How I Bought 35+ Businesses and Built a $240M HoldCo At 38 | Andrew Wilkinson Interview
How I Bought 35+ Businesses and Built a $240M HoldCo At 38 | Andrew Wilkinson Interview  
Podcast: Buyers and Builders
Published On: Thu Dec 05 2024
Description: 12 ideas and observations from the 56-minute conversation with Andrew Wilkinson, the the founder of Tiny, on building a 30+ business holding company: 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. He will occasionally pay 10x for an amazing business, but that is rare. Some CEOs will go 6 months or more without speaking with Andrew. Portfolio companies are not at all connected. They each operate independently. Cash is kept in the company based on historical working capital needs and any extra goes to the head office for new acquisitions. 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. They have a 60-70% success rate on hiring CEOs. 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. Incentives act as a magnet to get what you want done. Money is more meaningful to new CEOs than to founders that have been making great money for the last 5 years. The first CEO he hired was paid $250k base + a couple hundred thousand variable. 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 - Intro00:00:19 - Ruthless and money focused Andrew on his early 20s00:05:42 - 1st business, billing in USD while living in Canada00:08:37 - First realization that it is better to buy a company compared to starting it00:10:28 - Buying the very first business for 3x ARR and $1.5M cash00:13:25 - Looking at companies that make a whopping $100 million in revenue but very little profit00:19:25 - Having extreme patience while waiting for excellent companies00:23:23 - Inefficient market and what many investors don’t understand00:27:32 - Everything post-acquisition and delegation00:33:45 - Andrew’s strengths and weaknesses in managing Tiny Group00:39:04 - A huge lesson about tech businesses: small $500k businesses get big00:43:52 - Big mistakes in pricing a product/service00:48:20 - Lessons from Jason Fried, Sam Parr and Sahil Bloom00:52:31 - Equity is forever. Never just give it awayFollow Mikk/PrivatEquityGuy on Twitter: https://x.com/PrivatEquityGuy⁠⁠⁠Andrew on Twitter: ⁠⁠⁠https://x.com/awilkinsonThis podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.