I Ranked the Best & WORST Businesses to Start Before 2026 | Andrew Wilkinson

We have $65 million of ARR. We do over $40 million of EBITDA. We also manage a $200 million fund. So we're over $300 million in revenue across 30 businesses. And all the businesses in the fund are profitable as well. I don't know. I'm kind of like, if that's failing, like, sign me up, right?

You've owned a number of agencies. How much revenue lifetime has MetaLab generated for you?

The hundreds of millions of dollars of profits, not revenue. I don't know that I would still rank it very highly, though.

SaaS. Where are you putting SaaS? I would say it's a B. What do you think about marketplaces?

Well, I would say it comes down to scale. A good marketplace like Airbnb, I'd say an A. I'd rank marketplaces in general as B.

That's the one I would disagree with you with. I feel like I got to ask you this because I think you get a lot of shit nowadays. I think a lot of people go look at the Tiny Stock and then they click like max and basically you see just a downward trend. A lot of people I see on Twitter want to kind of look at that and say, oh, this guy calls himself the Warren Buffett of the internet and he says he buys these great businesses, but what's going on? I feel like I could rule the world. I know I could be what I want to.

I put my all in it like no days off.

On the road, let's travel. What's up? Andrew is here. Andrew is one of the most visited guests on the pod. Always good to have you, man. I wanted to play a game with you. You've done many types of businesses. You've done agencies and, you know, private equity, and you've started, you know, e-commerce companies. You've done a huge number of companies in the last 20 years. So I want to do a game where we rank the different types of businesses that you could start, and we could work out this criteria together. But I think the idea should be we're not looking at the outlier scenarios. So in every industry, right, the world's best plumber makes a fantastic living. That may not mean that plumbing is the best trade to go into. No offense to the plumbers out there listening, but we're not looking at just the extreme outliers. So I think that here's my criteria for a great business, Andrew. It's going to be the median successful outcome. Okay. So like the sort of like normal case, if you can make it work, that's the first, that's the first criteria. The second thing is we're thinking or taking into account both the lifestyle as well as the, um, the result, the upside. So, you know, if one thing is just makes you miserable, um, or overworks you like crazy, then that would be obviously worse than a business that lets you have a great flexible schedule and flexible location, for example. So lifestyle matters, upside matters, and we're looking for kind of the median success case. But, but, you know, in some of these it's going to be like, dude, it's median success. I mean, only the top 0.1% make it. So you have to factor that in. The likelihood of success matters in these, in these scenarios. Okay. If you're, if you're listening on audio, it's going to be a little more fun if you go to YouTube or go to Spotify and actually you can see on screen the stuff that we're sharing. All right. So here we go. Here's the tier list. If you've never seen a tier list before, they're ranked as you would expect, sort of A, B, C, D, E, F, A being better than F, but there is of course S tier. And I don't even, I don't even really know what S tier stands for. I think it's like from the gaming world, but it's basically like S tier is sort of like God tier. It's the best you can, it's the best of the best. Okay. So we're going to start with a little layup here. And for each, Andrew, I want you to give me your almost like rapid fire take on like you know, kind of what this business is, why it's either great or why it sucks. Okay. So the first we're going to do easy, an MLM, which is actually a surprisingly common business that people get into. If you just look at the raw numbers of people who take part in MLMs. So MLM, where you, where you rank it?

So where are you ranking it?

I would say that's an F. Okay.

It's going in the F. Although it does sound like for the MLM owner, you know, it's not necessarily an F. You know, one of the, one of the associates, or as they call them, you know, the business owners that they like to call themselves that are underneath. Yeah, that's F tier for them.

I think if you are willing to go to jail too, like you can make a lot of money, but I mean, like 50/50 odds you go to jail.

All right. Next one up is one that I think you did it, by the way. Say, say if you've done any of these. Okay. So freelancer, which I believe is how you started your career, you were a a freelance, what, web designer?

Yeah. Yeah. I started making websites, uh, out of my apartment basically. Um, I would, I would rank that probably a D. Um, I think it's a, it's a really good business. I'd say it's, um, it's a living, right? I think there's nothing wrong with freelancing or a restaurant or a corner store or that sort of thing. But fundamentally it's an owner-operator model and it doesn't really scale unless you scale it, which is what I did.

Yeah. Okay. Well, that's the, the kind of the next one, which is actually agency. You've owned a number of agencies. You've probably made, I don't know, I don't know what the number is, but MetaLab has to have generated something like $200 million plus in revenue. How much, how much revenue lifetime has MetaLab generated for you, your design agency?

I don't know the exact math, but I think we're probably well over into the hundreds of millions of dollars of profits, not revenue.

Okay. So I'm assuming you might have agency higher than most people.

So I think, well, you know what, I don't know that I would still rank it very highly though. You know, the reason some, you know, my story, I started a web design agency, I scaled it, I got clients like YouTube and Uber and Walmart and all these big companies. And I was terrified. I mean, it's a business where you're either making a ton of money or you're about to go out of business constantly and you swing between those two things. And so because of that lumpy nature, I'd maybe give it a C, but it's B, it would be a tentative C. It would kind of— yeah, it's really, really a hard business.

And the hard part is you're saying clients come and go. It's that one. It can be feast or famine with clients. Is that, is that the reason why? Or is it the headache of operating and delivering the service? What is it about the agency that makes it like, well, not—

Right.

And all of a sudden you're left with 30 people you have to lay off. So I think it depends on the nature of the business, honestly.

So you did Meta Lab. You've also had like a game design agency. You've had like a no-code agency. You've probably, what, 6 to 10 different—

10 to 15 agencies and services, business copywriting, social media, web development, design, a lot of different stuff.

What were the sort of top 2 agencies you did and what were the sort of bottom 2 agencies you did?

Right, right. Hey, what's up? If you're liking this episode, the research team at HubSpot has taken all the rankings that we're doing today in this episode. And they made it a downloadable thing in case you want to go see the final tier list, you want to download it and maybe have a little breakdown of our commentary for each one. It's available in the show notes below. You can go ahead, download it totally free. Okay, next one up, SaaS. Where are you putting SaaS?

I would say it's a B probably. I think, again, it depends on the type of SaaS. If you have a SaaS software that is a ChatGPT thin wrapper and does something like put a funny nose on your friend's face and you trick people into subscribing to it for 6 months and they always churn, I'd say that's a pretty bad SaaS business. If you have a SaaS business that, let's say, has become the dominant player in funeral home management and all the funeral homes use it and they don't want to switch because it's the standard, that's an incredible SaaS business. And I mean, SaaS businesses, they're often highly recurring, really good margins. I mean, they can be incredible, but you really have to find something with a limited amount of competition or high switching costs.

Tell the quick story of the DJ software SaaS business, because that's kind of like the funeral home example you have. So you're saying it's a vertical niche tool that's like mission critical for an industry to run on. They're unlikely to ever switch. And, you know, that's going to be super, super sticky for a long time with high margins. It sounds like— I don't know a lot about the DJ software business, but like, can you just tell the quick story of that one?

You know what? I appreciate that you even think it's possible that I look like a guy who's DJed before. So I take that as a compliment.

Why does a business like that grow? Like, are there just way more DJs or something else?

I think as long as a DJ is a desirable thing to be, I mean, if you think about it, one of the weirdest phenomenon, you know, when I would go to a nightclub, it doesn't matter how much money I have in my bank account. I remember looking around and going, oh man, there's all these great girls here. But, you know, none of them, none of them know that, you know, I've got all these businesses and I'm a cool guy or whatever.

Um, and you're literally that meme, like, they don't know I have a design agency. Exactly. Exactly.

I don't know how much eBay I have, but like, I'd, I'd look up, I actually had a friend who's a DJ and he would get paid like $200 and some beer tickets and he'd be swarmed with girls and he'd have status and throughout the city he'd be the man. And so I think as long as. That's true. As long as young men think DJs are cool, uh, and women, I mean, increasingly there's way more female DJs now. I just met an amazing one yesterday. Um, but as long as that's true, I think people are going to want to do it. I mean, it's just fun to mix music and you can, you can become famous. You can, uh, you know, express yourself. So I don't know, as long as that's true, it's like we've got one of the toll roads to achieving that.

Yeah. I like the analogy of the toll road. Okay. Next one I'm going to do, uh, Actually, I'll do it. Do it easy. One restaurant. I think you've owned— I think you own or still own a restaurant.

Yeah, for people to get context, most successful restaurants, even the big chains like a Subway or a Chipotle or things like that, 10% margin is the good case scenario. It's like, that's doing well. Of course, you know, there's, there's exceptions like luxury, you know, sort of Michelin star restaurants might have higher margins, but, you know, on the whole, if 10% is winning and then your, but your revenue is capped at what you can produce because again, you're working 7 days a week. You're there for breakfast, lunch, and dinner. You, you know, you basically, you can't, like, you always have to be there. You always have to go in and make the product again, fresh every single day. And you're only as good as the, your sort of last interaction with the customer. It is just such a brutal business. It is an absolutely terrible business. In fact, it's funny that the only business you've ranked below it so far is an MLM. It's pretty much a crime. It's the only thing that's been worse so far.

And, you know, like I said, like, we own restaurants. I think they're really important, but I just don't— if you want to make money and you want to get rich, I don't think that's a good way to do it. It's like I always use the gym analogy. If you go into the gym and you try and deadlift 300 pounds on day one, you will hurt your back and never come back. And I think entrepreneurs who go into restaurants, they have a rough go.

All right. Next one, Marketplace. So an online marketplace. Um, where, how do you think about marketplace? This would be something like a, whether it's an Etsy or an eBay or an Amazon, or it could be, you know, even marketplaces like, uh, AngelList is a marketplace. Twitch is a marketplace. Anywhere where there's suppliers, there's supply and demand, right? There's creators and viewers. Uh, YouTube is a marketplace of creators and viewers as well. So what do you think about marketplaces?

First big controversial pick there. I can't believe you rank it as a C. That's the one I would disagree with you with. I think if you get a marketplace to work like an Airbnb, it's S tier.

Well, are we saying a working marketplace? Because we're talking about business model.

If you're one of the very few successful marketplaces, you're an S. It's like one of the most defensible, lucrative businesses in the world. But because the likelihood of success is so low, I would have just knocked it down to probably an A if you can actually get one, get one going even.

Let's put, let's put Airbnb as an A. I'm down with that. I just can't agree with the business model in general as being a C because we're basically ranking in terms of quality and difficulty, right? Yeah. And I just think like, like, for example, like we could say that the services business, the accounting firm, let's say PwC, right? PwC. 75 years ago was just one accountant and with a few partners. And now today, if you want to get audited, you're a public company, you have basically 5 options. You are going to pay a fortune for their rubber stamp, right? So I'd say like we could rank that as a B or an A, but we're talking about the business model.

Okay, fair enough. Uh, agree to disagree on that one. All right. This Airbnb is not the company Airbnb. It's owning Airbnb's short-term rentals. So saying, oh, you know what, here's how I'm going to make money. I'm going to get a property, I'm going to get a home, I'm going to put it on Airbnb, and I'll be a, I'll be a short-term rental unit owner. Maybe I'll do 2, maybe I'll do 3. What do you think of that plan?

I'd say it's a D, similar to freelance. You know, the risk there, regulatory. I owned a— so, you know, I bought a beautiful apartment in Vancouver. I go to Vancouver a lot and I said, oh, I don't want to own a second home, but You know, the 28 days a month I don't use this place, I'll Airbnb it. So I Airbnb it. I'm making a fortune. It's great. I love it. All of a sudden, City of Vancouver changes the regulations. Boom. There goes my margin. There goes my business. You know, total nightmare. And now I just— it's fine. I have a tenant, but it's just not nowhere near as profitable.

The same thing happened to my parents. They were Airbnb-ing their house in San Francisco, making a killing. And then San Francisco changed rules that you can only Airbnb 90 days out of the year. So basically 3 out of the 12 months you can Airbnb. So then 9 out of the 12 months, their, their cash cow disappeared overnight. Today's episode is brought to you by HubSpot because using only 20% of your business data is like dating somebody who only texts you in emojis. First of all, that's annoying. And second, you're missing a lot of the context. But that's how most businesses are operating today. They're only using 20% of their data unless you use HubSpot. That's when all your emails, your call logs, your chat messages, they turn into insights to help you grow your business because all that data makes all the difference. Learn more at HubSpot.com. All right. I want to do content creator. So for the person who says, I want to create the next podcast, I want to be the next YouTuber, I want to be an Instagrammer, I'm going to build a following and then I'm going to make a ton of money because I'm going to get brand deals or launch my own products or who knows what, but I'm going to go all in on being a content creator.

So I think that's a— that's probably a D. I would argue that if you become the next Andrew Huberman, You're a, you're an A, like you're a B. Like you think about it in a world of AI, um, if somebody has a trusted relationship with you, um, it's a phenomenal business. The issue with it is it just doesn't scale. So in terms of defensibility, it's amazing, highly profitable, very simple to operate. But one of the problems with it is, and I know a lot of these people, if you don't show up and you don't bring the fire on the camera every single day, and you stop posting, your business goes to zero. And I think that's a bit of a— it's a bit of a prison, I think, for some people.

Why did you say Huberman? Is it because of the trust factor or because it's in health or wellness or medical? Is that the important factor there, the niche, or is it just the level of trust that people have?

All right. Next one, owning real estate. So buying properties, either cash flowing them or flipping them. Obviously, this is a big space, right? So this is— there's like 1,000 variations of how you do this. So I think it's a little bit of a tough one, but just give me your general thoughts on going into real estate as whether it's multifamily, it's commercial real estate, and saying, I'm going to try to buy these properties using some debt. Maybe I'm— maybe I'm just going to cash flow these properties, or maybe I'm going to try to improve them and sell them, you know, for a higher, higher cap rate. You know, when I, when I exit.

The beauty of real estate is predictability. I think depending on the sort of real estate, I think there's really a big distinction between real estate ownership where you just buy something and you rent it out. And then there's real estate development where you actually buy a piece of land or you buy something, you add value. I remember talking to your— I think it's your brother-in-law who does the real estate where he he was like, look, like, I know all of the people that, you know, need space and I just go and I acquire a strip mall and before I close, I already know that I'm going to put someone new in and, you know, it's going to be a way higher quality asset and then you can refinance it out or whatever. To me, that's kind of a no-brainer way to make money. So I would rate that a C probably.

All right, go and see. And why is that not higher? Because, well, if you're not doing the value add or you don't have that unfair advantage like my brother-in-law has.

Yeah, I think, well, I think they do the same thing, right? They just go buy and they take the profits or they refinance and go buy a second property. What's wrong with that? That works.

Yeah, I mean, you can do it. I don't know. It's just not something I've spent a lot of energy on. I don't think it's— when someone tells me that they're going to go do it, I think like of all the things they could do, that's a pretty solid approach. And I think one of the things I've noticed, I know a lot of, you know, really wealthy real estate people, and I've been fascinated by how illiquid it is. So you'll meet people who have $2 billion of real estate.

Yeah.

But the actual profits that come out of it are like $20 million a year, which is amazing, right? It's made their family wealthy. The bank understands that they live a good life, but they don't actually have that much liquidity. And it's often tied up in the next project and the next project and the next project. So I think it's a great way to make your kids really, really wealthy and, you know, ruin a few generations and then they'll buy an F1 team and then lose all their money.

All right. We have nothing in the S tier yet, so I got to try to get there. I think this is the guy to do it. So I have a an icon here of Warren Buffett, and this represents investing. So just being an investor generically. But I think maybe the way I was really thinking about this, because I think Buffett is a little unusual in the way that he's structured his company. So really, this is to me owning an investment fund or being in the money management business, investing other people's money and taking fees and a profit off the top of it.

Is that— Well, no, I would argue a little bit differently. I'd say investment management is an incredible business, but I wouldn't put Buffett in that category because he doesn't actually manage other people's money.

Yeah, I know. That's the thing about sort of the exception here.

And they can literally, I mean, if you think about, sorry, why is it permanent capital? I can sell my Berkshire stock today. I can sell my Pershing Square today. What do you mean it's permanent? What's permanent? About that part, is that, or are you not talking about that? Is there some other money?

You're just trading little stock certificates of ownership between the businesses. But what I mean is typically a hedge fund manager would say, let's say I give a hedge fund manager $1 million, I can withdraw that capital. And the only way that they can give me that money back is by selling stock. So let's say that you, let's say you're the hedge fund manager, you go out, you invest in some company. The stock goes down, I lose faith. I say, Sean, I want my money back. You have to go sell part of your stake, potentially losing quite a bit of money. Whereas someone like Buffett or Ackman, people are just trading the stock certificates, right? Those are just ownership shares. Sure.

Even when I'm out, whoever I sold it to, they're in. So the money is essentially there, even if the stock price goes down.

Exactly. And they— if you think about it just in terms of the beauty of their business model, Buffett's is more complex. Bill's business, for example, He simply just goes out and he buys 10 stocks and he, he has 50 employees and he makes hundreds and hundreds of millions. Sometimes some years I think he makes billions.

Wait, wait, wait. So Bill Ackman's firm only has 50 employees?

Yes.

50 employees. I think he manages— how much does Bill Ackman manage?

So $16 to $20 billion, somewhere in there.

So, okay, let's call it $15 billion. So he's got $15 billion under management. You know what? We got to break the rule and we got to do a little public math here.

I know he takes a 2% fee or he doesn't take the fee. He takes a fee on, I think he, it's a blended fee of between 1% and 2%, depending on the pool of capital.

Let's call it a million, 1.5%. So let's take, say he's taking 1.5%. So his firm with 50 employees whose job is to go and analyze and find 10 stocks to own is making $200 million plus a year in cash flow off of just the fees.

Well, you got to remember, so, so that's revenue. Yeah. Cost. There's cost to it. Transaction, legal, all the other stuff. And again, I think that number swings around based on the performance and stuff as well.

Right. But how high could that cost be? He's got 50 employees and his legal— he's not doing M&A with private companies. He's doing public company investing.

I believe— I mean, we don't need to do the public math. People can look it up. But if you look at Pershing Square Holdings, his public company, you can basically see what they pay him in fees every year.

Okay. That's incredible.

Okay, that's incredible. What about the other side of it where you talked about the hedge fund managers? So where are we putting them? So if Buffett and Ackman are your first S-tier, Where are you putting the general hedge fund manager, money manager, um, who's got, you know, assets under management but not permanent capital?

I'd give it a, I'd give it a B just because of the nature of the swings. You can, you're pretty much guaranteed as a, let's say you're a very, you have a large venture capital fund or you have a large hedge fund, you're pretty much guaranteed over 10 or 15 years to make, to become a deca-millionaire. Almost no matter what, which is kind of a crazy thing about the model. But you might get blown up at some point.

But explain the inconsistency, because I believe Ackman also has like blown up or almost got blown up, you know, a couple of times. What's the difference in your mind between what you're talking about?

Bill keeps getting shot and then miraculously getting back up. And I think he's one of the—

I remember that of the investment world.

I mean, he has a great line. He just says the secret to success in business is just getting back up over and over and over again. And what happened to him was Bill has made so many incredible investments, but I believe in 2014 he bet against Herbalife, uh, which was an MLM. And then he also bet on Valiant Pharmaceuticals, which was a pharmaceuticals company that was basically increasing prices. It was a very elegant intel, you know, very, very, um, smart model, but it was run in a kind of unethical way and the company blew up. So between Herbalife and Valiant Pharmaceutical, his investors lost faith in him and a lot of them pulled their cash. And so suddenly he's— his whole hedge fund is blowing up. And fortunately, in 2012 or 2013, Bill had raised, I believe it was like $4 million or $4 billion of permanent capital in Pershing Square Holdings. And Bill was able to basically bet on himself. He went to JP Morgan, he went to Jamie Dimon, who he's buddies with, and he got a $500 million or something loan to bet on himself and buy more stock. And he managed to come out the other end, uh, absolutely killing it. And I think the big lesson for him was don't short stocks, uh, because he was shorting stocks and be a lot more disciplined about investing in businesses with leverage or exogenous risks. I think there's this funny story. Bill went out and he bought these little plaques and he puts them on every single person's desk at Pershing Square. And it's the Ten Commandments. It's like, thou shalt not short stocks, thou shalt not invest in a business with too much debt, et cetera. So Bill has really learned the lesson and been through it.

Do you know how in venture capital, the sort of the normal VC fund isn't going to— it's basically like a pretty poor performing asset class because you're, you're illiquid for 10 years. And then the sort of, you know, the IRR that you get out of it is less than if you just kept it in an index fund. So like venture capital on the whole is a pretty bad asset class. Of course, the top funds perform pretty well. Is, is basically hedge fund management the same distribution or do they on average do better?

So Warren, there's this great story. There's this guy, Ted Seides, who's a, he's a fund manager, a fund of fund manager. And he had lunch with Buffett and he said, Warren, I'll bet you, I think it was $1 million that I can choose a basket of hedge funds and they'll outperform the S&P. And I believe he lost that bet to Buffett. Buffett basically said, on average, funds do not outperform, which is very true. I mean, most hedge funds, most venture capital, do not perform. And I think that's kind of what's distinct about private equity. I think— I don't know for sure, but I think most private equity funds at least have a reasonable return.

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So I would say that's a C. Those are hard businesses. But if you can dominate a local industry, let's say like, let's say like you're really good at internet marketing and you own an HVAC business and you're able to hire great technicians, there's only so many technicians out there. And so they're kind of fundamentally difficult to compete with. And I think they're challenging. I know a lot of people over the last few years who have bought HVAC businesses or plumbing companies and they're like, you know, guys that look like you and me and they, you know, they come in and they're dealing with all these blue-collar guys and they're like, who the fuck are you? Why would I come and work with you? And so I think, I think they're, they're good businesses. If you're like, let's say you're a very enterprising HVAC technician and you want to start one of these businesses, you can do phenomenally well. But I think they're actually quite difficult to operate for an outsider.

All right. I got a couple more. Venture capital slash angel investing, although they're a little bit different. One's investing other people's money and one's investing your own. I bucketed them together here.

They seem slow or they seem a little too boring, a little too common.

And you hear a Jason Calacanis, you know, I'm the first investor in Uber and, you know, whatever. And so you want to do that same thing. And it's a little bit like, um, you ever been pitched by a founder and they have like a popsicle company and they say like, well, I know we're like tiny right now, but there's this one company that sold to Procter Gamble for $300 million. It's just, it's all story-driven. Um, and don't get me wrong, there's amazing angel investors like Lockie Groom and people that do amazing stuff. But I think for laymen, that's a terrible, terrible thing to do with your money.

Yeah, it does feel a little bit like golf. It's an expensive hobby, but if you enjoy it, fantastic. Give it more power.

I mean, we, we talked about this, I think on the last episode or two episodes ago, when I first started out, I got in the habit of angel investing. I have $30 million or something tied up in angel investments, completely illiquid. I have no access to it. I'd much rather own like stocks and real estate or something. Um, all right.

I have one more here. That's, uh, buy a local sweaty startup. Oh, we have Cody Sanchez entering the chat here. I have, I couldn't find a good icon, so I just put Cody on here for, for lack of a better term. She's, it's a picture of Cody at a laundromat. Uh, and I think she's, I don't know if I don't, I don't actually know, by the way, if Cody really pushes that you should buy laundromats, but I think that's a little bit of a narrative. I'll use her as a figurehead for this idea that you should find a local sort of brick and mortar, a sweaty business, you know, go buy a boring Main Street business and you're going to cash flow. Then you reinvest the cash flow and you buy the second laundromat, then you buy a car wash and you keep going in that direction. Where does Andrew Wilkinson rank that model on the tier list?

I mean, I love, I love Cody and I love Nick, Nick Huber. I think what they're advocating is basically, look, don't go and work for someone else when you can create your own job. And I think if you can be an owner-operator—

but they don't say that. I think if they said that, it would be a lot more of an honest broker, right? The way you, you said one key word, which is what they say is own your own business. And you said own your own job. And I think there's a big difference between those two things.

Well, that's what you eventually started doing, right? But you— what you did at some point was you guys decided to switch into buying businesses that are already working as your main business to be in. And I believe you guys invested— you can correct me if I'm wrong, but I think the initial kind of seed capital was you took something like $5 or $6 million from Meta Lab's profits and you were like, this will be the base. And then we'll try to find these sort of compounding businesses that we can hold for a long time, which you guys call wonderful businesses. Great. And that's what has become Tiny, the, you know, the public company today. I think the market cap is something like $200 something million dollars.

Yeah, basically we just started buying businesses in 2013 when we read about Warren Buffett and we're like, oh my God, this guy's doing easy mode. Why are we doing hard mode? But to be honest, Buffett has this great quote: I'm a better businessman because I'm an investor, and I'm a better investor because I'm a businessman. And I think that in order to be a good investor, you need to have run or experienced the chaos behind the scenes at different businesses. And I think the beauty of what we did was we got really lucky. So we went to the gym, we didn't deadlift 300 pounds. We got really lucky with MetaLab and it worked. So that built our confidence to go try more stuff. Then we tried every bad business model. You know, we did dropshipping, we started a restaurant, we did a skin company, skincare company, like all sorts of dumb stuff. We always joke we put forks into electrical sockets. We learned a lot., and then we started investing. And so what we could do is we could look at these businesses and say, oh wow, this is actually a really high quality business. And I know that because I've operated a similar one.

And do you remember how much capital you started doing that with? Once you, once you stopped starting new businesses, you decided to go start buying.

I think it was like $4 or $5 million. We, we basically sat down and said, um, okay, we're going to start this thing called Tiny. I'm going to own 80%, you're going to own 20%. And that was only because I had more capital because I was the one who owned most of Metalab. And, uh, Chris put in $500K or a million bucks and I put in the rest and that's it. We never put any more money in.

So that's what I was going to ask you. Was that just a seed or did every year, oh, we found a new business, let's take more Metalab profits and put it into Tiny or no?

No, nothing. I mean, we merged, so it was interesting. So I actually owned Metalab myself. I own 90% of Metalab, and then my brother and Chris and a few other people were small shareholders in it. And so, um, that, that's what basically I diversified with. So I went off and in my family office did all the venture investing and bought some real estate and, you know, bought newspapers and restaurants and other dumb stuff, but Tiny itself. Really just grew from that original amount.

So that's pretty incredible. I feel like I got to ask you this because I think you get a lot of shit nowadays. I think a lot of people go look at the Tiny stock and basically you see— I think you guys went public, you like did this reverse merger. And so then the stock basically like shoots up in 2021 at the kind of like peak era at that time. And then basically it's just a downward trend since then. And I think a lot of people I see on Twitter want to kind of look at that and say, oh, this guy calls himself the Warren Buffett of the internet and he says he buys these great businesses, but what's going on? Look at your stock. And so they see that and they say, man, is this guy like many other people on the internet who maybe either overstate their claims or whatever, right? That's a common problem on the internet, I would say, on the whole, is that you don't know who's real. You don't know who's actually good. And so you have this public company that's a little bit of a public scoreboard in a way, and people get really riled up about that. On the other hand, and this is kind of like, you know, the two parts of the trial, right? You have the prosecution, the defense in a way. The other hand, you say, look, there's a guy who took $4 or $5 million, you know, first created this design agency that was really successful as a business, has generated, you said, over $100 million of profit lifetime. And then you took, you know, $4 or $5 million and you compounded that into a, uh, $200, between $200 and $300 million business that holds all these interesting assets. And, you know, cool, like the stock, stock prices go up and down. That's not necessarily the end-all be-all. And even if you said, look, that's how big it was, that's still fantastic. I don't know a lot of people who are listening to this that have done anything that's more impressive than that, you know? So I admire, even if that, even if your worst case, least generous interpretation is today's current, you know, stock price, that's still pretty damn impressive. So I guess like, what's your reaction to this? Here's— you're sitting there, you don't want to go out there and, you know, fight all the internet trolls or anything like that. But like, how do you see this? What's your take on this?

Well, let's take the, the, the vulnerable side a little bit, right? Because I always ask myself this whenever I get criticized, and my first reaction is like, what the hell are you guys talking about? Like, do you not see? Do you not see? And I want to like kind of defend myself, but at the same time, I always ask myself this just for my own learning, which is Basically like, what about this is fair? What is the fair criticism? And I think that's always been an important question for me. It keeps me honest because, you know, look, either I'm just going to ignore it, I got nothing from it, I'm going to get mad about it and think they're stupid, I get nothing out of it, or I mostly, you know, disregard what I think is the sort of like off-base line of thinking. But maybe there's, you know, some things that some part of it that's fair. Oh, it is fair that I said this. It is fair that I didn't I didn't do this, or it is fair that I thought it would be X and actually it turned out to be Y. You know, those are some things that are fair, right? So what would you say is fair criticism about you?

First of all, I just want to say I really empathize with people. I remember watching like Shark Tank and I'd be like, oh wow, Kevin O'Leary, you know, he sold his business for billions of dollars. And then you go read the juicy gossip that, you know, he, he got $10 million or whatever out of that deal. And I think it's very easy to kind of have the one blurb and then judge someone. And I think before I went through this experience, I would just believe what I read on the internet and, and, you know, kind of enjoy it, to be honest. Like, I think there's this dirty, horrible part of humanity, myself included, that loves when somebody who's on an upswing falls. Like, talk about Bill Ackman. Like, Bill, Bill's an amazing investor. But he's loud, right? And I'm loud too. I'm extroverted. I like talking what I'm doing. I like, I like talking about our companies and everything. And it's really, really fun to watch someone loud like me fall in the mud. Right. And I see this in myself. You know, you kind of cheer and enjoy it. Like celebrities go through this too, where it's like they're awesome and everyone loves them. And then all of a sudden, you know, they like to shit on them for a few years and then they love them again. Like Justin Bieber, everyone hated him for the last 5 years. Now everyone loves him again. I just kind of think that's the course of things. And I think it's kind of, uh, I just got to eat humble pie and there's a lot of great things I get out of being loud on the internet, uh, and talking about this stuff. I've connected with so many incredible entrepreneurs. I get to, I've made so many new friends. Uh, you know, I love talking about this stuff and teaching people about business and stuff, but this is the price and I'm willing to pay the price. And it sucks. And for me, it's a button, right? Like when I was a kid, I was always— I have ADHD and like, I'd always fuck up and I'd always be the one in our family that was blamed for everything. And so being misunderstood is a big button, and I really have to resist getting on the horn and trying to argue with everyone because it really doesn't help. So I think for me, we're just focused on delivering good results and building great businesses, which we're continuing to do. And people on the internet are going to twist it however they want to. The reality is 60% of the businesses that went public in 2023 when we did are still under their IPO price. So Asana, Sweetgreen, Coupang, like all these other businesses, they're all under IPO. Does that instantly mean that what the founder has built is invalidated and they're a moron? No. Um, and I think that, you know, the fair The really fair criticism though of us is our business is a bit confusing, right? Even our stock chart, like starting businesses. So I made all this money from the web design business, started a bunch of companies. One of those companies became the dominant seller of themes in the Shopify ecosystem. And Chris and I always had it in our head. We were like, let's, let's take a business public. We'd love to do that. And so we actually went and we partnered with Bill Ackman. We, we had sold the business, we, uh, to a family office. We bought it back and we took that business public and we took it public in January 2021. Do you remember what was happening in January 2021? Every stock was going to the moon. And so you have this business that's doing $40 million or something in revenue and like $7 million of EBITDA. And it goes to literally the day we took it public, it jumps from a $250 million market cap to $1.2 billion. And so we didn't take it public at $1.2 billion, but that first day, that's where the chart starts, right? And then the mania is over and the chart starts going down. And as the chart started going down, we ended up deciding, hey, let's take Tiny public. So we merge into it. So really, like, the Tiny story is this, right? We've been compounding at 25% from almost nothing., and what people see, unfortunately, because that's what's in the public market, is this little, you know, this little dip down here. And to be honest, like, I get it. I think it's like, you really have to take the time to understand the business and the story and why the, you know, why it looks like that. But I'd encourage people to do their research and actually dig in and understand what we own. Because from my perspective, I think we own a lot of pretty incredible businesses.

And you, you still own the majority of the business?

I do.

And is that still, you know, the majority of your net worth, basically? So you're like skin in the game. How much skin do you still have in the game?

Yeah, this is what's so funny is like people— I mean, I've even— people have said like, oh, you did a pump and dump. And I'm going like, what are you talking about? Like, I've sold almost no stock. And the only stock I did one large transfer, I think, of $8 million, I moved it to my foundation so I could start doing philanthropy. Right? Like, right. I haven't taken any cash out. I still own all the stock. And like, people say like, oh, you're a pump and dumper or something. Like, I, I don't know. It's just, it's kind of sad.

Yeah. And so you, uh, you hear all this and you've also talked about this idea of, uh, The Courage to Be Disliked. You've, I think, you know, maybe that was the right, the right book at the right time for you during, during this Period. I haven't actually read the book. It's a killer title. What is the thing that I can learn, you know, from that book?

So Sam just did that great— I love that episode he did where he basically said, here's the recipe to a miserable life, uh, and let's invert. And one of my favorite inversions is that you actually want people to hate you. You do not want to be liked by everybody. I think that's a great signal that you're doing life wrong. And I think if you told me this 10 years ago, like, I would think that's insane. I remember I read this Warren Buffett quote, it takes 20 years to build a reputation and 5 minutes to ruin it. And for me, I really internalized that. I was like, oh my God, I need to make sure that, you know, everyone thinks positive of me.

And right, I better protect this reputation.

Then every founder I meet for coffee, I have to, you know, woo them and make them like me or whatever. And I really felt that I had to be like consistent and predictable. So for example, like, you know, I buy companies and I'm, you know, I'm a Warren Buffett, like, wannabe value investor kind of guy. But I also really like startups. I like starting restaurants and all this other chaotic stuff, and people don't like that. And I remember the moment, like, I kind of realized what was going on. My dad retired. My dad was an architect. And, uh, he retired and I took him out for a beer and I said, dad, what, what now? Um, you know, what are you going to do with all your time? And he was saying he didn't really know. And I said, well, dad, I've got, I've got money. Why don't we team up and you can become a real estate developer. You can build the things that you've always wanted to build. And he goes, what do you think someone's going to say if I suddenly call them up? They know me as Architect David. And all of a sudden I'm pitching them on a real estate development. People don't like it when you leave your box, Andrew. And I was like, oh my God, like, I, I know that feeling. Like, have you ever had like a restaurateur friend who like pitches you on a tech startup they're starting all of a sudden? Or, you know, your yoga instructor gets their real estate license, they want to sell your house or whatever it is. My mental reaction— I hate this about myself— my mental reaction is stay in your lane.

Yeah.

I don't like it. It makes me uncomfortable. I don't know why. And it's incredibly hypocritical because like, I'm, I'm a flip-flopper. I love jumping around. I'm an inch deep and a mile wide. And so it's like, I hate in others what I hate about myself. And I realized we're all like, uh, prison guards, you know, like we all have these labels. Like for me, it's like, you know, I'm an investor and an entrepreneur, but then it goes deeper. It's like. I'm in tech, not real estate, you know, no real estate allowed. I'm bootstrapped. You can't do venture. That's weird if you do that. I'm pro crypto or anti crypto. And these labels kind of lock you into this identity. And I've seen this in a lot of, um, big public figures. So like, do you remember when the CEO of Goldman Sachs, David Solomon, uh, it came out that he was like a DJ, right? He loves to DJ, right? This guy on the weekends and evenings, he DJs. And the press went crazy. There was an article in The Economist about how, you know, is Goldman Sachs suffering because he's, you know, DJing? Do you think they would have said that if he was playing golf? Right. Uh, or like, you know, we see like Kim Kardashian get passionate about prison reform. We're like, fuck you, Vanity Project.

Right.

You know, I like that. When I was in high school, I used to wear mismatched socks. I still wear mismatched socks, but I would like, I would leave the house and I would be wearing two different socks. And to me, I didn't even think twice about it because I don't know, I was just not even, who cares? It's just socks. But everybody would comment on it. My mom would comment on it about out the way, out the house. What are you doing? She was like horrified. Like, I can't believe you're doing this. And I was like, what do you mean? It's just, they're both socks. It does. Yeah. The pattern doesn't match. Who cares? Who gives a shit? And at school people would make fun of me for it. But they sort of realized like, oh, we made fun of him and he just continued doing it. But also I wasn't even doing it really as like some statement. I just didn't care. Like, I just didn't— I just decided not to care about socks the same way everybody else did. And I decided that the idea of matching socks really didn't matter to me. And maybe it matters to other people. More power to you. But it just, just didn't matter to me. And I don't think I realized at the time how important of a, like, mini lesson or trait that would be in the future. I remember moving to San Francisco and we were self-funding or not self-funding, but like I had basically like a billionaire backer. So Michael Birch was funding like the lab we were using to do startups. We didn't take any outside funding, but one of our companies started to pop and we got, I don't know, like a million users, 2 million users, 3 million users. And, you know, VCs got a little bit excited. So there was an investor at Founders Fund that reached out. And I took the meeting because I was always intrigued by Peter Thiel. And I thought, I don't know, maybe this will somehow lead to me meeting Peter Thiel. So let me take this meeting, even though I really didn't want investment. And we go in and I start asking, you know, he's supposed to ask me about the business. I'm just asking him questions about Founders Fund because again, I don't really care if he invests in me or not. I'm just here to like learn about them. And, you know, I'm asking all these questions that if you ask a normal VC, what stage do you normally invest in? Answer: pre-seed.

Yeah.

What's your typical check size? Answer, you know, $500K to $1 million or whatever. You know, everybody's got like these predefined boxes, labels. What, what, what industries or what categories do you invest in? B2B SaaS, enterprise, blah, blah, blah. They have these labels that they were like, you know, and I went to the Founders Fund guy. I'm asking the same questions. He's like, we just, I don't know, we're just trying to find the, you know, singular businesses. And then we, I don't know, back up the truck. Like, how much money do you need? How much money can we put in? Let's put it— how much money you need now? Then we'll put more money in later. What's the— what stage? Who cares? Just go. And so he was talking and he said that when Peter started Founders Fund, he had almost like a Fight Club style rule. And the Fight Club style rule was the only rule is that there are no rules. The rules that we set as a fund are going to limit our ability to find the singular business. And this is why Founders Fund was one of the only VCs to own a shit ton of Bitcoin. And, you know, starting in 2014, 2015, most VCs couldn't even like buy crypto, like by their bylaws basically. And they didn't even see Bitcoin as a, like, they were so blinders on to like, we need to find the next Facebook, right? We need to find the next Mark Zuckerberg that they didn't think that this anonymous Satoshi Nakamoto open source project creating a currency like it broke all the rules. But that was the thing that mattered. And, and so Founders Fund has had a few of these really contrarian bets. They backed Android when Silicon Valley, like at the time, it was completely unpopular. To back a weapons company. It was like, so like, the, the time, the, the narrative at the time was that that was a bad thing. In fact, Google had to shut down their weapons project. Uh, they were doing a— they had a big contract with the Department of Defense, and Google just turned it down because their own employees were like, this is not right, I don't want to sign up to be part of making weapons and killing, you know. And so the companies, you know, bowed down, and the venture capitalists bowed down, and there was only a couple of investors and Elad Gil came on this podcast and he said, the day I saw that Google shut that project down, I knew there's a huge opportunity. If anyone was willing to go against the grain and actually build a weapons company, they were going to do phenomenally well. Like, it makes total sense for the US. We're going to have a Defense Department, right? I think everyone agrees on that. And the Defense Department is going to need weapons. And if the weapons are built by a high-tech company, that's going to be better than building low-tech, old-school weapons. Like, this all makes sense. And that's when he backed Anduril and Founders Fund backed Anduril. And so I just saw the payoff. You know, in Silicon Valley they call it being contrarian, but what does it feel like in practice? I think it's what you're talking about. The courage to be disliked, the courage to look stupid, right? Uh, the ability to think differently, right? All these terms that have been floating around, they all sort of apply to this thing. And I, I'll share one more story that kind of reminds me of this, which is one of my business heroes is, uh, Jesse Itzler. And he came, you came to one of our Hoop Group events, the basketball camp we do. So Jesse was there and Jesse was laughing. Uh, we were at the table. He's just laughing. He's like, all these guys, he's like, they're all talking about their like crazy ambitious plans. Like this guy's building a city. This guy's building a religion. This guy's building rockets. This guy's building this. And he goes, I'm literally selling a calendar because his project right now is called the Big Ass Calendar is literally a calendar you put on your wall so you can be a little more intentional about how you're going to spend your time this year. And he's like, I think it matters. But like, in the grand scheme of this, I sell a $19 calendar. You know, it's just funny. I'm even funny. I'm even here. And here's a guy who reinvented himself 10 times, did not stay in any box, right? Started as a white guy rapper, then wrote, and that wasn't really fully working out. So he writes a jingle. It becomes the New York Knicks song. He sells a sports jingle company. When he sells the company, he gets to ride on this guy's private jet. He's like, this is amazing. Starts a private jet company, gets involved in a coconut water brand. You know, he now hosts a big running event because he loves running. He has a sauna company because he loves sauna. And he basically is just like almost productized himself. And none of the labels that you would— you try to— whatever label you try to apply to this guy, like, oh, he must just be a biz— a brand builder. Then he tells me about how he, you know, invests in this. Like, he decided that water was going to be really important. He bought— he invested in like land that produced really pure water. And I was like, oh wait, so you're an investor? He's like, well, no, I don't really, I don't really care about investing. I just, yeah. And so he was unlabeled. And so I really find a lot of inspiration in people like this. And the thing that he said that really stuck with me, I was like, so what are you going to do after this? And you know, in this room, when you're surrounded by these hyper ambitious, hyper talented people, it's very tempting to just be like, oh, I need to ratchet up how big my thing sounds, you know, that I'm working on. Otherwise I'm sort of low status in this room. And he told me, he goes, oh, I think I'm going to go be an assistant basketball coach with this, like, local, like, like, like this all-Black college that's nearby. Like, I want to go be the assistant coach. Like, I love basketball. He's like, but dude, I was like, I was like, what do you— why assistant basketball coach? Like, clearly not for the money. Like, you know, because you want to get into basketball. He's like, no, dude, I just want to be on the bus. He's like, some of the best times in my life were on the bus going to a game. He's like, if I could just be on the bus. Oh dude, that's going to be good for the soul. And I just admire this guy having the courage to be like, yeah, I'm going to go do this thing that sounds completely random. But as soon as he says it, it instantly resonated. And like, I'm actually now an assistant coach for a high school basketball team near me because I was like, dude, I want to get on the bus. That actually makes total sense to me. That was a huge part of my childhood. I would have so much fun doing that, even though I don't know how that fits with like the rest of the stuff. It doesn't really need to fit. It just needs to be something I want to do.

We're gonna get the hate either way. You think those— you think the, the ASG crowd doesn't get the hate? Of course they do too, right?

Uh, totally.

You're gonna get the hate either way. Yeah, if you're not getting the hate, you probably haven't— you know, it's just a signal you haven't really done enough yet. You haven't made it.

How jealous are you of— you— are you, by the way, of those guys, right? I wish that I could be that focused. I wish I'd get that excited about buying, you know, waste management businesses. I do.

It's—

but it's just not true. You know, it's not true to me or you.

Exactly. Why would I be jealous of something that I would be miserable of?

You imagine My First Million if every time you just talked about one vertical, right? Be the most boring podcast of all time.

I think if more people knew the behind the scenes of a lot of these super wealthy people, they wouldn't want that life. Like the— there's a lot of, there's a lot of sad, very wealthy people, as you know. I think the trick is how do you figure out what you're great at and you actually enjoy? Because there's things I'm great at that I just don't enjoy, like sales. I, love pitching and selling and talking to people, or sorry, I'm very good at it, but I actually, it drains my life force. I, it's, it's misery. Right. And so I think like, you know, for me, I started out, uh, headphones on coding, making websites. 20 years later, I've realized I can write and talk about things I'm passionate about. And that creates opportunity, which I can then funnel into all my various businesses. Like I think being a human router and just doing the thing you're great at. You're doing this too. I mean, it's like Ben might run all the day-to-day operations. You just get to go and do the thing you're amazing at, right? And it benefits your business in a profound way. And I think that's the trick.

Let me ask you this. Are you leaving your, your, uh, your cell? Are you breaking out of your cell? Is it something that people go, wow, this is like crazy? I, it's like when Tim Ferriss launched, uh, his card game or he wrote his, like, he made that weird crypto project. Is it one of those?

Uh, it's, it's, I've explored that wide, like totally weird, totally weird. Moo, go make a movie. Create a Broadway play. Like, I've explored all that, uh, and there's like things, but that's not the active thing I'm working on. Um, one of them is, I would say, uh, different in that it's a different mode to be in. So for example, this podcast is live, it's improvised, it's unedited. I get on here and I just do me, and then I don't really think about it after the fact. There's a team that basically takes it, they edit it, they title it, they package it, they send it out there, and I don't really think about it again. Whereas the thing I'm doing right now is a little bit more of a craftsman approach. It's like, I'm not just going to improvise it and it's this like, you know, 3 weeks later that's kind of gone. I'm going to make a new one. It's like, no, I'm going to make one thing. It's going to be great. But that means I'm going to really like have to be a craftsman about this. And I'm going to really have to go and take a, take a scalpel to this and try to like make it as great as I possibly can, which is not a mode I'm normally in.

That's awesome. I mean, it's like, uh, the happiest I've been in the last 10 years is writing my book, just headphones on, doing something and actually shipping something that will be relevant hopefully in 20 years that you can go back to. Yeah, there's something so ephemeral about podcasting and tweeting and all the other stuff. So nice to zoom out.

Totally. Well, Andrew, thanks for coming on again, man. It's always good to, good to hang. And, uh, yeah, you want to shout out anything, your newsletter or anything you want to shout out?

Uh, yeah, I mean, that's mostly, I haven't really actually been tweeting very much. I've been, um, posting on my newsletter and I really love it. I sit down like once a month and I kind of do like what Tim Ferriss and Kevin do. I just like write about all the random things I'm excited about. Sometimes it's about business, sometimes it's about other stuff. Um, but yeah, people can sign up neverenough.com. Uh, the newsletter's there and I, I love it. Like it's, it's been so, it's been so much more enjoyable to just sit down and actually write something formally and take my time instead of like tweeting out toilet thoughts randomly and then fighting with trolls.

All right, man. Good to see you.

Yeah, great to see you, dude.

I feel like I could rule the world. I know I could be what I want to.

I put my all in it like no days off.

On the road, let's travel, never looking back. Hey, let's take a quick break. I want to tell you about a podcast that you could check out. It is called The Science of Scaling by Mark Roberge. He was the founding CRO of HubSpot, and he's a guest lecturer at Harvard Business School. The guy's smart, and he sits down every week with different sales leaders from cool companies like Klaviyo and Vanta and OpenAI. And he's asking about their strategies, their tactics, and how they're growing their companies as, you know, head of sales or chief revenue officer. If you're looking to scale a company up, if you're a CRO or head of sales that's looking to level up in your career, I think a podcast like this could be great for you. Listen to The Science of Scaling wherever you get your podcasts.