor is and basically the idea is it's never attribute to malice what can otherwise be explained by ignorance or stupidity right so never assume negative intent but everybody assumes negative intent you know we all know what it's like to send an email that's really important to us and the person doesn't respond for 3 or 4 days you assume that they're going you know fuck this person or I'm gonna ice them out in reality they're busy they've got kids they're doing their email they're they're behind whatever it is and so I've just observed this fact I don't know what to do about it but people will always assume silence equals malice

Sam Parr

And then you have this other one that says, "People don't change." So, you first said people always suffer, or people suffer in silence, and people don't change. This is... you're getting a little pessimistic on this.

Shaan Puri

his. Worldview

Sam Parr

But I agree with you. There's this author called Robert Greene. He's got, you know, "The 48 Laws of Power," and he has this other book called "Human Nature." He's like, "Why should you study human nature?" Because very rarely do people change. It's the same stuff over and over and over again. Then, when you look at their individual habits, whatever they've done in the past, they're going to just do it again. Just assume it's going to happen again and again and again in the future.

Andrew Wilkinson

That's one of the best books I've ever read: **The Laws of Human Nature** by Robert Greene. I just got the audiobook, and I keep listening to it every year. It's amazing. I've seen this over and over again. I find that you rarely hire someone, and let's say, like, I love to hire people based on scrappiness. Will they figure things out? Will they learn? Do they have high pace? I've never hired someone who doesn't have high pace and then coached them into having high pace. People either do or they don't. The only thing I've seen where people change is kind of like addiction; you have to hit rock bottom. If you're kind of an asshole, and you interrupt people all the time, and you always talk about yourself, maybe you stop having any friends, or your friends have an intervention with you. Maybe at that point, you hit rock bottom and realize, "I need to change. I have a problem." But most people generally continue on the track they're on. I see this all the time with people I work with, especially when it comes to changing their ideas. For example, if a CEO comes to me and says, "I think the best way for us to grow is SEO," and I respond, "Oh, well, let's think about that. What about X, Y, Z opportunity? I think we should focus on PPC marketing, or have you thought about changing the product in this way?" They will actually double down when I challenge their idea. They will defend the idea, and as soon as they defend it, they will commit. This is known as **commitment and consistency bias**. They will double down on that. I've just realized that trying to change people is impossible. At the end of the day, people are like elephants, and you're just the rider. You know, you just kind of go where the elephant's going to go and hope for the best.

Sam Parr

You see a big guy, a poor guy, on the side of the street begging for change. You just say, "Change comes from within, my brother. Change comes from within." I completely agree with the idea that people don't change. I had a moment in my life, around 22 or 24—I forget exactly when—where I thought, "Oh, this is rock bottom." There was a distinct moment when I decided, "I'm just going to change that trajectory just a few degrees." I realized that if I just keep going, it's going to make a massive impact. But there's really only, I remember, two times in my life where I thought, "Oh, that's going to change," and it actually happened. Everything else? It rarely changes. It's very hard to break any type of habit or human nature characteristic.

Shaan Puri

I think I would disagree with that. The only thing I would disagree with is, instead of the phrase "people don't change," I would say "assume people don't change" as a reminder to myself. The problem is, if you assume that people are going to change because you're being hopeful, you're going to make a bunch of bad decisions. You're going to be baking in change when change is quite rare. So, it's not that they don't change; it's that you should not be assuming that they will change. That's the trap that you want to avoid.

Andrew Wilkinson

It's like when you get married, there's that classic saying: "Don't try and change the person that you're with." I think it's about being pleasantly surprised; like, it has happened for sure. But it's really a fool's errand to try and change a person.

Shaan Puri

And also, it's sort of like ads. People are like, "Oh, ads don't work on me." It's like, okay, everybody thinks ads don't work on them. Everybody thinks they're not average. I think, you know, the same way it's like, we think that other people don't change. But if I separately asked you, "Are you the same guy you were with, you know, the last 20 years?" you'd say, "No, I've learned so much. I've evolved. I've just matured. I've changed so much." But we think other people don't change. I think this... I guess I'm a little more optimistic about change. Although my sister has a funny phrase about this. She goes, "People say that people don't change. They do; they get worse." And I think that that's like, you know, more of the "how to protect your downside" mentality. You assume that people are not going to change or that they're just going to dig in even further into their current set of patterns. But of course, there are so many outliers that I think you can only make an assumption, not a rule.

Sam Parr

Andrew, it was awesome being able to catch up with you! I'm happy things are going well. You said a few things here, and I hope the listener does this too. I actually have a notepad here where I take notes for everything we're writing about this Profit First thing and how much money is leaving the bank. I have a note here, and I'm like, "Shit, alright, I actually have to go and do that." Moyes said something a while ago, and Patrick Campbell, we had him on from ProfitWell. I still have his notes here. I had a meeting with my company right afterward, and I said, "Here's what Patrick Campbell said. I just did a podcast with him. We gotta do this, this, and this." This is another one of those episodes where you've actually given me things that I need to go and run and tell my company right now. Everybody loves this!

Shaan Puri

A CEO who comes in with a whole new life approach every three days because they listen to a podcast... If I was at a company, I'd be like, "Hey dude, you're not allowed to listen to podcasts anymore or go to these dinners because every time you come back, everything's changing."

Sam Parr

that is an annoying person there's a good way to to deliver it though

Andrew Wilkinson

It's amazing how just a lack of awareness can change the results of a business. Right? Like, as soon as I stopped—I remember I used to obsessively look at my credit card statement. As soon as I stopped looking because I got too busy, I started spending so much on stupid SaaS crap or whatever. I think just building those processes into your company can make such a big difference. There literally is that saying you described: if you were a plane taking off from New York and you changed just 3 degrees, that could be the difference between ending up in Seattle versus Tijuana. I think that same thing is true in a company.

Sam Parr

Yeah, and I think that this might change the trajectory of a bunch of things that I'm doing. Thanks for doing this, and we appreciate it.

Shaan Puri

thanks for coming on man

Andrew Wilkinson

yeah that was awesome guys

Sam Parr

alright that's the pot