How To Grow A Small Agency Into A Billion Dollar Company, Shaan's $15M Miss, And More
His company, which is called Tiny, which buys businesses, it's going public, and Andrew owns roughly 71% of the shares, and it's going public at a nearly billion-dollar valuation. Who knows what it's going to actually trade at, but if it trades at what they want it to trade at, that's about $700 to $800 million that Andrew will have from all starting with a bootstrap agency. I want to walk through his journey, and I think this is amazing. It's pretty mind-blowing. All right, let's do it.
I'm, um, fancy shirt, fancy shirt. All I gotta say is fancy shirt. I now do this thing where if somebody does anything that's like, I feel like they left the house today feeling good about that, or they, you know, they got a haircut, I'm not subtle about it. I'll just, I act like a, like a dog barking. I'm just like, nice haircut. You got, you, you changed your face.
The thing that the audience is going to call me out on is I couldn't find my other glasses, so I have to wear these glasses. The problem with them is that asshole Jeffrey Dahmer decided to wear the same ones. Yeah, it looks like I'm going to ask you, like, do you want to come back to the apartment to take some tasteful pictures and have some beers? Like, they'll be real nice. Like, he ruined it for me.
Some people are into that.
I have a meaty one. Another publicly traded company. This is a big deal and it kind of has not been made a big deal in the media because it's, I guess, not that big a deal to them. It's a billion-dollar company, but basically our friend Andrew Wilkinson, friend of the pod, friend of ours, we're going to be with him in Vancouver on February 16th. So if you want to come see us live, he basically, and by the way, I got to preface this now that he's a publicly traded company, everything that I'm going to say, I just Googled it. This is all just from Google. I didn't ask him anything. And a lot of it's guesses, but not all of it. He basically had a company that was publicly traded called WeCommerce, and it was not doing great. It like peaked at like $500 million, went down to $80 million. Anyway, he's doing a reverse takeover. No, sorry. He's doing a merge and his company, which is called Tiny, which buys businesses, it's going public. And Andrew owns roughly 71% of the shares and it's going public at a nearly billion-dollar valuation. Who knows what it's going to actually trade at, but if it trades at what they want it to trade at, that's about $700 to $800 million that Andrew will have from all starting with a bootstrap agency. I want to walk through his journey. I think this is amazing. It's pretty mind-blowing.
Okay. By the way, the billion dollars, is this— one problem, by the way, is that all of his numbers were in Canadian dollars. It was all CAD instead of USD. So is this a billion CAD or is this a billion USD?
Everything I'm going to say is Canadian. I don't know what the conversion rate is of Monopoly money to USD, but it's somewhere close enough that we're still in the same ballpark.
Yeah. So I think it's a little bit more like $700 million is the number that basically just discounted something like 20, 30%.
Yeah. Andrews and CAD is Canadian. Andrews and Canada.
If you ever really want to inflate something, right? Like if you're 5'9", you're 5'11 CAD. So just go CAD and you'll get that little extra that you feel you've been missing your whole life.
So dude, this story, it's really impressive. Andrew comes on the pod and we mess with him, but we treat him like he's one of us. What he's pulled off is not one of us, man. It's pretty epic.
He's actually more like 20 of us if you add it all up.
He's the worst billionaire I know, but he's the best millionaire I know.
Yeah, for sure. I mean, he's killing it. So listen to this. So basically the company that is taking public at this point has— and this now, this stuff is actually public. It's doing about $150 million in revenue, $50 million in EBITDA. And so here's the story. So 2006, Andrew was, I think, 19. He started a web design agency called MetaLab. And MetaLab is like the core of all this. In year 1, it had $250,000 in revenue. And basically what he's doing is he's doing like design stuff. So one of his big famous clients was before Slack was Slack, Stewart Butterfield. He, you know, reached out to Andrew and said, hey, help me design Slack. And like, I don't know, it's web interfacing, which frankly, I don't even know entirely the whole scope of that work, but like more than logos, but including logos, I believe.
Right. More than logos. That should be their tagline.
No, it was definitely—
we draw good.
We draw good plus more logos and more. Uh, no, it was, it was web interfacing, so it was actually fairly technical. But in year 1, it did $250,000 in revenue with a 50% profit margin. In year 2, uh, 2019, so 3 years in, it was doing about a couple hundred thousand in profit. And it doubled for a couple of years and then grew by 30% a year. So 2012, you're 6 years in, only $3 million in revenue. Not like, right, crazy out of this league. Like, you know, he's, he's kind of like what people say about us is you're relatable. And whenever people say that, I was like, I don't want to— I don't want to be relatable. I want to be way out of your league.
Yeah.
They say you're so— you're so authentic, you're so relatable.
I'm like, what I like about you guys is you're not that successful. Yeah. And you're pretty dumb. Um, so it just feels good.
Yeah, and so that, that's exactly how I feel. So he was relatable. So in year 6, $3 million in revenue, but after that it grows 30% a year, which, but which, if you add up 30% annual growth, by 2020 you're at something like $20 million revenue. By 2023 you're in like the $40 or $50 range. And the reason why Andrew's agency works so well is, and I actually think this won't work, this doesn't work as much anymore, is he's based out of Victoria I don't even— I'm such— I'm so ignorant. I don't even know what state, province.
Minnesota, but a little higher.
Yeah, yeah, yeah. He's in like— yeah, he's in like the Boise of Canada.
Yeah. Upper Idaho, I guess.
Our software is the worst.
See, most CRMs are a cobbled-together mess, but HubSpot is easy to adopt and actually looks gorgeous.
I think I love our new CRM.
Our software is the best. HubSpot. Grow better. What that means is he's paying those wages, but he's charging Silicon Valley— British Columbia. Ben just corrected me.
There you go.
British Columbia, whatever that is. I don't know what piece that is on the Monopoly board, but it's somewhere around there. He's charging Silicon Valley prices to the Slacks of the world, so these high-end prices, but he's paying Canadian wages. That margin is fat. That's why he's able to make all this profit. He starts taking his profit and he starts launching companies. And it doesn't work so well. He launches one little software company. I forget what it was called. Flow, I think. It was basically like an Asana competitor. Doesn't work out. He's like, I invested too much money. He goes, fuck this. What if I just buy a company? He reads a book on Warren Buffett and he's like, yeah, yeah, yeah, I could do this. And that's his new hero. He turns into a Buffett guy and he starts buying businesses and he buys a couple that are doing okay. But then he buys one that becomes like the crown jewel of this whole business. So this whole thing, tiny. There's, I think there's two crown jewels. There's Meta Lab, which we can guess is doing $40 or $50 million in revenue, $20 million in profit. That's the cash flow engine of this whole thing of being able to buy these companies. Then he buys, uh, Dribbble, which is basically like GitHub for designers. So designers go to this website and they upload their portfolios. Other people can, uh, share your portfolio. You send it to employers, they can comment, you get inspiration, whatever. Now, I don't have all the details on this, but I, if I had to guess, Dribbble was launched by two founders who weren't very business savvy and it had a lot of traffic, but they're like, dude, we don't know how to like make money off this. And Andrew buys it from them. I imagine if I had to guess, I bet you he buys it for $5 to $10 million, turns this thing into a behemoth making, now it's making many tens of millions of dollars. If I had to guess, it's worth $200 million. Or higher. I'm— this is just pure guess. And that becomes the crown jewel of this company, Tiny. And so now he's got these two agencies, or Meta Lab and Dribbble, and then he also has now— what do they own, like 15 other companies? And he's taking it public. And throughout this whole period, he's bootstrapping this thing. So Meta Lab is the one that's paying for everything. He hires a CEO to run Meta Lab, and because of that, he basically owns like 90% of Meta Lab. And now he owns— what did I say? 70% of these Tiny shares, and then his other partner in the business owns like 10%. So him and Chris, his partner, own 80% of this publicly traded company that's hoping to go public in the billion-dollar range. This is just a crazy, fascinating story. And I can't believe he's pulled this off.
Yeah, I got to be careful what I say because I invested in Tiny recently when it was private. So I kind of know more of the numbers, but I don't know what's public versus what was private.
Am I in the ballpark of everything?
Yeah, I think you're in the ballpark. I think that maybe the Dribbble valuation may be a little bit high, but you're right that those two things make up, like, you know, it's like, because I guess here's my, here's where this kind of broke for me. And this is maybe not that interesting, just my personal frame of mind.
Broke in a good way.
In a good way, which was, I thought he had been around doing this for way longer. It was actually 2016 when he started, like, buying other companies. And that's not that long ago. We met him in— I don't know, I met him in, I want to say 2020. That's almost 4 years in. And it was—
but I had known about him. He was like a personality.
Yeah, exactly.
He always had this cool looking avatar. His pictures always looked cool. He was like a designer, so his hair was always slicked back and he had this— where we all looked like dorks, he was kind of good looking in his pictures and stuff like that.
Yeah, it just shows what a good head of hair can do for you. And, um, you know, I think that's the real takeaway. Number one. Um, number two, number two, this segment is brought to you by Hims. Number three. Uh, no. So, so I think that that was the first thing, which was, wow, this was actually built up in a relatively, like on one hand, it's a long period of time. Cause he'd been started MetaLab a long time ago. So that part you got to give credit for that. Oh wow. 2006. And then he grinded it out year after year, building the service business up. But on the other hand, the portfolio side of things was relatively new. So I thought that was really interesting. The second thing, I assumed that the portfolio was a lot more, a lot flatter, a lot more parity. So maybe like there were, um, you know, 5 to 10 companies, all of sort of equal value pitching in each one, like, you know, 5 to 10% of the overall value of the pie. And that's how you get like, you know, 70% or something like that. And the rest is Meta Lab. And in fact, it was kind of like, like a venture portfolio in a way where a couple of the companies were really the standout ones that were driving most of the value. And I think for them it was actually 3. There was the, the one they took, they originally took public. So, uh, WeCommerce, which is basically their Shopify apps rollup. Uh, so the Shopify app rollup I think was, was one winner. Dribbble is another winner and Meta Lab is another winner. And to me, everything else is nice, but now that those are such big winners, the, They make up so much revenue and so much EBITDA that the others are almost like rounding errors at the moment. Uh, that's a little bit harsh, I would say, but like, you know, so maybe that's, maybe that's a little too harsh, but just comparatively, it wasn't like this portfolio of a dozen equally sized companies. Um, which maybe was, I never should have assumed that in the first place, but when you hear somebody's doing a portfolio, you sort of think, okay, it's going to be sort of more smoothly distributed out. But, but it was actually a little bit more concentrated in a few key, key winners that just really kept compounding at a high rate. And, um, so yeah, so I think that's, that's amazing. I think what he's done is amazing. Like, um, to build this level of a, of a sort of empire in this short of amount of time is, uh, it's pretty awesome. And I, the biggest thing is I love that he did it his way. Like there really wasn't anybody doing exactly what he was doing. Um, of course there's private equity, right? But he wasn't doing it like private equity cuz he wasn't looking to flip. He's looking to buy and hold. So then you have sort of, okay, okay, who's doing permanent equity? Who's doing a buy and hold strategy? Okay. There's some people doing it, but they all raised money. He used his own company's profits to do it. So that's pretty dope. And then he branded it and was more public about it versus these kind of more under the radar. It's like, oh, you, you're part of like Maple Oak Capital. What is that? I, you know, I go to your website, it's got two lines. It just says, We acquire software companies and it's like, okay, I don't know what this means. Whereas he built kind of like a sexy brand out of it. So I think there was a bunch of things he did that were pretty cool, like even his term sheet. He's like, oh, I read that Warren Buffett basically, you know, will meet a company, understand it, and then write a one-sheet, a one-page, you know, like term sheet for them to just, you know, are they going to take this deal or not? He doesn't do this like complicated lawyer process. If he could buy a billion-dollar company with, with a one or two pager, then I should be able to buy this $3 million company with a one-pager. And so he took, you know, he took that approach and I think did a good job branding what he was doing along the way. Yeah.
And so here's a few more takeaways and then I want to hear yours if you have any extra ones. The first is that you said that he did this quickly. Yeah, kind of. But he also did it really slowly.
The acquisitions part only.
Yeah, the acquisition part. But he basically started in 2006 and then he didn't really hit his stride until 2016. So that's 10 years of having an agency. Now, he didn't run the agency the whole time. He ran it for a little while, and then he also hired people. And so I'm, I'm sure he was managing it to some extent, but slow is good in some cases. And the second thing is that he didn't raise money for an agency, and because of that, he had so much freedom. The second you raise money, that, that your cap table is one of the few things that you can't reverse, or it's really hard. And he didn't raise money for a company that— Meta Labs should not have raised money, and it did not raise money. And because of that, he was able to use the profits to invest in shit versus if you raise money, they're like, no, don't use those profits to do other things, reinvest them and make this thing bigger. The next thing is financial maneuvering. Like, you know, I joke that I like don't know anything about finances. It's kind of like his like thing.
I think he's built that skill up over time. Right. Didn't, didn't know it initially, but, but yeah, has he can create a lot of value. A lot of people do this now where they can create a lot of value by increasing their financial IQ. Like, um, taking WooCommerce public via SPAC in 2020 when the timing was perfect, um, required some combination of being prepared with a good business. Secondly, um, you know, identifying the timing and saying now's the time to go aggressively. And third is like just having the financial IQ to go with the balls to be able to actually go pull something like that off.
100%. The next thing is where you live. It can actually matter a lot. Now I think that this gap of Silicon Valley wages and Victoria, Canada wages might be closed a little bit. It's closer at least than it was before. That gap is smaller, but this still exists in other places. I know I have friends that have built pretty big businesses, are building them right now, and they're using Indian talent versus American talent and they're getting great products.
That's what you do with this podcast.
Guilty. And then the final thing is hiring and negotiating the way he negotiated with his CEOs and kept them happy. While also retaining equity. So I don't know how he pays people. I imagine he pays them with just tons of cash. So that's like, you're like, well, that's easy. You just overpay people. But anyway, it's still really impressive how he's able to negotiate and hire and manage people. I've heard from a bunch of his CEOs where they're like, when things are going fine, I don't ever hear from him. And I love that. And then of course, I imagine there's times when things aren't going fine. He's like, all right, dude, come on. We gotta push this a little harder, but he's done a really good job of hiring. And, uh, anyway, this whole thing that he's pulled off, I messaged him and I was like, this sounds like an insult. Yeah, we gotta clap. We'll clap for him. I was like, dude, this sounds like an insult, but do you ever just sit with like a shit-eating grin and just laugh and like a little evil laugh and be like, got him. I pulled off this caper because that's kind of what it feels like because He makes it look easy, and of course it's never easy. There's like, there's times where he'll message me, he's like, dude, I feel like I'm in the dumps, or I feel overwhelmed. He's human, but he's done a really good job of doing it his way, almost to the point where I'm like, dude, you got to be smirking right now. Like, it's that feeling like when you get successful and you think of all your ex-girlfriends who like made fun of you. It's like, you, you fucking—
yeah, me only, that thing.
Yeah, you know that thing? No, no, I got you, bro.
Don't worry.
You know, like, you know, like, you know, that, that shelf you have with like the names all your enemies marked on like champagne bottles. You know, like when you pop that cork off, whenever you like, take a lock of their hair and you just set it afire with a lighter.
It's like, no dude, what are you talking about?
But he's pulled it off.
He's— let me, let me, let me also say another thing. You know that, um, there are people that are masters of engineering, you know, people that are, um, you know, fantastic leaders, but you know, I'm the don of storytelling. And Andrew is a great storyteller, so people should go read his Dribbble 2.0 blog post. It's on Medium. So, uh, just Google Dribbble 2.0, Andrew Wilkinson. And here, okay, Sam, how do most people announce an acquisition? Uh, go, just, just, uh, give me your generic thing. Yeah.
It's like, uh, we are so proud. We are so proud to press release. We're so pleased. They built a really nice business and we're happy to be stewards of this business and we're really looking forward to the future. And then like the sellers, like. You know, we were looking for a nice home for dribble, and this is a perfect partner, and we're excited for the future.
Just nonsense. Absolute, absolute soulless drivel. So here's, here's what he, he did instead. So here's, I'm just gonna read a little snippet of this because I think people should pick up on the storytelling too. I think that helps. So he goes, when I first started Meta Lab, Dan Sederholm was my hero. A great opening line. A great, because I don't know who this guy is, and now I'm like, why is this person your hero? And he goes, this Bulletproof Web was the first book I read. I used to reverse engineer his style sheets on Simplebits to learn his CSS tricks. Anything he did, I did. And I drove my front-end developers nuts trying to get them to implement every little 1-pixel detail that I learned from Dan. So already you're like, okay, this is interesting. He's basically setting the context of like, that's the guy who started Dribbble. And he is like, it's not just, I bought Dribbble and I'm pleased to, to, you know, raise prices in 6 months. He's like, you know, I, uh, I've admired this guy. This guy's my hero. I learned from him. And so when he, uh, so, so let me, uh, keep going. So he goes, I remember meeting another favorite designer, Dave, Dave Shea, at a conference back in 2008. He mentioned that he knew Dan. My jaw hit the floor. Wait, what? Those CSS drop shadows, the Corked logo. He's the best. What's he like? I was gushing. Um, blah, blah, blah. I wasn't just a fanboy. I was his web standards fanboy. Uh, blah, blah, blah. Then he keeps going and he goes, one of the projects that Dan did was Dribbble, which he co-founded with whoever. Uh, I had used it, blah, blah, blah, which is why I'm excited. I'm insanely excited to share the big news. Right? So just that little paragraph of setup, it draws you in in a way that like he could have just done a standard boring eye roll press release. And instead he decided to do it this way. And then he talks about kind of like, that it wasn't just like, therefore we've acquired it and it's done. He's like, I was bugging them and bugging them. I kept emailing them every month, asking them if they would let me in. He's like, this September, my moxie finally paid off. He emailed me saying they would think to do that. They might do it. They cared about these 3 things. I wouldn't mess it up. I have a long-term view and I want them to stay involved and own a piece of the business. We shook hands and made a deal. Um, blah, blah, blah. And then he tells the rest of the, you know, then he, then he does the standard stuff about we're excited. It's going to be great.. And I just thought that was just a way better way of doing it than the average person would do it. And if you add up a lot of doing things better than the average person would do it, you end up with this type of exceptional outcome.
Dude, it's just great, man. I have a lot of respect for him. There's always like this little bit of envy in me when I talk to Andrew because he's my friend and I consider us peers. And but then, then he'll make jokes about like what he's doing on the weekend and then like, oh, that's sick. And then, but I'm proud of him. I feel like, I feel a lot of pride like on his full kind of for him. And I'm very happy that he's pulled this off and I think it's really impressive. And I think that it's badass that people are, that there are people that are bold enough to do things their way regardless of what the nerds in vests and from Stanford tell you the way you should do it. And I imagine that along the way he got a lot of flack making fun of him from being in Canada, for not raising money, for buying these little, quote, little things. And I guess that's the fucking name of the company, Tiny. But he just like pulled it off. And I appreciate that gumption and I appreciate that boldness and I find it inspiring and I'm happy that like we have him in our life. So that's a little— my little love note to Andrew. Good job.
Love letter to Andrew Wilkinson.
Yeah, yeah. And if you wanna— we're going to Canada, we're going to be there February 16th. And Andrew, if you're listening to this, you want to fly us up there private, that's cool. If you want to celebrate, we know how much money you have now. So, um, look, let's celebrate.
My opinion— one friend invite another over.
Yeah, yeah, yeah. Let's celebrate by flying private together, except we'll be like, you don't have to be there. And Sean and I will each be in different planes. Yeah.
So can we have an allowance? Can he just send us a card with just an allowance?
Dude, I got roasted so badly by my daughter last night. I was like, oh man, this is—
Your 4-year-old daughter roasted you so badly? Nice.
3, 3 years old. We play— so she— She can't play many games. We play rock, paper, scissors, but she always throws scissors. So that's like, you know, fun for her, not for me. She plays hide and seek, always hides in the same spot. There's like, kids do this. They just like play the game, but they don't know how to play. And then she, so I taught her I Spy. I was like, oh, here's a game we could play in the car. I Spy. And so she loves I Spy. So I'm like, I spy something green. She's like, is it the tree? I'm like, how'd you get it? It's always the tree. That's right. And she goes, I spy something yellow. And I'm like, looking around the house, I'm like, what is it yellow? I don't see anything yellow. She goes, your teeth. Oh, and she's not aware that that's the sickest burn that anybody's done to anybody.
Hey, I spy an asshole.
Yeah, exactly. I was like, wow, that is just like natural. That's a natural burn. Oh, that's good.
Can I tell you about something cool that you probably know about? And I saw it and I can't stop thinking about it. Have you heard of the Scallange?
I don't know about this. Tell me about this.
All right, this is, you know, I don't pay attention to sports. This is your league. So, uh, you know, you know, Brian is Brian.
Oh, oh, Scalabrine. Okay, I didn't know he called it the Scallange. That's a good name. Well, explain who he is. People don't know.
But I think he looks like, uh, Will Ferrell but actually was an NBA player.
Yeah. So easy to make fun of. But I think he was like, okay, right? Or was he always—
Yeah, he was okay. But then like, it was okay. But he was— he didn't take himself too seriously. And over time, you know, like he had a kind of a few years where he actually played, but most of his career he's on the bench as a scrub. And yeah, yeah, Barshop's— his nickname, you know, Kobe was the Black Mamba. He started calling himself the White Mamba. And so, you know, he was a goofy dude. Who was basically a benchwarmer for like the last, whatever, 7 years of his career, uh, but was a great, you know, great locker room presence and, you know, a warm body. So people kept him around.
And I think at one point he called himself— I don't know if it was a joke or what— the worst player in the NBA. Obviously it was a joke. But anyway, after he retired— so I guess he retired from the NBA somewhat recently-ish, but he's still 6'9" and athletic and whatever, or athletic for, uh, you know, he's a basketball player, but compared to the other guys, he wasn't like that athletic. But he starts playing rec leagues and like he would score, you know, rec leagues like at the YMCA and on playgrounds and he scores like 60 points a game, you know, just crushing these guys and he doesn't like brag about it too much. But then like online at one point he mentions like, yeah, I got 60 points last night at my rec league. And then just people online just start chirping at him hard and they're like, dude, you suck. I could beat you. Or, you know, I don't even know how you made it in the NBA. You know, yada, yada, yada. They start chirping at him. He goes, "Wait a minute. No, I maybe suck compared to Derrick Rose, but I don't suck compared to any of you guys." So, he starts doing this tour where he goes to all these basketball courts. He goes, "I want to go to the hoodest of the hood basketball court. I want to go to the best YMCA. I'll go all around the country." He starts doing this and he crushes these guys.
He challenges people. He says, "Come play me one-on-one. You think I suck?
Come play me one-on-one." Yeah, and he destroys them. And there's— he's like, I'm not even doing this for social media, but some people recorded a couple of these things that he would beat them like 10-nothing. He was like, I let them get one point just to figure out what they're going to do, but I just destroy these guys. And he's got this awesome quote that he goes— he said this to like one of the kids. It was like an 18-year-old kid who like plays against him, and he crushes this kid. He goes, let's get something straight. I'm closer to LeBron than you are to me. And I thought—
I read that and I go, this is the greatest thing I've ever heard.
This is awesome. It's such a good story. And he called it the Scallange. And I thought it was so good. It just shows there's levels to greatness.
Yeah, there's levels to this, I think is the perfect takeaway from that. And also, he's hilarious. He is so good. I don't know if you remember this, by the way, when we did our Camp MFM getaway. Um, the, the guy who came to train us, he's, he trains like a bunch of NBA stars. So he trains Kyrie Irving, he's trained Trae Young. And so he was there and his wife is in the WNBA and, uh, she's like one of the best players in the WNBA. We were talking about the WNBA and how like they're, you know, the players are awesome, but they also don't get like high viewership. It's like, not like the league doesn't do that well. It's kind of like subsidized by the NBA. They kind of lose his money. But, you know, it's good overall for the sport for there to be a women's league. And so we were like, yeah, well, we had kind of an impromptu brainstorm of like, the main thing everyone says, which is, can I beat her up?
You know, like, it's like, it's what everyone says.
Not beat her up.
Just beat her up. That's what happens with like, when a bunch of drunk idiots at Buffalo Wild Wings are watching like Rose Namajunas and like these female UFC fighters. Everyone thinks it. Can I kick her ass?
Yeah. What would happen if I fought her? Yeah, exactly. Uh, so basically we did a brainstorm of like, what would you do to get ratings up? Or to like, if you were to launch a different women's league, like how would you get people interested? Because the problem is, uh, I think I saw this, this crazy TikTok. It was like some team, whoever won the championship last year, I don't, I have no idea. Maybe it's like the Atlanta Dream or something like that. And they came home to do their parade in the city and it literally just looked like, you know, if I walk to my bus stop here and there's like 3 people kind of loitering around. There's like a bum. And then, you know, that was the parade. There was nobody there for the parade and the team was going down on the bus and there was just like other people were like, why is this? What is this? Why is this bus here? What do you guys play? A sport? I didn't really realize that. So there's this TikTok that went viral making fun of it. And yeah, the idea that, that we all landed on was basically the 3 or 4, 3, 4 or 5 best players should basically go on tour like it's the And1 Mixtape Tour. And go city to city and challenge, you know, any 5, you know, go play pickup with any, with dudes at any of these and livestream that, um, or like cut that into clips of them basically punking, punking guys. Yeah. Like beating guys who think they could beat them and, uh, you know, put some respect on their name. So, so that was kind of the marketing idea, but yeah, to our, if the CMO of the WMA is listening, you're welcome.
Dude, I love these challenges. There was another one where like when you're watching running, running's not a popular sport, but I love it. It's my favorite sport to watch next to the UFC. And people were like, they're not that, they're like a 2-hour marathon. Do you remember that when the guy Eliud Kipchoge, he ran 2 hours and he just looks so smooth. He looks closer to an animal than he does a human. Like his body is just like, he just, you know, running 100 miles a week for probably 20 years. He's just like his, you look at his calves and you're like, I can't believe that you and I are like the same. We're both humans. It just, it's not even fair. He looks graceful when he runs. He looks beautiful and he doesn't look that fast. And so they put a treadmill at the same speed and they go, here's, here's his speed. Yeah.
Because he's doing it with ease.
He's doing it with ease and he does it for 2 hours and they go, see if you can do this for 15 seconds. And they have this treadmill and like people can't do it for just 20 seconds. They can't even run that speed. It's basically like 4 minutes and 30 seconds a mile, which is like, I don't know, would that be like 6 miles an hour?
That'd be like sprinting for me.
Yeah. Yeah, yeah, yeah. It's like a sprint and, um, it's a sprint for most people. And, uh, it was really funny. No one could keep up with it. So I love these, like, that's actually one of the tenets of making content viral, which is it made, you have to make something made to stick and you can make it stick by comparing it to real tangible things that everyone can understand. And when you put one of these treadmills at that speed, you're like, oh, I can't keep up with that for 10 seconds, let alone 2 hours.
Totally. Totally. Somebody said this about the Olympics. They go, the Olympics, there should be one civilian in every event. Just a normal fit guy from the gym. And it should just be like, just as a baseline comparison, here's the average person. And you know, here's even like an above average person. And then here's the Olympians. Like, let them all just let them line up in lane 11 and see what happens.
Dude, I would love that. I would love that. I have a, I've got, I've got a big meaty topic. What do you have?
All right. So I, this is a story of a multi-million, easily multi-million prop. Ben, type in the chat, how do the calculation, how much I lost doing this? Let's see. I would have invested at a company at $5 million and it's now a $3 billion-ish company. Um, so, you know, I basically turned, I missed out on a chance to probably turn something like $25K into tens of millions of dollars. Yeah. Um, okay. So here's what happened, but it's kind of, there's kind of some, some interesting things baked into this.
So it's not just a, oh, I missed it. Big deal.
Uh, everybody misses, misses opportunities. This is, uh, an interesting one. So back in 2015, uh, which is kind of when we met, um, I was not an angel investor, but I liked the idea. I thought it sounded cool. I was a founder of a, uh, of a company, uh, and I was making, I think, $100,000, $160,000 a year. So $160,000 a year.
Back then you told me you were making $160,000 and I was like, oh, you're the richest person I know. I remember you told me you were making $150,000. I was like, oh my God.
Yeah. I remember I was like, man, find a, find somebody who looks at me the way Sam looks at me right now, but the way that Sam looks at my pay stub. And so, um, so yeah, I was making $160,000 a year, but in California, you know, you've kind of after taxes, now you're at like $110,000, you're netting, you know, and then you pay for life. It's pretty expensive, blah, blah, blah. You don't save much. So I didn't have much of a bankroll, but I liked the idea of being an angel investor and people, Because our office was so dope, when a founder would come, they would think that I'm a lot richer than I was, but just because our office was so fancy, which was only fancy because our main investor owned the building and decked it out for himself. And like, that's why the office was so fancy. It had nothing to do with me. So anyways, I, um, I meet this kid, we're building a product and I meet this kid, he's 13 years old. And he uses our app every day. Our app was like a Clubhouse type of app. He used to use it every day after school, come home, use the app. And he's hanging out in the Silicon Valley chat rooms. And we're like, dude, you should be like going and go try to have a kiss. Like, you know, that should be your mission. Not like sitting in on this room talking about raising your Series A. And, um, and so two things happened. One, he's like, dude, I want to come work with you guys. Whatever. We're like, dude, you're in middle school. Like I can't. Your parents are going to kill me. I can't help you work for us. But I go, here's, here's what you can do. He goes, I want to be a scout for you. I said, okay, go ahead, kid. Be a scout for me. And he goes, um, he goes, he goes, what do you want me to do? I go, every week I want you to send me a company that you think is awesome and that you think I should invest in and just write why you think I should invest and send me the company. Now I have zero hope or really even zero plan to read this email at the time. I'm just basically giving this kid a homework assignment. I'm like, yeah, this will help you think. And most likely this is gonna be too much work for you. You might do it once, you might do it twice, but you're gonna give up by the third time for sure. So I give him this homework assignment. Very first company he sends me is a company called ApplyBoard. And so here's, uh, this was the second, this is, sorry, this is the second week. Hey Sean, here's the second company I wanna introduce, ApplyBoard. What they do, They help international students find the right university for themselves and apply there on their behalf. They have 11 schools contracted to pay them a commission for every, uh, for a student that gets, that signs up. And they have 14 more schools in the funnel. They have over 1,500 students signed up, 160,000 Facebook likes. And this is all with $10 in paid marketing. So it's actually pretty interesting, right? Like that's actually a kind of a really good analysis and that's, you know, simple two lines. So I'm like, wow, this kid's 13. He's like, You know, this is a good find and he's explained it well. He goes, why you should invest. Now this is where he got a little off, but that's okay. He goes, they started 4 years ago with offline consulting and then pivoted into a software business. They know the space well. They have 4 co-founders. They have a very, very diverse skillset, blah, blah, blah. Um, they have an algorithm, something, something. And he says, um, their customer acquisition costs only a few dollars and their LTV is thousands. So they have sustainable growth. Uh, he goes, I'm trying to correct my shots so that one day I can hit the bullseye for you. If you have any feedback on the company, I would love to hear it. Cause the first one I didn't even respond. I said, I said like, this is bad. Um, so this was his second one. And I'm like, you know what? This is actually pretty good. I'm going to take this meeting. So guy is in San Francisco. He comes to my office, love him. Super charming. This guy, Martin. Um, you, you've probably met like a bunch of these guys who are like, there's something that's really just like, uh, charismatic or charming about dudes from like, you know, Israel or something like that. Anyone who's like Israel, Persian, Turkey, there's like, it's like, there's just so goddamn charming. Like they're just dripping with sauce.
And, uh, what's Cliff's company? Effortless. What's our buddy Cliff? Cliff W. Uh, Cliff, uh, Weitzman.
Yeah. Um, it's the audio one.
I, I think he's, uh, Middle Eastern. I met him, uh, when, when he was just starting. And I was like, he's Israeli actually. He had that same vibe. And in the office, I go, what's interesting about you or something? And he goes, I can do a backflip. I go, all right, well, move that chair over.
Best friends. Yeah.
I said, all right, well, move that chair over. There's enough room here. Go do it. And he did a backflip in the middle of my office and his company now Speechify, it's It's in the unicorn territory and I didn't invest in it, but that, like, he had that same charisma when he came to my office. He lit up the room. I should have, I should have known better.
Yeah, he's got amazing energy. And, and so, yeah, this is the, so, so he, so I meet this guy, he's got the Israeli swag, I'm loving it. And then, and again, I have never, at this point, I've never angel invested in a company, but I'm like, this seems like a great idea. And what they're, why this is a great idea for people to know, it's kind of an effed up part of the system, which is Colleges in the US just have like surge pricing for international students. So it's basically like, if I'm a, if I'm a state resident, I get like cheaper tuition at state schools. Okay. But if I'm a US resident, I pay, you know, what I thought is full price. So maybe I'll pay $25K, uh, to go to school at this place, but an international student will have to pay 2 or 3 times more than that. So they'll pay $50,000 to $75,000 for the same exact thing. They just charge them more. It's kind of insane. I don't really know even how they are able to justify this, but they do.
And, um, and so you remember in San Francisco University, was that what it was called? University of San Francisco? I dated a girl that went, like, had ties there. And I remember walking around campus and it was only Chinese students.
And it's, and it's not even good schools like University of San Francisco or USF or whatever. It's not even that good of a school. And so it's actually, it's actually a bit of a trick. It's like, um, international students just want to come to America. They can't differentiate between, uh, you know, University of Utah and, you know, um, you know, Columbia or whatever, like these different schools. They don't know the lay of the land that well. They don't know that the school's in the middle of nowhere. They don't know that it's not actually considered that prestigious or whatever it is. It's just expensive. So it's actually a lot of these other schools that really take advantage of this and have a huge percentage of their population coming from international, which makes up a disproportionate amount of revenue. So that's kind of like why the schools were interested. So they went to him and they were like, yo, we'll give you $3,000 if you can get somebody to sign up. And he's like, $3,000. Oh, that's pretty good. And I think now they take a lot more than I think that now they take, you know, 10% or something of the, of the overall tuition. So it's gone up since then. But, um, anyways, so he pitches and I'm like, dude, I just get, yeah, I get caught up. I like the idea. I love this guy's personality. I'm like, I'm in. He's like, you're in. I'm in. He said, fantastic. I haven't really talked to anybody else yet. Uh, so I don't know all the round details. I said, brother, I'm in. And, uh, he's like, all right, love it. You're, you're the first guy I've met in Silicon Valley. You're my champion on this. And I thought, huh, I'm the first guy he's met. Oh wait, hold on. I don't, I didn't want to be, I didn't, I didn't really want to be the first guy in, like, you know, first at the dance floor is kind of like not, not exactly the position to be in. So Then he goes on tour, he goes, starts pitching people and he starts coming back to me with, and he, he's a nice dude. He's an honest guy. He trusts me. He says, man, they're saying no because of this. And I'm like, oh, these guys are idiots. Don't worry about them. They don't get it. Next one. They came back. They said no because of this. And I, by the third one, I'm like, maybe I should have been saying no. So I start to doubt my, uh, my conviction in this thing, but I'm still like, brother, I told you I'm in. So I'm in. And anyways, it takes him a little time.
Dude, if you— if the end of the story is you backed out on him and you were calling him brother.
I wasn't calling him brother. In fact, I think he was calling me brother because that was like, you know, it's like the Khabib thing where they just, they just say brother a lot.
And you just knifed him in the back.
Well, I didn't actually knife him in the back. I don't know. I don't know exactly what— I don't know. I don't remember exactly how it played out, but I definitely wussed out. So, so basically takes him a little time to raise the round. He eventually does get the round together. And I'm supposed to write a $25K check, not even like some crazy amount of money. But to me at that time, that was like, it's like, all right, well, that's kind of like my entire like savings for this year is going to go to this one random Israeli guy's company. All right. Uh, you know, I, I could lose this, but I would really hate to lose this. And I start thinking about, you know, am I, am I ready for this? I don't know. And so I kind of just, I don't back out. But I don't, uh, I, from what I remember, I didn't back out, but I didn't reach back out either. And so I think he probably emailed me once. I was like, yeah, okay. Let me know when it's time. And then he probably emailed me like 3 or 4 weeks later. I was like, yo, it's time. And I just like didn't reply to that thing. And I don't think anything really happened, but anyways, long story short, I don't invest. Um, fast forward, you know, 5 years, I get an email from that same kid, Saroj. And Saroj is like, Hey, remember this email?
Yeah.
Plyboard's a unicorn now. Huh? And, uh, you know, what do you know? Curious what you think about that. And I was like, I think I was an idiot. And I, uh, I think I was a total idiot. And there's actually a few kind of like takeaways in this for me. So the few takeaways are one, um, don't be a wuss. If you say you're going to do something, just do it. That's just a lesson for myself. And I think, you know, for most people, yourself included, that's, that's rarely a problem. For me, that's more of a problem. Second, um, I actually think I was correct that I was not ready to be angel investing at the time. Um, and so I should have either—
you could have done like a $5,000 check.
Yes, exactly. So what I should have done is I should have said, all right, look, I don't have the bankroll to place 20 bets, which is kind of what you'll need. You need 20 to 30 bets for, you know, angel investing to work.. And so it's like, you know, I don't, I don't realistically, I do not have the bankroll to do this, but that's okay. That doesn't mean I don't do what I want. It means I gotta be resourceful and find a way. So either let me come in at a smaller check size that makes, it's my version of, you know, if an angel investor writes $25K when they have $5 million, then I need to write the proportional check for me and see what happens. Or I should have gone to somebody and said, hey, I actually found this deal. I think it's really good. You have the money. Uh, which is what I did later with Lambda School. It was like, hey, I like this company. Uh, they haven't really raised much money yet. It's not proven, but like, I think it's worth a shot. And I convinced somebody else to write the check and give me some carry. So that's really what I should have done to make this happen. But at the time, my fear overrode my, like, um, you know, the, the, uh, not even ego, the fear overrode my, like, uh, ability to think like from just think like with a clear head and say, okay, well, sounds like there's just a little obstacle here and let's figure out how we're going to get around it.
I pay a lot of people are embarrassed. They're like, well, can I do $5,000? Like, I remember doing a deal. I did a deal for $15,000 or $25,000 when I didn't have a lot of money. Thankfully, on paper it's turned into a bit. But I remember thinking like, that's— I want to ask them if I could do $5K, but I don't want to look like a punk, right?
Yeah. So, so I think I should have found a way. And that's, I think, has been a common theme in my life, which is like, A lot of good opportunities come my way and I say, I don't have the time. I don't have the money. I don't have the skill. I don't have whatever. And I rule it out, even though objectively I'm like, this is a great opportunity. And the real answer is find a way to get the time or find somebody who does have the time, find a way to get the money or find somebody who has the money to help you out. Right? Like do, do one of those things to get there. Uh, and this is not like a small thing, like just doing the difference between doing that and not doing that. Would've been again, tens of millions of dollars in this case, when it, in the result case where it, it worked out. So that's one takeaway. The second is this guy Saroosh is like now become a general strategy for me, which is I always want to have like, I don't know, 4 or 5 people who are kind of like way, it's like, it's like an anti-mentor or like, you know, it's a mentee or something like that. Right. It's like, I want to have people that are young, hungry, and ignorant and naive. Uh, but that's an asset for them because they're young and hungry. Uh, I want to have them more in my orbit and I need to find some excuse to have them in my orbit and hang out with them and hear what they think is interesting and meet their friends and whatever. Like that is, um, you know, I think that is an actual strategy that most people miss out on. Everybody wants to, to sort of climb up. They're like, oh, how do I meet the person who's done more than me or is more successful than me, has more money than me, whatever. And they're focused constantly on like reaching up and trying to like pull themselves up. And instead I found so much benefit out of just having a crew, a small crew of like 18 to 21-year-olds that I'm like, okay, you guys just think differently than me. You're worried about different things and, um, you're excited about different things than me. How do I have that in my life in some way? And so that's actually become a, a, a more core strategy. Do you do anything like that?
Yeah. So listen to this.
So we had this kid, by the way, thank you for not making like an Epstein joke. I felt like I was treading. I was like, what you need is like 14-year-old dudes that you hang out with all the time.
It's like, yeah, no, I, I, so I'm 33. I'm just now hitting the age where I'm no longer the youngest guy in the room and I'm just hitting the age where I've got 15 years or so of experience and I'm seeing younger people and I'm like, oh, You're full of energy. You're gonna do something, but you're making an error here. And I'm just gonna let you, I'm just gonna watch you make that error because it's good for you. I'm just now getting to the point where I'm able to be a little wise and I'm seeing the importance of surrounding ourselves with young people. Here's an example. A year ago, Sean and I did this thing where we offered $5,000 to someone who made a TikTok video from our podcast and shared it. One kid in particular, his name was Michael at the time. He made these videos that reached tens of millions of people for us, and we gave him the $5,000. And I went to email him and I was like, dude, you should do this full-time. And I asked him what his email, and it was like, you know, michael@universityofmichigan.edu. And I was like, wait, who are you? He goes, yeah, I just recorded this in my dorm room. I'm like, oh, you're gonna be a— you're, you're on to something. You're gonna be a superstar. Just start— turn this into a company. Turns into a company. I guess our 5K was his first money. He makes tens of thousands of dollars a month, eventually sells it to Morning Brew. Michael, what's Michael's last name? I don't even know.
Sikand.
Sikand. Yeah. And he comes over to my house and uses the studio, and I just— he'll— me and Sarah will be in the kitchen, and I'll just— I go, Mike, come out to the kitchen, have a coffee with me. And me and Sarah won't say a word, and we'll just let him talk. And I'm just like, I'm just here to— because he's 22, maybe.
I'm like, I'm gonna come to the kitchen, have some chocolate milk.
Yeah, you want some hot cocoa? A lollipop? Yeah, sit on my lap too while you're at it. And like, he just talks, and about 60% of the stuff that he says is nonsense.
40% absolute nonsense. Not just him, anybody who fits this category, you have to literally just immediately throw away 60% of the words.
But what I say to him, I go, Michael, most of what you're saying is bullshit, and I think you might know it. But look, here's the deal. Even a blind squirrel finds a nut once in a while. Keep on swinging. You'll hit a home run soon because you're swinging. You're in the game, and I appreciate that about you. And if you ever want to know what you're saying is bullshit, just ask me and I'll tell you. But I'm not going to call you out. I'm going to let you get away with it all because I like this gumption. And he tweeted something the other day that was hilarious. He tweeted, got bad news. Just got back from the chiropractor. They said the chip on my shoulder is permanent.
How funny is that?
And I was like, this is why you're going to make something of yourself. Now, you might ruin it by saying dumb stuff and you're going to cost yourself a whole lot of money and you're going to have a lot of headache throughout the years until you learn to be calmer.
But, you know, he was feeling good about that line too when he tweeted it. Oh, you know, he was feeling so good.
But I appreciate that this is a young kid. So I have— I had— he moved to Austin. I invite him over all the time and I go, just talk, man. Just just, just talk. I want to hear what you got to say. And he's telling me like, and I'm just like learning about what like the younger generation feels about this and that. And he's like, yeah, we're going to— he's like, he has a birthday party coming up on Saturday and we're taking some like new weird version of Uber. I don't even know what it is, like a party bus company. I don't even know what it is. But he's like, this is what all— this is what we're all using. I was like, all right, cool. I'm in. I just want to experience this stuff. So yes, long story short, I totally am experiencing this where I have young people around me. Sounds weird, but let's get past that.
No, the young blood strategy is a real strategy. And, and actually, this is my reminder to myself. I need to refresh my— my young bloods are are now like 24 to 25 and rich. They're like, made it. Like, okay, so Michael is one example. Um, the other guys who set up our initial studios here and then created that, uh, agency Clipped, they've, they do over $1 million a year in revenue off their, off their thing. And now their, their content is going, going nuts. Their short-form videos are going nuts, like millions of views.
Um, and I had to like reprimand, reprimand Henry all the time. I was like, hey Henry, just so you know, You shouldn't talk like this when you're in this meeting or something. And then eventually I was like, you know, I'm not going to give him advice. I'm just going to let him learn. But I saw the same thing where I'm like, you're making a bunch of mistakes, but you're taking a ton of swings. You're going to, you're going to, you're going to hit the kid.
I talked about Saroj, probably has more money than me now from crypto. The guy has made an absolute killing in crypto over the last few years and so done, done incredibly well. The guy who was my intern to start this podcast, Uh, Ishan, who was just like doing the video editing and like created the initial brand name and all that stuff.
Uh, did he like invest all of his money into like a short stock, a short position on a penny stock? No, not a short, not a short one.
He, he went all in. He took basically, he had like $100 grand saved up after a couple of years of working for me and then for a friend I introduced him to. And he took the $100 grand and he just bought, there was a stock that got delisted on a stock exchange. So all the shareholders were like, damn it, what do we do with this stock that we can't trade anymore? It's like illiquid. And so he bought it all for like 10 cents on the dollar, being like, I don't know, I still believe. And then that ran up to be worth a few million dollars. Uh, his $100K basically turned into like a $2 to $5 million stake at that time. Now I think it's gone down a little bit, but, um, there's articles about him in the Australian Post or whatever now.. And I'm like, dude, this is crazy. Who? And another one, Steve Bartlett. I hired Steve when I, when he was, uh, 18, 19 years old, maybe, maybe that's a little, maybe a little, maybe he's 20 at the time. Um, and I was like, this guy again, just dripping with swag. And I was like, I just want to be around this guy. This guy's like cool. I don't know. He wears like rings and he like says words I don't know. And like, for some reason his tweets go viral. Uh, I don't know. Like, Mine don't. So like, what does this guy know? And sure enough, ends up creating this social media agency, ends up taking it public, has this great podcast that's super popular. He's a shark on the Shark Tank of Europe. Like this guy's like, now he's like, he's the black Gary Vee now. And so it's like, there's a, it's like, dude, that's, I just thought of 6 in the last 15 seconds. Like, I don't know, there might be even more that I'm not even remembering that were like, come from the same batch. And I need a new batch, my little personal YC.
This is good that you're talking about this. So I was talking to a friend yesterday. So producer Ben, you can leave all this live, but you're going to have to bleep out what I'm about to say, but I want Sean to know what it is. So my friend I was talking to, he said, he just mentioned it. We were talking about something totally different and he was like, yeah, you know, like, you know, I made $30 million from an angel investment and Yeah. So this is how I found my accountant. I did this, this, because I was asking him for a good accountant and I was like, like I made the rewind sound. I was like, like, you know, scratch the record, reverse. Tell me about this thing. He goes, yeah, basically I was, uh, you know, like president of like a smallish startup that wasn't doing so well. And a 22-year-old kid who worked for me, he quit to start a company. And I was, you know, frustrated at first, but like he was real promising. And so I invested $25,000. At a $3 million valuation. The company went public like a year or two ago, and it was a $15 billion valuation. It was called a market cap. It was called— this is the part you got to bleep out. It was called . You know that company?
No, but okay.
It's a boring, nothing special, like B2B, whatever. And he's like, yeah, I had $75,000 at the time. When I was running my first startup, I didn't have a lot of money, but I decided to invest all of it into startups, and I did it in sizes of $10,000 and $25,000. And that one check that I did of $25,000, it turned into $30 million. And I was like, "Are you kidding me?" He goes, "Yeah, basically, I knew this kid was strong and I wanted to be part of just whatever he was in. I wanted to surround myself with young people, and I thought he was promising." And in fact, It worked out really well and I made so much money off of this one deal. And he goes, and then the other one, he said, made like a 10x return as well. And he just got super lucky on that one and it totally worked out. So it's crazy story. And I'm like, well, I've invested in a bunch of companies. I'm waiting for that to happen. That'd be nice.
Yeah, exactly. What part do I do for the $30 billion? Is there a line for that? Am I in the right line?
Yeah. Yeah, so it worked out. It, it, it's a crazy story.
That was good. All right, I had another one, but let's, let's save it for the next, let's save it for the next episode cuz it's getting a little long now.
All right, that's the pod. I think that was a banger. We forgot to remind people if you made it this far, there is a gentleman's agreement. This content that you're listening to, it is not free. We are like one of the only places on YouTube actually where the content's not free. You have to pay. What do you have to pay with? That's your cue, Sean.
Oh, oh, I was enthralled. I was ready for you to just keep going. I thought you were on one. Go ahead.
Keep going. You have to pay something in order to listen to this channel. If you've listened to more than one thing, you have to do me a favor. Go to the YouTube page and click subscribe because that like helps us. Or you know what, what I'm going to ask people to do, if you're listening to this on like Apple or Spotify, share this, share it on Twitter, LinkedIn, all that stuff. And we're even. So you listen to us. I just spent hours on this research, by the way. And you spent $15 million of lost money in order to make this content to tell that story.
Yep.
I tell that story.
I bleed in front of you.
So you've seen my blood.
Subscribe to the channel.
Yeah, this is not— this is not— this channel is not free. You have to click subscribe on YouTube because we're trying to build up our YouTube and you have to click subscribe and follow on the spot podcast.
By the way, what I like, people go in the comments on YouTube and they just say they honored the gentleman's agreement and I go to each one and I just say from handshake. From Handshakes to You. From Handshakes to You Too.
All right, we're outta here.