A THREAD on insightful thought provoking ideas shared by Andrew Wilkinson (@awilkinson):
1/
Venture: Roulette
Private equity: Blackjack
Bootstrapping: Poker
1/
Venture: Roulette
Private equity: Blackjack
Bootstrapping: Poker
2/
Most companies aren’t venture scale and are ill suited to raise venture (can’t grow at 100%+ per year).
Yet most people starting tech companies think they need to raise venture.
Most companies aren’t venture scale and are ill suited to raise venture (can’t grow at 100%+ per year).
Yet most people starting tech companies think they need to raise venture.
3/
Way too many non-venture scale businesses raise venture and put themselves in a binary outcome:
1. Grow at all costs
2. Die trying
You wouldn’t mortgage your house using credit cards. Why think of your business any differently? For most, it’s your entire net worth.
Way too many non-venture scale businesses raise venture and put themselves in a binary outcome:
1. Grow at all costs
2. Die trying
You wouldn’t mortgage your house using credit cards. Why think of your business any differently? For most, it’s your entire net worth.
4/
PATH 1: VENTURE STARTUP
- 95% chance of $0
- Tiny personal income while building startup until IPO/scale
- Massive dilution (most founders end up owning 5-15%).
$1BN market cap = $50-$150MM for founder.
PATH 1: VENTURE STARTUP
- 95% chance of $0
- Tiny personal income while building startup until IPO/scale
- Massive dilution (most founders end up owning 5-15%).
$1BN market cap = $50-$150MM for founder.
5/
PATH 2: COMPOUND EARNINGS OVER 20 YRS (BUFFETT STYLE)
- 50-80% chance of success...
- Pay yourself whatever you want out of profits
- 100% ownership
- If you can bootstrap a $250k/yr profit business and grow it/reinvest in new businesses at 20%/yr for 20 years = $59 MILLION
PATH 2: COMPOUND EARNINGS OVER 20 YRS (BUFFETT STYLE)
- 50-80% chance of success...
- Pay yourself whatever you want out of profits
- 100% ownership
- If you can bootstrap a $250k/yr profit business and grow it/reinvest in new businesses at 20%/yr for 20 years = $59 MILLION
6/
With the internet: podcasting, blogging, newsletters, easy monetization, subscriptions, etc, the middle man is gone.
It’s just you <—> your fans.
Nobody in between to mess with it.
Suddenly, having a personal brand—even just a couple thousand true fans—is a MASSIVE moat.
With the internet: podcasting, blogging, newsletters, easy monetization, subscriptions, etc, the middle man is gone.
It’s just you <—> your fans.
Nobody in between to mess with it.
Suddenly, having a personal brand—even just a couple thousand true fans—is a MASSIVE moat.
7/
Most entrepreneurs start with one goal in mind: FREEDOM.
If you truly value freedom, you should have one goal for your first company: Something that can produce $100-$200k of personal income.
It can be boring and doesn't have to scale.
Most entrepreneurs start with one goal in mind: FREEDOM.
If you truly value freedom, you should have one goal for your first company: Something that can produce $100-$200k of personal income.
It can be boring and doesn't have to scale.
8/
If you want to start a business, most people think you should learn specific skills (coding, accounting, cooking etc).
In reality, you should be studying psychology.
If you want to start a business, most people think you should learn specific skills (coding, accounting, cooking etc).
In reality, you should be studying psychology.
9/
Saying you want to "learn to code" to get into tech/start a startup is like saying "I want to learn how to lay bricks" when you're interested in becoming a real estate developer.
You don't need to learn to code.
You need to understand how it all fits together.
Saying you want to "learn to code" to get into tech/start a startup is like saying "I want to learn how to lay bricks" when you're interested in becoming a real estate developer.
You don't need to learn to code.
You need to understand how it all fits together.
10/
Insightful Thread on PE Hustle
Insightful Thread on PE Hustle
11/
"I can't afford to buy ads/hire marketers/sales people, we don't have any revenue!"
So often startup CEOs screw up chicken or egg problem:
You need to BUY THE EGGS (ads/marketing)—either with cash or clever marketing—before you can get a chicken (organic sales)
"I can't afford to buy ads/hire marketers/sales people, we don't have any revenue!"
So often startup CEOs screw up chicken or egg problem:
You need to BUY THE EGGS (ads/marketing)—either with cash or clever marketing—before you can get a chicken (organic sales)
12/
Subscription podcasts might be an even better business than SaaS.
Insanely low cost of production, no R&D, recurring revenue, and free distribution.
I've see podcasts with 95% net margins, 50-100% annualized ARR growth, and 3% churn.
Subscription podcasts might be an even better business than SaaS.
Insanely low cost of production, no R&D, recurring revenue, and free distribution.
I've see podcasts with 95% net margins, 50-100% annualized ARR growth, and 3% churn.
13/
Writing direct, easy to read emails that cut right to the chase is an undervalued skill.
It's just like designing a website or writing copy:
Don't make me think.
Writing direct, easy to read emails that cut right to the chase is an undervalued skill.
It's just like designing a website or writing copy:
Don't make me think.
14/
'The Tao of Charlie Munger' by David Clark is easily the most impactful book I've read over the past 5 years.
I've read it probably 20 times, just to drill all of Munger's lessons into my head.
Better than any MBA.
'The Tao of Charlie Munger' by David Clark is easily the most impactful book I've read over the past 5 years.
I've read it probably 20 times, just to drill all of Munger's lessons into my head.
Better than any MBA.
15/
My favorite Munger line is: “Fish where the fish are” It’s so simple.
Fish in a lake crowded with expert fishermen and you’re unlikely to catch many fish.
Fish in a quiet fishing hole off the beaten path with few competitors and ample fish and it’s hard NOT to do well.
My favorite Munger line is: “Fish where the fish are” It’s so simple.
Fish in a lake crowded with expert fishermen and you’re unlikely to catch many fish.
Fish in a quiet fishing hole off the beaten path with few competitors and ample fish and it’s hard NOT to do well.
16/
The best business models are often hiding in plain sight for YEARS before the world notices
For example:
-Sam Harris has had a subscription podcast since 2013
- @benthompson has had a paid newsletter since 2014.
It took 6+ years for anyone to notice.
The best business models are often hiding in plain sight for YEARS before the world notices
For example:
-Sam Harris has had a subscription podcast since 2013
- @benthompson has had a paid newsletter since 2014.
It took 6+ years for anyone to notice.
17/
I've been working on a local news site as a side project.
First, we tried WordPress. It took 2+ months to get the site live (post design) and it's *still* buggy.
Then, I hired a no-coder to rebuilt it in Webflow. It took him 7 days & looks better and is way faster. Insane.
I've been working on a local news site as a side project.
First, we tried WordPress. It took 2+ months to get the site live (post design) and it's *still* buggy.
Then, I hired a no-coder to rebuilt it in Webflow. It took him 7 days & looks better and is way faster. Insane.
18/
"Stop complaining about problems. Problems are the definition of business. The people who do best in business aren't the people with the least problems, they're the people who solve their problems better and have more fun doing it with better people." – Danny Meyer
"Stop complaining about problems. Problems are the definition of business. The people who do best in business aren't the people with the least problems, they're the people who solve their problems better and have more fun doing it with better people." – Danny Meyer
19/
The #1 litmus test for whether to do business with someone: Do you feel mentally exhausted after talking to them?
The #1 litmus test for whether to do business with someone: Do you feel mentally exhausted after talking to them?
20/
It’s funny seeing everyone realize working remote is possible and makes teams more productive (fewer disruptions, more flow state).
We’ve been doing it since 2006, before Slack and Zoom.
Even then, totally feasible.
It’s funny seeing everyone realize working remote is possible and makes teams more productive (fewer disruptions, more flow state).
We’ve been doing it since 2006, before Slack and Zoom.
Even then, totally feasible.
21/
For buyers of technology businesses, two new investment screens:
"Could this company run remote?"
"Is this business simple enough to switch to NoCode?"
Both have a profound impact on margins.
For buyers of technology businesses, two new investment screens:
"Could this company run remote?"
"Is this business simple enough to switch to NoCode?"
Both have a profound impact on margins.
22/
Biggest consequence of remote work:
Outsourcing and globalization used to be physical goods and low level labor (cust support etc).
Now you are competing with the super smart, highly motivated person with perfect English in India who wants $30k/yr vs your $100k.
Biggest consequence of remote work:
Outsourcing and globalization used to be physical goods and low level labor (cust support etc).
Now you are competing with the super smart, highly motivated person with perfect English in India who wants $30k/yr vs your $100k.
23/
Spending time with a toddler in a good mood is like hanging out with a monk who has achieved nirvana.
Completely present and joyful.
Everybody practicing mindfulness and doing drugs is just chasing that unadulterated toddler joy.
Spending time with a toddler in a good mood is like hanging out with a monk who has achieved nirvana.
Completely present and joyful.
Everybody practicing mindfulness and doing drugs is just chasing that unadulterated toddler joy.
24/
It's truly insane to me that people optimize their life for anything but lifestyle/personal/familial happiness.
What else is there?
It's truly insane to me that people optimize their life for anything but lifestyle/personal/familial happiness.
What else is there?
